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 2012

 

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 x

Form 40-F o

 

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): o

 

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): o

 

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 o

No x

 

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 26, 2012.

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

 

The information provided by Item 1 above is deemed filed for all purposes under the Securities Exchange Act of 1934.

 

2



 

Press Release

 

Steady top line growth in a mixed market

 

·                  Orders and revenues increased(1), orders steady to higher in all regions

·                  Operational EBITDA(2) and margin lower vs Q2 2011, margin up 1% point vs Q1 2012

·                  Thomas & Betts acquisition completed, solid first contribution to operational EBITDA

·                  Significant foreign exchange translation negatively impacts top line and earnings

 

Zurich, Switzerland, July 26, 2012 — ABB reported higher orders and revenues in the second quarter of 2012 despite short-term macroeconomic volatility as customers in almost all regions continued to invest in power grid upgrades and improved industrial productivity.

 

Orders received grew 9 percent (6 percent organic(3)) to $10.1 billion while revenues rose to $9.7 billion, representing a 6 percent increase (3 percent organic). Utilities continued to invest in transmission grids, while industrial customers, especially in oil and gas, increased spending to secure reliable power and improve productivity.

 

Operational EBITDA amounted to $1.5 billion, a 5 percent decrease compared to the same quarter in 2011 (-9 percent organic). The operational EBITDA margin was 15.1 percent versus 16.0 percent the previous year. Cost savings of about $280 million offset the impact of lower prices and project margin slippages, while growth investments in selling and R&D supported volume increases. An unfavorable business mix also impacted the operational EBITDA margin, while significant differences in foreign exchange rates compared with the second quarter of 2011 reduced our US-dollar reported revenues by approximately $600 million and operational EBITDA by approximately $100 million.

 

Cash flow from operations was approximately $300 million lower than Q2 last year. Total divisional cash from operations increased by $40 million. Group cash flow reflects lower cash generation from hedging of corporate exposures as a result of the strengthening US dollar.

 

Net income amounted to $656 million, including the negative impact of the strengthening US dollar and transaction and amortization-related charges(4) of approximately $100 million related to the acquisition of US low voltage product manufacturer Thomas & Betts, which was completed on May 16 of this year.

 

“These results clearly show how our balanced business and regional scope, together with good execution on cost, allow us to produce solid results even in a mixed market,” said Joe Hogan, ABB’s CEO. “We’re also satisfied to see operational profitability improve compared to the first quarter. The macroeconomic view remains uncertain, but the positive developments we’ve seen in China, the continued strength of the US market and our resilience in Europe make us more confident about the short-term outlook than we were three months ago.”

 

2012 Q2 key figures

 

 

 

 

 

 

 

Change

 

$ millions unless otherwise indicated

 

Q2 12

 

Q2 11

 

US$

 

Local

 

Orders

 

10’052

 

9’867

 

2

%

9

%

Order backlog (end June)

 

29’070

 

29’983

 

-3

%

6

%

Revenues

 

9’663

 

9’680

 

0

%

6

%

EBIT

 

1’001

 

1’337

 

-25

%

 

 

as % of revenues

 

10.4

%

13.8

%

 

 

 

 

Operational EBITDA

 

1’471

 

1’547

 

-5

%

 

 

as % of operational revenues

 

15.1

%

16.0

%

 

 

 

 

Net income attributable to ABB

 

656

 

893

 

-27

%

 

 

Basic net income per share ($)

 

0.29

 

0.39

 

 

 

 

 

Cash flow from operating activities

 

595

 

891

 

-33

%

 

 

 


(1)  Management discussion of orders and revenues focuses on local currency changes. U.S. dollar changes are reported in results tables

(2) See reconciliation of Operational EBITDA in Note 13 to the Interim Consolidated Financial Information (unaudited)

(3) Organic changes exclude the acquisition of Thomas & Betts in mid-May 2012

(4) Includes inventory step-up

 

3



 

Summary of Q2 2012 results

 

Orders received and revenues

 

Macroeconomic uncertainties continued to impact the timing of large power investments in most regions during the second quarter. Nevertheless, utility customers continued to invest in selected projects to strengthen grid reliability and increase capacity. Oil and gas customers also invested in power equipment to secure reliable power supplies for production and processing. As a result, orders in the power divisions were steady to higher in most key markets, such as the US, Brazil, China, and India. Power orders were steady in Europe.

 

On the automation side, the need for energy-efficient solutions and higher productivity and quality drove order growth across several businesses and regions. The acquisition of Thomas & Betts significantly expanded ABB’s access to the key North American automation market and supported strong automation order growth in the region. The acquisition had no material impact on automation orders in other regions. North American automation orders also increased on an organic basis. Orders for Low Voltage Products in China rebounded in the quarter. Automation orders increased in Europe as demand in countries like the UK, Norway and in eastern Europe more than offset lower industrial activity in southern Europe. Automation orders declined in Germany compared to the same quarter in 2011 when a large order was won for rail equipment.

 

Base orders (below $15 million) increased 4 percent (1 percent organic). Large orders (above $15 million) increased 43 percent in the quarter and represented 15 percent of total orders compared to 12 percent in the year-earlier period.

 

The order backlog at the end of June 2012 amounted to $29 billion, a local-currency increase of 6 percent compared to the year-earlier period and an increase of 1 percent versus the end of the first quarter of 2012.

