Activity Report 2008 ABB Turbo Systems Ltd
Activity Report 2008 ABB Turbo Systems Ltd
Contents Highlights in 2008
4/5
What to expect in 2009
6/7
Key figures
8/9
Outlook 2009
10
Organization
11
Editorial 2008 was extraordinary in every respect.
2008 saw the world economy cool markedly. Hardly a single nation has been able to avoid the economic downturn. In spite of this, new turbocharged engine power approached 100 gigawatts, an all-time production record. Once again, we were able to take advantage of this situation and position turbochargers in our markets with great success. Overall, demand for our turbochargers increased in 2008 by 27 percent; some 12’000 units were delivered to customers around the world. The marine sector once again contributed most to our business growth, although the boom was seen to have now clearly passed its peak. The global economic crisis has caused a sharp decline in world trade and demand for cargo capacity has decreased accordingly. By contrast, the world’s hunger for energy remains stable. Diesel and gas power plants – and with them ABB turbochargers – play their part in meeting demand. The traction market has also developed encouragingly: State rail companies committed to environmentally friendly solutions for their new fleets turn increasingly to our turbochargers. Energy efficiency and sustainability are, and will remain, the key parameters for selecting a turbocharger partner. As the technology leader in turbocharging, we see our market position strengthened by this.
2
From left to right: Axel Kettmann (Service), Darko Fux (Finance & Controlling), Willy Kuhn (Production), Daniel Arnet (President), Beat Kunz (Human Resources), Urs Gribi (Engineering), Bernhard Schönung (Test Center), Oliver Riemenschneider (Sales & Marketing), Rolf Schweizer (New Turbochargers).
We also performed well in the service business in 2008. Thirteen new stations were added to our service network and a significant number of new employees took up positions as specialists in service and customer support. This secures the required level of manpower availability, while spare parts availability lay at the customarily high level of 98 %. The outcome was a record result for the service business. The record year here under review would not have been possible without our employees, our partners around the world and, of course, our loyal customers. Each and every one of them has earned our thanks. Our customers, in particular, deserve a special thank you: Delivery bottlenecks at times made extra claims on their patience – an exceptional situation that we now have under control again, thanks to additional efforts and investments that we have made. When there is confidence in the economy and the will to invest is strong, our customers know they can count on that extra ounce of support from us. But they need to know they can also rely on it when clouds appear on the horizon. That is precisely when we are called upon to perform at our very best. And that is what we shall do.
The year brought us almost everything: new records for revenues and orders received; an unprecedented order backlog; and an unexpected degree of uncertainty with regard to forecasts.
Daniel Arnet
3
Highlights in 2008
2008 was dominated by the new turbocharger business. It was a year in which we recorded a 27 percent growth in units delivered, booked successes with the new A100 generation and made good progress with two-stage turbocharging.
A record year in many respects We can look back over another record year. Compared with 2007, results could be improved in every sector. Close to 12’000 delivered turbochargers and a production capability that at times was unable to meet extraordinary demand, are just two aspects of what was certainly an eventful year.
4
Availability – a key parameter Our biggest challenge in 2008 was, without doubt, to secure the on-time delivery of our turbochargers. The huge increase in demand put us and our suppliers under great pressure. In spite of our utmost efforts and a marked increase in production capacity, our customers at times had to accept delays in delivery that pushed the bounds of what could be considered reasonable. Although we had still not reached our accustomed level of 95 percent availability by the end of the year, the situation fortunately presented itself as somewhat calmer. In our service business we were able to maintain availability at the usual high 98 percent.
Capacity added High demand for small turbochargers resulted in a new factory especially for these being built in Switzerland. The ultra-modern production plant will start up in the first quarter of 2009. In China, our efforts to get the new factory up and running have not gone quite so well. The shift of production to the new plant was scheduled to begin in 2008. While this goal could not be met, we nevertheless took some important steps in the area of quality assurance. Developments so far can be seen as a further strengthening of our production network.
