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ABB ASEA BROWN BOVERI GROUP REPORTS 1992 RESULTS

 ZURICH, Switzerland, March 11 /PRNewswire/ -- The Zurich-based ABB Group reported an order increase for 1992 of 7 percent to $31.6 billion (1991: $29.6 billion). The order backlog increased to $28.5 billion at the end of 1992 (1991: $27.3 billion). The order growth was due to good demand for large project and system deliveries, while orders for standard products and other industrial investment goods were stable. Revenues increased by 3 percent to $29.6 billion (1991: $28.9 billion).
 Earnings
 The ABB Group's earnings after financial items amounted to $1.1 billion, a decrease of 4 percent (1991: $1.2 billion). Operating earnings after depreciation decreased by 5 percent to $1.8 billion (1991: $1.9 billion).
 The Power Plants business segment showed a good increase as a result of productivity improvements and restructuring efforts initiated during previous years. Financial Services conducted successful risk management operations in volatile financial markets and increased earnings substantially. Both Power Transmission and Power Distribution maintained the previous year's earnings levels, a satisfactory development considering the poor market conditions in large parts of Europe and North America.
 Earnings of the Transportation business segment decreased from a low level. Capacity adjustments and some old loss orders generated negative results in 1992 for the segment.
 Industry recorded lower earnings as demand for investment goods declined. The largest contribution to earnings in the various activities segment came from the Installation Material and Superchargers business areas, and good increases were reported by Oil & Gas and Motors.
 Major declines in earnings came from Indoor Climate and Electrical Wholesaling, negatively affected by the significant decline in the Scandinavian construction industry. In 1992 the operations previously making up the Environmental Control business segment were integrated into other business segments. These businesses overall generated a loss for the year.
 On a regional basis, the main contributions to operating earnings after depreciation came from Germany, Sweden, Switzerland, Italy, Finland, and Norway. Earnings in Germany increased substantially. The Scandinavian countries showed satisfactory earnings, thanks to effective recession management in a severe economic recession. Among ABB's medium-sized operations in Europe, the Netherlands significantly improved earnings while some other countries reported decreases.
 North American profits fell somewhat due to some loss projects and cyclical poor demand in areas like investment goods for different process industries and products related to home construction.
 Most countries in Asia, Australasia, South America, North Africa, and the Arabian Peninsula improved their earnings due to expanding business volumes and higher local value-added. ABB's operations in Eastern Europe were profitable. Poland reported the highest earnings in this region.
 Restructuring programs continued, but non-recurring costs, totaling $201 million, were lower than in the previous year (1991: $250 million). Due to the weak market environment for divestments, non-recurring income decreased to $37 million (1991: $145 million). This resulted in a net charge of -$164 million (1991: -$105 million).
 Total taxes for the ABB Group amounted to $418 million (1991: $415 million) corresponding to an overall tax rate of 44 percent (1991: 40 percent). The higher tax rate is a consequence of improved results in high-tax countries, mainly Germany, and low income before taxes in countries with tax loss carry-forwards such as the United States. However, current taxes, which directly impact cash flow, decreased by $63 million, whereas deferred taxes increased by $66 million.
 Net income for 1992 was $505 million, down 17 percent from $609 million in 1991. Return on capital employed increased to 17.9 percent (1991: 17.1 percent) and return on equity decreased to 11.8 percent (1991: 13.9 percent).
 Investments, Divestitures and Capital Expenditure
 The Group continued its policy to concentrate on its core businesses. Divestitures totaled $274 million while payments for acquisitions amounted to $253 million.
 Capital expenditure for tangible fixed assets in 1992 amounted to $957 million, 8 percent below 1991 ($1 billion). The pace of rationalization investments increased and, at the same time, the economic slowdown reduced the need for new capacity investments in Europe and North America.
 ABB continued to invest in research and development at a high rate -- about 8 percent of revenues. Total expenditure for research and development increased slightly to $2.4 billion (1991: $2.3 billion).