 

Revenues in the power divisions were flat compared to the same quarter a year ago, mainly reflecting the variable timing of large projects being executed out of the backlog. Revenues were higher in both Discrete Automation and Motion and in Process Automation, supported by the backlog, and were slightly lower in Low Voltage Products on an organic basis. Service revenues outgrew total revenues and were 11 percent higher in the quarter, amounting to 16 percent of total revenues, unchanged versus the same quarter a year earlier. Currency translation effects reduced reported US-dollar revenues by approximately $600 million in the quarter compared to the same quarter in 2011.

 

Earnings and net income

 

Operational EBITDA in the second quarter of 2012 amounted to $1.5 billion, a decline of 5 percent over the year-earlier period. Included in operational EBITDA is a contribution of approximately $60 million from Thomas & Betts. The decline was mainly due to negative foreign exchange translation impacts of approximately $100 million and an unfavorable business mix; cost savings effectively offset pricing pressure and net project margin slippages in the Power Systems division, while higher investments in sales and R&D helped generate offsetting volume gains.

 

Cost savings of approximately $280 million were achieved in the quarter, of which roughly 50 percent came from global sourcing initiatives, 45 percent from operational excellence projects and about 5 percent from footprint changes. Costs associated with the savings measures in the

 

4



 

quarter amounted to approximately $15 million. For the first half of the year, savings reached approximately $540 million on associated costs of approximately $35 million.

 

Net income for the quarter decreased 27 percent to $656 million and resulted in basic earnings per share of $0.29 compared to $0.39 in the year-earlier period. Most of the difference results from the strengthening of the US dollar and acquisition-related expenses.

 

Balance sheet and cash flow

 

Net debt at the end of the second quarter was $4 billion compared to a net cash position at the end of the previous quarter of $1.4 billion. The change primarily reflects the dividend payment in May of approximately $1.6 billion as well as the Thomas & Betts acquisition.

 

Cash from operating activities decreased compared to the same quarter of 2011, as higher aggregate cash from the operating divisions was more than offset by significant foreign exchange movements on derivatives used to manage Corporate balance sheet exposures.

 

In May of 2012, ABB issued US-dollar bonds totaling $2.5 billion—its largest ever bond offering—with favorable rates on 5-, 10- and 30-year maturities.

 

Acquisitions

 

During the second quarter, ABB completed the acquisition of US-based Thomas & Betts, a North American leader in low voltage products, first announced in January 2012. Thomas & Betts contributed revenues of approximately $310 million and operational EBITDA of approximately $60 million to ABB’s second quarter results.

 

Outlook

 

Uncertainty around the short-term growth prospects for Europe, the emerging markets and the US continues to challenge the company’s ability to reliably forecast its business performance over the next several months. At the same time, the second quarter results provided several reasons to be more optimistic, such as the stability in operational EBITDA margins in the Power Products division over the past three quarters in the face of significant competitive challenges; the resilience of orders in Europe despite ongoing economic weakness in southern Europe; higher orders in key power and automation businesses in China (including construction); sustained order growth across the portfolio in the US; continued significant investments in power transmission around the world; and further indications that price pressure on new power orders is easing.

 

The longer-term outlook in ABB’s major end markets remains favorable, driven by megatrends such as the need for greater resource efficiency, increasing urbanization in the emerging markets, and the growing demand for more, and more efficient and reliable, power delivery.

 

Therefore, management is cautiously optimistic that the business environment over the remainder of 2012 will support continued growth and profitability in line with its 2011-2015 targets, provided that there is no further deterioration in the macroeconomic environment. Management will nevertheless continue to focus on reducing costs and ensuring that investments in growth are generating returns in line with our longer-term targets.

 

5



 

Divisional performance Q2 2012

 

Power Products

 

 

 

 

 

 

 

Change

 

$ millions unless otherwise indicated

 

Q2 12

 

Q2 11

 

US$

 

Local

 

Orders

 

2’791

 

2’810

 

-1

%

5

%

Order backlog (end June)

 

8’692

 

8’955

 

-3

%

5

%

Revenues

 

2’610

 

2’783

 

-6

%

0

%

EBIT

 

302

 

417

 

-28

%

 

 

as % of revenues

 

11.6

%

15.0

%

 

 

 

 

Operational EBITDA

 

387

 

454

 

-15

%

 

 

as % of operational revenues

 

14.7

%

16.5

%

 

 

 

 

Cash flow from operating activities

 

224

 

158

 

42

%

 

 

 

Orders increased in the quarter driven by growth in emerging markets. Power distribution demand was stable while the transmission sector is seeing selective investments by utilities. Macroeconomic uncertainties continue to impact large power investments in most regions. Orders were stable in Europe and Asia and grew in the Americas and the Middle East and Africa.

 

Revenues were at the same high level as the second quarter last year, mainly due to the timing of order execution from the backlog. Service revenues increased in the quarter.

 

The lower operational EBITDA and operational EBITDA margin in the quarter were due to the execution of lower margin order backlog, reflecting the pricing environment in previous quarters, and a less favorable geographic and product mix. Cost saving initiatives partially mitigated this impact.