Test program well under way Progress in the R & D area has kept the Test Center constantly on the go. Three frame sizes of the new A100 generation as well as the largest turbocharger in the TPL . . -C series were tested and released. In addition, the turbocharger family for high-speed engines was enlarged through the addition of a new, smallest member, the TPS 44-F33. Especially encouraging was the good progress made with two-stage turbocharging. The test rig designed and built for this has been operational since the autumn and the results of first tests on it are very promising.
Qualified service providers At the end of 2008 our global service network counted 106 service stations. The 100 th service station was taken into operation at the beginning of December 2008 in Rijeka, Croatia. Stations were also added in Azerbaijan, Denmark, Ecuador, India, Japan, Mexico, Pakistan, Panama, the Philippines, Saudi Arabia, Turkey and Vietnam. Happily, we were able to recruit qualified service specialists for all of these stations. Investment in basic and advanced training was also increased in order to guarantee high service quality even as the work is becoming more complex.
OHS measures taken To ensure that customers’ needs are met, we integrated more than 300 new employees worldwide in 2008. Notwithstanding these additions to the workforce, our production and service capacity was sometimes stretched to the limits. Measures were taken to help balance efficiency, effectiveness, quality and operational safety, and so make sure that this situation in no way endangers or poses a health risk to staff.
5
What to expect in 2009
In 2009 the keyword will be flexibility. Reliably predicting how all our markets will develop is difficult. Not so in research and development: Here we forecast the release of further members of the new A100 generation and successful engine tests for our two-stage turbocharging program.
The new “Mönch” test rig.
6
Bucking the trend The world economy is in crisis. This is also true of our markets, with the marine segment in particular feeling the downturn in world trade. We can expect the power production and traction segments to be less susceptible. Here we reckon with stable development, not least in view of the many national infrastructure programs on the way. All in all, we remain positive about our prospects for 2009.
factory in Klingnau and the new factory in China should become operational soon. To enable customers to benefit even more from our production network with plants in Switzerland, China and India, we shall be reviewing and optimizing the management organization. By adopting appropriate processes and checks, it will be ensured that rough-cast and machined casings produced in China and India meet Swiss quality standards.
A stronger network The sales and service network will be further strengthened in 2009. Seven additional service stations and a corresponding build-up of the workforce, plus more service products, will expand our service portfolio. We shall also pursue worldwide standardization wherever it is appropriate, and without compromising the benefits of individual customer care. In general, we expect our service business to go on growing in 2009.
Aim for 95 percent Orders for deliveries in 2009 are at a high level. One of the most urgent tasks is therefore to return to an on-time delivery figure of at least 95 percent for new turbochargers. The necessary measures have already been initiated and should enable a return to this level by spring 2009. It is expected that the availability figure for spare parts will be maintained at 98 percent.
R & D on the test rig Development projects involving small, medium and large turbochargers are under way. The enlargement of the A100 family calls for a series of thermodynamic measurements and qualification trials on the test rigs. Qualification tests on the first two-stage turbocharger combination are being carried out on the new “Mönch” test rig. Qualification of the first frame size of the high-pressure turbocharger should also take place. It is also planned to release further frame sizes of the A100 generation in 2009.
Recruiting and empowerment As a pro-active approach to the increasing complexity we see in the service business, we are strengthening the technical application support we provide. Reinforcement of the local know-how and experience base in the service stations will make a significant contribution to the ongoing optimization of products and processes.
Optimizing infrastructure Numerous relocations and plant extensions will take up time alongside the day-to-day business. Changes will be made and equipment relocated in order to optimize processes in the Baden factory. Production will start at the new
7
Key figures
2008 was an extraordinary year that produced extraordinary results. Growth rates were double-digit. Revenues and orders received rose by 19 and 15 percent, respectively. CHF 53.5 million were invested in R & D.
