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Global financial crisis dampens Oerlikon customers' ability to invest

22
Oct '08
The opposing tendencies within the Oerlikon Group continued into the third quarter. While Oerlikon Balzers, Oerlikon Solar, Oerlikon Vacuum, Oerlikon Drive Systems and Oerlikon Space showed sustained growth, the markets at Oerlikon Textile and Oerlikon Esec continued their downward trend. Besides negative currency influences amounting to CHF 0.2 billion, the global financial crisis further dampened Oerlikon customers' ability to invest.

“Our core businesses show a high resilience to the global slowdown in the economic cycle,” says CEO Dr. Uwe Krüger. “In the segments affected by the downturn, production capacities are being adapted to the altered conditions, and further restructuring measures are consistently implemented and extended where necessary."

"We expect a reduction in annual sales for the whole year in the mid to high single-digit per cent range. The EBIT before impairment and restructuring charges will improve in the second half year compared to the first six months and is expected at approx. CHF 250 million for the full year“, says CEO Krüger.

The sales of the Oerlikon Group showed a reduction of -7.4 per cent to CHF 3.8 billion in the first nine months of 2008. The order intake amounted to CHF 3.7 billion, -16.9 per cent below the level of the previous year. Orders on hand had a value of CHF 1.7 billion.

The continuing downward trend in the world's largest textile markets China, India and Turkey, with an industry average of over 60 per cent reduction in order intake, led to a further slowdown of business for Oerlikon Textile. The segment achieved sales of CHF 1.4 billion in the first nine months of 2008 (-31.2 per cent). The semiconductor market, also still weak, had a similar dampening effect on the sales of Oerlikon Esec and Oerlikon Systems.

Overall, Oerlikon experienced a reduction in sales from the textile and semiconductor-related businesses of more than CHF 0.7 billion.

In terms of orders, the volume reduction in the textile and semiconductor business units for the first nine months amounts to a total of CHF 1.1 billion (-43 per cent). In contrast, all other businesses showed a growth in the order intake of CHF 0.3 billion until September, despite a quarter without large orders in Solar – the contracted Sunwell 120 MWp expansion is scheduled to be booked in 2009 as planned.

Possible postponements of projects under negotiation might lead to a temporary slowdown in order growth of the Solar segment in 2008.

The continued strong growth in the other businesses compensated in part for the negative influences of the textile and semiconductor businesses with growth of more than CHF 400 million (+23 per cent), despite negative currency influences of around CHF 110 million. Oerlikon Solar more than doubled its sales with CHF 442 million (an increase of 133.1 per cent) and is thus completely in line with this year's goal.

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