ZURICH--(BUSINESS WIRE)--Regulatory News:
ABB’s focus on profitable organic growth and the related strategic initiatives resulted in a strong order increase across all regions in the third quarter.
Total orders[iii] rose to $11.2 billion, boosted by large orders (above $15 million) including a power transmission link in Europe, a mining automation project in the Americas and a gas treatment plant in Africa. Base orders (below $15 million) increased in every region. Continued successful implementation of ABB’s service strategy resulted in a 10-percent increase in service orders in the quarter.
“Our program for profitable organic growth has successfully created healthy order momentum across all regions,” said CEO Ulrich Spiesshofer. “I am encouraged to see attractive large project wins and five consecutive quarters of base order growth.”
In line with a lower order backlog at the start of 2014, revenues were 6 percent lower (4 percent like-for-like[iv]) at $9.8 billion. The operational EBITDA margin was 14.3 percent in the third quarter versus 15.7 percent a year earlier. The margin reflected lower revenues and the result in Power Systems (PS).
“In PS, we achieved significant milestones in project execution, continued to de-risk the portfolio and implement a new business model for offshore wind projects,” Spiesshofer said. “The division broke even in the quarter. We continue to drive our focused action program to complete the turnaround and address the remaining challenges ahead. Overall, our efforts on relentless execution, including our cost savings program, are on track.”
Net income was $734 million and basic earnings per share was $0.32. Targeted net working capital management measures supported cash from operations, which increased 29 percent in the first nine months. ABB initiated the $4-billion share buyback program announced in September and purchased shares with a value of approximately $350 million during the quarter.
“We are driving profitable growth through penetration, innovation and expansion, aimed at growing ahead of the global economy.” the CEO added. “We will carefully manage costs and cash as the short-term outlook for the global economy is increasingly uncertain. The entire management team is taking decisive actions in line with our Next Level strategy, which was announced at our Capital Markets Day in September.”
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[i] Orders up 28 percent on a like-for-like basis. See the “Supplemental Financial Information” attachment to the press release.
[ii] See reconciliation of operational EBITDA to Income from continuing operations before taxes in Note 13 to the Interim Consolidated Financial Statements (unaudited).
[iii] Management discussion of orders and revenues focuses on local currency changes. U.S. dollar changes are reported in the results tables.
[iv] For non-GAAP measures, see the “Supplemental Financial Information” attachment to the press release.
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