ABB Annual Report 2012 PDF - ABB Group Annual Report 2012

OrdersIn 2012, orders were flat due to slower industrial growthglobally in a more challenging macroeconomic environment.Lower demand from the renewable energy sector was offsetby increased volumes from large orders in other sectors.The highest growth was achieved in the Robotics businessdue to several larger automotive orders. Our Motors andGenerators business as well as our Power Electronics andMedium Voltage Drives business recorded single-digit growth,while orders in our Low Voltage Drives business were loweras a result of weaker demand in renewables.In 2011, orders increased 63 percent (57 percent in localcurrencies) reflecting both increased demand for energyefficientautomation solutions, as well as the contributionfrom the U.S.-based industrial motor manufacturer Baldor,acquired in January 2011 (approximately half of the division’sorder growth related to Baldor). The highest order growthwas achieved in Motors and Generators due to the Baldorintegration while Robotics orders increased due to improvingdemand in automotive and general industry sectors.The geographic distribution of orders for our DiscreteAutomation and Motion division was as follows:(in %) 2012 2011 2010Europe 37 37 46The Americas 34 32 16Asia 26 28 34Middle East and Africa 3 3 4Total 100 100 100In 2012, the share of orders in the Americas increased dueto double-digit growth in South America, as well as dueto single-digit growth in North America. The share of ordersin Europe was unchanged compared to 2011, as doubledigitgrowth in the U.K. and Finland was offset by a declinein Germany and Spain. The share in Asia declined due toslower industrial growth and the weakening of the renewableenergy business. Orders from MEA showed double-digitgrowth while its share of total orders remained at the samelevel, compared to 2011, as orders in other regions also increased.All regions increased orders in 2011, with the highestgrowth in the Americas due to Baldor. With Baldor’s substantialpresence in the U.S., the Americas’ share of the division’stotal orders doubled in 2011, compared to 2010, andtherefore all other regions’ shares declined, resulting ina more balanced global presence with three equally strongregions – Europe, the Americas and Asia.Order backlogOrder backlog in 2012 grew 7 percent (6 percent in localcurrencies) as the order intake from large orders increasedin our Robotics and Motors and Generators businesses,which have a longer execution time. The backlog for thePower Electronics and Medium Voltage Drives businesswas 3 percent higher, compared to 2011.Order backlog in 2011 increased as orders were higherthan revenues during the year. The highest increase camefrom the Robotics business, due to the high level of orders tobe delivered in 2012 or later.RevenuesIn 2012, revenues grew due to higher execution from thebacklog in the Robotics business as well as in the PowerElectronics and Medium Voltage Drives business. Motorsand Generators business reported single-digit growth in revenuescompared to 2011, while revenues in the Low VoltageDrives business were lower, as orders declined due to weakeningmarket demand.Revenues in 2011 increased at a similar pace to orders,on the solid execution of the strong order backlog and dueto the Baldor acquisition (which accounted for approximately60 percent of the division’s revenue growth). The highestgrowth was achieved in Motors and Generators business, dueto Baldor, and the Robotics business as a result of the strongorder growth.The geographic distribution of revenues for our DiscreteAutomation and Motion division was as follows:(in %) 2012 2011 2010Europe 37 38 48The Americas 33 32 14Asia 27 27 34Middle East and Africa 3 3 4Total 100 100 100In 2012, the share of revenues from the Americas increaseddue to higher orders. Revenues in Europe grew due to thesolid execution of the order backlog but Europe’s share waslower as revenues in the other regions grew faster. Asiaachieved single-digit revenue growth but its share remainedat the same level as 2011, as the revenues in other regionsgrew faster.The geographic distribution of revenues changed substantiallyin 2011 with the integration of Baldor causingthe share of the Americas to more than double compared to2010. All regions increased revenues on higher orders asdemand increased in most markets.Operational EBITDAIn 2012, Operational EBITDA increased 4 percent while theOperational EBITDA margin was 18.4 percent compared to18.9 percent in 2011. The improved Operational EBITDA wasdue to higher revenues. The margin was slightly lower mainlydue to changes in the business mix as the share of highmarginbusinesses such as Low Voltage Drives was lower thanin 2011. All businesses, except Low Voltage Drives, increasedtheir Operational EBITDA, with the highest increase in theRobotics business. Revenue growth supported an increase inOperational EBITDA in the Motors and Generators businesswhile the Power Electronics and Medium Voltage Drives businessbenefited from solid execution of the order backlog.Operational EBITDA in the Low Voltage Drives business waslower than in 2011, due to a decline in revenues caused bythe weakening market conditions, as well as higher sales expensesand research and development spending.66 Financial review | ABB Annual Report 2012