ABB Annual Report 2012 PDF - ABB Group Annual Report 2012

(1)(1)Process AutomationThe financial results of our Process Automation division wereas follows:($ in millions, % Changeexcept OperationalEBITDA margin %) 2012 2011 2010 2012 2011Orders 8,704 8,726 7,383 – 18Order backlog at Dec. 31, 6,416 5,771 5,530 11 4Revenues 8,156 8,300 7,432 (2) 12Operational EBITDA 1,003 1,028 925 (2) 11Operational EBITDAmargin % (1) 12.3 12.4 12.5 n.a n.a.EBIT 912 963 759 (5) 27Operational EBITDA margin % is calculated as Operational EBITDA dividedby Operational revenues.Reconciliation to Financial Statements($ in millions) 2012 2011 2010Operational revenues 8,134 8,318 7,427FX/commodity timing differenceson revenues (1) 22 (18) 5Revenues (as per FinancialStatements) 8,156 8,300 7,432Operational EBITDA 1,003 1,028 925FX/commodity timing differenceson EBIT (1) 21 26 (46)Restructuring-related costs (28) (8) (44)Acquisition-related expenses andcertain non-operational items (2) – –Depreciation and amortization (82) (83) (76)EBIT (as per FinancialStatements) 912 963 759For further details of FX/commodity derivative timing differences, see “Note 23 Operatingsegment and geographic data.”OrdersDespite economic uncertainty across many parts of the world,orders in 2012 reached the same level as 2011 (increased4 percent in local currencies) driven by key markets in marine,mining, and oil and gas. The Pulp and Paper, and Metalsbusinesses were weaker however, especially in Europe, Chinaand India. Certain short-cycle product businesses, such asMeasurement Products, also recorded lower volumes in thesecond half of the year.Orders in 2011 grew 18 percent, led by Oil and Gas,Marine, Metals, and Pulp and Paper businesses. Large orderswere strong, mainly in the Marine, and Oil and Gas businesses,where major automation and offshore projects wererecorded, while base orders also grew. Product orderswere also strong, led by our Measurement Products business.Life-cycle services grew strongly, driven by several smallandmedium-sized upgrade projects.The geographic distribution of orders for our ProcessAutomation division was as follows:(in %) 2012 2011 2010Europe 37 39 39The Americas 25 23 22Asia 27 30 29Middle East and Africa 11 8 10Total 100 100 100From a regional demand perspective, growth in 2012 wasdriven by MEA and the Americas, while Europe retained itshigh share of total orders. Growth in MEA was driven byseveral oil and gas investments across the region, as well asharbor cranes investments in the United Arab Emirates anda mining investment in Mozambique. In the Americas, SouthAmerica recorded the strongest growth, driven by severalmining investments in Chile and Peru, as well as a large marineorder in Brazil. North America also continued to be strong,largely driven by mining investments in Canada. Growth inEurope was overall low, as growth in Central Europe, driven bythe marine and cranes sector, was offset by declines inNorthern Europe. Asia recorded lower orders as the historicallyhigh activity level in the South Korean marine sector in2011 was not repeated, while China grew moderately.In 2011, from a regional demand perspective, Asia andthe Americas recorded strong growth. In Asia the growthwas led by large projects in South Korea in the shipbuildingsector, and investments in the metals industry in China. Inthe Americas several large projects in oil and gas, minerals,and pulp and paper sectors were recorded in South America,while growth in the U.S. was driven by our products andservices business. Orders in Europe were also at a high level,driven by oil and gas investment in an offshore gas platformfor Statoil in Norway. In MEA, orders were lower as fewer largeprojects were recorded.Order backlogOrder backlog at December 31, 2012, was 11 percent higher(8 percent in local currencies) than 2011. Order backloggrowth was largely driven by our Marine, Mining, and Oil, Gasand Petrochemical businesses.Order backlog at December 31, 2011, increased 4 percent(8 percent in local currencies) compared to 2010. Orderbacklog growth was primarily driven by our Marine, andPulp and Paper businesses.RevenuesIn 2012, revenues were down 2 percent (up 2 percent inlocal currencies) compared to 2011. We continued to executefrom a strong order backlog. Revenue growth was led by thesystems business, where our Marine, and Pulp and Paperbusinesses recorded strong growth, while Metals and Mineralsbusinesses were lower. Our Oil and Gas business wasflat. Product businesses grew moderately, where growth inour Measurement Products business was offset by a declinein our Turbo Products business. Life-cycle services continuedto be strong and recorded a moderate growth, while ourFull Service business was down, as we continued to refocusour portfolio towards higher value-added activities.ABB Annual Report 2012 | Financial review 69