 

Power Systems

 

 

 

 

 

 

 

Change

 

$ millions unless otherwise indicated

 

Q2 12

 

Q2 11

 

US$

 

Local

 

Orders

 

1’890

 

1’654

 

14

%

27

%

Order backlog (end June)

 

11’571

 

11’310

 

2

%

14

%

Revenues

 

1’872

 

2’025

 

-8

%

1

%

EBIT

 

37

 

194

 

-81

%

 

 

as % of revenues

 

2.0

%

9.6

%

 

 

 

 

Operational EBITDA

 

119

 

189

 

-37

%

 

 

as % of operational revenues

 

6.2

%

9.4

%

 

 

 

 

Cash flow from operating activities

 

90

 

112

 

-20

%

 

 

 

Order growth in the second quarter was driven mainly by utility investments in transmission infrastructure and grid enhancement. Both base and large orders increased in the quarter, led by substations and grid system solutions.

 

Orders increased in all major regions. The US, Canada and Brazil contributed to double-digit growth in the Americas. Large orders in Iraq to build transmission capacity contributed to growth in the Middle East and Africa. India and Australia led the growth in Asia, while order intake in Europe was driven mainly by grid upgrades.

 

Revenues were stable compared to the second quarter of 2011 and mainly reflect the timing of project execution from the order backlog.

 

6



 

Operational EBITDA and operational EBITDA margin declined compared with the same quarter a year earlier, resulting from the execution of lower margin orders in the backlog, higher selling and R&D expenses and costs on a small number of projects in different businesses.

 

Discrete Automation and Motion

 

 

 

 

 

 

 

Change

 

$ millions unless otherwise indicated

 

Q2 12

 

Q2 11

 

US$

 

Local

 

Orders

 

2’428

 

2’615

 

-7

%

-2

%

Order backlog (end June)

 

4’567

 

4’595

 

-1

%

8

%

Revenues

 

2’368

 

2’248

 

5

%

11

%

EBIT

 

382

 

349

 

9

%

 

 

as % of revenues

 

16.1

%

15.5

%

 

 

 

 

Operational EBITDA

 

446

 

419

 

6

%

 

 

as % of operational revenues

 

18.8

%

18.7

%

 

 

 

 

Cash flow from operating activities

 

332

 

303

 

10

%

 

 

 

Orders declined in the quarter compared to the strong second quarter a year earlier, mainly reflecting lower demand from the renewable energy and rail sectors as well as reduced demand in China and southern Europe. Orders continued to grow in North America, including a double-digit increase in orders for ABB’s low-voltage drives. North American order growth benefited from the distribution channels of Baldor Electric, in line with the growth synergies expected when Baldor was acquired at the beginning of 2011.

 

Revenues increased on solid execution of the strong order backlog in all businesses, led by robotics and power electronics and medium-voltage drives.

 

Operational EBITDA rose on the increase in revenues and the operational EBITDA margin was slightly higher compared to the same quarter in 2011 despite difficult market conditions.

 

Low Voltage Products

 

 

 

 

 

 

 

Change

 

$ millions unless otherwise indicated

 

Q2 12

 

Q2 11

 

US$

 

Local

 

Orders

 

1’655

 

1’417

 

17

%

23

%

Order backlog (end June)

 

1’082

 

1’141

 

-5

%

2

%

Revenues

 

1’596

 

1’397

 

14

%

21

%

EBIT

 

139

 

234

 

-41

%

 

 

as % of revenues

 

8.7

%

16.8

%

 

 

 

 

Operational EBITDA

 

286

 

268

 

7

%

 

 

as % of operational revenues

 

17.9

%

19.2

%

 

 

 

 

Cash flow from operating activities

 

161

 

67

 

140

%

 

 

 

Order growth in the quarter was driven by the contribution from the acquisition of Thomas & Betts, a North American leader in low-voltage products, which was completed in mid-May 2012. On an organic basis, orders were steady (up 1 percent), with increases in Asia and some countries in northern Europe compensating lower orders in southern Europe.

 

Organic revenues declined 2 percent in the quarter, reflecting the weaker demand environment in most businesses compared to the year-earlier period. Low-voltage systems revenues continued to grow on execution of the strong order backlog.

 

Organic operational EBITDA and operational EBITDA margin declined year-on-year, reflecting both an increase in lower margin systems sales, as well as lower volumes of certain higher-margin products in China. However, margins rebounded strongly from the first quarter of 2012.

 

7



 

Thomas & Betts contributed revenues of approximately $310 million and operational EBITDA of approximately $60 million during the quarter.

 

Process Automation

 

 

 

 

 

 

 

Change

 

$ millions unless otherwise indicated

 

Q2 12

 

Q2 11

 

US$

 

Local

 

Orders

 

2’247

 

2’340

 

-4

%

3

%

Order backlog (end June)

 

6’417

 

6’829

 

-6

%

4

%

Revenues

 

2’052

 

2’095

 

-2

%

5

%

EBIT

 

232

 

223

 

4

%

 

 

as % of revenues

 

11.3

%

10.6

%

 

 

 

 

Operational EBITDA

 

268

 

249

 

8

%

 

 

as % of operational revenues

 

13.1

%

11.8

%

 

 

 

 

Cash flow from operating activities

 

95

 

222

 

-57

%

 

 

 

Order growth in the second quarter was driven by strong large orders, mainly in oil and gas and the marine sector, including harbor cranes. Orders were also higher in measurement products but declined in pulp and paper, metals and turbochargers. Total service orders were flat in the quarter as the ongoing reduction in full service contracts and a decline in turbocharging services in the marine sector was offset by lifecycle service orders.

