ABB Annual Report 2012 PDF - ABB Group Annual Report 2012

In 2011, orders in the Power Products division grew13 percent (8 percent in local currencies) and were higher inall businesses. The order increase was driven primarilyby continued strength in the industrial and power distributionsectors as well as large orders in the transmission sector.Continuing investments in grid upgrades and the integrationof renewable energy sources fuelled an 18 percent (12 percentin local currencies) orders increase in the Power Systemsdivision. In August 2011, ABB won its largest-ever powertransmission order, worth around $1 billion, to supply a powerlink connecting offshore North Sea wind farms to the Germanmainland grid. The strong growth in the Discrete Automationand Motion division reflected continued demand for energyefficientautomation solutions leading to an increase in ordersof 63 percent (57 percent in local currencies, 21 percentexcluding Baldor). While all businesses contributed to theincrease in orders in that division, Robotics and PowerElectronics posted the highest growth rates. Orders were14 percent higher in Low Voltage Products (9 percent inlocal currencies), mainly on increased demand for low-voltagesystems to improve electrical efficiency in industry. Ordergrowth slowed in that division in the second half of the yearon a combination of more difficult comparisons with the stronggrowth recorded in 2010, slowing demand in most earlycycleindustries and cutback in renewable investments comparedto the previous year. The Process Automation divisionsaw orders up 18 percent (12 percent in local currencies),mainly on continuing demand from the oil and gas and relatedmarine industry. Service orders in Process Automation grewat a double-digit pace as well.Base orders grew significantly in the first half of 2011, asthe global economic upturn continued. Although the developmentslowed in the second half of the year amid increaseduncertainties about the global macroeconomic outlook,growth rates remained double digit. For ABB as a whole, baseorders grew 21 percent (16 percent in local currencies), asall divisions reported an increase in base orders in 2011. Additionally,a number of sizeable projects in the tender backlogmaterialized into large orders, which led to significant growthin the year. After a decline in 2010, large orders reboundedand grew 32 percent (25 percent in local currencies).We determine the geographic distribution of our ordersbased on the location of the customer, which may be differentfrom the ultimate destination of the products’ end use.The geographic distribution of our consolidated orders wasas follows:% Change($ in millions) 2012 2011 2010 2012 2011Europe 13,512 15,202 13,781 (11) 10The Americas 12,152 9,466 6,223 28 52Asia 10,346 12,103 8,720 (15) 39Middle East and Africa 4,222 3,439 3,957 23 (13)Total 40,232 40,210 32,681 – 23In 2012, orders grew 28 percent (32 percent in local currencies)in the Americas due to Thomas & Betts, as well as onorganic growth in existing businesses. The U.S. recordedhigher orders in every division. Additionally, Canada and Brazilremained significant growth areas in this region. In Asia,orders were down 15 percent (13 percent in local currencies)primarily on lower large orders from the power sector inChina and India, as well as from the marine sector in SouthKorea. Europe declined 11 percent (6 percent in local currencies)despite increases in Finland and the U.K., as a $1 billionoffshore wind order in Germany received in 2011 was notrepeated in 2012, as well as on lower orders in Sweden, Norwayand Italy. Orders grew in MEA by 23 percent (28 percentin local currencies) on large orders from the power sectorin Saudi Arabia, solar power orders in South Africa as well asorders from the oil and gas sector in Oman.Orders in 2011 grew in the Americas 52 percent (50 percentin local currencies) driven by Baldor, as well as by organicgrowth. The U.S., Canada and Brazil were the main growthdrivers in this region, as Brazil recorded large orders in thePower Systems division, as well as in the Power Automationdivision from the oil and gas and minerals sectors. In Asia,orders were up 39 percent (32 percent in local currencies) ondouble digit growth in all divisions. In China, large ordersfor the Power Systems and Power Products divisions, as wellas base order growth in the Discrete Automation and Motion,and Low Voltage Products divisions drove significant ordergrowth. India returned to double-digit order growth after a contractionin 2010 and South Korea recorded large orders fromthe marine sector. Europe grew 10 percent (4 percent in localcurrencies), on growth in the industrial sectors. Additionally,a large order for offshore wind farm connection in Germany wasrepeated in 2011 (at a higher amount than in 2010) and Norwaywon large orders in the oil and gas sector. Order volumesdecreased in the MEA by 13 percent (15 percent in local currencies)as large orders from the power sector in Saudi Arabiaand from the oil and gas sector in Congo were offset bya lower orders level in the Power Systems division in Kuwait,Qatar and the United Arab Emirates.56 Financial review | ABB Annual Report 2012