Sulzer Ltd

Pump Indusuy Analyst

July 1997

Sulzer Ltd CH-8401 Winterthur Switzerland Tel: +4152 262 11 22 Fax: +4152 262 0101 Internet:http://www.sulzer.com

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KEY FIGURES (SFr million) Sulzer Roteq Group Year ended 31.12 1996 Orders Received Of Which: Sulzer Pumps

1223

1141

577

508

Order Backlog

786

757

Net Sales Of Which: Sulzer Pumps

1253

1035

569

515

Operating Income

40

28

R&D Expenditure

15

15

Capital Expenditure

35

34

i Operating Assets

340

283

No of Employees Of Which: Sulzer Pumps

5831

5197

3600

3150

Sulzer Pumps Ltd CH-8404 Winterthur Switzerland Tel: +4152 262 1155 Fax: +4152 262 00 40 F‘resident,Sulzer Pumps: JohnP Naegeli

ii

Founded in 1834, Sulzer Corporation comprises Sulzer Rtlti, Sulzer Infra, Sulzer Medica, Sulzer Roteq and Sulzer Winterthur. Employing approximately 26 000 people, the group has an annual turnover of SFr5728 million. The Sulzer Roteq Group was formed in 1995. Group activities include pumps, turbocompressors and reciprocating compressors for selected applications. Order intake for Sulzer Roteq rose 7 per cent last year to SFr1223 million, while sales for the year reached SFr12.53million. The Sulzer Pumps Division has production plants in Europe, North and South America, South Africa and Asia. Headquartered in Winterthur, Switzerland, Sulzer Pumps Ltd is a leading global

1995

supplier of engineered and pre-engineered pumps for the oil and gas, hydrocarbon, power, water and general industries.SulzerPumps’operations are divided into four regions: Europe, which comprises Western and Eastern Europe, CIS and the Middle East; North America, consisting of the USA, Canada,Mexice, Central and Northern Latin America; South, covering South America and Southem Africa; and Asia Pacific, Each region is headedby a regional director. During 1996 the SulzerPumps division recorded a further increasein order intake. Demand wasparticularly high in the petroleum industry. Pump sales in the power generation sector were stagnant. Substantial pump orders were booked for off-shore oil and gas rigs in

Europe, North and South America while some large orderswere also receivedfor refineries and petrochemical plants in the Middle East and South EastAsia.Thecompany has made good progress supplying thermal power generation with vertically split pumps to the North American market, The company has also extended the existing network of strategicallianceswith leading American customers. During 1996, Sulzer Pumps acquired Schulte GmbH as an additional service specialist, extending the servicenetwork into eastern Germany. The 1996 aCCpliSitiOn Of a I’Il~Ol’ity holding in the Indian joint venture Khimline PumpsLimited, Bombay should better position Sulzer to serve the Far East market, and should also provide cost-effective local pro-

duction facilities for pump components. Reflecting Sulzer’s policy of focusing on strategic core areas the company sold its Swiss foundry, Bulachguss Foundry AG, in a management buyout during November 1996. In January 1997, Sulzer and Ebara Corporation signed an agreementto discontinue their cross-participation arrangement, which was originally signed in March 1992. As a result, Sulzerrepurchased110 OOo of its own registered shares, which accounted for 4.4 per cent of Sulzerpsregistered share capital, while Ebm

purchased

its

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ibie notes issuedto Sulzerto a value of SFr66 million. Recently, Sulzer successfully placed the 110 000 shares(see Pump Industry Analyst, June 1997). n