Description
In the second quarter, market demand in the power sector showed a complex trend. Businesses related to the integration of renewable energy and investment in improving grid reliability, especially those related to digitalization, continued to grow.
Large-scale investment in power grid fields such as long-distance transmission continues to be sluggish.
Based on the broad-spectrum coverage of the customer base, industrial demand is growing well this quarter. Investments from process industries such as oil and gas and mining continue to grow, and capital expenditures are mainly focused on
automation upgrades of existing projects. Continued focus on specific industries such as food and beverage and automotive has driven order growth in businesses such as ABB”s automation and robotic solutions.
Market demand in the transportation and infrastructure sectors has grown steadily, with outstanding orders in rail transit electrification, the construction industry and special ships. Business highlights for the quarter also included continued strong
growth in the data center and electric vehicle fast charging solutions businesses.
Sales revenue
In the second quarter, sales revenue increased by 1% year-on-year (up 5% in US dollars), and the Robotics and Motion Control Division and the Electrical Products Division maintained steady growth. Affected by the decline in order reserves at the
beginning of the year, the sales revenue of the Industrial Automation Division was flat year-on-year, while the sales revenue of the Power Grid Division declined.
Thanks to the leading ABB AbilityTM digital solution, service business sales revenue increased by 13% (16% in US dollars), accounting for 19% of total sales revenue from 17% in the same period last year.
Changes in exchange rates contributed to a 2% increase in sales revenue, and changes in business mix contributed to a 2% net increase in sales revenue.
“New Stage” Strategy
Since ABB implemented its “New Phase” strategy in 2014, it has focused on three major areas: profitable growth, comprehensive execution with no effort, and business-led cross-department cooperation. In the past few years, ABB has successfully
built four business divisions that are market-oriented and entrepreneurial; achieved major breakthroughs in the digital field through ABB Ability™; accelerated operational excellence; and strengthened ABB”s brand image.
ABB”s business units continue to drive profitable growth in key markets, leveraging new and existing ABB Ability™ end-to-end digital solutions to achieve a closed loop of connected devices based on the intelligent cloud. Each business unit continues to
focus on unremitting execution, maintain the current growth momentum, expand investment to promote growth, and closely link compensation with operating performance.
Now, with a leaner and stronger business portfolio, ABB will better seize market opportunities in more favorable market conditions. ABB”s technology comprehensively covers the power and industrial automation value chain and is used in various scenarios
from the power generation end to the power consumption end, from natural resource extraction to the completion of finished products.
Earnings growth
As part of its drive to drive profitable growth, ABB continues to expand its ABB Ability™ digital solutions, which now number more than 210, to meet the needs of customers in the power, industry, transportation and infrastructure sectors.
This quarter, ABB won an order from Danish green energy company Orsted to integrate offshore wind power into the British power grid. As part of the order, ABB will provide it with leading ABB Ability™ digital solutions to ensure the reliability
and operating efficiency of the power grid. In addition, ABB has reached cooperation with Yitai Group, a Chinese coal chemical enterprise. As the first order in a series of digital projects between the two parties, ABB will provide Yita with end-to-end ABB Ability™
digital solutions to significantly improve the production efficiency of its new factory.
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