Sulzer confident of hitting target

Fred Kindle gives the thumbs up to Sulzer's future Keystone

Sulzer expects second-half operating results in its core business to exceed first-half levels, the head of the Swiss industrial group said on Friday.

“Our expectations for the current year are fully intact,” chief executive Fred Kindle said in an interview with Swiss newspaper “Der Landbote”. “For the second half, we expect another improvement of operating results in the core business.”

He reiterated that Sulzer’s performance would depend in part of the state of the global economy, but said the company was less vulnerable to cyclical swings since its recent restructuring.

Sulzer is aiming for core sales of more than SFr1.8 billion ($1.1 billion) in 2001, and expects to raise operating profits before goodwill amortisation and special items to more than SFr120 million from SFr87 million in 2000.

With the help of up to SFr700 million of acquisitions and organic growth, Kindle still aims to boost sales to SFr3 billion by 2003, although he did not go into details about the timing of the expected purchases.

Sulzer shares managed to recover some ground on Friday, unwinding some of this week’s selling pressure over concern that it could be dragged into legal battles in the United States involving its former medical unit Sulzer Medica.

Medica, in which Sulzer still holds a small equity stake after this summer’s spin-off, faces thousands of potentially costly product liability claims from patients who were given faulty artificial hip and knee implants.

Kindle said Sulzer saw no legal or moral grounds on which it could be implicated in the claims against Medica, although theoretically it was possible for affected patients to sue Sulzer, too.

Kindle said it was “completely open” whether a US court was competent to handle a court case involving Sulzer and whether the Swiss ex-parent company could be held liable for problems at Medica unit, Sulzer Orthopedics.

Sulzer shares fell this week after news that a US court would allow some of the individual lawsuits against Medica to proceed, undermining stock market confidence that the medical devices firm could weather the storm.

The provisional ruling by the Appelate Court of the Sixth District reopened the possibility of large awards of punitive damages against Europe’s largest maker of orthopaedic devices.

It threatens to quash a controversial September injunction by a lower district court suspending all individual suits in preference of Medica’s proposed $783 million class settlement.

swissinfo with agencies