Itaipu, the world' s targest hy d ro powerproJect. !.l under construction on the Parana R1ver thai forms the boundary between Paraguay and Braz1r ASEA is supplying equipment for high- voltoge d1rect-current (HVDC) transmission of power to south- eastern Brazil. Cover shows an aerial vie w oj the power rtation.
Contents
Annual Meeting 2 Finished goods 18 Balance sheet 28
The ASEA Group Semifinished goods 19 Notes to the financial
in 1979 3 Other products and statements 30
Outlook for 1980 3 services 20 stockholdings 37
The ASEA Group Accounting principles 21 Employees, wages and
and the future supply ASEA Group salaries 39
ofenergy 4 Consolidated profit ASEA stockholders 39 The ASEA Group's and loss account 22 Proposcd dispo sition
situation 6 Consolidated state- of profits 40
10-year Group summary
6ment of changes in Audito rs' report 41 Board of Directors' financialposition 2:1 AS EA Group oper-
Report 7 Consolidated halancc ating companies 42
Operations she et 24 Board of Directo rs 50
Power equipment 12 ASEAAB Management of ASEA 51
Industrial equipment 14 Profit and loss account 26 Transportatian statement of changes equipment 16 in financial position 27
Annual Meeting
The Annual Meeting of stockholders will be hel d in the Prisma Cinema, Stora Gatan 21, Västerås at 4 p.m., Monday, March 17, 1980.
stockholders wishing to participate in the Meeting should notify the Board of
Directors, ASEA AB, S-72183 Västerås, no later t han 12 noon, Wednesday, March 12, 1980. Notice should be in writing, clearlyshowing name andaddress of the stockho lder and registered stockholdings.
In addition to giving notice as specified above, stockholders who wish to participate in the Meeting must be recorded in the seeurities Register maintained by Värde- papperscentralen VPC AB (Swedish Securities R egister Center) no laterthan Friday, March 7, 1980.
stockholders whose shares are h eld in trust by banks or other trustees m u st temporarily reregister the shares in their own name no laterthan March 7, 1980, in order to be eligible to vote at the Annual Meeting.
The Board has propose d Wednesday, March 19, 1980 as the record date for the dividend. If the proposal is approved by the Annual Meeting, itis expected that the dividend payments will be mailed by VPC on Wednesday, March 26, 1980. Holders of old stock certificates cannot receive dividend payments until they have exchanged them for the new VPC certificates and have registered the latter in the VPC seeurities
Register. Toassure that dividend payments, the Annual Report, etc., are mailed to the correct address, stockholders should notify Värdepapperscentralen VPC AB promptly of any change of address. Forms for this purpose ma y be obtained at the offices of all banks in Sweden.
Note: ASEA AB ts the Paren t Company of the ASEA Group. References to ASEA throughout this Report cover the operations of ASEA AB .
Exchange rate. United States dollar amounts shown throughout this Annual Report are transtations from Swedish kronor at the parity exchange rate at December 31. 1979 of
Swedish kronor 4.14 to $1.00.· ·
Notice to stockholders who have not exercised rights to stock dividends
stockholders who have not exerc1sed their rightsto receive stock divtdends in accordance Wtth the ASEA stock dividend 1ssues of1942, 1950, 1958, 1962, 1965, 1970 and 1973 are requested to ad vise the Share Department of Skandmavtska Enskilda Banken, S-106 40 Stockholm, no later t han Apnl l . 19fl0. of the u
claim~ to such shares. After this date the remammg shares attributable to the aforementtoned ~tock dividend 1ssues wdl be sold through brokers for the accounts of holders of rightsto such shares, as prest:nbed in Chapter 4, Paragr a ph 17 of the Swedish Campanies Act. Thereafter stockholders will be en t itled to recetve only the
The ASEA Group in 1979
($ millions)
1)Percent 1979 1978 change
Orders booked $3,350 $2,410 39
Invoiced sales 2,858 2,371 21
Operating earnings after depreciation 105
2)103 2 Profit after financial income and expense 82
2)79 4 Profit before allocations and taxes 842) 82 2 Nominal return on yield-demanding capital (percent) 9.&) 9.6
Order backlog at year-end 4,385 3,635 21
Capital expenditures for property, plant
and equipment 122 107 14
Employees 43,404 43,071 1
ASEA dividend (1979: proposed)
Pershare 1.45 1.21 20
Total 29 24
l) Except where orherwise indicared.
Z) After the publicalion of the ASEA Group repart on 1979 operations the Board decided to increase the reserve for inventory profits by $4.8 million, which has been charged to the earnings.
Outlook for 1980
The large backlog of orders at the beginning of 1980 creates prospects for a high er utilization of capacity. The rise in prices of materials has been troublesame recently. Despite considera b le uncertainty with respect to thefuturetrend of costs and the market situation for the ASEA Group, a continued increase in earnings is anticipated.
