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ABB ASEA BROWN BOVERI GROUP REPORTS 1991 RESULTS

 ABB ASEA BROWN BOVERI GROUP REPORTS 1991 RESULTS
 ZURICH, March 18 /PRNewswire/ -- The ABB Group today reported orders


received in 1991 of $29.6 billion, an increase of 1 percent (1990: $29.3 billion). Revenues rose by 8 percent to $28.9 billion (1990: $26.7 billion). The order backlog at the end of 1991 totaled $27.3 billion (year-end 1990: $25.7 billion). Currency translation effects had only a minor impact on the figures reported for 1991.
 Earnings
 Earnings after financial items amounted to $1.2 billion in 1991, an increase of 2 percent (1990: $1.1 billion). Operating earnings after depreciation increased by 7 percent to $1.9 billion (1990: $1.8 billion).
 The Industry business segment reported the biggest increase, almost double the 1990 figure. This is primarily due to the rapid integration and restructuring of the activities within the former Combustion Engineering operations. The Power Transmission business segment increased from an already good level and the Power Plants business segment reported higher profits while increasing R&D spending. Operating earnings decreased, due to recessionary impacts, for the Power Distribution, Environmental Control, and Various Activities business segments. Financial Services had another good year, but reported lower earnings due to a real estate gain included in the 1990 result. Earnings remained at a low level for the Transportation business segment. In the Various Activities business segment, the largest contributions to operating earnings came from the Installation Material and Power Lines and General Contracting business areas, both achieving good improvements. The District Heating, Robotics, and Superchargers business areas also reported strong performances, while the business area Other Activities Sweden showed substantially reduced results.
 On a regional basis, good increases in earnings were reported from the United States and Canada, where the planned turnaround was achieved with substantial result improvement. Germany showed a strong improvement of results and also Great Britain achieved better earnings. Decreases in earnings were reported from Sweden, Norway and Finland.
 Non-recurring costs amounted to $250 million, mainly as a result of restructuring programs and discontinued operations (1990: $193 million). Non-recurring income, mostly capital gains, totaled $145 million (1990: $168 million) leading to a net charge of -$105 million (1990: -$25 million).
 Total taxes for the ABB Group in 1991 amounted to $415 million (1990: $477 million), which corresponds to an overall tax rate of just under 40 percent (1990: 43 percent).
 Net income for 1991 was $609 million, 3 percent up on the $590 million in 1990. Return on capital employed was 17.1 percent (1990: 19.7 percent). Return on equity 13.9 percent (1990: 14.5 percent).
 Divestitures, Investments and Capital Expenditure
 Divestitures in 1991 totaled $607 million (1990: $1.1 billion), balancing payments for acquisitions of $612 million (1990: $677 million).
 Capital expenditure for tangible fixed assets for the ABB Group amounted to $1.1 billion (1990: $961 million). The strategy of expanding local operations with investments in a number of developing countries continued, and modernization of newly acquired companies in Eastern Germany and Eastern Europe also took place.
 Expenditures for research and development, affecting operating earnings after depreciation, rose by 21 percent to $2.3 billion (1990: $1.9 billion) which corresponds to about 8 percent of revenues.
 Financial Position
 The net debt (interest bearing debt minus cash) for the Group was reduced by about $1 billion, partly as a result of successful implementation of capital rationalization programs. The Group's liquid assets at the end of 1991
increased to $5.2 billion (year-end 1990: $5.0 billion).
 Personnel
 At year-end ABB employees numbered 214,000 compared to 215,000 a year earlier. Excluding acquisitions and divestitures the net reduction of the number of employees was 13,000 or about 6 percent. Early employment stoppages and voluntary departures kept the number of layoffs at a limited level.
 Outlook
 ABB made a satisfactory result in 1991, in view of the fact that the recession affected 60 percent of its markets. The results were achieved through a consistent strategy of customer focus, streamlining of the operations and productivity improvements, which counterbalanced the negative recessionary impact.
 The foundation has been laid for substantial growth in sales and earnings when the economy recovers. ABB is well positioned to reach the goals of 10 percent average operating earnings margin and 25 percent return on capital employed by the mid-90's.
 In 1992 a somewhat slow recovery in the recession-affected markets is anticipated. Standard products, about 30 percent of total sales, might experience some improved demand towards the end of the year. Investment goods, also about 30 percent, might recover only late in 1993. A further decline in demand and intensified price pressure could hurt both these product categories in 1992. For most of the infrastructure businesses, about 40 percent, the impact of the recession will be smaller and demand in several developing countries is anticipated to remain high.