 

Regionally, order growth was driven by the Middle East and Africa and Europe on higher demand from the oil, gas and petrochemicals as well as marine and cranes sectors. Orders were also up double digits in North America, while South America saw fewer large investments compared to last year. Orders declined in Asia as the high level of marine orders in South Korea was offset by lower demand in China, mainly in the metals business.

 

The revenue increase reflects execution of the stronger order backlog—especially in the marine, pulp and paper and oil and gas businesses—as well as the recent growth in service orders.

 

Operational EBITDA and operational EBITDA margin increased reflecting strong project execution, tight cost control, and higher margins in lifecycle services and measurement products.

 

8



 

More information

 

The 2012 Q2 results press release is available from July 26, 2012, on the ABB News Center at www.abb.com/news and on the Investor Relations homepage at www.abb.com/investorrelations, where a presentation for investors will also be published.

 

A video from Chief Executive Officer Joe Hogan on ABB’s second-quarter 2012 results will be available today at www.youtube.com/abb.

 

ABB will host a media conference call starting at 10:00 a.m. Central European Time (CET). U.K. callers should dial +44 203 059 58 62. From Sweden, +46 8 5051 00 31, from U.S. (toll-free) +1 866 291 41 66, and from the rest of Europe, +41 91 610 56 00. Lines will be open 15 minutes before the start of the conference. Audio playback of the call will start one hour after the call ends and will be available for 48 hours: Playback numbers: +44 20 7108 6233 (U.K.), +41 91 612 4330 (rest of Europe) or +1 866 416 2558 (U.S./Canada). The code is 15380, followed by the # key. The recorded session will also be available as a podcast one hour after the end of the conference call and can be downloaded from www.abb.com/news.

 

A conference call for analysts and investors is scheduled to begin today at 3:00 p.m. CET (2:00 p.m. in the UK, 9:00 a.m. EDT). Callers should dial +1 866 291 4166 from the U.S./Canada (toll-free), +44 203 059 5862 from the U.K., +46 85 051 0031 from Sweden, or +41 91 610 56 00 from the rest of the world. Callers are requested to phone in 15 minutes before the start of the call. The recorded session will be available as a podcast one hour after the end of the conference call and can be downloaded from our website. You will find the link to access the podcast at www.abb.com.

 

Investor calendar 2012

 

 

ABB Capital Markets Day 2012

 

Sept. 12, 2012

Q3 2012 results

 

Oct. 25, 2012

 

ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 145,000 people.

 

Zurich, July 26, 2012

Joe Hogan, CEO

 

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. 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” 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, raw materials availability and prices, 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.

 

For more information please contact:

 

 

 

 

 

Media Relations:

Investor Relations:

ABB Ltd

Thomas Schmidt, Antonio Ligi

Switzerland: Tel. +41 43 317 7111

Affolternstrasse 44

(Zurich, Switzerland)

USA: Tel. +1 919 807 5758

CH-8050 Zurich, Switzerland

Tel: +41 43 317 6568

investor.relations@ch.abb.com

 

Fax: +41 43 317 7958

 

 

media.relations@ch.abb.com

 

 

 

9



 

ABB Q2 and half-year 2012 key figures

 

 

 

 

 

 

 

 

 

Change

 

 

 

 

 

Change

 

$ millions unless otherwise indicated

 

Q2 12

 

Q2 11

 

US$

 

Local

 

H1 12

 

H1 11

 

US$

 

Local

 

Orders

 

Group

 

10’052

 

9’867

 

2

%

9

%

20’420

 

20’224

 

1

%

5

%

 

 

Power Products

 

2’791

 

2’810

 

-1

%

5

%

5’908

 

5’670

 

4

%

8

%

 

 

Power Systems

 

1’890

 

1’654

 

14

%

27

%

3’848

 

3’591

 

7

%

14

%

 

 

Discrete Automation & Motion

 

2’428

 

2’615

 

-7

%

-2

%

5’106

 

4’959

 

3

%

6

%

 

 

Low Voltage Products

 

1’655

 

1’417

 

17

%

23

%

2’992

 

2’826

 

6

%

10

%

 

 

Process Automation

 

2’247

 

2’340

 

-4

%

3

%

4’787

 

4’946

 

-3

%

1

%

 

 

Corporate and other (inter-division eliminations)

 

(959

)

(969

)

 

 

 

 

(2’221

)

(1’768

)

 

 

 

 

Revenues

 

Group

 

9’663

 

9’680

 

0

%

6

%

18’570

 

18’082

 

3

%

7

%

 

 

Power Products

 

2’610

 

2’783

 

-6

%

0

%

5’123

 

5’110

 

0

%

4

%

 

 

Power Systems

 

1’872

 

2’025

 

-8

%

1

%

3’679

 

3’858

 

-5

%

1

%

 

 

Discrete Automation & Motion

 

2’368

 

2’248

 

5

%

11

%

4’610

 

4’128

 

12

%

16

%

 

 

Low Voltage Products

 

1’596

 

1’397

 

14

%

21

%

2’788

 

2’592

 

8

%

12

%

 

 

Process Automation

 

2’052

 

2’095

 

-2

%

5

%

4’022

 

3’995

 

1

%

6

%

 

 

