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 2016

 

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 21, 2016 titled “ABB: Solid progress on profitability”.

2.              Q2 2016 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.

 

  

 


ABB: Solid progress on profitability

 

Zurich, Switzerland, July 21, 2016: Second-quarter highlights

·         Operational EBITA margin1 up +100 basis points to 12.7%

·         All divisions in target margin corridor

·         White collar productivity program delivering results

·         Operational earnings per share1 up +18%2

·         Net Income $406 million impacted by $367 million3 of restructuring and restructuring-related expenses

·         Base orders steady1,4, continued market headwinds reflected in total orders -5%

·         Revenues -2% on lower short-cycle volumes and timing of order backlog execution

·         Cash flow from operating activities up +80% at $1,082 million

 


“We improved our operational margin for the seventh consecutive quarter and significantly increased cash flow through relentless execution amid continued strong market headwinds and economic uncertainties,” said CEO Ulrich Spiesshofer.

“We delivered double digit operational earnings per share growth for the quarter and year-to-date, as cost savings contributed to the bottom line,” he said. 

“Our continued focus on high growth segments dampened the impact of challenging markets like the process industries,” Spiesshofer said. “We are improving our cost and capital structure, as well as our productivity, and shaping a leaner, more agile ABB in a disciplined way. We have strengthened our leadership team and are executing our Next Level strategy, focused on accelerating sustainable value creation.”

 

Key Figures

Change

 

Change

($ in millions, unless otherwise indicated)

Q2 2016

Q2 2015

US$

Comparable1

H1 2016

H1 2015

US$

Comparable1

Orders

8,316

8,996

-8%

-5%

17,569

19,400

-9%

-6%

Revenues

8,677

9,165

-5%

-2%

16,580

17,720

-6%

-2%

Operational EBITA1

1,106

1,058

+5%

 

2,049

2,007

+2%

 

as % of operational revenues1

12.7%

11.7%

+1.0pts

 

12.3%

11.4%

+0.9pts

 

Net income

406

588

-31%5

 

906

1,152

-21%

 

Basic EPS ($)

0.19

0.26

-28%2

 

0.42

0.51

-19%2

 

Operational EPS1 ($)

0.35

0.30

+16%2

+18%2

0.63

0.58

+9%2

+10%2

Cash flow from operating activities

1,082

598

484

 

1,334

651

683

 

                     

 

 


1  For a reconciliation of non-GAAP measures, see “Supplemental Reconciliations and Definitions” in the attached Q2 2016 Financial Information

2  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)

3  Restructuring and restructuring-related expenses include the incremental implementation costs in relation to the white collar productivity program

4  Growth rates for orders, revenues and order backlog are on a comparable basis (local currency adjusted for acquisitions and divestitures), previously referred to as ‘like-for-like’. US$ growth rates are presented in Key Figures table

5  Net Income excluding certain amounts and non-operational items, also known as operational net income1, grew +12%

 

 

 

Page 1 


 

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, although at a slower pace than in 2015. The 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.

ABB will host its Capital Markets Day on October 4, 2016, in Zurich, Switzerland, and report on the progress of its Next Level strategy, including the strategic portfolio review of its Power Grids division.

 

Q2 2016 Group Results

 

Orders

Total orders were 5 percent lower (8 percent in US dollars) compared with the second quarter of 2015, reflecting timing of large order awards. Base orders (below $15 million) were steady (down 3 percent in US dollars), while large orders ($15 million and above) were 39 percent lower (41 percent in US dollars). Large orders were lower in all divisions and represented 8 percent of total orders compared with 12 percent a year earlier. Service orders increased 4 percent (1 percent in US dollars) and represented 19 percent of total orders compared with 18 percent a year ago. A stronger US dollar versus the prior year period resulted in a negative translation impact on reported orders of 3 percent.

 

Market Overview

Demand patterns in ABB’s three regions:

·         Strong demand in Europe was primarily driven by construction, integration of renewable energy, and energy efficient solutions for transport. Industrial demand was mixed. Total orders improved 2 percent (steady in US dollars) and base orders grew 7 percent (6 percent in US dollars).  Base order demand was strong in Germany, Spain, Sweden and Denmark, and weak in the UK amid uncertainties around Brexit.