3
The o il crisis reduced the growth rate of electricity consumption
The electrical energy requirements of the developing countries are growing rapidly
Sweden can reduce its dependence on the outside world for its supply of energy
Technical development work within a broad spectrum gives a position of leadership
The ASEA Group and
the future supply of energy
The increase in the need for electrical energy is being determined, in essence, by the manner in w hi ch economic growth develops. In a Iong perspective, the consumptian of electricity has risen about seven percent a year. Beginning with the oil crisis, the rate of economic growth throughout the world declin ed and electrical energy consumptian is now rising at a rate of only three to four percent a year.
For the ASEA Group, w hi ch delivers plants and equipment for the generation and use of electrical power, this development has meant a declining market base. As istrue of the world's electrical industry generally, the Group has troublesame excess capacity, with strong pressure on prices. A successive ad justment of capacity was quickly insti- tuted, but imbalance still prevails in a number of product areas, even if the excess capacity is less pronounced today.
There is reason to fear that the continued sharp increases in the price of oil during 1979 can cause downward pressure on the rate of economic growth, with consequent declining growth in the market for the electrical industry's products. If this occurs, i t would necessitate a further process of ad justment with respect to the industry's capacity.
A countervailing force, however, is the situation that the electrical energy requirements of the developing countries are growing more rapidlythan those of the industrialized countries. The developing countries arethus assuming a growing importance as markets for ASEA Group products. A force working in the same direction is the fact that rising prices of energy are creating needs for capita] expenditures to achieve amore rational use of energy in all seetars of society. The necessary conversion from oil-based electrical power to another form will also result in increased demand for equipment and components. The uncertainty surmunding the future supply of oil, in terms of both price and availability, will stimulate this development.
Sweden is one of the world's countries with the highest consumptian of energy and the greatest per capita use of oil. The rises in oil prices since the crisis of 1973-74 have increased the annual costs in real terms of imported oil more than fivefold,
contributing to a difficult imbalance in the Swedish economy.
In an international perspective, Sweden-with its hydra power potential, its uranium resources and its substantial know-how in the electrotechnical area-has favorable conditions for assuring its supply of energy and simultaneausly reducing its sharp dependence on the outside world. In the shorter perspective, this energy supply can be assured only through the use of nuclear power. In recent years nuclear power has accounted for 20 to 25 percent of the total consumptian of electricity in Sweden.
I t is the natural responsibili ty of the ASEA Gro u p to con tri bu te-through i t s
manufacture of plants, equipment and products-to the generation, transmission and use of energy in a reliable and economical manner within industry and other seetars of society.
The ASEA Group is not concentrating on any special type of electricity production;
it is, instead, developing and manufacturing equipment for all methods of converting energy to dectricity that have, or are expected to have, a commercial
potential.
As a result of its experience in the electrotechnical field and its continual new technical
development work within ev er broader parameters, the ASEA Group today has a
position of international leadership in many fields that are of great importance to
the supply of energy in the 1980s.
The technology for the transmission of bothalternating and direct current at very high voltages, electric locomotives and electrical equipment for advanced rail traffic as a who le, re actors and fuel for nuclear power stations and equipment for metallurgkal processes are all examples of these fields. There are spearheads of technical develop- ment work in other fields as well, notably in the areas of power electronics and semiconductor technology.
The realization that the future will force a conversion from an "oil society" to one that is electricity-intensive and based on other primary sources of energy willlead to a situation in which the consumption of e leetricity will rise more rapidlythan that of energy as a whole.
5
Developments in Iran symbolized the growing uncertainty in the world during 1979.
