ABB Q2: Improved Results on Balanced Portfolio

• Higher revenues, operational EBITDA and EPS despite uncertain market environment
• Early-cycle product businesses trending sequentially higher in several key markets
• Orders reflect greater ABB project selectivity and lower utility and industrial large capex
• Thomas & Betts with positive contribution, synergies on track

ABB Q2: Improved Results on Balanced Portfolio

ABB Ltd

ABB reported higher revenues and earnings in the second quarter of 2013 despite challenging global markets.

“We continue to see the positive impact on our results from our balanced geographic and business portfolio,” said ABB Chief Executive Officer Joe Hogan. “We grew orders in a number of key sectors and geographies, including China, and we saw an encouraging trend with sequential order growth in most of our product business compared to the first quarter of the year.

“At the same time, we executed from our strong order backlog to drive both revenues and earnings higher, and we continued to take out cost to maintain profitability despite the uncertain market conditions.

“Orders were down as the strategic realignment in Power Systems launched at the end of last year started to take shape with our focus on greater project selectivity and higher profitability,” Hogan said. “We’ve seen the first results in higher gross margins in the division’s order backlog.

“Delays in the award of large orders, which is linked to the ongoing global macroeconomic uncertainty, also impacted orders this quarter. But our underlying demand drivers remain sound and we still generated a book-to-bill ratio for the first half of the year of 0.99, and 1.06 excluding the Power Systems division.

“In addition, we saw another good contribution from Thomas & Betts, with synergies on track. Both power divisions achieved a solid operational EBITDA margin, and we grew service revenues faster than total organic revenues,” Hogan said. “And our improving Net Promoter Scores show we are making progress to increase customer satisfaction.

“Our outlook for the rest of the year remains unchanged from the end of the first quarter. Macro indicators are increasingly mixed, which makes predicting the timing of orders more difficult, especially large project orders. However, our strong backlog will continue to partly mitigate that uncertainty, while we continue to focus on balancing cost and growth and increasing customer satisfaction. We remain confident that our business and regional balance will continue to provide us with profitable growth opportunities.”

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