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ABB 6-K 2017
 

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of July 2017

 

Commission File Number 001-16429

 

ABB Ltd

(Translation of registrant’s name into English)

 

P.O. Box 1831, Affolternstrasse 44, CH-8050, Zurich, Switzerland

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ☒ 

Form 40-F ⬜ 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ⬜ 

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indication by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ⬜ 

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes ⬜ 

No ☒ 

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

 

 

 


 

 

This Form 6-K consists of the following:

 

1.              Press release issued by ABB Ltd dated July 20, 2017 titled “ABB: Building growth momentum”.

2.              Q2 2017 Financial Information.

3.     Announcements regarding transactions in ABB Ltd’s Securities made by the directors or the members of the Executive Committee.

 

The information provided by Item 2 above is incorporated by reference into ABB Ltd's registration statement on Form F-3 (File No. 333-180922) and registration statements on Form S-8 (File Nos. 333-190180, 333-181583, 333-179472, 333-171971 and 333-129271) each of which was previously filed with the Securities and Exchange Commission.

  

 


 

 

 

 

 

Zurich, Switzerland, July 20, 2017: Second quarter highlights

ABB: Building growth momentum

 

       Total and base orders grew 3%1; higher orders in all regions

       Revenues up 1%

           Operational EBITA margin2 12.4%, dampened this quarter by commodity prices and some overcapacity

       Net income $525 million

       Cash flow from operating activities $467 million reflects timing of short-term incentive payments

       Net working capital as a percentage of revenues 14.1%, reduced 90 bps on an annual basis

           Active portfolio management: B&R acquisition closed July 6, KEYMILE’s communication business to be acquired Q3   

“In Q2, ABB continued to build its growth momentum as our targeted initiatives are delivering. Order growth was broad-based and across all regions,” said ABB CEO Ulrich Spiesshofer. “Our industry-leading digital offering, ABB Ability, is taking off and starting to contribute to growth.”

“Operational performance in the Power Grids and Industrial Automation divisions was solid in the quarter. Electrification Products and Robotics and Motion improved margins sequentially, but were not able to fully compensate commodity price headwinds and overcapacity during the quarter,” he said. “While we are pleased with the growth momentum, especially the double-digit order growth in Robotics and Motion, we remain firmly focused on further improving operational execution and our cost base.”

“The successful completion of the B&R acquisition and the handover of our last legacy off-shore wind project, Dolwin 2, are solid examples of the disciplined execution of our Next Level strategy.”

Key Figures

 

 

Change

 

 

Change

($ in millions, unless otherwise indicated)

Q2 2017

Q2 2016

US$

Comparable1

H1 2017

H1 2016

US$

Comparable1

Orders

8,349

8,316

0%

+3%

16,752

17,569

-5%

0%

Revenues

8,454

8,677

-3%

+1%

16,308

16,580

-2%

+2%

Operational EBITA2

1,042

1,120

-7%

-5%3

1,985

2,071

-4%

-2%3

as % of operational revenues

12.4%

12.9%

-0.5pts

 

12.3%

12.5%

-0.2pts

 

Net income

525

406

29%

 

1,249

906

38%

 

Basic EPS ($)

0.25

0.19

30%4

 

0.58

0.42

39%4

 

Operational EPS2 ($)

0.30

0.35

-15%4

-11%4

0.58

0.64

-9%4

-6%4

Cash flow from operating activities

467

1,082

-57%

 

976

1,334

-27%

 

 

 

Short-term outlook

Macroeconomic and geopolitical developments are signaling a mixed picture with continued uncertainty. Some macroeconomic signs in the US remain positive and growth in China is expected to continue. The overall global market remains impacted by modest growth and increased uncertainties, e.g., Brexit in Europe and geopolitical tensions in various parts of the world. Oil prices and foreign exchange translation effects are expected to continue to influence the company’s results. With this and the ongoing transformation of ABB, we expect 2017 to be a transitional year.

 

______

1 Growth rates for orders, base orders, revenues and order backlog are on a comparable basis (local currency adjusted for acquisitions and divestitures). US$ growth rates are presented in Key Figures table

2 For a reconciliation of non-GAAP measures, see “Supplemental Reconciliations and Definitions” in the attached Q2 2017 Financial Information

3 Constant currency (not adjusted for portfolio changes)

4 EPS growth rates are computed using unrounded amounts. Comparable operational earnings per share is in constant currency (2014 exchange rates and not adjusted for changes in the business portfolio)

 

 

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Q2 2017 Group results

 

Orders

Total orders were 3 percent higher (stable in US dollars) compared with the second quarter a year ago, as the significant increase in Robotics and Motion and Industrial Automation more than offset the decline in Electrification Products and Power Grids. Large orders grew 5 percent (1 percent in US dollars) and represented 8 percent of the total orders, unchanged compared with the same quarter a year ago. A stronger US dollar versus the prior year period resulted in a negative translation impact on reported orders of 3 percent.