·         The Americas was weaker due to lower investments in process industries. Construction and utility demand was mixed and consumer industries were strong. Total orders declined 5 percent (8 percent in US dollars) on weaker large orders; base orders were 1 percent lower (4 percent in US dollars). US base order demand showed some sequential improvement; base orders in Brazil were strong as a result of ABB’s focused growth initiatives.

·         Demand in Asia, Middle East and Africa (AMEA) was mixed. China continued to invest in large grid interconnections and construction which was reflected in its strong order development. Total orders for the region were down 10 percent (13 percent in US dollars) as strong order development in China and India could not offset declines in Saudi Arabia and South Korea. Base orders declined 6 percent (9 percent in US dollars). 

Demand patterns in ABB’s three major customer sectors show a mixed picture: 

·         Utilities remained cautious but continued to make selective investments to integrate renewable energy and enhance energy security. ABB won orders of more than $300 million in China to deliver key equipment for a 1,100 kV ultra-high voltage direct current power link.

·         Industry: Automotive and consumer industries continued to drive demand; ABB won an order to improve energy efficiency in the greenfield Renault-Nissan and Daimler car factory in Mexico. Demand from the process industries remained subdued due to reduced capital expenditure, although some productivity and energy efficiency investments continued. ABB won an order from South Korea’s largest steelmaker to supply high efficiency motors and drives technology at POSCO’s Pohang Works hot rolling mill. 

 

Page 2 


 

·         The transport & infrastructure market was mixed, with continued demand for energy efficient solutions, particularly in data centers, rail and electric mobility; ABB received an order to provide additional fast chargers for hybrid electric buses in the city of Luxembourg.

  

The book-to-bill1 ratio in the second quarter decreased slightly to 0.96x from 0.98x in the same quarter a year earlier. For the first six months, book-to-bill1 is 1.06x. The order backlog at the end of June 2016 amounted to $25 billion, an increase of 2 percent (3 percent decline in US dollars) compared with the end of the second quarter in 2015.

 

Revenues

Revenues declined 2 percent (5 percent in US dollars) in the second quarter, primarily due to lower short-cycle volumes and timing of order backlog execution.  Revenues increased in Power Grids but were lower in the other divisions. A stronger US dollar versus the same period a year ago resulted in a negative currency translation impact on revenues of 2 percent. Exiting certain businesses in Power Grids had a negative impact on revenues of around 1 percent. Total service revenues increased 1 percent (decreased 2 percent in US dollars) and remained unchanged at 17 percent of total revenues compared with a year ago.

 

Operational EBITA

Operational EBITA improved 7 percent in local currencies (5 percent in US dollars) to $1,106 million mainly due to a positive net savings. Operational EBITA margin increased for the seventh consecutive quarter. In the second quarter, it improved 100 basis points to 12.7 percent, reflecting the turnaround in Power Grids, strong margin accretion in Electrification Products, and ongoing Group-wide productivity and cost savings measures, such as the white collar productivity program.

 

Operational EPS and Net Income

Operational EPS was $0.35, an increase of 18 percent2 in constant currency compared with the same period a year earlier. Higher operational EBITA and a lower effective tax rate as well as a reduction in the weighted-average number of shares outstanding, contributed to the strong increase.  Net income decreased to $406 million and was impacted by restructuring and restructuring-related expenses of $367 million3. Consequently, basic earnings per share was $0.19 compared with $0.26 for the same quarter of 2015. Operational net income1, which excludes the large restructuring and restructuring-related expense and certain other amounts, increased 12 percent.

 

Cash Flow from Operating Activities

Cash flow from operating activities was up 80 percent in US dollars, improving by approximately $484 million to $1,082 million, primarily due to strong working capital management and lower income tax payments.

 

Shareholder Returns

As part of its $4 billion share buyback program, ABB purchased 37.6 million shares, with a buyback value of approximately $780 million, during the second quarter of 2016. Since the program was announced, the company has purchased a total of approximately 170 million shares with a buyback value of approximately $3.5 billion.

In July 2016, based on the shareholders’ vote at the company’s annual general meeting on April 21, 2016, ABB paid a dividend of 0.74 Swiss francs per share in a tax efficient way and cancelled 100 million of the repurchased shares.

