ABB Management Discusses Q1 2013 Results
Http://www.peutereyset.com ladies and gentlemen, good morning or good afternoon. Welcome to the ABB First Quarter 2013 Results Analyst and Investor Conference Call. I'm Julia, the Chorus Call operator. [ Instructions] At this time, it's a pleasure to hand over to Mr. Joe Hogan, CEO of ABB; and Mr. Eric Elzvik, CFO of ABB. Please go ahead, gentlemen.It's Joe and Eric, and thanks for joining the call. And good afternoon to everyone. Let me call your attention to Chart 2, and that's our Safe Harbor statement. And I challenge anybody to find the change in that for the last couple of quarters, I guess.Moving on to Chart 3. We feel good about the quarter, overall, from an operational standpoint and also from a strategic standpoint, too, and we'll talk more about that. Given the uncertainties in the global economy, we feel that we performed as we should have and as we'd planned. We continue to execute well and we're balancing solid cost discipline and that we see across the portfolio with targeted growth in businesses in regions where we have competitive advantages, especially in areas like industrial efficiency, power reliability and renewable energy.Our balanced portfolio and global footprint contributed to the resilient performance overall, allowing us to find and capture growth opportunities in a mixed market. For example, we won some key orders in marine and mining and robotics, and increased emerging market orders by doubledigits by 10%. We lifted total revenues on both an organic and an inorganic basis. Our execution on cost remains strong with very tight discipline on our G expenses. Continued success in sourcing and productivity improvements saved us about $260 million in the quarter.The Thomas Betts integration and synergies were on track. We're very pleased with this acquisition and the improved balance it gives us in the North American marketplace. Power Products team turned in another very good performance with an operational EBITDA margin of 14.9%, again, within our guidance of 14.5% to 15% for the full year. Thanks to solid execution on cost and selective growth initiatives in more profitable end markets. And we announced the planned acquisition of PowerOne earlier this week to tap what we think will be one of the most dynamic and attractive Power markets in the future, with solar inverters and it plays right into the combined strengths of automation and power as we described earlier this week.Moving onto Chart 4 and looking at the quarterly overview. I already mentioned the mixed demand environment that we see out there, which you can see reflected in our topline numbers. We generated a solid increase in operating earnings and margins. This is partially due to an easier yearonyear comparison. As you recall, we saw some weakness in the first quarter last year, but also the result of ongoing efforts to target more attractive end markets; to improve our service offerings; and to be more selective on the kinds of projects we take, especially in Power.And also, thanks to our continued success in balancing growth and cost, which is the foundation of our strategy, our execution on costs remained strong in the first quarter with tight discipline on G expenses, continued success in sourcing and productivity improvements, again, saved us $260 million. Eric will break that down for you in a moment.We also achieved these results despite continued demand headwinds. decelerated further in the quarter and industrial investments in much of Europe remained mixed. Cash flow was lower than we'd like, but it's largely expected and mainly reflects the timing of project execution, so we expect to see a recovery in the coming quarters as we always do at ABB,http://www.peutereyset.com/peuterey-lange-nylon-damen-parka-c-288.html, given the cyclical nature of our cash.Moving on to Chart 5. This chart highlights what we think is a key competitive advantage for ABB, namely our varied, balanced business and geographic scope. For example, we now have some 60% of our business now coming from the Automation side, which helps us take up some of the slack that we've seen in the Power cycle. Similarly, we've enhanced our presence in North America and that's contributed to the resilience of our results. And the share borders from a strong emerging markets' presence is again returning to near 50%, 48% of total orders in Q1. This has helped mitigate much of the market turbulence and allowed us to tap opportunities for profitable growth.Moving on to Chart 6. Here's a look at the regional highlights in some of our key industries. Starting with the Americas, orders were lower on an organic basis. That mainly reflects the tougher comps that we had versus Q1 last year in North America, especially in our Power business. As I mentioned earlier, we saw a continued yearonyear deceleration on order growth in the United States in Q1. We have to wait and see how this develops over the rest of the year, but we think that's a good sign.Europe was also, again, a very mixed bag. This quarter, we saw strong improvements in Eastern Europe; Poland, Lithuania, HVDC, large order link; and Russia, mine hoists. These offset weaker orders in some of our traditional Western European markets like Germany and Switzerland. However, we also saw good growth in countries like France in our Power business and the Netherlands in all of our divisions except for PA.So again, it's difficult to draw any general conclusions. The only conclusion I'd draw from the European discussion is that we have really good diversification from what we can sell in Europe, and you can see that on our portfolio, that we can drive in the kind of economic environment over here that we're seeing that we have just minus 1% in orders, relatively flat, I think is a great tribute to the diversity and the work of the team here.Asia also improved the results. China returned the demand levels of 2011 after a softer 2012 1Q.