Base orders (below $15 million) increased 3 percent (stable in US dollars), improving in Robotics and Motion, Industrial Automation and Power Grids. Electrification Products decreased 1 percent (4 percent in US dollars), impacted primarily by fewer trading days in the quarter compared with the same period a year ago.

Total service and software orders rose 8 percent (5 percent in US dollars) and increased to 20 percent of total orders compared with 19 percent a year ago.

The order backlog at the end of June 2017 amounted to $23.6 billion, 1 percent lower (7 percent in US dollars) compared with the end of the second quarter a year ago. The book-to-bill2 ratio in the second quarter was 0.99x compared with 0.96x in the second quarter of 2016.

 

Market overview 

Demand patterns in all of ABB’s regions were positive in the quarter:

        Europe  benefited from positive market developments in industry, transport and infrastructure and timing of large capital investments. Total orders improved 6 percent (1 percent in US dollars) with positive contributions from the United Kingdom, Finland, Turkey and Spain more than offsetting declines in Norway and France. Base orders improved 1 percent (4  percent lower in US dollars) with Spain, Sweden and Turkey as the main contributors.

        The Americas was positive, driven by the need for energy-efficient solutions for industry, transport and infrastructure and increased demand for automation in general. Total orders grew 2 percent in the quarter (2 percent in US dollars) on increased large order awards. Base orders declined 2 percent (2 percent in US dollars) as higher demand in the United States and Brazil could not offset declines in Canada. The United States grew 7 percent overall (6 percent in US dollars) and 1 percent in base orders (stable in US dollars).

        Asia, Middle East and Africa (AMEA) grew due to increased demand in industry, transport and infrastructure for energy-efficient and automation solutions. Utilities made selective investments in the quarter. Total orders increased 2 percent (2 percent lower in US dollars) driven primarily by substantial growth in India, Saudi Arabia and South Africa. Total orders in China declined, as higher base orders could not offset lower large order awards. Increased demand in India reflects the continuing need for industrial automation and reliable power solutions. Base orders for the region increased 9 percent (6 percent in US dollars) with positive contributions from China and India. 

Demand patterns in ABB’s three major customer sectors were mixed:

            Utilities continued their selective investments, adding new capacity in emerging markets, upgrading the aging power infrastructure in mature markets and integrating renewable energy globally. They are also investing in automation and control solutions to enhance the stability of the grid. 

        In industry, investments in robotics solutions and  the automotive and food and beverage sectors remained positive. Investments in process industries, especially offshore oil and gas, remained subdued. Selective investments in mining, exploration and downstream oil and gas are expected to continue.

        Transport & infrastructure demand  has been mixed. Demand for building automation solutions as well as solutions involving energy efficiency for rail  transport remained strong while the marine sector, except for cruise ships, suffered from a sharp decline due to the subdued oil and gas sector. Electric Vehicle charging remained a highlight in the quarter.

 

 

 

2/6

 

                                                                                                                                                             


 

 

Revenues

Revenues increased 1 percent (3 percent lower in US dollars) in the second quarter and were higher in Electrification Products and Robotics and Motion. Power Grids was stable and Industrial Automation was lower on the reduced order backlog. Total services and software revenues were stable (2  percent lower in US dollars) and represented 17 percent  of total revenues, unchanged compared with a year ago. 

 

Operational EBITA 

Operational EBITA  was $1,042 million, 5 percent lower in constant currencies (7 percent lower in US dollars). Operational EBITA margin was 12.4 percent, 0.5 percent lower compared with the same period a year ago. Operational EBITA margin improved in Industrial Automation and Power Grids but decreased in the Electrification Products and Robotics and Motion divisions. Operational EBITA was impacted by commodity price increases and overcapacity in some businesses which could not offset the positive net savings effect.

 

Net income, Basic and Operational earnings per share

Net income increased to $525 million from $406 million and basic earnings per share was $0.25 compared with $0.19 for the same quarter of 2016. This result was impacted by lower restructuring and restructuring-related expenses and a higher tax rate of 30% versus 25.1% compared with the same period a year ago. Operational EPS was $0.30 compared to $0.35 for the same quarter of 2016, a decrease of 11 percent in constant currencies2.