  

Next Level strategy

 

Page 3 


 

ABB is executing its Next Level strategy along its three focus areas of profitable growth, relentless execution and business-led collaboration. In stage 2 of the Next Level Strategy, ABB is accelerating its transformation to improve customer focus, and become leaner and more agile to deliver on its 2015-2020 targets and unlock further value.

Profitable Growth

With its new structure of four market focused global divisions, ABB is better positioned to drive organic growth by serving its customers in a way that meets their needs and delivers additional value. ABB drives profitable growth through its approach of Penetration, Innovation and Expansion (PIE).

 

·         Penetration: Focused growth initiatives in mature markets like Europe delivered improved base order growth. In the tough market environment, the BRIC countries (Brazil, Russia, India and China) grew total orders. Three grew base orders, while China was stable.

·         Innovation: New offerings and value propositions continued to strengthen ABB’s competitiveness and demand for its innovative solutions. ABB’s collaborative robot, YuMi, won the industry’s most prestigious innovation award in Q2. Two new robotics offerings: “Connected Services” and “SafeMove2” will strengthen ABB’s position in software solutions for improving robot uptime and performance optimization, as well as safety certified robot monitoring.

·         Expansion: ABB gained access to the Japanese market for high voltage direct current (HVDC), winning its first orders through its joint venture with Hitachi. This success paves the way for a new business model for the Power Grids division.

Relentless Execution

Stage 2 of the Next Level strategy aims to close the gap in operating performance between ABB and its best-in-class peers.

ABB’s white collar productivity (WCP) program, aimed at optimizing business functions, shared services and reducing organizational complexity, achieved a key milestone in the quarter with the consolidation of the Group headquarters resulting in a significant reduction of its size. The two global shared service centers went into operation in Bangalore, India, and Krakow, Poland, an important step forward in the consolidation of functions like finance and HR. With these and other initiatives, ABB is well on track to achieve the 2016 targeted white collar productivity savings of $400 million.

The program to reduce working capital is well on track to meet its target of freeing up at least $2 billion in cash by the end of 2017. In the last twelve months, net working capital as a percentage of revenues fell 150 basis points. The ambition is to drive best-in-class capital performance throughout the value chain in inventory and unbilled receivables.

Business-led Collaboration

ABB strengthened its leadership with the appointment of Sami Atiya to its Executive Committee as President of the Discrete Automation and Motion (DM) division, effective June 13, 2016. With his extensive experience in leading industrial portfolios across a wide range of markets and geographies, Atiya is well positioned to steer DM through the next phase of transforming ABB into a leaner, more agile and customer-focused technology company. With his background in robotics, software and artificial intelligence, Atiya will play a key role in helping ABB’s customers take advantage of the opportunities created by the digital revolution in industry.

 

 

Page 4 


 

 

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, although at a slower pace than in 2015. The market remains impacted by modest growth and increased uncertainties relating to 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.

 

The long-term demand outlook in ABB’s three major customer sectors — utilities, industry and transport & infrastructure — remains positive. Key drivers are the big shift in the electricity value chain, industrial productivity improvements through the Internet of Things, Services and People (IoTSP), as well as rapid urbanization and the need for energy efficiency in transport & infrastructure.

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

 

 

Page 5 


 

Q2 Divisional Performance

 

($ in millions,
unless otherwise indicated)

Orders

Change

Revenues

Change

Operational EBITA %

Change

US$

Comparable

US$

Comparable

Electrification Products

2,451

-5%

-2%

2,397

-4%

-1%

17.3%

+0.8pts

Discrete Automation
& Motion

2,201

-9%

-8%

2,221

-5%

-3%

14.0%

-0.5pts

Process Automation

1,369

-22%

-20%

1,717

-8%

-6%

12.2%

-0.1pts

Power Grids

2,655

-4%

0%

2,779

-6%

+1%

9.0%

+2.2pts

Corporate & other (incl. inter-division elimination)

-360

 

 

-437

 

 

 

 

ABB Group

8,316

-8%

-5%

8,677

-5%

-2%

12.7%

+1.0pts

 

Electrification Products

Orders were mixed as positive order development in Europe could not offset declines in the Americas and AMEA. Product orders were stronger in Germany and Russia but softer in China, Saudi Arabia, and the US, with the lower demand pattern impacting revenues. Capacity adjustments to address the shift in demand were implemented swiftly in the quarter. Operational EBITA margin improved ~80 basis points on additional cost savings and some positive mix.

