In 2005, the global economy is expected to continue the growth shown in 2004.  Reports and forecasts by leading economic researchers (OECD, WIFO) predict that the GDP of the USA will grow by approximately 3.3% in 2005.  The economic development in Euroland should again remain much more moderate compared to the USA, mainly as a result of continued weak domestic demand and the strength of the Euro against the US dollar, which will dampen export activities of the European exporting industries.

The outlook for the markets relevant to Andritz - pulp, paper, and steel - is also favorable according to market researchers.  In pulp and paper, it is expected that project activity will primarily focus on greenfield pulp mills and major modernizations of existing installations in the southern hemisphere.  In Europe and North America, investment activities should remain moderate, although a slight pickup in the course of the year 2005 can be expected.  

In steel, the very high investment activity in China and Asia seen in 2004, particularly in the stainless steel area, is likely to show some cooling off in 2005, but still is expected to remain at an attractively high level.  Researchers expect the focus of investments to shift to the downstream area of steel strip finishing.  

For the Environment and Process Business Area, centrifuges are expected to continue their high volume growth; margins, however, could be under some pressure, not at least because of increasing steel prices.  The market for thermal sludge treatment should pick up in the course of the year.

Full integration of the newly acquired companies into the Group and the implementation of Group-wide rules and procedures for Controlling, Accounting, IT, Production, and Purchasing will be the main corporate targets for 2005.  This should enable Andritz to realize optimum synergies.

Given the positive forecasts for the global economy and the relevant Andritz markets, the Andritz Group expects Sales and Net Income for 2005 to increase compared to 2004.  However, if the expected positive development of the global economy does not materialize, Sales and Earnings of the Andritz Group may be negatively affected.