ABB India: Sustained growth momentum

ABB India Limited third quarter (July – September) CY2018 results

  • Orders up by 22% Y-o-Y led by consistent growth in base orders and exports
  • Double digit growth across all divisions
  • Operational EBITA increased by 68% Y-o-Y
  • PAT increases 30% Y-o-Y led by differentiated portfolio mix and digital value additions

“We have delivered another satisfying quarter of increased orders, improved revenues and step-up in profits. Profitable growth was supported by base orders and the successful execution of our quality order backlog. All divisions registered double digit growth benefitting from technology solutions for the local and international markets,” said Sanjeev Sharma, Managing Director, ABB India. “Relentless execution is reflected in the consistent productivity enhancement, focus on managing costs and improving net cash position. ABB’s market leading ABB AbilityTM digital offerings are driving the next level of growth in markets for process industries, food and beverage, smart cities, mobility solutions and datacenters,” he added.

KEY FIGURES INR Crores

Q3 2018

Q3 2017

YTD 2018

YTD 2017

Orders

2355

1936

7411

6580

Revenue

2515

1923

7754

6308

Profit before tax

165

118

483

370

Profit before tax %

6.6

6.1

6.2

5.9

Profit after tax

108

83

313

248

Profit after tax %

4.3

4.3

4.0

3.9

Operational EBITA**

152

90

473

306

Operational EBITA%

6.0

4.7

6.1

4.8

Orders

Total orders increased to INR 2,355 crore during the third quarter of 2018, driven by a base order growth of 16 percent. The base order growth was supported by offerings for smart factory applications and ABB AbilityTM digital solutions in sectors like food and beverage and building automation. Power infrastructure for solar segment also contributed to moderately large orders.

Transportation remains a major growth area with orders from railways for power equipment as well as electric propulsion systems in the quarter. ABB India in Q3, provided power quality management solutions for India longest dedicated rail freight corridor project.

ABB’s water management solutions is one of the key elements in building smarter and inclusive Indian cities. During the quarter, the company received an order for distributed control systems (DCS), including the electrification of a control room for the waste water management sewage treatment plant (STP) of a new smart city in Gujarat.

Improved opportunities for cement, oil and gas and mining opportunities were other highlights of the quarter. The double-digit growth in services was led by the orders in process optimization, technical information systems, and digitalization applications across select process industries.

Propelled by the global growth in renewable energy and industrial energy management, export orders continued its solid growth trajectory.

The order backlog as of September 30, 2018 is INR 11,368 crore and is expected to provide revenue visibility for the coming quarters.

Revenue and operations

Revenue for the quarter was INR 2,515 crore, up 31 percent year on year. The quarter witnessed double digit growth across divisions with quick conversions and timely delivery. Strong execution and delivery further stabilized solid net cash position supporting revenue momentum.

Profit

Profit before tax (PBT) increased by 40 percent to INR 165 crore and profit after tax (PAT) rose 30 percent Y-o-Y to INR 108 crore. The continued focus on cost saving measures and the market success of ABB AbilityTM digital offerings contributed to a strong growth in profits.

Outlook

As the domestic market readies itself for elections across various states, the multiple government initiatives in renewable energy, transportation, digitalization and smart cities are likely to provide the levers for sustainable growth in the medium to long term. The initial impact of industrial recovery is being felt across certain sectors like steel, mining, oil and gas and could retain a similar pace for the medium term. Despite global head winds of geopolitical trade tensions, fiscal consolidation and volatility in commodity prices and forex, ABB is well-positioned to tap into these opportunities for medium to long-term profitable growth.

ABB (ABBN: SIX Swiss Ex) is a pioneering technology leader in power grids, electrification products, industrial automation and robotics and motion, serving customers in utilities, industry and transport & infrastructure globally. Continuing a history of innovation spanning more than 130 years, ABB today is writing the future of industrial digitalization with two clear value propositions: bringing electricity from any power plant to any plug and automating industries from natural resources to finished products. As title partner in ABB Formula E, the fully electric international FIA motorsport class, ABB is pushing the boundaries of e-mobility to contribute to a sustainable future. ABB operates in more than 100 countries with about 147,000 employees. www.abb.com

  • Endnotes

    1. **The Company evaluates the profitability of its segments based on Operational EBITA. Operational EBITA represents income from operations excluding: (i) amortization expense on intangibles, (ii) restructuring and restructuring-related expenses, (iii) non-operational pension cost, (iv) gains and losses from sale of businesses, acquisition-related expenses and certain non-operational items, as well as (v) foreign exchange/commodity timing differences in income from operations consisting of: (a) unrealized gains and losses on derivatives (foreign exchange, commodities, embedded derivatives), (b) unrealized foreign exchange movements on receivables/payables (and related assets/liabilities).

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