 

Cash flow from operating activities 

Cash flow from operating activities was $467 million compared with $1,082 million in 2016 due to the change in timing of short-term incentive payments to the second quarter from the first quarter in 2017. It was also impacted by timing of tax payments, delays in payment from Middle Eastern customers and the positive cash contribution in the previous year from the recently divested cables business. 

 

Share cancelation

In July 2017, based on the shareholders’ vote at the company’s annual general meeting on April 13, 2017, ABB canceled 46.6 million shares. This will be reflected in the third quarter. 

 

Executive Committee changes

Effective April 1, 2017, Timo Ihamuotila joined ABB from Nokia as Chief Financial Officer and a member of the Executive Committee. Effective July 1, 2017, Chunyuan Gu, Managing Director of ABB in China, became President of the Asia, Middle East and Africa (AMEA) region and a member of the Executive Committee. Chunyuan takes over AMEA from Frank Duggan, who was appointed President of the Europe region, succeeding Bernhard Jucker, who retired on June 30 after a long and distinguished career at ABB.

 

 

3/6

 

                                                                                                                                                             


 

 

Q2 divisional performance 

($ in millions, unless otherwise indicated)

Orders

Change

Revenues

Change

Operational EBITA %

CHANGE

US$

Comparable1

US$

Comparable1

Electrification Products

2,512

-4%

-1%

2,509

-1%

+2%

15.0%

-0.8pts

Robotics and Motion

2,219

+12%

+14%

2,087

+3%

+5%

14.9%

-1.3pts

Industrial Automation

1,499

+6%

+8%

1,608

-9%

-7%

12.7%

+0.3pts

Power Grids

2,484

-6%

-3%

2,647

-3%

0%

9.8%

+0.5pts

Corporate & other (incl. inter-division elimination)

-365

 

 

-397

 

 

 

 

ABB Group

8,349

0%

+3%

8,454

-3%

+1%

12.4%

-0.5 pts

 

 

Electrification Products 

Total orders were impacted by fewer trading days in the second quarter versus the second quarter of 2016; total orders for the first half of 2017 were up 1 percent (2 percent lower in US dollars). Revenues grew 2 percent in the quarter (1 percent lower in US dollars). Operational EBITA margin improved sequentially but was lower in the quarter versus a year ago mainly due to higher material costs, which more than offset productivity and cost savings.

 

Robotics and Motion 

Total orders were 14 percent higher (12 percent in US dollars) as all regions and business units contributed to the significant growth. Third-party base orders increased 10 percent (8 percent in US dollars) on continued strong growth in robotics and light industry. Revenues improved 5 percent (3 percent in US dollars). Operational EBITA margin was impacted by product mix, significantly higher commodity prices and under absorption, which more than offset the cost-out measures. 

 

Industrial Automation

Total orders grew 8 percent (6 percent in US dollars) due to selective capital expenditure investments in oil and gas and in mining. Third party base orders continued to be positive. Revenues were 7 percent lower (9 percent in US dollars), reflecting the execution of a lower order backlog. Operational EBITA margin increased slightly as cost and productivity savings offset the lower revenue contribution.

 

Power Grids

Third party base orders grew 2 percent (stable in US dollars) on investments in emerging markets while total orders were impacted by the timing of large order awards. Revenues were steady (3 percent lower in US dollars) on solid order backlog execution. Operational EBITA margin increased 50 basis points to 9.8 percent, reflecting improved productivity, project execution and continued cost savings.  The division’s ‘Power Up’ program to drive transformation and value creation is underway and the company will continue to invest in this initiative in the coming quarters.

 

 

4/6

 

                                                                                                                                                             


 

 

Next Level strategy – Stage 3

 

ABB continued the implementation of its Next Level strategy during the quarter by further shifting its center of gravity to higher growth segments, strengthening its competitiveness and de-risking the portfolio.

On July 6, ABB announced the completion of its acquisition of B&R (Bernecker + Rainer Industrie-Elektronik GmbH), the largest independent provider focused on product- and software-based, open-architecture solutions for machine and factory automation worldwide. This acquisition closes ABB’s historic gap in machine and factory automation and will create a uniquely comprehensive automation portfolio for customers globally. This all-cash acquisition is expected to be EPS-accretive in the first year.

ABB successfully launched its new industry-leading digital offering, ABB Ability, at its customer events in Houston, Hanover and Hangzhou. With more than 180 solutions, across all customer segments, ABB Ability has seen very positive customer response and is contributing to sustainable growth.