 Based on this economic outlook and continuing positive results from our internal improvement programs, we expect earnings after financial items in 1992 to reach about the level of 1991. As in past years, ABB will continue its efforts to balance non-recurring restructuring costs with gains from divestment of non-core businesses and freed-up real estate.
 Dividends
 ABB Asea Brown Boveri Ltd's Board of Directors proposes that a dividend of SFr. 165 million (approximately $110 million), net of withholding tax, be paid to each of the two shareholders, ASEA AB and
BBC Brown Boveri Ltd. Last year's dividend of SFr. 150 million net to each shareholder converted at March, 1991 exchange rate also amounted to approximately $110 million.
 ABB ASEA BROWN BOVERI GROUP
 Consolidated Income Statement
 (US$ millions)
 1991 1990
 Revenues 28,883 26,688
 Material expenses (11,764) (10,851)
 Personnel expenses (9,482) (8,821)
 Other expenses (4,911) (4,613)
 Changes in work in progress
 and finished goods 1 137
 Depreciation of fixed assets (819) (750)
 Operating earnings after depreciation 1,908 1,790
 Earnings from associated/divested
 companies 19 47
 Dividend income 13 11
 Interest income 798 1,006
 Interest on advances (440) (351)
 Interest expense (1,158) (1,375)
 Exchange differences 13 2
 Earnings after financial items 1,153 1,130
 Non-recurring items (105) (25)
 Income before taxes 1,048 1,105
 Taxes (415) (477)
 Net income before minority interest 633 628
 Minority interest (24) (38)
 Net income 609 590
 NOTE: Exchange rates used in the above income statement are average for the periods shown. The average exchange rates for the Swiss Franc and the Swedish Krona are stated below:
 1991 1990
 1.00 US$ equals SFr.: 1.42 1.39
 1.00 US$ equals SKr.: 6.01 5.92
 ABB ASEA BROWN BOVERI GROUP BALANCE SHEET
 (US$ millions)
 Year-end: 1991 1990
 Cash and marketable securities 5,211 4,975
 Trade receivables 5,449 5,528
 Other current receivables 2,584 2,181
 Inventories 7,353 7,277
 Total current assets 20,597 19,961
 Financing receivables 1,701 2,173
 Shares and participation 556 864
 Intangible assets 2,268 2,000
 Constructions in progress 243 188
 Machinery and equipment 2,638 2,472
 Land and buildings 2,751 2,589
 Total fixed assets 10,157 10,286
 Total assets 30,754 30,247
 LIABILITIES AND EQUITY
 Trade payables 3,269 3,030
 Provisions 3,986 4,059
 Other current liabilities 4,474 3,979
 Short-term loans 3,665 4,373
 Total current liabilities 15,394 15,441
 Advances from customers 5,518 4,937
 Medium- and long-term loans 2,496 2,712
 Employee share ownership
 debentures 360 399
 Pension liabilities 1,740 1,547
 Deferred taxes 447 496
 Minority interest 301 468
 Share capital 1,750 1,750
 Restricted reserves 1,171 938
 Retained earnings 968 969
 Net income 609 590
 Total stockholders' equity 4,498 4,247
 Total liabilities and equity 30,754 30,247
 NOTE: Exchange rates used in the above balance sheets are year-end rates. For the Swiss Franc and the Swedish Krona these rates are stated below:
 1991 1990
 1.00 US$ equals SFr.: 1.36 1.27
 1.00 US$ equals SKr.: 5.53 5.63
 ABB ASEA BROWN BOVERI GROUP
 Business Segment Figures
 (US$ millions)
 Orders Received Revenues
 1991 1990 1991 1990
 Power Plants 6,378 5,999 5,700 4,653
 Power Transmission 5,428 5,397 5,436 5,287
 Power Distribution 3,267 3,104 3,186 3,073
 Industry 4,077 4,208 4,182 4,022
 Transportation 2,059 1,798 1,903 1,309
 Environmental Control 4,164 4,067 3,949 3,684
 Financial Services 868 1,092 868 1,092
 Various Activities 7,379 7,290 7,455 7,126
 Gross total 33,620 32,955 32,679 30,246
 - Intragroup transactions (3,999) (3,674) (3,796) (3,558)
 Net total 29,621 29,281 28,883 26,688
 Operating earnings
 after depreciation
 1991 1990
 Power Plants 319 242
 Power Transmission 512 421
 Power Distribution 174 199
 Industry 242 123
 Transportation 16 22
 Environmental Control 117 168
 Financial Services 148 175
 Various Activities 454 514
 Gross total 1,982 1,864
 - Intragroup transactions (74)(A) (74)(A)
 Net total 1,908 1,790
 (A) -- Includes corporate items
 Regional Figures
 (US$ millions)
 Revenues(A) Employees
 1991 1990 1991 1990
 Western Europe - EC 10,302 8,329 78,888 71,157
 Western Europe - EFTA 7,038 6,902 65,200 69,734
 North America 5,265 5,483 30,967 33,595
 Asia and Australasia 4,350 3,984 19,809 20,179
 Africa, Eastern Europe,
 Latin America 1,928 1,990 19,535 20,489
 Total 28,883 26,688 214,399 215,154
 (A) -- Total third-party revenues in each region, excluding exports which are accounted for in the revenue figures of the importing region.
 -0- 3/18/92
 /CONTACT: Karen Armour of The ABB Group, 203-328-2217, or at home: 203-655-9461/ CO: Asea Brown Boveri Inc. ST: Connecticut IN: SU: ERN


TS -- NY001 -- 9049 03/18/92 08:25 EST
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Date:Mar 18, 1992
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