Corporate and other (inter-division eliminations)

 

(835

)

(868

)

 

 

 

 

(1’652

)

(1’601

)

 

 

 

 

EBIT

 

Group

 

1’001

 

1’337

 

-25

%

 

 

2’049

 

2’350

 

-13

%

 

 

 

 

Power Products

 

302

 

417

 

-28

%

 

 

625

 

767

 

-19

%

 

 

 

 

Power Systems

 

37

 

194

 

-81

%

 

 

125

 

299

 

-58

%

 

 

 

 

Discrete Automation & Motion

 

382

 

349

 

9

%

 

 

736

 

574

 

28

%

 

 

 

 

Low Voltage Products

 

139

 

234

 

-41

%

 

 

319

 

469

 

-32

%

 

 

 

 

Process Automation

 

232

 

223

 

4

%

 

 

466

 

474

 

-2

%

 

 

 

 

Corporate and other (inter-division eliminations)

 

(91

)

(80

)

 

 

 

 

(222

)

(233

)

 

 

 

 

EBIT %

 

Group

 

10.4

%

13.8

%

 

 

 

 

11.0

%

13.0

%

 

 

 

 

 

 

Power Products

 

11.6

%

15.0

%

 

 

 

 

12.2

%

15.0

%

 

 

 

 

 

 

Power Systems

 

2.0

%

9.6

%

 

 

 

 

3.4

%

7.8

%

 

 

 

 

 

 

Discrete Automation & Motion

 

16.1

%

15.5

%

 

 

 

 

16.0

%

13.9

%

 

 

 

 

 

 

Low Voltage Products

 

8.7

%

16.8

%

 

 

 

 

11.4

%

18.1

%

 

 

 

 

 

 

Process Automation

 

11.3

%

10.6

%

 

 

 

 

11.6

%

11.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational EBITDA*

 

Group

 

1’471

 

1’547

 

-5

%

 

 

2’699

 

2’866

 

-6

%

 

 

 

 

Power Products

 

387

 

454

 

-15

%

 

 

750

 

858

 

-13

%

 

 

 

 

Power Systems

 

119

 

189

 

-37

%

 

 

236

 

321

 

-26

%

 

 

 

 

Discrete Automation & Motion

 

446

 

419

 

6

%

 

 

863

 

797

 

8

%

 

 

 

 

Low Voltage Products

 

286

 

268

 

7

%

 

 

483

 

530

 

-9

%

 

 

 

 

Process Automation

 

268

 

249

 

8

%

 

 

511

 

495

 

3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational EBITDA %

 

Group

 

15.1

%

16.0

%

 

 

 

 

14.5

%

15.9

%

 

 

 

 

 

 

Power Products

 

14.7

%

16.5

%

 

 

 

 

14.6

%

16.8

%

 

 

 

 

 

 

Power Systems

 

6.2

%

9.4

%

 

 

 

 

6.4

%

8.4

%

 

 

 

 

 

 

Discrete Automation & Motion

 

18.8

%

18.7

%

 

 

 

 

18.7

%

19.3

%

 

 

 

 

 

 

Low Voltage Products

 

17.9

%

19.2

%

 

 

 

 

17.3

%

20.5

%

 

 

 

 

 

 

Process Automation

 

13.1

%

11.8

%

 

 

 

 

12.7

%

12.4

%

 

 

 

 

 


* See reconciliation of Operational EBITDA in Note 13 to the Interim Consolidated Financial Information (unaudited)

 

10



 

Q2 2012 orders received and revenues by region

 

 

 

Orders received

 

Change

 

Revenues

 

Change

 

$ millions

 

Q2 12

 

Q2 11

 

US$

 

Local

 

Q2 12

 

Q2 11

 

US$

 

Local

 

Europe

 

3’214

 

3’490

 

-8

%

2

%

3’441

 

3’779

 

-9

%

1

%

Americas

 

2’934

 

2’564

 

14

%

20

%

2’577

 

2’228

 

16

%

20

%

Asia

 

2’759

 

2’902

 

-5

%

-1

%

2’708

 

2’579

 

5

%

9

%

Middle East and Africa

 

1’145

 

911

 

26

%

34

%

937

 

1’094

 

-14

%

-9

%

Group total

 

10’052

 

9’867

 

2

%

9

%

9’663

 

9’680

 

0

%

6

%

 

Half-year 2012 orders received and revenues by region

 

 

 

Orders received

 

Change

 

Revenues

 

Change

 

$ millions

 

H1 12

 

H1 11

 

US$

 

Local

 

H1 12

 

H1 11

 

US$

 

Local

 

Europe

 

7’108

 

7’580

 

-6

%

0

%

6’827

 

7’070

 

-3

%

3

%

Americas

 

5’629

 

4’728

 

19

%

23

%

4’903

 

4’236

 

16

%

19

%

Asia

 

5’525

 

5’999

 

-8

%

-6

%

5’031

 

4’692

 

7

%

9

%

Middle East and Africa

 

2’158

 

1’917

 

13

%

17

%

1’809

 

2’084

 

-13

%

-9

%

Group total

 

20’420

 

20’224

 

1

%

5

%

18’570

 

18’082

 

3

%

7

%

 

 

Operational EBITDA by division Q2 2012 vs Q2 2011

 

 

 

ABB

 

Power
Products

 

Power
Systems

 