On July 3, ABB announced that it had agreed to acquire the mission-critical communication network business from the KEYMILE Group to strengthen its portfolio and further enhance ABB Ability. It will add reliable communications technologies that are essential to maintain today’s dynamic and complex digital electrical grids. The acquisition will bring with it products, software and service solutions, as well as research and development expertise. It is expected to close during the third quarter of 2017.

ABB continues to build on its existing momentum and is further accelerating its operational performance.

The company’s White-Collar Productivity savings program has exceeded expectations since its launch in 2015. ABB is on track to achieve the program’s increased cost reduction target of $1.3 billion within the initially announced timeframe and approximately $200 million lower combined restructuring program and implementation costs than initially announced. ABB is continuing its regular cost-savings programs, leveraging operational excellence and world-class supply chain management to achieve savings equivalent to 3-5 percent of cost of sales each year.

ABB reaffirms the target of its Net Working Capital program to free up approximately $2 billion by the end of 2017. The program is on track; Net Working Capital as a percentage of revenues decreased 90 bps compared with the same period a year ago.

 

Outlook

Macroeconomic and geopolitical developments are signaling a mixed picture with continued uncertainty. Some macroeconomic signs remain positive in the United States and growth in China is expected to continue. The overall global market remains impacted by modest growth and increased uncertainties, e.g., Brexit in Europe and geopolitical tensions in various parts of the world. Oil prices and foreign exchange translation effects are expected to continue to influence the company’s results. With this and the ongoing transformation of ABB, we expect 2017 to be a transitional year.

 

The attractive  long-term  demand outlook in ABB’s three major  customer  sectors — utilities, industry and transport & infrastructure  —  is driven by the Energy and Fourth Industrial Revolutions.

 

ABB is well-positioned to tap into these opportunities for long-term profitable growth with its strong market presence, broad geographic and business scope, technology leadership and financial strength.

 

 

5/6

 

                                                                                                                                                             


 

 

More information

The Q2 2017 results press release and presentation slides are  available  on the ABB News  Center at www.abb.com/news and on the  Investor  Relations homepage at www.abb.com/investorrelations.

 

ABB will host a press conference today starting at 10:00 a.m. Central European Time (CET) (9:00 a.m. BST, 4:00 a.m. EDT). The event will be accessible  by conference call. Callers from the UK should dial +44 203 059 58 62.  From Sweden, the  number to dial is +46 85 051 00 31, and from the  rest  of Europe, +41  58  310 50 00. Callers from the US and Canada should dial +1 866 291 41  66 (toll-free) or +1  631  570 56 13 (long-distance charges apply). Lines will be open 10-15 minutes before the start of the call.   

 

A conference call  and webcast for  analysts and investors is scheduled to begin today at 2:00 p.m. CET (1:00 p.m. BST, 8:00 a.m. EDT). Callers from the UK should dial +44 203 059 58 62.  From Sweden, the  number to dial is +46 85 051 00 31, and from the  rest  of Europe, +41  58  310 50 00. Callers from the US and Canada should dial +1 866 291 41  66 (toll-free) or +1  631  570 56 13 (long-distance charges apply). Callers are requested to phone in 10 minutes before the start of the call.  The  call will also be accessible  on  the ABB website and a recorded session will be available  as a podcast one hour  after  the  end of the conference  call and can be downloaded from our website. www.abb.com/investorrelations

 

ABB (ABBN: SIX Swiss Ex) is a pioneering technology leader in electrification products, robotics and motion, industrial automation and power grids, serving customers in utilities, industry and transport & infrastructure globally. Continuing more than a 125-year history of innovation, ABB today is writing the future of industrial digitalization and driving the Energy and Fourth Industrial Revolutions. ABB operates in more than 100 countries with about 132,000 employees. www.abb.com

 

 

 

Investor calendar 2017

Innovation and Technology Day

September 6, 2017

Third quarter 2017 results

October 26, 2017

Fourth quarter and full year 2017 results

February 8, 2018

Annual General Meeting

March 29, 2018

 

Important notice about forward-looking  information 

This press release includes forward-looking information and statements as well as other statements concerning the outlook  for  our  business,  including those in the sections of this release titled “Short-term outlook”, “Outlook”, and “Next Level strategy – Stage 3”.  These statements are based on  current expectations, estimates and projections about the factors that may affect our future performance, including global economic conditions, the economic conditions of  the regions and industries that are major  markets for ABB Ltd. These expectations,  estimates and projections are  generally identifiable by  statements containing words such as “expects,” “believes,” “estimates,” “targets,”  “plans,” “is likely”, “intends” or similar  expressions. However, there are  many risks and uncertainties, many of which are  beyond our control, that could cause  our  actual results to differ materially from the forward-looking information and statements made in this press release and which could affect our ability to achieve any or all of our stated  targets. The important factors that could cause  such differences include, among others, business risks associated with the volatile global economic environment and political conditions, costs associated with compliance activities, market acceptance of  new  products  and services, changes in governmental regulations and currency  exchange  rates and such other factors as may be discussed from time  to  time  in ABB Ltd’s filings with the U.S. Securities and Exchange Commission, including its Annual Reports on  Form 20-F. Although ABB Ltd believes that its expectations reflected in any such forward-looking statement are based upon reasonable  assumptions, it can give no assurance that those expectations will be achieved.  