Benefiting from the boom For the first time in our history orders received passed the CHF 700 million mark, reaching CHF 728 million. The figure corresponds to an increase of 15 percent over the previous year. Even more impressive is the 19 percent year-on-year rise in revenues. In 2008 the revenues rose to CHF 678 million for another outstanding result. All of our markets contributed to this success. The marine, power plant and traction sectors prospered once more, rewarding our business with above-average
Investment in the future Technology leadership is one of our strategic success factors. We invest accordingly. In the year under review we invested 7.9 percent of revenues in research and development. While this figure is slightly lower than that for the previous year (8.3 percent of revenues),
at CHF 53.5 million the sum is nevertheless the highest to date. Investment in assets exceeded the previous year’s figure by 27 percent and reached the new record of CHF 27.4 million. The predominant share of this went into the new factory in Klingnau. Autumn 2008 saw the new test rig “Mönch” start operating. This test rig will be of decisive importance for the two-stage turbocharging program. The production plant was once again upgraded and expanded to cater for the increase in demand.
TPS, TPC population
TPL . . -A, TPL . . -C, TPR population
TPL . . -B population
[units]
[units]
[units]
40000
7500
2500
36000
6750
2250
32000
6000
2000
28000
5250
1750
24000
4500
1500
20000
3750
1250
16000
3000
1000
12000
2250
750
8000
1500
500
4000
750
250
0
0 1998 2000 2002 2004 2006 2008
8
results. The service business also developed in a positive way, with both the growth of the network and the new products reflected in the higher revenues.
0 1998 2000 2002 2004 2006 2008
1998 2000 2002 2004 2006 2008
Monte Rio power plant, Dominican Republic.
Production [GW] [units]
26
Marine (units)
10000
24 22 20 18 16 14 12 10 8 6 4 2 0
Stationary (units)
9000 8000 7000 6000 5000 4000 3000 2000 1000 0
Traction (units) Turbocharged engine power (GW)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (All data refer to ABB Turbo Systems Ltd only)
9
Outlook 2009
We expect the year to be turbulent. We shall therefore be doing everything to ensure stability and dependability in our business activities. Daniel Arnet, President
2009 will see our flexibility especially tested. We can expect the market to be much more competitive, in the technology area too.
We will ensure we can meet our customers’ growing needs with an innovative, market-oriented service portfolio. That will be our focus. Axel Kettmann, Service
The return to “normality” – on-time delivery of at least 95 % for new turbo chargers – is our declared goal.
Innovation has to be quickly brought to market. Added test capacity gives us “just-in-time” leverage when it comes to releasing new products. Bernhard Schönung, Test Center
Today’s economic climate calls upon us to invest in areas with longer-term benefits for customers in every market segment.
Willy Kuhn, Production Oliver Riemenschneider, Sales and Marketing
In our markets the future belongs to whoever offers the most energy-efficient solutions. Our new turbocharger generation sets new benchmarks.
Darko Fux, Finance and Controlling
The next generation of turbocharging systems is taking shape. In 2009 engine tests will put it through its paces. Urs Gribi, Engineering
Success and overwork often lie close together. We are taking precautions to ensure our people do not put themselves under undue pressure. Beat Kunz, Human Resources
Rolf Schweizer, New Turbochargers
10
Organization as of January 1, 2009
Board of Directors Veli-Matti Reinikkala
Chairman, President ABB Process Automation
Daniel Arnet
Delegate
Jasmin Staiblin
President and Country Manager ABB Switzerland
Yann Moor
CFO, ABB Switzerland
Management Committee Daniel Arnet
President
Oliver Riemenschneider
Sales and Marketing
Darko Fux
Finance and Controlling
Urs Gribi
Engineering
Willy Kuhn
Production
Beat Kunz
Human Resources
Bernhard Schönung
Test Center
Auditors Ernst & Young AG, Basel Ownership ABB Turbo Systems Ltd is a wholly owned subsidiary of ABB Switzerland Ltd, Baden / Switzerland
11
www.abb.com/turbocharging
CHTUS 2031-0903-2000 E
ABB Turbo Systems Ltd Bruggerstrasse 71 a CH-5401 Baden / Switzerland Phone: +41 58 585 7777 Fax: +41 58 585 5144 E-mail: [email protected]
© 2009 ABB Turbo Systems Ltd, Baden / Switzerland
Contact us
Contents Highlights in 2008
4/5
What to expect in 2009
6/7
Key figures
8/9
Outlook 2009
10
Organization
11
Editorial 2008 was extraordinary in every respect.