 

Discrete Automation and Motion

Total orders were impacted by lower large orders and steady third party base order development. Continued strong demand patterns in automotive and food and beverage could not fully offset the capex declines in process industries such as oil and gas. Revenues were impacted by lower volumes and timing of order backlog execution. The implementation of focused capacity adjustments and productivity measures resulted in improved margin for the second consecutive quarter and the division re-entering the target margin corridor.  

 

Process Automation

Reduced capital expenditure and cautious discretionary spending in process industries impacted large and base orders. Total orders declined 20 percent (22 percent in US dollars) while third party base orders were 8 percent lower (10 percent in US dollars). Revenues were lower on execution timing of the order backlog and lower base order demand.  Operational EBITA margin was basically stable as early initiated cost and productivity savings largely offset lower volumes and reduced capacity utilization.

 

Power Grids

Strong third party base order growth of 7 percent (4 percent in US dollars) compensated for lower large orders; total orders were steady. Revenues were higher, reflecting solid conversion of the order backlog. The operational EBITA margin of 9 percent was significantly higher than in the second quarter of 2015 based on improved volumes, and productivity and cost savings, e.g., the ongoing step change program. This result includes additional project costs for the remediation actions taken with regards to cable components. The strategic portfolio review is progressing according to plan and ABB will report on this review at its Capital Markets Day in October 2016.

 

 

 

 

Page 6 


 

More information

The Q2 2016 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. UK callers should dial +44 203 059 58 62. From Sweden, the number 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 tariff). Lines will be open 10-15 minutes before the start of the conference. A podcast of the media conference will be available for one week afterwards. The podcast will be accessible here. 

A conference call 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). UK callers should dial +44 203 514 3188. From Sweden, the number 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 +1 800 860 2442 (toll-free) or +1 412 858 4600 (long distance tariff). 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 

Investor calendar 2016

 

 

Capital Markets Day, Zurich

October 4, 2016

Third-quarter 2016 results

October 27, 2016

Fourth-quarter and full year 2016 results

February 8, 2017

 

ABB (www.abb.com) is a leading global technology company in power and automation that enables utility, industry, and transport & infrastructure customers to improve their performance while lowering environmental impact. The ABB Group of companies operates in roughly 100 countries and employs about 135,000 people.

 

 

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 Short-term outlook, Next Level Strategy and Outlook sections of this release. 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” 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.

 

Zurich, July 21, 2016

Ulrich Spiesshofer, CEO

For more information please contact:

Media Relations

Saswato Das, Antonio Ligi, Sandra Wiesner, Domenico Truncellito

Tel: +41 43 317 7111 media.relations@ch.abb.com

Investor Relations

Tel. +41 43 317 71 11 investor.relations@ch.abb.com

ABB Ltd

Affolternstrasse 44

8050 Zurich

Switzerland

  

 

 

Page 7 


 

Q2 2016
Financial Information
 

 

 

 

 

 

  

1         Q2 2016 Financial Information 


 

Financial  Information

 

 

 

 

 

 

 

 

 

3     Key Figures

 

 

8     Interim  Consolidated  Financial  Information  (unaudited)

 

8         Interim  Consolidated  Income  Statements

9         Interim  Condensed  Consolidated  Statements  of Comprehensive  Income 

10       Interim  Consolidated  Balance  Sheets

11       Interim  Consolidated  Statements  of Cash  Flows 

12       Interim  Consolidated  Statements  of Changes  in  Stockholders’  Equity 

13       Notes  to  the  Interim  Consolidated  Financial  Information

 

 

 

 

 

31       Supplemental Reconciliations and Definitions

 

 

 

 

 

 

 

                                              

2         Q2 2016 Financial Information 


 

 

Key Figures

  

 

 

 

 

 

Change

 

($ in millions, unless otherwise indicated)

Q2 2016

Q2 2015

US$

Comparable(1)

 

Orders

8,316

8,996

-8%

-5%

 

Order backlog (end June)

25,338

26,028

-3%

2%

 

Revenues

8,677

9,165

-5%

-2%

 

Operational EBITA(1)

1,106

1,058

5%

 

 

 

as % of operational revenues(1)

12.7%

11.7%

+1.0 pts

 

 

Net income

406

588

-31%

 

 

Basic earnings per share ($)