 

Zurich, July 20, 2017  

Ulrich Spiesshofer, CEO

 

 


For more information please contact:

Media Relations
Phone: +41 43 317 65 68
Email: media.relations@ch.abb.com

Investor Relations
Phone: +41 43 317 71 11
Email: investor.relations@ch.abb.com

ABB Ltd
Affolternstrasse 44
8050 Zurich
Switzerland

 

 

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1         Q2 2017 Financial Information 


 

  

2         Q2 2017 Financial Information 


 

 

Key Figures

 

 

 

 

 

CHANGE

 

($ in millions, unless otherwise indicated)

Q2 2017

Q2 2016

US$

Comparable(1)

 

Orders

8,349

8,316

0%

3%

 

Order backlog (end June)

23,553

25,338

-7%

-1%

 

Revenues

8,454

8,677

-3%

1%

 

Operational EBITA(1)

1,042

1,120

-7%

-5%(2)

 

 

as % of operational revenues(1)

12.4%

12.9%

-0.5 pts

 

 

Net income

525

406

29%

 

 

Basic earnings per share ($)

0.25

0.19

30%(3)

 

 

Operational earnings per share(1) ($)

0.30

0.35

-15%(3)

-11%(3)

 

Cash flow from operating activities

467

1,082

-57%

 



 

 

 

 

 

 

CHANGE

 

($ in millions, unless otherwise indicated)

H1 2017

H1 2016

US$

Comparable(1)

 

Orders

16,752

17,569

-5%

0%

 

Revenues

16,308

16,580

-2%

2%

 

Operational EBITA(1)

1,985

2,071

-4%

-2%(2)

 

 

as % of operational revenues(1)

12.3%

12.5%

-0.2 pts

 

 

Net income

1,249

906

38%

 

 

Basic earnings per share ($)

0.58

0.42

39%(3)

 

 

Operational earnings per share(1) ($)

0.58

0.64

-9%(3)

-6%(3)

 

Cash flow from operating activities

976

1,334

-27%

 

 

(1)  For a reconciliation of non-GAAP measures see “Supplemental Reconciliations and Definitions” on page 33.

(2)  Constant currency (not adjusted for portfolio changes).

(3) Earnings per share growth rates are computed using unrounded amounts. Comparable Operational earnings per share growth is in constant currency (2014 foreign exchange rates and not adjusted for changes in the business portfolio).

3         Q2 2017 Financial Information 


 

 

 

 

 

CHANGE

 

($ in millions, unless otherwise indicated)

Q2 2017

Q2 2016

US$

Local

Comparable

 

Orders

ABB Group

8,349

8,316

0%

3%

3%

 

 

Electrification Products

2,512

2,624

-4%

-1%

-1%

 

 

Robotics and Motion

2,219

1,978

12%

14%

14%

 

 

Industrial Automation

1,499

1,419

6%

8%

8%

 

 

Power Grids

2,484

2,632

-6%

-3%

-3%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(365)

(337)

 

Third-party base orders

ABB Group

7,681

7,657

0%

3%

3%

 

 

Electrification Products

2,393

2,494

-4%

-1%

-1%

 

 

Robotics and Motion

1,967

1,826

8%

10%

10%

 

 

Industrial Automation

1,327

1,325

0%

2%

2%

 

 

Power Grids

1,977

1,980

0%

2%

2%

 

 

Corporate and Other

17

32

 

 

 

 

Order backlog (end June)

ABB Group

23,553

25,338

-7%

-6%

-1%

 

 

Electrification Products

3,220

3,452

-7%

-5%

-5%

 

 

Robotics and Motion

4,188

4,025

4%

4%

4%

 

 

Industrial Automation

5,710

6,165

-7%

-7%

-7%

 

 

Power Grids

11,860

12,286

-3%

-3%

-2%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(1,425)

(590)

 

Revenues

ABB Group

8,454

8,677

-3%

0%

1%

 

 

