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John Simon

Ben Coyne

ABB AT A GLANCE

P/E ► 11.8 HIGH EV/EBITDA ► 8.70 HIGH ROA ► 10.8% LOW ROE ► 28.2% HIGH Debt to Equity ► 1.97 HIGH Current Ratio ► 1.52 LOW Interest Coverage Ratio ► 13.9 HIGH

 

 

 

 

 

 

Revenue, Net Income, and Net MarginRevenue, Gross Profit, and Gross MarginOperating IncomeEbitIncome Before TaxesNet Income from Continuing OpsInterest vs Continuing IncomeInterest CoverageOperating ExpensesSG&AAmortization & Depreciation

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[trends and forces overview]

[edit] Business and Financials

The company serves electric, gas, and water utilities, as well as industrial and commercial customers, with a broad range of products, systems, and services for power transmission, distribution, and power plant automation. The company also delivers automation systems for measurement, control, motion, protection, and plant optimization across a full range of industries. The company applies its expertise to develop creative ways of integrating its products and systems with customers' business processes to enhance their productivity and efficiency. The company is international in scope and generates revenues in numerous currencies. The company operates in approximately 100 countries, and has structured its global organization into four regions: Europe, the Americas, Asia, and the Middle East and Africa (MEA), which contributed roughly 46%, 19%, 25%, and 10% respectively to total revenue. The company is headquartered in Zurich, Switzerland. ABB has four operating segments with a range of products. However, 55% of 2008 revenue and 68% of operating profits are driven by ABB's niche position in switchgear circuit breakers.

[edit] Business Segments

[edit] Power Products (31.0% of 2008 Revenue)

The Power Products division serves electric, gas, and water utilities, as well as industrial and commercial customers with a broad range of products and services for power transmission and distribution. Key technologies include high- and medium-voltage switchgear and apparatus, circuit breakers for various current and voltage levels, power and distribution transformers, and sensors and products to automate and control electrical and other utility networks.

[edit] Power Systems (17.9% of 2008 Revenue)

The Power Systems division serves electric, gas, and water utilities, as well as industrial and commercial customers, with a broad range of systems and services for power generation, transmission, and distribution. Key technologies include substations, high-voltage power converters, advanced cables for underground and undersea power transmission, and systems to automate and control power plants, electrical, and other utility networks.

[edit] Automation Products (26.6% of 2008 Revenue)

The Automation Products division provides products, with related services, that are used as components in machinery, switchboards, distribution panels, and building and automation systems. The Automation Products offering covers a wide range of products and services including low-voltage switchgear, breakers, switches, control products, DIN-rail components, enclosures, wiring accessories, instrumentation, drives, motors, generators, and power electronics systems. These products help customers to improve productivity, save energy, and increase safety. Key applications include power distribution, protection and control, energy conversion, data acquisition and processing, and actuation. The majority of these applications are for industrial applications, with others provided for building construction, rail transportation, and utilities.

[edit] Process Automation (20.2% of 2008 Revenue)

The Process Automation division provides products, systems, and services for the automation and optimization of industrial processes. The main offerings are process automation, plant electrification and quality control systems, analytical measurement devices, turbochargers, and marine propulsion and control systems. The key end markets are the oil and gas, pulp and paper, metals and minerals, chemicals and pharmaceuticals, turbocharging, and marine industries.

[edit] Robotics (4.3% of 2008 Revenue)

The Robotics division offers robot products, systems, and service for the automotive and manufacturing industries. The division develops standardized manufacturing cells for machine tending, welding, cutting, painting, and finishing and provides packaged systems to Auto Makers for press automation, paint process automation, and power train assembly. The division also provides a full range of robotics services, from product maintenance to system design.

[edit] Trends and Forces

[edit] Increasing Revenue from Developing Nations

in 2008 for the first time in ABB's history, revenue from developing nations exceeded revenue from developed nations.

[edit] Need for Investment in Power Infrastructure

[edit] Worldwide Focus on Efficient Energy Production

[edit] Competition

[edit] Siemens AG (SI)

[edit] Emerson Electric Company (EMR)

[edit] Honeywell International (HON)

[edit] Rockwell Automation (ROK)

[edit] References

1. ↑ ^{1.0 1.1 1.2} ABB 2008 6-K (filed 2/14/2009)