News Column

ABB delivers strong order growth and cash in Q2

July 22, 2014



· Orders up 13%; book-to-bill ratio of 1.04x · Group operational EBITDA impacted by loss in Power Systems (PS) · Decisive step change actions implemented in PS · Cash from operations up by more than $300 million · Successful execution of announced portfolio pruning Zurich, Switzerland, July 23, 2014 – ABB today reported strong order growth, stable revenues and a significant increase in cash from operations for the second quarter of 2014. The lower operational EBITDA margin mainly reflects ongoing project-related challenges in the Power Systems (PS) division.

Orders[i] (http://connect.ne.cision.com#_edn1) of $10.6 billion were 14 percent higher (13 percent on a like-for-like basis2) compared with the same quarter in 2013. Base orders accelerated and large orders grew more than 70 percent. The positive growth momentum was supported across all regions.

“Last October we said that we will drive organic growth through penetration, innovation and expansion and now we are delivering results,” said ABB Chief Executive Officer Ulrich Spiesshofer. “Our focused actions are paying off and support overall increased order momentum. In the second quarter we saw encouraging growth in our two largest markets, the US and China.”

The strong order intake resulted in a positive book-to-bill ratio of 1.04x. ABB delivered steady revenues of $10.2 billion despite the lower opening order backlog.

Group operational EBITDA was impacted by a loss in the PS division related to ongoing project charges in large engineering, procurement and construction (EPC) projects for offshore wind and solar power generation. New management has taken strict actions to de-risk the PS portfolio and adjust capacity. In addition to the exit from the solar EPC business, ABB is implementing a new business model for offshore wind EPC. “As said previously, PS is likely to weigh on earnings in the coming quarters. Spiesshofer said. “We are driving the PS turnaround as a top priority and made good progress in lowering the exposure.”

Operational EBITDA margin2 was stable to higher for the remaining divisions, excluding the expected dilutive impact of the Power-One acquisition in Discrete Automation and Motion. Cash from operations improved by more than 60 percent to $888 million in the quarter.

ABB successfully executed on its announced strategic portfolio pruning of businesses that have limited synergies with the rest of the portfolio. “Since October last year, we have moved quickly on our commitment to optimize the portfolio in a value-creating way and to strengthen the focus on the core,” Spiesshofer said.

“For the second half of the year we will continue to push hard on our organic growth initiatives in a mixed market environment,” he said. “We will drive our relentless execution on cash and further step up the momentum on cost savings. We are confident that our balanced growth and execution initiatives will yield positive results for our shareholders.”

ABB will host a capital markets day on September 9 in London to communicate its new strategy and financial targets as well as priorities for value creation and capital allocation.

The complete press release including the appendices is available at http://www.abb.com/news (http://www.abb.com/news_) ABB Group Corporate Communications, Zurich Thomas Schmidt, Antonio Ligi Tel: 41 43 317 7111 Fax: 41 43 317 7958 media.relations@ch.abb.com

Investor Relations Switzerland: Tel. 41 43 317 7111 USA: Tel. 1 203 750 7743 investor.relations@ch.abb.com

 For further information please refer to http://www.abb.com/news ABB is on Facebook: www.facebook.com/ABB (http://www.facebook.com/aroundABB) ABB is on Twitter: www.twitter.com/ABBgroupnews ABB is on YouTube: http://www.youtube.com/abb



This information was brought to you by Cision http://news.cision.com

http://news.cision.com/abb/r/abb-delivers-strong-order-growth-and-cash-in-q2,c9619816

The following files are available for download:

http://mb.cision.com/Main/417/9619816/269117.pdf Press release English version (pdf)


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Source: Cision


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