In the Middle East and Africa, our strong presence in South Africa helped us to offset [indiscernible] some of the weaknesses in other parts of the Middle East and Africa.Moving onto Chart 7. Here are just some key orders, and I don't want to walk through each one, but what I hope you see through this is just the diversification in region and also product line that we have in these different orders, and you see it across the Automation portfolio and also the Power portfolio, too.Moving to Chart 8. And that's just a look at orders in revenue by individual divisions. So when you look at DM, revenues reflect execution of a strong order backlog, especially in robotics, and service revenue is up 5%. In LP and lowvoltage products, really steady organic we mean almost flat to one up. And this is our earliest cycle business, and no matter where we are around world, it's our biggest heads up in the sense of where economic activity is going, and so we see it relatively flat in that sense.Process Automation, higher mining and marine orders offset weaknesses in other sectors. We get a lot of questions on how we're doing from a marine standpoint in a down marketplace, and our comments are a lot of the marine that we do in PA has to do with oil and gas and offshore, and that's why we've been able to tap into that sector that has some robust investment.On PP, order selectivity in a challenging market overall. So Bernhard and his team were just, given the quotations that are out there today and the diversity of our product line and also our global footprint, we're able to pick the jobs that we like and there's enough robustness in the jobs out there that allow us to do that. On PS, we talked extensively with you in the fourth quarter about our PS reset. You're starting to see some of the benefits of that with the 8.3% for the quarter, overall, we'll talk about it in a moment. But it's also reflected in the orders being down in the sense that we're going to be more selective in the jobs that we take. And overall, you'll see this balance out as we go through the quarters in the year.So moving on to Chart 9, which is basically, when you look at the operational EBITDA and operational EBITDA margin, you can read through this yourself, too, but we have higher revenues in DM, a little less favorable mix. And what we mean by that is that you have both mediumterm and shortterm products in the portfolio of DM. Right now, we have more of the mediumterm coming in and that does give us a little bit of the shift in mix and a shift in margin side.LP, margin is up organically on improved cost control and better capacity utilization. PA improved project execution and higher full service margins. And in Power products, really favorable business mix and price pressure is mostly offset by cost savings. That team continues to execute well. And PS, we just talked about that.So with that, I'll turn it over to Eric, and he'll walk you through the waterfall.Yes. If you take a look at the EBITDA bridge we have here a presentation, which reflects the factors that impact our operational EBITDA. Performance has been slightly changed from the last quarter. You see in the first column, the net savings, the price pressure combined with the cost savings, that's the way we like to see it. And you can see we were successful to get a net effect out of that with more savings than price pressure in this quarter.Looking at the volume effect. So despite the limited revenue increase, we have a positive effect from the volume as we have kept the expenses under tight control. So $115 million improvement comes from there. Looking down further to the mix, that is negative and it's mainly within the divisions. There's a different mix between projects and products, geographies. There's a big variation in different places, but net to that is a, slight pressure on the mix. And as you can see, Other is almost nothing before arriving at the $1,360 billion and then adding the T contribution, bringing us to the EBITDA margin of 15.5% 15.0%, as you can see.Looking at the EPS slide on Chart 11. You can see that we had a, under net income, a reduction of 3%, but if you consider the amortization and the timing difference is mainly from derivatives that we book from an accounting point of view every quarter. We had actually an operational net income before amortization and improvement of the earnings per share of 16%. So we think that's a good reflection also on how the operational EBITDA has improved during the period.Turning to Chart 12. This is the update on Thomas Betts. Integration is on track, we had a strong start in the year with stable revenues, roughly $590 million with about $100 million operational EBITDA; margin at 16.6% versus 18.1% a year ago. That's against a strong comparable and also some of the mix impacts on Thomas Betts. But overall, integration is well on track. We are starting to get these cost synergies and also some early signs of the revenue side. The special items on amortization stays unchanged from before, so there's no change on the guidance on that side.Continuing to Chart 13. On the cash flow, you can here see that the regional cash flow was lower than last year. That's mainly due to timing of project payments and as well as the cash impact from the PS reset. We have a seasonal effect on cash flow, the first quarter is always weaker. And this year was specifically even perhaps more weak than the normal cycle because of those effects.All in all, the net working capital is at 16.4% and we continue to work hard to improve this and foresee that we will have stronger cash flow in the coming quarters.And so moving onto Chart 14, the technology innovation chart. We just want to show you just some of the products that have been successful for us recently. We announced that 1,000 kilowatt central solar inverter. And so when we do a deal, as we have with PowerOne recently, as we've mentioned, we do it from a standpoint of really understanding the market better than we did 3 or 4 years ago. And so as we go into that acquisition, we understand the technology, the regions, some of the grid codes and different things it's responsible for, and that's why we feel we could accelerate our efforts there. But that acquisition made a lot of sense at this point in time.On righthand side, the launching of our first DC grid on a ship, Norwegian offshore supply vessel. This is where about 20% of the energy is saved and a huge amount of cargo space that's saved by going with DC. We want to look at the trends translating that into other marine applications that are intermittent like this that allow for that kind of technology.相关的主题文章/Original Link：
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