ABB has launched a “step change” program in its Power Systems division to thoroughly transform the business that faced a loss in the first quarter of 2014, the company said today as it released Q1 results.
ABB’s operational EBITDA in Q1 is 13% down, compared to the same period of last year, mainly due to the weak operational performance in Power Systems and charges related mostly to engineering, procurement and construction (EPC) projects in offshore wind and solar power generation. However, cash from operations improved in the quarter despite the deterioration in Power Systems, the company said.
“We are disappointed with the continued poor performance in Power Systems and are rigorously executing actions that go well beyond the previously-announced strategic realignment,” ABB Chief Executive Officer Ulrich Spiesshofer said. “After a thorough review, the new leadership has initiated a ‘step change’ program and already taken a number of corrective decisions. These include the discontinuation of bidding for solar EPC projects and further management changes.”
Within the “step change” program, the company will reassess the business model for offshore wind power connections.
ABB remains on track in four divisions which combined deliver higher early-cycle orders, steady earnings and stronger cash flow in the first quarter.
Offshore WIND Staff, April 29, 2014; Image: ABB