Electrification Products

2,509

2,536

-1%

2%

2%

 

 

Robotics and Motion

2,087

2,033

3%

5%

5%

 

 

Industrial Automation

1,608

1,770

-9%

-7%

-7%

 

 

Power Grids

2,647

2,717

-3%

0%

0%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(397)

(379)

 

Operational EBITA

ABB Group

1,042

1,120

-7%

-5%

 

 

 

Electrification Products

373

400

-7%

-4%

 

 

 

Robotics and Motion

312

329

-5%

-2%

 

 

 

Industrial Automation

205

220

-7%

-5%

 

 

 

Power Grids

257

254

1%

4%

 

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(105)

(83)

 

Operational EBITA %

ABB Group

12.4%

12.9%

 

 

 

 

 

Electrification Products

15.0%

15.8%

 

 

 

 

 

Robotics and Motion

14.9%

16.2%

 

 

 

 

 

Industrial Automation

12.7%

12.4%

 

 

 

 

 

Power Grids

9.8%

9.3%

 

 

 

 

Income from operations

ABB Group

884

647

 

 

 

 

 

Electrification Products

333

303

 

 

 

 

 

Robotics and Motion

280

250

 

 

 

 

 

Industrial Automation

203

123

 

 

 

 

 

Power Grids

231

149

 

 

 

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(163)

(178)

 

Income from operations %

ABB Group

10.5%

7.5%

 

 

 

 

 

Electrification Products

13.3%

11.9%

 

 

 

 

 

Robotics and Motion

13.4%

12.3%

 

 

 

 

 

Industrial Automation

12.6%

6.9%

 

 

 

 

 

Power Grids

8.7%

5.5%

 

 

 

 

Cash flow from operating activities

ABB Group

467

1,082

 

 

 

 

 

Electrification Products

259

325

 

 

 

 

 

Robotics and Motion

213

289

 

 

 

 

 

Industrial Automation

143

270

 

 

 

 

 

Power Grids

75

241

 

 

 

 

 

Corporate and Other

(223)

(43)

 

 

 

4         Q2 2017 Financial Information 


 

 

 

 

 

CHANGE

 

($ in millions, unless otherwise indicated)

H1 2017

H1 2016

US$

Local

Comparable

 

Orders

ABB Group

16,752

17,569

-5%

-2%

0%

 

 

Electrification Products

5,040

5,130

-2%

1%

1%

 

 

Robotics and Motion

4,396

4,066

8%

10%

10%

 

 

Industrial Automation

3,181

3,257

-2%

0%

0%

 

 

Power Grids

4,863

5,597

-13%

-11%

-11%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(728)

(481)

 

 

 

 

Third-party base orders

ABB Group

15,279

15,300

0%

2%

2%

 

 

Electrification Products

4,758

4,845

-2%

1%

1%

 

 

Robotics and Motion

3,958

3,629

9%

11%

11%

 

 

Industrial Automation

2,772

2,777

0%

2%

2%

 

 

Power Grids

3,759

3,996

-6%

-4%

-4%

 

 

Corporate and Other

32

53

 

 

 

 

Order backlog (end June)

ABB Group

23,553

25,338

-7%

-6%

-1%

 

 

Electrification Products

3,220

3,452

-7%

-5%

-5%

 

 

Robotics and Motion

4,188

4,025

4%

4%

4%

 

 

Industrial Automation

5,710

6,165

-7%

-7%

-7%

 

 

Power Grids

11,860

12,286

-3%

-3%

-2%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(1,425)

(590)

 

Revenues

ABB Group

16,308

16,580

-2%

1%

2%

 

 

Electrification Products

4,802

4,825

0%

2%

2%

 

 

Robotics and Motion

4,013

3,906

3%

5%

5%

 

 

Industrial Automation

3,157

3,434

-8%

-6%

-6%

 

 

Power Grids

5,052

5,170

-2%

0%

2%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(716)

(755)

 

Operational EBITA

ABB Group

1,985

2,071

-4%

-2%

 

 

 

Electrification Products

695

707

-2%

1%

 

 

 

Robotics and Motion

586

615

-5%

-2%

 

 

 

Industrial Automation

409

422

-3%

-2%

 

 

 

Power Grids

502

437

15%

19%

 

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(207)

(110)

 

Operational EBITA %

ABB Group

12.3%

12.5%

 

 

 

 

 

Electrification Products

14.6%

14.7%

 

 

 

 

 

Robotics and Motion

14.6%

15.8%

 

 

 

 

 

Industrial Automation

13.0%

12.2%

 

 

 

 

 