0.19

0.26

-28%(2)

 

 

Operational earnings per share(1) ($)

0.35

0.30

16%(2)

18%(2)

 

Cash flow from operating activities

1,082

598

81%

 



 

 

 

 

 

 

Change

 

($ in millions, unless otherwise indicated)

H1 2016

H1 2015

US$

Comparable(1)

 

Orders

17,569

19,400

-9%

-6%

 

Revenues

16,580

17,720

-6%

-2%

 

Operational EBITA(1)

2,049

2,007

2%

 

 

 

as % of operational revenues(1)

12.3%

11.4%

+0.9 pts

 

 

Net income

906

1,152

-21%

 

 

Basic earnings per share ($)

0.42

0.51

-19%(2)

 

 

Operational earnings per share(1) ($)

0.63

0.58

9%(2)

10%(2)

 

Cash flow from operating activities

1,334

651

105%

 

(1)   For a reconciliation of non-GAAP measures see “Supplemental Reconciliations and Definitions” on page 31.

(2)   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 2016 Financial Information 


 

 

 

 

 

Change

 

($ in millions, unless otherwise indicated)

Q2 2016

Q2 2015

US$

Local

Comparable

 

Orders

ABB Group

8,316

8,996

-8%

-5%

-5%

 

 

Electrification Products

2,451

2,573

-5%

-2%

-2%

 

 

Discrete Automation and Motion

2,201

2,428

-9%

-8%

-8%

 

 

Process Automation

1,369

1,750

-22%

-20%

-20%

 

 

Power Grids

2,655

2,754

-4%

-1%

0%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(360)

(509)

 

Third-party base orders

ABB Group

7,657

7,874

-3%

0%

0%

 

 

Electrification Products

2,330

2,428

-4%

-1%

-1%

 

 

Discrete Automation and Motion

2,037

2,080

-2%

0%

0%

 

 

Process Automation

1,277

1,422

-10%

-8%

-8%

 

 

Power Grids

2,000

1,924

4%

7%

7%

 

 

Corporate and Other

13

20

 

 

 

 

Order backlog (end June)

ABB Group

25,338

26,028

-3%

0%

2%

 

 

Electrification Products

3,164

3,120

1%

6%

6%

 

 

Discrete Automation and Motion

4,532

4,761

-5%

-1%

-1%

 

 

Process Automation

5,985

6,677

-10%

-7%

-7%

 

 

Power Grids

13,310

13,239

1%

4%

7%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(1,653)

(1,769)

 

Revenues

ABB Group

8,677

9,165

-5%

-3%

-2%

 

 

Electrification Products

2,397

2,506

-4%

-1%

-1%

 

 

Discrete Automation and Motion

2,221

2,348

-5%

-3%

-3%

 

 

Process Automation

1,717

1,875

-8%

-6%

-6%

 

 

Power Grids

2,779

2,951

-6%

-3%

1%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(437)

(515)

 

Operational EBITA

ABB Group

1,106

1,058

5%

7%

 

 

 

Electrification Products

414

411

1%

3%

 

 

 

Discrete Automation and Motion

311

339

-8%

-7%

 

 

 

Process Automation

210

227

-7%

-4%

 

 

 

Power Grids

253

196

29%

32%

 

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(82)

(115)

 

Operational EBITA %

ABB Group

12.7%

11.7%

 

 

 

 

 

Electrification Products

17.3%

16.5%

 

 

 

 

 

Discrete Automation and Motion

14.0%

14.5%

 

 

 

 

 

Process Automation

12.2%

12.3%

 

 

 

 

 

Power Grids

9.0%

6.8%

 

 

 

 

Income from operations

ABB Group

647

961

 

 

 

 

 

Electrification Products

339

389

 

 

 

 

 

Discrete Automation and Motion

226

293

 

 

 

 

 

Process Automation

112

216

 

 

 

 

 

Power Grids

151

181

 

 

 

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(181)

(118)

 

Income from operations %

ABB Group

7.5%

10.5%

 

 

 

 

 

Electrification Products

14.1%

15.5%

 

 

 

 

 

Discrete Automation and Motion

10.2%

12.5%

 

 

 

 

 

Process Automation

6.5%

11.5%

 

 

 

 

 

Power Grids

5.4%

6.1%

 

 

 

 

