E_mg_GB_03_vorne-29_3_04

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74 GEA forecasts higher new orders and sales Despite the persistently adverse impact that the euro’s exchange rate – particularly against the U.S. dollar – is expected to have on business volumes, GEA is forecasting a modest increase in its new orders and sales. Although the U.S. primary and secondary energy markets are not expected to recover just yet, the American dairy farm systems market should improve – provided that the muchpublicized first case of BSE remains a one-off. GEA is mitigating regional fluctuations in its markets by extending its market and technology leadership, implementing cost-cutting measures as swiftly as possible, and developing new market segments. Its goal is to increase its earnings significantly. Lurgi forecasts recovery Lurgi believes that in 2004 it will benefit from the anticipated recovery in business by virtue of its outstanding technological position. This subgroup expects to win contracts for delayed big-ticket projects and to close deals on a number of promising projects involving methanol and petrochemical plant. The markets it intends to focus on this year are the Middle East, China, southeast Asia and South America. Lurgi sees further lucrative business opportunities in the development of technology chains for gas-based petrochemicals as an alternative to oil and in bio-diesel plant and conceptual studies on bio-ethanol plant. If these expectations fail to materialize during the course of the year, further capacity adjustments may well be needed in view of the insufficient level of capacity utilization at present. Lurgi Lentjes predicts strong performance in 2004 Lurgi Lentjes has laid the foundations for a strong performance this year by focusing on profitable, limited-risk proprietary technologies and reorganizing its corporate and management structures. In 2004 it again expects to win a high level of new orders on the back of its strong market position in key projects. Zimmer forecasts higher earnings Although conditions in 2004 are likely to be difficult, Zimmer expects to increase its earnings this year. The euro’s strength against the U.S. dollar will continue to have an adverse impact on the market environment for industrial plant engineering. In the Middle East, the propensity to invest will continue to be low. The potential performance of markets in the Americas and western Europe must also be viewed with some skepticism. Nonetheless, the signals coming out of eastern Europe are increasingly encouraging, and the textile industry in India and Pakistan is expected to add capacity. Although the Chinese market will continue to expand in the field of polymers and fibers, this growth will be very much localized, fueling strong price competition that will be intensified by the local currency’s peg to the U.S. dollar.
MANAGEMENT SHARE STRATEGY SPECIAL SECTION MANAGEMENT REPORT FINANCIAL STATEMENTS FURTHER INFORMATION Dynamit Nobel confident about 2004 Economic Environment • Situation of the Company • Organization and Structure • Risk Report • Employees • Performance of the Subgroups • Outlook In the current year Dynamit Nobel once again expects to see only a slight increase in demand from its main customer segments. It should manage to raise its sales to the automotive industry further by launching new products and technologies in its plastics and specialty chemicals businesses. This subgroup also expects to see a continuation of the strong performance in its advanced-ceramics business, especially in the fields of medical equipment and special engineering applications. Dynamit Nobel is forecasting growing unit sales and rising prices in its pigment chemicals business in 2004. If the euro continues to appreciate against the U.S. dollar, this will affect Dynamit Nobel’s sales and earnings. Its business this year will be impacted by the process of disposals. As a result of divestments, this subgroup is forecasting slightly lower sales and higher earnings for 2004. 2004 will be the year of implementation for the mg Group The current year will be one of implementation for the mg Group. This will center on the successful disposal of the Chemicals division and the restructuring of the mg Group, and will put the company back on track for growth and expansion in 2005. The Group’s sales – excluding acquisitions – will then be in the order of a4.5 billion. Its profitability will increase substantially on the back of GEA’s robust performance, the improvement in the Group’s financial structure – relieving much of the pressure on its financial income – and the sharp reduction in its holding-company costs. Assuming the economic environment improves, its pre-tax return on sales should be raised to five percent. Should the right opportunities arise, mg will once again be in the market for acquisitions. Outlook for discontinued operations Year of restructuring at solvadis In 2004, solvadis is restricting its activities to the distribution of base and industrial chemicals. Its Natural Products and Specialty Chemicals strategic business units left the mg Group at the beginning of 2004 when Safic-Alcan was sold. This year, solvadis will continue to restructure low-margin businesses and improve its supply chain management in order to strengthen its sales activities and supplier relationships. Reducing its administrative functions will have a beneficial impact on its costs. In view of the persistently difficult market conditions, however, the company does not expect 2004 to bring any improvement on the disappointing level of earnings reported last year for its remaining Distribution strategic business unit. Frankfurt am Main, March 23, 2004 The Executive Board Udo Stark Karlheinz Hornung Jürg Oleas Klaus Moll Peter Steiner 75
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Consolidated Key Figures 2003 RESUL
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Key Figures for the mg Group RESULT
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