2008 saw the world economy cool markedly. Hardly a single nation has been able to avoid the economic downturn. In spite of this, new turbocharged engine power approached 100 gigawatts, an all-time production record. Once again, we were able to take advantage of this situation and position turbochargers in our markets with great success. Overall, demand for our turbochargers increased in 2008 by 27 percent; some 12’000 units were delivered to customers around the world. The marine sector once again contributed most to our business growth, although the boom was seen to have now clearly passed its peak. The global economic crisis has caused a sharp decline in world trade and demand for cargo capacity has decreased accordingly. By contrast, the world’s hunger for energy remains stable. Diesel and gas power plants – and with them ABB turbochargers – play their part in meeting demand. The traction market has also developed encouragingly: State rail companies committed to environmentally friendly solutions for their new fleets turn increasingly to our turbochargers. Energy efficiency and sustainability are, and will remain, the key parameters for selecting a turbocharger partner. As the technology leader in turbocharging, we see our market position strengthened by this.
2
From left to right: Axel Kettmann (Service), Darko Fux (Finance & Controlling), Willy Kuhn (Production), Daniel Arnet (President), Beat Kunz (Human Resources), Urs Gribi (Engineering), Bernhard Schönung (Test Center), Oliver Riemenschneider (Sales & Marketing), Rolf Schweizer (New Turbochargers).
We also performed well in the service business in 2008. Thirteen new stations were added to our service network and a significant number of new employees took up positions as specialists in service and customer support. This secures the required level of manpower availability, while spare parts availability lay at the customarily high level of 98 %. The outcome was a record result for the service business. The record year here under review would not have been possible without our employees, our partners around the world and, of course, our loyal customers. Each and every one of them has earned our thanks. Our customers, in particular, deserve a special thank you: Delivery bottlenecks at times made extra claims on their patience – an exceptional situation that we now have under control again, thanks to additional efforts and investments that we have made. When there is confidence in the economy and the will to invest is strong, our customers know they can count on that extra ounce of support from us. But they need to know they can also rely on it when clouds appear on the horizon. That is precisely when we are called upon to perform at our very best. And that is what we shall do.
The year brought us almost everything: new records for revenues and orders received; an unprecedented order backlog; and an unexpected degree of uncertainty with regard to forecasts.
Daniel Arnet
3
Highlights in 2008
2008 was dominated by the new turbocharger business. It was a year in which we recorded a 27 percent growth in units delivered, booked successes with the new A100 generation and made good progress with two-stage turbocharging.
A record year in many respects We can look back over another record year. Compared with 2007, results could be improved in every sector. Close to 12’000 delivered turbochargers and a production capability that at times was unable to meet extraordinary demand, are just two aspects of what was certainly an eventful year.
4
Availability – a key parameter Our biggest challenge in 2008 was, without doubt, to secure the on-time delivery of our turbochargers. The huge increase in demand put us and our suppliers under great pressure. In spite of our utmost efforts and a marked increase in production capacity, our customers at times had to accept delays in delivery that pushed the bounds of what could be considered reasonable. Although we had still not reached our accustomed level of 95 percent availability by the end of the year, the situation fortunately presented itself as somewhat calmer. In our service business we were able to maintain availability at the usual high 98 percent.
Capacity added High demand for small turbochargers resulted in a new factory especially for these being built in Switzerland. The ultra-modern production plant will start up in the first quarter of 2009. In China, our efforts to get the new factory up and running have not gone quite so well. The shift of production to the new plant was scheduled to begin in 2008. While this goal could not be met, we nevertheless took some important steps in the area of quality assurance. Developments so far can be seen as a further strengthening of our production network.