Cash flow from operating activities

ABB Group

1,082

598

 

 

 

 

 

Electrification Products

364

346

 

 

 

 

 

Discrete Automation and Motion

258

266

 

 

 

 

 

Process Automation

260

98

 

 

 

 

 

Power Grids

289

68

 

 

 

 

 

Corporate and Other

(89)

(180)

 

 

 

4         Q2 2016 Financial Information 


 

 

 

 

 

Change

 

($ in millions, unless otherwise indicated)

H1 2016

H1 2015

US$

Local

Comparable

 

Orders

ABB Group

17,569

19,400

-9%

-6%

-6%

 

 

Electrification Products

4,778

5,128

-7%

-3%

-3%

 

 

Discrete Automation and Motion

4,518

4,997

-10%

-7%

-7%

 

 

Process Automation

3,153

4,022

-22%

-18%

-18%

 

 

Power Grids

5,962

6,495

-8%

-5%

-4%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(842)

(1,242)

 

 

 

 

Third-party base orders

ABB Group

15,300

15,908

-4%

0%

0%

 

 

Electrification Products

4,511

4,775

-6%

-2%

-2%

 

 

Discrete Automation and Motion

4,058

4,284

-5%

-2%

-2%

 

 

Process Automation

2,681

2,930

-8%

-5%

-5%

 

 

Power Grids

4,024

3,881

4%

8%

8%

 

 

Corporate and Other

26

38

 

 

 

 

Order backlog (end June)

ABB Group

25,338

26,028

-3%

0%

2%

 

 

Electrification Products

3,164

3,120

1%

6%

6%

 

 

Discrete Automation and Motion

4,532

4,761

-5%

-1%

-1%

 

 

Process Automation

5,985

6,677

-10%

-7%

-7%

 

 

Power Grids

13,310

13,239

1%

4%

7%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(1,653)

(1,769)

 

Revenues

ABB Group

16,580

17,720

-6%

-3%

-2%

 

 

Electrification Products

4,522

4,735

-4%

-1%

-1%

 

 

Discrete Automation and Motion

4,300

4,619

-7%

-4%

-4%

 

 

Process Automation

3,338

3,639

-8%

-5%

-5%

 

 

Power Grids

5,297

5,723

-7%

-5%

-1%

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(877)

(996)

 

Operational EBITA

ABB Group

2,049

2,007

2%

5%

 

 

 

Electrification Products

732

751

-3%

0%

 

 

 

Discrete Automation and Motion

585

657

-11%

-9%

 

 

 

Process Automation

406

443

-8%

-4%

 

 

 

Power Grids

452

360

26%

29%

 

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(126)

(204)

 

Operational EBITA %

ABB Group

12.3%

11.4%

 

 

 

 

 

Electrification Products

16.2%

15.9%

 

 

 

 

 

Discrete Automation and Motion

13.6%

14.3%

 

 

 

 

 

Process Automation

12.1%

12.3%

 

 

 

 

 

Power Grids

8.5%

6.4%

 

 

 

 

Income from operations

ABB Group

1,431

1,820

 

 

 

 

 

Electrification Products

627

699

 

 

 

 

 

Discrete Automation and Motion

466

593

 

 

 

 

 

Process Automation

282

421

 

 

 

 

 

Power Grids

332

309

 

 

 

 

 

Corporate and Other

 

 

 

 

 

 

(incl. inter-division eliminations)

(276)

(202)

 

 

 

 

Income from operations %

ABB Group

8.6%

10.3%

 

 

 

 

 

Electrification Products

13.9%

14.8%

 

 

 

 

 

Discrete Automation and Motion

10.8%

12.8%

 

 

 

 

 

Process Automation

8.4%

11.6%

 

 

 

 

 

Power Grids

6.3%

5.4%

 

 

 

 

Cash flow from operating activities

ABB Group

1,334

651

 

 

 

 

 

Electrification Products

397

402

 

 

 

 

 

Discrete Automation and Motion

372

448

 

 

 

 

 

Process Automation

308

119

 

 

 

 

 

Power Grids

372

(54)

 

 

 

 

 

Corporate and Other

(115)

(264)

 

 

 

5         Q2 2016 Financial Information 


 

Operational EBITA

 

  

 

 

 

Electrification

Discrete Automation

Process

Power

 

