ZURICH, Switzerland — Swiss-based ABB posted a 21% year-on-year decrease in its third quarter earnings due in part to China’s economic slowdown and the global fall in oil prices.
“Our Q3 results reflect the challenging markets we face. Short-cycle demand in oil and gas, China and the US was down and the orders compare to a strong Q3 2014 when we won a record amount of large orders in Power Systems and Process Automation,” said CEO Ulrich Spiesshofer. “However, building on our Next Level strategy, we were able to win key customer orders and to deliver margin accretion as well as a positive book-to-bill ratio in spite of significant market headwinds,” he said. “We delivered a 50 basis point improvement in operational EBITA margin and higher operational earnings per share by building on our strong focus on execution, restructuring and cost measures as well as the Power Systems ‘step change’ program.”
“We have launched Stage 2 of our Next Level strategy aimed at accelerating ABB’s transformation,” Spiesshofer said. “Markets are expected to remain challenging well into 2016. In this environment we continue to drive “self-help” by focusing on growth opportunities in a disciplined way while mitigating the impact of market headwinds through capacity adjustments, productivity measures and cost reductions. Executing our 1,000- day white-collar productivity and ongoing restructuring programs is pivotal,” he said. “We kicked off the announced strategic portfolio review of the future Power Grids division and are on track to complete it in 2016, as previously stated.
“Overall, we will continue to drive the execution of our Next Level strategy to deliver on profitable growth and sustainable value creation in challenging markets,” he said.
The complete press release including appendices is available here.
- Order pattern reflects adverse market conditions
- Base orders -3% total orders comparison impacted by record Q3 2014 large orders (-12%)
- Book-to-bill ratio positive at 1.03x and year-to-date 1.07x
- Revenues -2% on lower short-cycle volumes
- Operational EBITA margin up 50 basis points to 12.5%
- Operational earnings per share +2% (constant currency)
- Financials impacted by currency translation due to strong appreciation of US dollar
- Stage 2 of Next Level strategy aimed at accelerating ABB’s transformation
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