The ASEA Group's situation
Trends in diagrams and figures
Order bookings, $millions
4,00) - - - -- - - - -- - - --
3,00)
Total 2,000
1,00) A broad
Sweden
o 1 975 76 n 78
79Profit per share, $
5 4 3 2
o 1975 76 n 78 79
Do llar amounts in millions except "per share"
1970 1971 1972 1973 1974 Invoiced sales $ 891 966 1,196 1,268 1,671
Increase in percent 11 8 24 6 32
Profit before allocations
and taxes
1)$ 58 54 66 83 98
Untaxed reserves l) $ 192 202 214 222 272 Stockholders' equity $ 294 305 338 361 357 Total assets l) $ 1,205 1,375 1,540 1,735 1,935 Profit per sharel) $ 1.55 1.40 1.60 2.00 2.55 Profit pershare according
to equity accounting
principle
1)$ 1.75 1.65 2.05 2.55 3.25
Dividend per share $ 0.77 0.77 0.87 0.87 0.97 Return on yield-demanding
capital
nominal , percent
real, percent 11.0 10.2 9.9 10.2 11.8
Ca pi tal expenditures for property, plant and equipment
N u m ber of employees at
$ 54 83 79 95 98
year-end 36,591 37,911 38,651 39,154 41,217
Invoiced sales, $ millions
Total
·-
' A broad
Sweden
1 975 76 n 78
79Nominal return on yield-demanding capital, percent
20
15
10
5o 1975 76 n 78 79
1975 1976 1977 1978 1979 1,899 2,029 2,347 2,371 2,858
14 7 6 l 21
175 150 129 82 84
329 374 612 604 590
436 446 481 494 531
2,399 2,932 3,420 3,729 3,929 3.75 4.60 3.25 2.10 2.25
4.00 4.95 4.15 2. 95 2)
1.21 1.21 1.21 1.21 1.453)
16.2 17.4 12.9 9.6 9.6 13.5 14.8 10.3 7.3 7.2
107 141 172 107 122
43,604 44,246 43,233 43,071 43,404
t) C ost depreciation was ap p lied in 1977, 1978 and 1979. A ccumulated excess depreciation has been reporled among untaxed reserves. Other years are based on repfacement depreciation. (However, the profit pershare has been recalculated so as to earrespond to the operating earnings with cost
Board of Directors' Report
Market conditions
The improvement in the trend of the economy which occurred in the OECD countries during the latter part of 1978 continued during the early months of 1979. This trend was then interrupted, due primarily to the sharp increases in the price of oil. In most countries, however, industrial productian and investments for the year were higher than in 1978. In Sweden, industrial productian rose at largely the same rate as the average for the OECD countries, after ha ving lagged behind in the years immediately preceding. lovestments increased slightly, following three years of sharp
decline.
The uncertainty with respect to the future supply and price of oil has remained. The lack of a purposeful and strong energy policy in most countries again in 1979 bad a
depressing effect ori the demand for man y of the ASEA Group's products, notably equipment for generating and transmitting electrical power.
The market for most of the Group's in dustrial equipment and products improved during the year as a result of the increase in industrial productian and investments in parts of the world. The picture was fragmented, however.
Orders received by the ASEA Group we re 39 percent higherthan in 1978. The Group' s share of the Itaipu order alone accounted for 24 percent of the increase.
The order backlog at year-end totaled $4,385 million, an i nerease of21 percent over the corresponding figure at year-end 1978.
Sales
Sales invoiced by the ASEA Group increased slightly mo re than 20 percent in 1979.
Approximately half of the increase was attributable to the TVO l nuclear power station in Finland. Invoicing by the Elektrakoppar and ASEA KABEL subsidiaries rose sharply, Iargely as a result of the strong price increases for copper, aluminum and iosulating materials.
Sales of ASEA increased 4 percent, to $1 ,O 15 million, campared with $978 million a year earlier. Sales to Group campanies accounted for 27 percent of invoicing in 1979, unchanged from the preceding year. Purchases from Group campanies were 24 percent of total procurement in 1979, campared with 23 percent in 1978.
Technical development
In terms ofboth technologies and products, ASEA's technical activities spana broad area. Both must be renewed continuously in all fields of operation. Marketers, designers and factory personnel have to cooperate to adapt the ASEA program to customer requirements and to the international competitive situation. Higher costs of energy, for example, demand products with Iowerenergy losses, that is higher efficiency.
New materials, automated productio n and computer-aided design work are im portant too Is in product development. Short development timesand coordination of product development and marketing are required for optimal results. Continual renewal of technologies and products are a prerequisite for ASEA's international competi- tiveness.
Current importantareas of new development work include insulatingsystems and optronics---{;ombinations of optics and electronics--as weil as software productian in the fields of relay protection and electronics.
7
ASEAGroup
Orders ofwhich, nuclear power
equ1pment
1979 1978 ($millions)
$3,350 $2,410
117 60
ASE.4 Group 1979 1978 ($ mtlhons) /m·01ced sa/e~ $1.858 $2.371 ofwhich.
nuclear powrr
equipmmr 429 163
200 ---
Sweden
o
L--'---~-'---'---'1975 76 77 78 79 Capital expenditures of the ASEA Group for property, plant and equipment, $ millions
J,(X)() - - - -- - - - - , - - -
-
,--- 750 r - --
500
250
o
1975 76 77 78 79 Wages, salaries and social welfare costs, ASEA Group, $ millions
Production and investments
Utilization of capacity improved in most of the Group's campanies during the year.
In a number of locations, the level is still unsatisfactory.
The volume of productian in ASEA's Swedish plants was high er, bu t has not as yet reached the lev el achieved during the peak economic year of 1975. The trend in the transformer plant in Ludvika was more favorable than might have been feared at the beginning of the y ear in vie w of the political developments in Iran. As the result of a higher work load and a reduction in plant personneJ through natural attrition, pro- ductivity has improved by approximately 30 percent since the beginning of 1978 and is now above the rate achieved in 1976.