($ in millions, unless otherwise indicated)

ABB

Products

and Motion

Automation

Grids

 

 

Q2 16

Q2 15

Q2 16

Q2 15

Q2 16

Q2 15

Q2 16

Q2 15

Q2 16

Q2 15

 

Revenues

8,677

9,165

2,397

2,506

2,221

2,348

1,717

1,875

2,779

2,951

 

FX/commodity timing

 

 

 

 

 

 

 

 

 

 

 

differences in total revenues

37

(100)

2

(13)

2

(3)

6

(26)

27

(57)

 

Operational revenues

8,714

9,065

2,399

2,493

2,223

2,345

1,723

1,849

2,806

2,894

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

647

961

339

389

226

293

112

216

151

181

 

Acquisition-related amortization

71

80

24

26

30

33

3

3

9

15

 

Restructuring and

 

 

 

 

 

 

 

 

 

 

 

restructuring-related expenses(1)

367

58

51

3

54

25

89

20

76

10

 

Gains and losses from sale of businesses,

 

 

 

 

 

 

 

 

 

 

 

acquisition-related expenses and certain

 

 

 

 

 

 

 

 

 

 

 

non-operational items

9

39

15

2

31

 

FX/commodity timing

 

 

 

 

 

 

 

 

 

 

 

differences in income from operations

12

(80)

(7)

1

(12)

6

(27)

15

(41)

 

Operational EBITA

1,106

1,058

414

411

311

339

210

227

253

196

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational EBITA margin (%)

12.7%

11.7%

17.3%

16.5%

14.0%

14.5%

12.2%

12.3%

9.0%

6.8%



 

 

 

 

Electrification

Discrete Automation

Process

Power

 

($ in millions, unless otherwise indicated)

ABB

Products

and Motion

Automation

Grids

 

 

H1 16

H1 15

H1 16

H1 15

H1 16

H1 15

H1 16

H1 15

H1 16

H1 15

 

Revenues

16,580

17,720

4,522

4,735

4,300

4,619

3,338

3,639

5,297

5,723

 

FX/commodity timing

 

 

 

 

 

 

 

 

 

 

 

differences in total revenues

18

(137)

(5)

(7)

(6)

(37)

24

(32)

5

(60)

 

Operational revenues

16,598

17,583

4,517

4,728

4,294

4,582

3,362

3,607

5,302

5,663

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

1,431

1,820

627

699

466

593

282

421

332

309

 

Acquisition-related amortization

142

163

48

51

61

65

6

6

18

32

 

Restructuring and

 

 

 

 

 

 

 

 

 

 

 

restructuring-related expenses(1)

436

84

55

10

61

28

93

21

94

25

 

Gains and losses from sale of businesses,

 

 

 

 

 

 

 

 

 

 

 

acquisition-related expenses and certain

 

 

 

 

 

 

 

 

 

 

 

non-operational items

11

50

1

18

4

33

 

FX/commodity timing

 

 

 

 

 

 

 

 

 

 

 

differences in income from operations

29

(110)

2

(10)

(3)

(29)

25

(23)

4

(39)

 

Operational EBITA

2,049

2,007

732

751

585

657

406

443

452

360

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational EBITA margin (%)

12.3%

11.4%

16.2%

15.9%

13.6%

14.3%

12.1%

12.3%

8.5%

6.4%

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



 

Depreciation and Amortization

 

  

 

 

 

Electrification

Discrete Automation

Process

Power

 

($ in millions)

ABB

Products

and Motion

Automation

Grids

 

 

Q2 16

Q2 15

Q2 16

Q2 15

Q2 16

Q2 15

Q2 16

Q2 15

Q2 16

Q2 15

 

Depreciation

194

192

51

52

39

36

15

16

51

52

 

Amortization

93

101

27

28

34

36

5

4

17

21

 

including total acquisition-related amortization of:

71

80

24

26

30

33

3

3

9

15



 

 

 

 

Electrification

Discrete Automation

Process

Power

 

($ in millions)

ABB

Products

and Motion

Automation

Grids

 

 

H1 16

H1 15

H1 16

H1 15

H1 16

H1 15

H1 16

H1 15

H1 16

H1 15

 

Depreciation

381

384

100

104

78

73

29

31

100

104

 