Power Grids

10.0%

8.5%

 

 

 

 

Income from operations

ABB Group

1,914

1,431

 

 

 

 

 

Electrification Products

640

565

 

 

 

 

 

Robotics and Motion

532

506

 

 

 

 

 

Industrial Automation

409

300

 

 

 

 

 

Power Grids

453

322

 

 

 

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(120)

(262)

 

 

 

 

Income from operations %

ABB Group

11.7%

8.6%

 

 

 

 

 

Electrification Products

13.3%

11.7%

 

 

 

 

 

Robotics and Motion

13.3%

13.0%

 

 

 

 

 

Industrial Automation

13.0%

8.7%

 

 

 

 

 

Power Grids

9.0%

6.2%

 

 

 

 

Cash flow from operating activities

ABB Group

976

1,334

 

 

 

 

 

Electrification Products

464

349

 

 

 

 

 

Robotics and Motion

467

407

 

 

 

 

 

Industrial Automation

253

322

 

 

 

 

 

Power Grids

229

267

 

 

 

 

 

Corporate and Other

(437)

(11)

 

 

 

5         Q2 2017 Financial Information 


 

Operational EBITA

 

 

 

Electrification

Robotics

Industrial

Power

 

($ in millions, unless otherwise indicated)

ABB

Products

and Motion

Automation

Grids

 

 

Q2 17

Q2 16

Q2 17

Q2 16

Q2 17

Q2 16

Q2 17

Q2 16

Q2 17

Q2 16

 

Revenues

8,454

8,677

2,509

2,536

2,087

2,033

1,608

1,770

2,647

2,717

 

FX/commodity timing

 

 

 

 

 

 

 

 

 

 

 

differences in total revenues

(26)

37

(16)

2

4

1

1

6

(13)

17

 

Operational revenues

8,428

8,714

2,493

2,538

2,091

2,034

1,609

1,776

2,634

2,734

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

884

647

333

303

280

250

203

123

231

149

 

Acquisition-related amortization

56

71

26

31

16

24

2

3

9

9

 

Restructuring and

 

 

 

 

 

 

 

 

 

 

 

restructuring-related expenses(1)

84

367

13

52

17

52

5

89

18

76

 

Non-operational pension cost

(7)

1

1

(1)

(1)

(1)

 

Changes in retained obligations of

 

 

 

 

 

 

 

 

 

 

 

divested businesses

 

Changes in pre-acquisition estimates

14

14

 

Gains and losses from sale of businesses

7

(2)

 

Acquisition-related expenses and certain

 

 

 

 

 

 

 

 

 

 

 

non-operational items

58

9

14

5

25

2

 

FX/commodity timing

 

 

 

 

 

 

 

 

 

 

 

differences in income from operations

(40)

12

(14)

(1)

3

(8)

5

(25)

19

 

Operational EBITA

1,042

1,120

373

400

312

329

205

220

257

254

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational EBITA margin (%)

12.4%

12.9%

15.0%

15.8%

14.9%

16.2%

12.7%

12.4%

9.8%

9.3%



 

 

 

 

Electrification

Robotics

Industrial

Power

 

($ in millions, unless otherwise indicated)

ABB

Products

and Motion

Automation

Grids

 

 

H1 17

H1 16

H1 17

H1 16

H1 17

H1 16

H1 17

H1 16

H1 17

H1 16

 

Revenues

16,308

16,580

4,802

4,825

4,013

3,906

3,157

3,434

5,052

5,170

 

FX/commodity timing

 

 

 

 

 

 

 

 

 

 

 

differences in total revenues

(105)

18

(27)

(7)

(7)

(2)

(12)

21

(38)

(3)

 

Operational revenues

16,203

16,598

4,775

4,818

4,006

3,904

3,145

3,455

5,014

5,167

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

1,914

1,431

640

565

532

506

409

300

453

322

 

Acquisition-related amortization

115

142

52

62

34

47

4

6

17

18

 

Restructuring and

 

 

 

 

 

 

 

 

 

 

 

restructuring-related expenses(1)

132

436

13

57

27

59

9

93

21

94

 

Non-operational pension cost

(14)

1

2

(1)

1

(2)

(2)

 

Changes in retained obligations of

 

 

 

 

 

 

 

 

 

 

 

divested businesses

94

 

Changes in pre-acquisition estimates

22

22

 

Gains and losses from sale of businesses

(331)

(2)

 

Acquisition-related expenses and certain

 

 

 

 

 

 

 

 

 

 

 

non-operational items

166

11

18

7

52

4

 

FX/commodity timing

 

 

 

 

 

 

 

 

 

 

 

differences in income from operations

(91)

29

(29)

(1)

(6)

3

(19)

23

(39)

1

 

Operational EBITA

1,985

2,071

695

707

586

615

409

422

502

437

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational EBITA margin (%)

12.3%

12.5%

14.6%

14.7%

14.6%

15.8%

13.0%

12.2%

10.0%

8.5%

 

(1) Amounts also include the incremental implementation costs in relation to the White Collar Productivity program.