 Financial Position
 The Group's net debt position (defined as cash and marketable securities minus short-, medium-, and long-term loans) improved by almost $1 billion. At the end of 1992 the ABB Group had virtually no net debt. This is a result of action programs to reduce cycle times and improve cash flows and was achieved despite fewer divestments of businesses and lower real estate sales than originally expected. Liquid assets for the ABB Group totaled $5.5 billion at the end of 1992 compared to $5.2 billion a year ago.
 Foreign Exchange Effects
 The U.S. dollar average exchange rates during 1992 were somewhat weaker compared to most currencies in 1991. As average exchange rates are used to translate income statements from local currencies into U.S. dollars, there was a small positive effect of about 2 percent on Group revenues for 1992 compared to 1991. There was also a small favorable impact on earnings. Compared to all major currencies, the U.S. dollar was stronger at the end of 1992 than a year earlier. This had a shrinking effect on ABB's balance sheet where assets and liabilities are translated into dollars at year-end exchange rates. The balance sheet, expressed in a higher U.S. dollar, shrank by around 12 percent compared to the end of 1991.
 Personnel
 Responding to the continued recession in most major markets, the general slowdown in demand and the resulting excess capacity, ABB reduced its personnel by a further 14,000, or more than 6 percent of total employment (excluding acquisitions and divestitures). The consolidation of ABB Transportation (formerly BREL) in Great Britain, where ABB increased its ownership from 40 to 85 percent, added 6,000 employees. Other acquisitions were made in Eastern Europe. In total the Group employed 213,000 people at the end of 1992 (1991: 214,000).
 Outlook for 1993 and Beyond
 Nineteen ninety-three will be the third year of recession in Western Europe, with a further decline of demand in Germany and adjacent countries and increased competition. At the same time ABB will vigorously continue its expansion in the Asia-Pacific region and in other parts of the developing world experiencing growing demand. The company will also continue the turnaround program in a somewhat improved North American market.
 ABB's internal improvement programs will continue to raise productivity and reduce working capital. With the present outlook, ABB expects Earnings After Financial Items in 1993 to reach about the level of 1992.
 "ABB will emerge from this prolonged recession as a much stronger and more competitive company than when the recession began," Percy Barnevik, ABB's CEO, said in a press conference today. "With higher levels of customer service, lower break-even points, and shorter cycle times, the company is well positioned to reap the benefits of increased demand in the Western world when general economic conditions improve. The investments in Asia and Eastern Europe will also increasingly pay off as these economies expand and adjust. Our goals remain to achieve a 10 percent average Operating Earnings margin and a 25 percent Return on Capital Employed within a few years."
 Dividends
 ABB Asea Brown Boveri Ltd's Board of Directors proposes that a dividend of SFr. 170 million (1991: SFr. 165 million), net of withholding tax, be paid to each of the two shareholders,
 ASEA AB and BBC Brown Boveri Ltd. In U.S. dollars, this is about equal to last year.