Amortization

186

204

53

56

69

73

9

9

33

44

 

including total acquisition-related amortization of:

142

163

48

51

61

65

6

6

18

32

6         Q2 2016 Financial Information 


 

Orders received and revenues by region

 

  

 

($ in millions, unless otherwise indicated)

Orders received

Change

Revenues

Change

 

 

 

 

 

 

Com-

 

 

 

 

Com-

 

Q2 16

Q2 15

US$

Local

parable

Q2 16

Q2 15

US$

Local

parable

 

Europe

2,802

2,809

0%

1%

2%

2,949

2,949

0%

1%

5%

 

The Americas

2,401

2,615

-8%

-5%

-5%

2,519

2,706

-7%

-4%

-4%

 

Asia, Middle East and Africa

3,113

3,572

-13%

-10%

-10%

3,209

3,510

-9%

-5%

-5%

 

ABB Group

8,316

8,996

-8%

-5%

-5%

8,677

9,165

-5%

-3%

-2%



 

 

($ in millions, unless otherwise indicated)

Orders received

Change

Revenues

Change

 

 

 

 

 

 

Com-

 

 

 

 

Com-

 

H1 16

H1 15

US$

Local

parable

H1 16

H1 15

US$

Local

parable

 

Europe

6,348

6,771

-6%

-4%

-3%

5,566

5,753

-3%

-1%

2%

 

The Americas

4,656

5,354

-13%

-9%

-9%

4,816

5,358

-10%

-6%

-6%

 

Asia, Middle East and Africa

6,565

7,275

-10%

-6%

-6%

6,198

6,609

-6%

-2%

-2%

 

ABB Group

17,569

19,400

-9%

-6%

-6%

16,580

17,720

-6%

-3%

-2%

7         Q2 2016 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, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

 

Sales of products

13,675

14,762

7,172

7,632

 

Sales of services

2,905

2,958

1,505

1,533

 

Total revenues

16,580

17,720

8,677

9,165

 

Cost of products

(10,069)

(10,711)

(5,358)

(5,517)

 

Cost of services

(1,738)

(1,788)

(904)

(928)

 

Total cost of sales

(11,807)

(12,499)

(6,262)

(6,445)

 

Gross profit

4,773

5,221

2,415

2,720

 

Selling, general and administrative expenses

(2,675)

(2,687)

(1,405)

(1,378)

 

Non-order related research and development expenses

(648)

(676)

(343)

(346)

 

Other income (expense), net

(19)

(38)

(20)

(35)

 

Income from operations

1,431

1,820

647

961

 

Interest and dividend income

38

38

20

19

 

Interest and other finance expense

(146)

(159)

(74)

(88)

 

Income from continuing operations before taxes

1,323

1,699

593

892

 

Provision for taxes

(350)

(493)

(149)

(263)

 

Income from continuing operations, net of tax

973

1,206

444

629

 

Income (loss) from discontinued operations, net of tax

(2)

2

(1)

(2)

 

Net income

971

1,208

443

627

 

Net income attributable to noncontrolling interests

(65)

(56)

(37)

(39)

 

Net income attributable to ABB

906

1,152

406

588

 

 

 

 

 

 

 

Amounts attributable to ABB shareholders:

 

 

 

 

 

Income from continuing operations, net of tax

908

1,150

407

590

 

Net income

906

1,152

406

588

 

 

 

 

 

 

 

Basic earnings per share attributable to ABB shareholders:

 

 

 

 

 

Income from continuing operations, net of tax

0.42

0.51

0.19

0.26

 

Net income

0.42

0.51

0.19

0.26

 

 

 

 

 

 

 

Diluted earnings per share attributable to ABB shareholders:

 

 

 

 

 

Income from continuing operations, net of tax

0.42

0.51

0.19

0.26

 

Net income

0.42

0.51

0.19

0.26

 

 

 

 

 

 

 

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

 

 

 

 

 

Basic earnings per share attributable to ABB shareholders

2,165

2,241

2,149

2,232

 

Diluted earnings per share attributable to ABB shareholders

2,169

2,246

2,154

2,238

 

 

 

 

 

 

 

See Notes to the Interim Consolidated Financial Information

 

 

 

 

8         Q2 2016 Financial Information 


 

 

ABB Ltd Interim Condensed Consolidated Statements of Comprehensive

 

Income (unaudited)