Discrete Automation
& Motion

 

Low Voltage
Products

 

Process Automation

 

 

 

Q2 12

 

Q2 11

 

Q2 12

 

Q2 11

 

Q2 12

 

Q2 11

 

Q2 12

 

Q2 11

 

Q2 12

 

Q2 11

 

Q2 12

 

Q2 11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational revenues

 

9’724

 

9’643

 

2’628

 

2’755

 

1’909

 

2’011

 

2’369

 

2’240

 

1’599

 

1’396

 

2’053

 

2’109

 

FX/commodity timing differences on Revenues

 

(61

)

37

 

(18

)

28

 

(37

)

14

 

(1

)

8

 

(3

)

1

 

(1

)

(14

)

Revenues (as per Financial Statements)

 

9’663

 

9’680

 

2’610

 

2’783

 

1’872

 

2’025

 

2’368

 

2’248

 

1’596

 

1’397

 

2’052

 

2’095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational EBITDA

 

1’471

 

1’547

 

387

 

454

 

119

 

189

 

446

 

419

 

286

 

268

 

268

 

249

 

Depreciation

 

(174

)

(167

)

(43

)

(43

)

(17

)

(14

)

(34

)

(31

)

(33

)

(29

)

(15

)

(15

)

Amortization

 

(107

)

(75

)

(9

)

(7

)

(26

)

(13

)

(31

)

(32

)

(20

)

(2

)

(5

)

(6

)

including total acquisition-related amortization of

 

(82

)

(51

)

(8

)

(5

)

(22

)

(11

)

(27

)

(30

)

(18

)

(1

)

(3

)

(2

)

Acquisition-related expenses and certain non-operational items*

 

(90

)

1

 

 

 

(3

)

 

(1

)

1

 

(81

)

 

 

 

FX/commodity timing differences on EBIT

 

(82

)

58

 

(27

)

14

 

(34

)

42

 

(3

)

4

 

(8

)

 

(8

)

(3

)

Restructuring-related costs

 

(17

)

(27

)

(6

)

(1

)

(2

)

(10

)

5

 

(12

)

(5

)

(3

)

(8

)

(2

)

EBIT (as per Financial Statements)

 

1’001

 

1’337

 

302

 

417

 

37

 

194

 

382

 

349

 

139

 

234

 

232

 

223

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational EBITDA margin (%)

 

15.1

%

16.0

%

14.7

%

16.5

%

6.2

%

9.4

%

18.8

%

18.7

%

17.9

%

19.2

%

13.1

%

11.8

%

 


* The Low Voltage Products Q2 12 amount of $81 million includes $15 million of Thomas & Betts inventory step-up

 

 

Appendix I

Reconciliation of non-GAAP measures

($ millions)

 

 

 

Jun. 30,

 

Dec. 31,

 

 

 

2012

 

2011

 

Net Cash (Net Debt)

 

 

 

 

 

(= Cash and equivalents plus marketable securities and short-term investments, less total debt)

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents

 

4’773

 

4’819

 

Marketable securities and short-term investments

 

375

 

948

 

Cash and marketable securities

 

5’148

 

5’767

 

Short-term debt and current maturities of long-term debt

 

2’217

 

765

 

Long-term debt

 

6’977

 

3’231

 

Total debt

 

9’194

 

3’996

 

Net Cash (Net Debt)

 

(4’046

)

1’771

 

 

11



 

ABB Ltd Interim Consolidated Income Statements (unaudited)

 

 

 

Six months ended

 

Three months ended

 

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

 

Jun. 30, 2012

 

Jun. 30, 2011

 

Jun. 30, 2012

 

Jun. 30, 2011

 

 

 

 

 

 

 

 

 

 

 

Sales of products

 

15,501

 

15,207

 

8,078

 

8,154

 

Sales of services

 

3,069

 

2,875

 

1,585

 

1,526

 

Total revenues

 

18,570

 

18,082

 

9,663

 

9,680

 

Cost of products

 

(11,055

)

(10,673

)

(5,792

)

(5,700

)

Cost of services

 

(1,983

)

(1,815

)

(1,029

)

(959

)

Total cost of sales

 

(13,038

)

(12,488

)

(6,821

)

(6,659

)

Gross profit

 

5,532

 

5,594

 

2,842

 

3,021

 

Selling, general and administrative expenses

 

(2,787

)

(2,619

)

(1,465

)

(1,356

)

Non-order related research and development expenses

 

(716

)

(640

)

(370

)

(334

)

Other income (expense), net

 

20

 

15

 

(6

)

6

 

Earnings before interest and taxes

 

2,049

 

2,350

 

1,001

 

1,337

 

Interest and dividend income

 

38

 

43

 

19

 

25

 

Interest and other finance expense

 

(144

)

(92

)

(87

)

(41

)

Income from continuing operations before taxes

 

1,943

 

2,301

 

933

 

1,321

 

Provision for taxes

 

(554

)

(679

)

(256

)

(395

)

Income from continuing operations, net of tax

 

1,389

 

1,622

 

677

 

926

 

Income (loss) from discontinued operations, net of tax

 

5

 

(1

)

5

 

(1

)

Net income

 

1,394

 

1,621

 

682

 

925

 

Net income attributable to noncontrolling interests

 

(53

)

(73

)

(26

)

(32

)

