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.
Orders4 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.”