Test program well under way Progress in the R & D area has kept the Test Center constantly on the go. Three frame sizes of the new A100 generation as well as the largest turbocharger in the TPL . . -C series were tested and released. In addition, the turbocharger family for high-speed engines was enlarged through the addition of a new, smallest member, the TPS 44-F33. Especially encouraging was the good progress made with two-stage turbocharging. The test rig designed and built for this has been operational since the autumn and the results of first tests on it are very promising.
Qualified service providers At the end of 2008 our global service network counted 106 service stations. The 100 th service station was taken into operation at the beginning of December 2008 in Rijeka, Croatia. Stations were also added in Azerbaijan, Denmark, Ecuador, India, Japan, Mexico, Pakistan, Panama, the Philippines, Saudi Arabia, Turkey and Vietnam. Happily, we were able to recruit qualified service specialists for all of these stations. Investment in basic and advanced training was also increased in order to guarantee high service quality even as the work is becoming more complex.
OHS measures taken To ensure that customers’ needs are met, we integrated more than 300 new employees worldwide in 2008. Notwithstanding these additions to the workforce, our production and service capacity was sometimes stretched to the limits. Measures were taken to help balance efficiency, effectiveness, quality and operational safety, and so make sure that this situation in no way endangers or poses a health risk to staff.
5
What to expect in 2009
In 2009 the keyword will be flexibility. Reliably predicting how all our markets will develop is difficult. Not so in research and development: Here we forecast the release of further members of the new A100 generation and successful engine tests for our two-stage turbocharging program.
The new “Mönch” test rig.
6
Bucking the trend The world economy is in crisis. This is also true of our markets, with the marine segment in particular feeling the downturn in world trade. We can expect the power production and traction segments to be less susceptible. Here we reckon with stable development, not least in view of the many national infrastructure programs on the way. All in all, we remain positive about our prospects for 2009.
factory in Klingnau and the new factory in China should become operational soon. To enable customers to benefit even more from our production network with plants in Switzerland, China and India, we shall be reviewing and optimizing the management organization. By adopting appropriate processes and checks, it will be ensured that rough-cast and machined casings produced in China and India meet Swiss quality standards.
A stronger network The sales and service network will be further strengthened in 2009. Seven additional service stations and a corresponding build-up of the workforce, plus more service products, will expand our service portfolio. We shall also pursue worldwide standardization wherever it is appropriate, and without compromising the benefits of individual customer care. In general, we expect our service business to go on growing in 2009.
Aim for 95 percent Orders for deliveries in 2009 are at a high level. One of the most urgent tasks is therefore to return to an on-time delivery figure of at least 95 percent for new turbochargers. The necessary measures have already been initiated and should enable a return to this level by spring 2009. It is expected that the availability figure for spare parts will be maintained at 98 percent.
R & D on the test rig Development projects involving small, medium and large turbochargers are under way. The enlargement of the A100 family calls for a series of thermodynamic measurements and qualification trials on the test rigs. Qualification tests on the first two-stage turbocharger combination are being carried out on the new “Mönch” test rig. Qualification of the first frame size of the high-pressure turbocharger should also take place. It is also planned to release further frame sizes of the A100 generation in 2009.
Recruiting and empowerment As a pro-active approach to the increasing complexity we see in the service business, we are strengthening the technical application support we provide. Reinforcement of the local know-how and experience base in the service stations will make a significant contribution to the ongoing optimization of products and processes.
Optimizing infrastructure Numerous relocations and plant extensions will take up time alongside the day-to-day business. Changes will be made and equipment relocated in order to optimize processes in the Baden factory. Production will start at the new
7
Key figures
2008 was an extraordinary year that produced extraordinary results. Growth rates were double-digit. Revenues and orders received rose by 19 and 15 percent, respectively. CHF 53.5 million were invested in R & D.