Net income attributable to ABB

 

1,341

 

1,548

 

656

 

893

 

 

 

 

 

 

 

 

 

 

 

Amounts attributable to ABB shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of tax

 

1,336

 

1,549

 

651

 

894

 

Net income

 

1,341

 

1,548

 

656

 

893

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to ABB shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of tax

 

0.58

 

0.68

 

0.28

 

0.39

 

Net income

 

0.58

 

0.68

 

0.29

 

0.39

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to ABB shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations, net of tax

 

0.58

 

0.68

 

0.28

 

0.39

 

Net income

 

0.58

 

0.68

 

0.29

 

0.39

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of shares outstanding (in millions) used to compute:

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to ABB shareholders

 

2,293

 

2,286

 

2,293

 

2,288

 

Diluted earnings per share attributable to ABB shareholders

 

2,294

 

2,290

 

2,294

 

2,292

 

 

See Notes to the Interim Consolidated Financial Information

 

12



 

ABB Ltd Interim Condensed Consolidated Statements of Comprehensive Income (unaudited)

 

 

 

Six months ended

 

Three months ended

 

($ in millions) 

 

Jun. 30, 2012

 

Jun. 30, 2011

 

Jun. 30, 2012

 

Jun. 30, 2011

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income, net of tax

 

1,232

 

2,573

 

90

 

1,448

 

Total comprehensive income attributable to noncontrolling interests, net of tax

 

(43

)

(81

)

(8

)

(37

)

Total comprehensive income attributable to ABB shareholders, net of tax

 

1,189

 

2,492

 

82

 

1,411

 

 

See Notes to the Interim Consolidated Financial Information

 

13



 

ABB Ltd Interim Consolidated Balance Sheets (unaudited)

 

($ in millions, except share data)

 

Jun. 30, 2012

 

Dec. 31, 2011

 

 

 

 

 

 

 

Cash and equivalents

 

4,773

 

4,819

 

Marketable securities and short-term investments

 

375

 

948

 

Receivables, net

 

11,245

 

10,773

 

Inventories, net

 

6,363

 

5,737

 

Prepaid expenses

 

302

 

227

 

Deferred taxes

 

887

 

932

 

Other current assets

 

409

 

351

 

Total current assets

 

24,354

 

23,787

 

 

 

 

 

 

 

Property, plant and equipment, net

 

5,407

 

4,922

 

Goodwill

 

10,498

 

7,269

 

Other intangible assets, net

 

3,689

 

2,253

 

Prepaid pension and other employee benefits

 

172

 

139

 

Investments in equity-accounted companies

 

279

 

156

 

Deferred taxes

 

235

 

318

 

Other non-current assets

 

709

 

804

 

Total assets

 

45,343

 

39,648

 

 

 

 

 

 

 

Accounts payable, trade

 

4,750

 

4,789

 

Billings in excess of sales

 

1,878

 

1,819

 

Employee and other payables

 

1,365

 

1,361

 

Short-term debt and current maturities of long-term debt

 

2,217

 

765

 

Advances from customers

 

1,764

 

1,757

 

Deferred taxes

 

254

 

305

 

Provisions for warranties

 

1,255

 

1,324

 

Provisions and other current liabilities

 

2,376

 

2,619

 

Accrued expenses

 

1,802

 

1,822

 

Total current liabilities

 

17,661

 

16,561

 

 

 

 

 

 

 

Long-term debt

 

6,977

 

3,231

 

Pension and other employee benefits

 

1,612

 

1,487

 

Deferred taxes

 

1,697

 

537

 

Other non-current liabilities

 

1,483

 

1,496

 

Total liabilities

 

29,430

 

23,312

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Capital stock and additional paid-in capital (2,314,743,264 issued shares at June 30, 2012 and December 31, 2011)

 

1,659

 

1,621

 

Retained earnings

 

16,703

 

16,988

 

Accumulated other comprehensive loss

 

(2,560

)

(2,408

)

Treasury stock, at cost (21,360,243 and 24,332,144 shares at June 30, 2012 and December 31, 2011, respectively)

 

(372

)

(424

)

Total ABB stockholders’ equity

 

15,430

 

15,777

 

Noncontrolling interests

 

483

 

559

 

Total stockholders’ equity

 

15,913

 

16,336

 

Total liabilities and stockholders’ equity

 

45,343

 

39,648

 

 

See Notes to the Interim Consolidated Financial Information

 

14



 

ABB Ltd Interim Consolidated Statements of Cash Flows (unaudited)

 

 

 

Six months ended

 

Three months ended

 

($ in millions)

 

Jun. 30, 2012

 

Jun. 30, 2011

 

Jun. 30, 2012

 

Jun. 30, 2011

 

 

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

1,394

 

1,621

 

682

 

925

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

534

 

473

 

281

 

242

 

Pension and other employee benefits

 

(49

)

(66

)

(32

)

(59

)

Deferred taxes

 

11

 

(6

)

(28

)

(3

)

Net gain from sale of property, plant and equipment

 

(8

)

(16

)

(5

)

(7

)

Loss (income) from equity-accounted companies

 

5

 

(1

)

1

 

(1

)

Other

 

48

 

47

 

23

 

27

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Trade receivables, net

 

(257

)

(260

)

(183

)

(275

)

Inventories, net

 

(376

)

(899

)

12

 

(399

)

