OREANDA-NEWS. Total orders received in the quarter were 4 percent lower on a like-for-like basis (15 percent lower in US dollars). The appreciation of the US dollar in Q2 2015 versus the prior year period resulted in a negative translation impact on reported orders of 9 percent; divestitures had a negative impact of 2 percent.

Base orders (below USD 15 million) decreased 2 percent (14 percent lower in US dollars) compared with a strong second quarter of 2014. Base orders increased in Low Voltage Products and were steady in Power Products, while declining in the remaining divisions. Large orders (above USD 15 million) decreased 13 percent (22 percent lower in US dollars) compared with the same quarter of 2014 when ABB won a USD 400-million power transmission order in Canada. Large orders represented 12 percent of total orders compared with 14 percent in the same quarter a year ago.

Geographically, orders grew in Europe, led by double-digit growth in countries such as Italy, the UK, Norway, Switzerland and Sweden. Orders declined in the Americas compared to a strong quarter in the previous-year, in which both large and base orders grew significantly. In Asia, the Middle East and Africa (AMEA), orders were steady as increases in several countries, such as India, Saudi Arabia, the UAE and Australia, offset lower demand in China as a result of slower growth in sectors such as utilities, construction and process industries.

Service orders were steady in the quarter and represented 18 percent of total orders compared with 17 percent a year ago.

The order backlog at the end of June 2015 amounted to USD 26 billion, an increase of 9 percent (down 4 percent in US dollars) compared to the end of the same quarter in 2014.

The book-to-bill ratio in the second quarter decreased to 0.98x compared with 1.04x in the same quarter a year earlier. For the first six months, book-to-bill increased to 1.09x from 1.06x in the same period in 2014 and was above 1.0x in all divisions.

Revenues grew 3 percent on a like-for-like basis (down 10 percent in US dollars) in the second quarter, and were steady to higher in all divisions, mainly reflecting successful execution of the stronger opening order backlog compared with the same period in 2014. The appreciation of the US dollar in Q2 2015 versus the prior year period resulted in a negative translation impact on reported revenues of 10 percent; divestitures had a negative impact of 3 percent.

Total service revenues increased 9 percent (down 7 percent in US dollars) and reached 17 percent of total revenues, up from 16 percent in the same quarter a year earlier.

Operational EBITA increased 8 percent on a like-for-like basis and was higher in Low Voltage Products and Process Automation, as well as Power Systems, which returned to profitability compared to a loss in the second quarter of 2014, supported by progress on the 'step change' program. On a US-dollar basis, operational EBITA was down due to currency translation effects of approximately 10 percent and impacts from divestments of approximately 1 percent.

The operational EBITA margin increased 100 basis points to 11.7 percent, led by continued operational improvements in Power Systems, strong execution of higher-margin projects in Process Automation, positive volume effects from growth initiatives in Low Voltage Products and ongoing cost savings. The operational EBITA margin in Discrete Automation and Motion decreased mainly due to a decline in the share of higher-margin standard products in total revenues resulting from soft demand in the oil and gas sector in recent quarters. In Power Products, the operational EBITA margin declined slightly, mainly as the result of costs associated with the ramp-up of new production facilities in key markets.

Operational EPS on a constant currency basis increased 9 percent to USD 0.33 versus USD 0.30 in the second quarter of 2014. Basic earnings per share amounted to USD 0.26 in the second quarter compared to USD 0.28 in the same quarter a year earlier. Net income for the quarter decreased 8 percent to USD 588 million and was negatively impacted by significant foreign exchange translation effects.