 ABB ASEA BROWN BOVERI GROUP
 Consolidated Income Statement
 (US$ millions)
 1992 1991
 Revenues 29,615 28,883
 Material expenses (11,789) (11,764)
 Personnel expenses (9,987) (9,482)
 Other expenses (5,351) (4,911)
 Changes in work in progress
 and finished goods 223 1
 Depreciation of fixed assets (901) (819)
 Operating Earnings
 After Depreciation 1,810 1,908
 Earnings from associated/divested
 companies 17 19
 Dividend income 17 13
 Interest income 904 798
 Interest on advances (506) (440)
 Interest expense (1,147) (1,158)
 Exchange differences 15 13
 Earnings after Financial Items 1,110 1,153
 Non-recurring items (164) (105)
 Income Before Taxes 946 1,048
 Taxes (418) (415)
 Net Inc. Bef. Minority Interest 528 633
 Minority interest (23) (24)
 Net Income 505 609
 NOTE: Exchange rates used in the above income statement are average for the period shown. The average exchange rates for the Swiss Franc, Swedish Krona and the Deutschmark are stated below:
 1992 1991
 1.00 US$ = SFr.: 1.39 1.42
 1.00 US$ = SKr.: 5.81 6.01
 1.00 US$ = DM: 1.55 1.64
 ABB ASEA BROWN BOVERI GROUP
 Consolidated Balance Sheet
 (US$ millions)
 Year-end 1992 1991
 ASSETS
 Cash and marketable securities 5,534 5,211
 Trade receivables 4,759 5,449
 Other current receivables 2,261 2,584
 Inventories(A) 4,412 4,655
 Total Current Assets 16,966 17,899
 Financing receivables 1,228 1,701
 Shares and participation 404 556
 Intangible assets 2,195 2,268
 Construction in progress 134 243
 Machinery and equipment 2,434 2,638
 Land and buildings 2,588 2,751
 Total Fixed Assets 8,983 10,157
 Total Assets 25,949 28,056
 LIABILITIES AND EQUITY
 Trade payables 3,044 3,269
 Provisions 3,759 3,986
 Other current liabilities 3,852 4,474
 Short-term loans 2,548 3,665
 Total Current Liabilities 13,203 15,394
 Advances from customers(A) 2,983 2,820
 Medium- and long-term loans 2,993 2,496
 Employee share ownership
 debentures 338 360
 Pension liabilities 1,738 1,740
 Deferred taxes 308 447
 Minority interest 291 301
 Share capital 1,750 1,750
 Restricted reserves 989 1,171
 Retained earnings 851 968
 Net income 505 609
 Total stockholders' equity 4,095 4,498
 Total liabilities and equity 25,949 28,056
 Contingent liabilities 1,178 1,057
 (A) Inventories are shown net of advances spent. This represents the part of gross advances consumed for costs incurred with ongoing orders.
 NOTE: Exchange rates used in the above balance sheets are year-end rates. For the Swiss Franc, Swedish Krona and Deutschmark these rates are stated below:
 1992 1991
 1.00 US$ = SFr.: 1.46 1.36
 1.00 US$ = SKr.: 7.04 5.53
 1.00 US$ = DM: 1.61 1.51
 ABB ASEA BROWN BOVERI GROUP
 Business Segment Figures
 (US$ millions)
 Orders Received Revenues
 1992 1991 1992 1991
 Power Plants 8,322 7,997 6,947 6,820
 Power Transmission 5,818 5,528 5,606 5,514
 Power Distribution 3,518 3,274 3,345 3,196
 Industry 4,935 4,230 4,430 4,486
 Transportation 2,896 2,093 2,662 1,946
 Financial Services 805 868 805 868
 Various Activities 9,945 9,641 10,027 9,740
 Total 36,239 33,631 33,822 32,570
 Intra-Group Transactions (4,605) (4,010) (4,207) (3,687)
 Net Total 31,634 29,621 29,615 28,883
 Operating earnings
 after depreciation
 1992 1991
 Power Plants 444 366
 Power Transmission 520 513
 Power Distribution 175 174
 Industry 184 271
 Transportation (40) 21
 Financial Services 228 148
 Various Activities 368 489
 Total 1,879 1,982
 Intra-Group Transactions (69)(B) (74)(B)
 Net total 1,810 1,908
 (B) Includes corporate items
 Regional Figures
 (US$ millions)
 Revenues(C) Employees
 1992 1991 1992 1991
 Western Europe - EC 11,147 10,302 79,385 78,888
 Western Europe - EFTA 6,320 7,038 60,717 65,200
 North America 4,931 5,407 29,016 32,271
 Asia and Australasia 4,927 4,350 21,205 19,809
 South America, Africa,
 Eastern Europe 2,290 1,786 23,084 18,231
 Total 29,615 28,883 213,407 214,399
 (C) Total third-party revenues in each region, excluding exports, which are accounted for in the revenue figures of the importing region.
 -0- 3/11/93
 /CONTACT: Karen Armour, 203-328-2217, or at home, 203-655-9461, for ABB Group/


CO: ABB Asea Brown Boveri ST: Connecticut IN: SU: ERN

SH -- NY010 -- 4992 03/11/93 09:13 EST
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