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ABB Q3: Solid performance across the business
- Revenues and operational EBITDA higher in all divisions, net income up 10 percent
- Base orders return to year-on-year growth, large project awards remain slow
- New CEO outlines priorities on growth, collaboration and execution
ABB reported higher revenues, earnings and cash flows in the third quarter of 2013, on improved performance across all divisions.
Orders in early-cycle businesses, driven mainly by customer investments in improved productivity and efficiency, grew compared to the same quarter in 2012, while further delays in large project awards - mainly the result of ongoing economic uncertainties - and the strategic repositioning of the Power Systems division resulted in lower large orders.
"It was a solid quarter where we executed well to grow revenues, earnings, cash and net income despite the continued mixed business climate," said Ulrich Spiesshofer, ABB's CEO. "We drove good order growth in a number of key markets, including China and Germany, and our base orders returned to year-over-year growth. Project tendering activity in sectors like power transmission and oil and gas continues to increase but the award of large orders remained slow.
"At the same time, we can do more to improve our performance and deliver greater value to all of our stakeholders," he said. "For example, we have significant opportunities to drive profitable growth through increased market penetration-delivering more to our existing customer segments-and by accelerating the development and marketing of innovative products and packaged solutions. We will also continue to expand into attractive markets, both by growing organically, as well as continuing to fill gaps in the portfolio through bolt-on acquisitions.
"The second focus area will be to improve our collaboration across the businesses to create more customer value by selling and delivering ABB's combined automation and power portfolio. Enhanced collaboration in operations will allow us to drive productivity to the next level.
"Relentless execution will be the third focus area. We will drive sustainable cost savings momentum, cash flow as well as capital efficiency even harder. In addition, we are stepping up the focus on the successful integration of our acquisitions to maximize the return on our investments. The announcement earlier this week that Greg Scheu will lead our global acquisition integration efforts from the senior executive team reflects our commitment to realizing the value of our acquisitions.
"Looking ahead, the long-term growth drivers are fully intact but several forward-looking indicators are mixed and we still face some near-term market uncertainty," Spiesshofer said. "But even in a volatile environment, our strong market positions, leading technologies and broad business portfolio will allow us to capture profitable growth opportunities. Therefore, we will continue to drive the top line in a very targeted way while executing on cost, business-led collaboration and improved capital efficiency."
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