Trade payables

 

(163

)

257

 

21

 

122

 

Billings in excess of sales

 

76

 

(12

)

(44

)

88

 

Provisions, net

 

(255

)

(265

)

(98

)

(87

)

Advances from customers

 

41

 

81

 

(60

)

117

 

Other assets and liabilities, net

 

(428

)

173

 

25

 

201

 

Net cash provided by operating activities

 

573

 

1,127

 

595

 

891

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

Purchases of marketable securities (available-for-sale)

 

(927

)

(618

)

(51

)

(32

)

Purchases of short-term investments

 

(27

)

(140

)

(2

)

 

Purchases of property, plant and equipment and intangible assets

 

(536

)

(343

)

(300

)

(204

)

Acquisition of businesses (net of cash acquired) and changes in cost and equity investments

 

(3,616

)

(3,186

)

(3,420

)

(84

)

Proceeds from sales of marketable securities (available-for-sale)

 

1,496

 

2,399

 

1,475

 

315

 

Proceeds from maturity of marketable securities (available-for-sale)

 

 

220

 

 

86

 

Proceeds from short-term investments

 

27

 

525

 

25

 

147

 

Proceeds from sales of property, plant and equipment

 

13

 

15

 

8

 

9

 

Proceeds from sales of businesses and equity-accounted companies (net of cash disposed)

 

5

 

3

 

2

 

3

 

Changes in financing and other non-current receivables, net

 

(35

)

(75

)

(16

)

(66

)

Net cash provided by (used in) investing activities

 

(3,600

)

(1,200

)

(2,279

)

174

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

Net changes in debt with original maturities of 90 days or less

 

591

 

97

 

500

 

46

 

Increase in debt

 

4,850

 

1,317

 

2,678

 

1,280

 

Repayment of debt

 

(727

)

(1,339

)

(542

)

(40

)

Issuance of shares

 

 

105

 

 

105

 

Transactions in treasury shares

 

46

 

5

 

 

1

 

Dividends paid

 

(1,626

)

(1,569

)

(1,626

)

(1,569

)

Acquisition of noncontrolling interests

 

 

(11

)

 

(11

)

Dividends paid to noncontrolling shareholders

 

(91

)

(110

)

(83

)

(109

)

Other

 

(4

)

63

 

(19

)

100

 

Net cash provided by (used in) financing activities

 

3,039

 

(1,442

)

908

 

(197

)

 

 

 

 

 

 

 

 

 

 

Effects of exchange rate changes on cash and equivalents

 

(58

)

170

 

(202

)

35

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and equivalents - continuing operations

 

(46

)

(1,345

)

(978

)

903

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents, beginning of period

 

4,819

 

5,897

 

5,751

 

3,649

 

Cash and equivalents, end of period

 

4,773

 

4,552

 

4,773

 

4,552

 

 

 

 

 

 

 

 

 

 

 

Supplementary disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid

 

70

 

65

 

46

 

32

 

Taxes paid

 

699

 

727

 

358

 

429

 

 

See Notes to the Interim Consolidated Financial Information

 

15



 

ABB Ltd Interim Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

 

 

 

 

 

 

 

Accumulated other comprehensive loss

 

 

 

 

 

 

 

 

 

($ in millions)

 

Capital
stock and
additional
paid-in
capital

 

Retained
earnings

 

Foreign
currency
translation
adjustment

 

Unrealized
gain (loss)
on
available-
for-
sale
securities

 

Pension
and other
postretirement
plan
adjustments

 

Unrealized
gain (loss)
of cash
flow hedge
derivatives

 

Total
accumulated
other
comprehensive
loss

 

Treasury
stock

 

Total ABB
stockholders’
equity

 

Noncontrolling
interests

 

Total
stockholders’
equity

 

Balance at January 1, 2011

 

1,454

 

15,389

 

(707

)

18

 

(920

)

92

 

(1,517

)

(441

)

14,885

 

573

 

15,458

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

1,548

 

 

 

 

 

 

 

 

 

 

 

 

 

1,548

 

73

 

1,621

 

Foreign currency translation adjustments

 

 

 

 

 

996

 

 

 

 

 

 

 

996

 

 

 

996

 

8

 

1,004

 

Effect of change in fair value of available-for-sale securities, net of tax

 

 

 

 

 

 

 

(7

)

 

 

 

 

(7

)

 

 

(7

)

 

 

(7

)

Unrecognized income (expense) related to pensions and other postretirement plans, net of tax

 

 

 

 

 

 

 

 

 

(18

)

 

 

(18

)

 

 

(18

)

 

 

(18

)

Change in derivatives qualifying as cash flow hedges, net of tax

 

 

 

 

 

 

 

 

 

 

 

(27

)

(27

)

 

 

(27

)

 

 

(27

)

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,492

 

81

 

2,573

 

Changes in noncontrolling interests

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

2

 

(1

)

Dividends paid to noncontrolling shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(122

)

(122

)

Dividends paid

 

 

 

(1,569

)

 

 

 

 

 

 

 

 

 

 

 

 

(1,569

)

 

 

(1,569

)

Treasury stock transactions

 

(8

)

 

 

 

 

 

 

 

 

 

 

 

 

13

 

5

 

 

 

5

 

Share-based payment arrangements

 

37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37

 

 

 

37

 

Issuance of shares

 

105