6         Q2 2017 Financial Information 


 

Depreciation and Amortization

 

 

 

Electrification

Robotics

Industrial

Power

 

($ in millions)

ABB

Products

and Motion

Automation

Grids

 

 

Q2 17

Q2 16

Q2 17

Q2 16

Q2 17

Q2 16

Q2 17

Q2 16

Q2 17

Q2 16

 

Depreciation

180

194

50

54

34

35

12

15

43

45

 

Amortization

78

93

29

34

19

27

3

5

15

16

 

including total acquisition-related amortization of:

56

71

26

31

16

24

2

3

9

9



 

 

 

 

Electrification

Robotics

Industrial

Power

 

($ in millions)

ABB

Products

and Motion

Automation

Grids

 

 

H1 17

H1 16

H1 17

H1 16

H1 17

H1 16

H1 17

H1 16

H1 17

H1 16

 

Depreciation

364

381

100

107

68

70

25

29

86

89

 

Amortization

157

186

58

68

40

54

6

9

30

32

 

including total acquisition-related amortization of:

115

142

52

62

34

47

4

6

17

18



Orders received and revenues by region

 

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

 

 

 

 

 

 

Com-

 

 

 

 

Com-

 

Q2 17

Q2 16

US$

Local

parable

Q2 17

Q2 16

US$

Local

parable

 

Europe

2,843

2,802

1%

5%

6%

2,813

2,949

-5%

-1%

1%

 

The Americas

2,441

2,401

2%

2%

2%

2,472

2,519

-2%

-1%

-1%

 

Asia, Middle East and Africa

3,065

3,113

-2%

2%

2%

3,169

3,209

-1%

1%

1%

 

ABB Group

8,349

8,316

0%

3%

3%

8,454

8,677

-3%

0%

1%



 

 

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

 

 

 

 

 

 

Com-

 

 

 

 

Com-

 

H1 17

H1 16

US$

Local

parable

H1 17

H1 16

US$

Local

parable

 

Europe

5,970

6,348

-6%

-2%

4%

5,507

5,566

-1%

3%

6%

 

The Americas

4,803

4,656

3%

3%

3%

4,804

4,816

0%

0%

0%

 

Asia, Middle East and Africa

5,979

6,565

-9%

-6%

-6%

5,997

6,198

-3%

-1%

-1%

 

ABB Group

16,752

17,569

-5%

-2%

0%

16,308

16,580

-2%

1%

2%

7         Q2 2017 Financial Information 


 

 

 

 

Interim Consolidated Financial Information

 

 

  

 

 

ABB Ltd Interim Consolidated Income Statements (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

Three months ended

 

($ in millions, except per share data in $)

Jun. 30, 2017

Jun. 30, 2016

Jun. 30, 2017

Jun. 30, 2016

 

Sales of products

13,451

13,675

6,982

7,172

 

Sales of services and software

2,857

2,905

1,472

1,505

 

Total revenues

16,308

16,580

8,454

8,677

 

Cost of sales of products

(9,643)

(10,069)

(4,981)

(5,358)

 

Cost of services and software

(1,693)

(1,738)

(874)

(904)

 

Total cost of sales

(11,336)

(11,807)

(5,855)

(6,262)

 

Gross profit

4,972

4,773

2,599

2,415

 

Selling, general and administrative expenses

(2,678)

(2,675)

(1,367)

(1,405)

 

Non-order related research and development expenses

(610)

(648)

(319)

(343)

 

Other income (expense), net

230

(19)

(29)

(20)

 

Income from operations

1,914

1,431

884

647

 

Interest and dividend income

35

38

18

20

 

Interest and other finance expense

(153)

(146)

(74)

(74)

 

Income from continuing operations before taxes

1,796

1,323

828

593

 

Provision for taxes

(456)

(350)

(248)

(149)

 

Income from continuing operations, net of tax

1,340

973

580

444

 

Income (loss) from discontinued operations, net of tax

(1)

(2)

1

(1)

 

Net income

1,339

971

581

443

 

Net income attributable to noncontrolling interests

(90)

(65)

(56)

(37)

 

Net income attributable to ABB

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