Benefiting from the boom For the first time in our history orders received passed the CHF 700 million mark, reaching CHF 728 million. The figure corresponds to an increase of 15 percent over the previous year. Even more impressive is the 19 percent year-on-year rise in revenues. In 2008 the revenues rose to CHF 678 million for another outstanding result. All of our markets contributed to this success. The marine, power plant and traction sectors prospered once more, rewarding our business with above-average
Investment in the future Technology leadership is one of our strategic success factors. We invest accordingly. In the year under review we invested 7.9 percent of revenues in research and development. While this figure is slightly lower than that for the previous year (8.3 percent of revenues),
at CHF 53.5 million the sum is nevertheless the highest to date. Investment in assets exceeded the previous year’s figure by 27 percent and reached the new record of CHF 27.4 million. The predominant share of this went into the new factory in Klingnau. Autumn 2008 saw the new test rig “Mönch” start operating. This test rig will be of decisive importance for the two-stage turbocharging program. The production plant was once again upgraded and expanded to cater for the increase in demand.
TPS, TPC population
TPL . . -A, TPL . . -C, TPR population
TPL . . -B population
[units]
[units]
[units]
40000
7500
2500
36000
6750
2250
32000
6000
2000
28000
5250
1750
24000
4500
1500
20000
3750
1250
16000
3000
1000
12000
2250
750
8000
1500
500
4000
750
250
0
0 1998 2000 2002 2004 2006 2008
8
results. The service business also developed in a positive way, with both the growth of the network and the new products reflected in the higher revenues.
0 1998 2000 2002 2004 2006 2008
1998 2000 2002 2004 2006 2008
Monte Rio power plant, Dominican Republic.
Production [GW] [units]
26
Marine (units)
10000
24 22 20 18 16 14 12 10 8 6 4 2 0
Stationary (units)
9000 8000 7000 6000 5000 4000 3000 2000 1000 0
Traction (units) Turbocharged engine power (GW)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (All data refer to ABB Turbo Systems Ltd only)
9
Outlook 2009
We expect the year to be turbulent. We shall therefore be doing everything to ensure stability and dependability in our business activities. Daniel Arnet, President
2009 will see our flexibility especially tested. We can expect the market to be much more competitive, in the technology area too.
We will ensure we can meet our customers’ growing needs with an innovative, market-oriented service portfolio. That will be our focus. Axel Kettmann, Service
The return to “normality” – on-time delivery of at least 95 % for new turbo chargers – is our declared goal.
Innovation has to be quickly brought to market. Added test capacity gives us “just-in-time” leverage when it comes to releasing new products. Bernhard Schönung, Test Center
Today’s economic climate calls upon us to invest in areas with longer-term benefits for customers in every market segment.
Willy Kuhn, Production Oliver Riemenschneider, Sales and Marketing
In our markets the future belongs to whoever offers the most energy-efficient solutions. Our new turbocharger generation sets new benchmarks.
Darko Fux, Finance and Controlling
The next generation of turbocharging systems is taking shape. In 2009 engine tests will put it through its paces. Urs Gribi, Engineering
Success and overwork often lie close together. We are taking precautions to ensure our people do not put themselves under undue pressure. Beat Kunz, Human Resources
Rolf Schweizer, New Turbochargers
10
Organization as of January 1, 2009
Board of Directors Veli-Matti Reinikkala
Chairman, President ABB Process Automation
Daniel Arnet
Delegate
Jasmin Staiblin
President and Country Manager ABB Switzerland
Yann Moor
CFO, ABB Switzerland
Management Committee Daniel Arnet
President
Oliver Riemenschneider
Sales and Marketing
Darko Fux
Finance and Controlling
Urs Gribi
Engineering
Willy Kuhn
Production
Beat Kunz
Human Resources
Bernhard Schönung
Test Center
Auditors Ernst & Young AG, Basel Ownership ABB Turbo Systems Ltd is a wholly owned subsidiary of ABB Switzerland Ltd, Baden / Switzerland
11
www.abb.com/turbocharging
CHTUS 2031-0903-2000 E
ABB Turbo Systems Ltd Bruggerstrasse 71 a CH-5401 Baden / Switzerland Phone: +41 58 585 7777 Fax: +41 58 585 5144 E-mail: [email protected]
© 2009 ABB Turbo Systems Ltd, Baden / Switzerland
Contact us