During the year the volume of productian increased substantially at ASEA KABEL, CEWE-SELFA, Kohlswa Jernverk, Järnkonst and Junga Verkstäder.
There was a slight rise in the productio n volume of the manufacturing u nits outside Sweden. The motorproduction operations in Mexico were successful. Utilization of capacity in the German transformer plant was unsatisfactory, due to the weak development of the market there.
lovestments within ASEA were primarit y for rationalization measures. Mechanization of workshop operations has led to a continued increase in the number of robots and numerically controlied rnachine tools used. In addition to providing greater efficiency, this equipment has taken over heavy and monotonous j obs in the factories.
The ASEA plant in Bollnäs hasplacedin service a new workshop for the productian of components for relay protections. A new building to house administrative and technical data processing has been constructed in Västerås. ASEA-HAFO has substantially expanded its plant in Järfälla, n ear Stockholm, and has concentraled operations in that location.
The Hägglunds company be gan construction of a new factory for tracked all-terrain vehicles. The total cost of the investment is approximately $15 million.
In Brazil, ASEA Eletrica inaugurated a new 15,000-square-meter extension of its factory , thereby doubling its productian capacity. ASEA Industrial, which was merged with ASEA Eletrica at year-end, concluded a cooperation agreement with Eletromotores WEG S.A., Brazil's targest manufacturer of motors. As this
cooperation develops, current productian of motors by ASEA E le tri ca will gradually be phased out.
A new company, ASEA A/S, was formed in Denmark to take over the productian of transformers, AC motors and switchgear formerly handled by Thrige-Titan NS, the Danish company in which ASEA earlier held a 33 percent interest.
PersonneJ
The total number of employees in the ASEA Group increased by 333, to 43,404, during the year. In connectionwith the formation of the Danish subsidiary, ASEA NS, ASEA took over approximately 1,000 employees from Thrige-Titan. Otherwise, the Group has reduced the number of its employees.
The number of employees in ASEA decreased slightly. The re was a reduction of 489 in the number offactory workers , while the salaried staffincreased by 392 persons. The latter increase is attributable to the expansion in the fields of electronics and plant engineering, among other factors. The proportion of graduate engineers among the salaried employees has continued to increase and now amounts to 58 percent.
Employee tumover in ASEA increased slightly du ring the y ear, from 7. 8 to 9. 8 percent among factory workers, and from 5.4 to 6.6 percent among salaried employees.
The number of employees in ASEA-HAFO and Järnkonst increased du ring the year.
No noteworthy changes occurred in the other Swedish companies.
The number of employees in the British and German manufacturing campanies
declined.
Financial review
As shown in the Statement of changes in financialposition on page 23,$114 million of funds s upplied during the year was generatedfrom operations within the ASEA Group, campared with $77 million in 1978. Long-term liabilities, including provisions for pensions, rose $88 million, as against an increase of$87 million a year earlier. In July a 15-year Skr 100 million ($24 million) Joan was negotiated in the Swedish bond market at a rate of 10 percent. In February a Joan in the amount of Skr 25 million ($6 millio n) with a 12-year term and a rate of 10 percent was issued for Järnkonst. At year-end, ASEA SKANDIA raised a 15-year Joan in the amount of Skr 50 million ($12 million) at a rate of 11.125 percent. In October, in order to finance its investment program outside Sweden, ASEA raised a 10-year bond Joan in the amount of 4 million Kuwaiti dinars
($15 million), at a rate of 8 percent. Two foreign bankloans totaling $30 million were retired. The ASEA Group's liquidity increased by $97 million, to $611 million.
The book value of ASEA Group holdings in associated campanies increased by $6 million, to $172 million. Of this amount, the bookvalue ofshares of Swedish and foreign campanies that aretradedon stock exchanges amounted to $131 million. At year-end, theseshares had a quoted value of $246 million, as against $240 million a year earlier.
The table below shows the degree to which investments in the ASEA Group have been self-financed. After payments of taxes and dividends, earnings during the 10-year period 1970-1979 have been adequate to cover investments. The borrowing amounting to approximately $630 million which has occurred during the same period has largely been for the purpose of financing the increase in working capita!.
Self-financing of capital expenditures in the ASEA Group, 1970-1979 ($millions)
1970 1971 1972 1973 1974 1975 1976 Profit before allocationsand capita! gains 58.7 55.8 62.5 68.3 93.0 119.6 145.4
+
Depreciation 28.5 33.6 42.8 50.7 58.5 72.9 83.8- Provision for tax e s -20.1 -15.0 -18.6 -20.3 -16.2 -25.8 - 33.1
-Dividends -15.2 -15.2 -17.1 -17.1 -19.1 -23.7 - 23.7
Total 51.9 59.2 69.6 81.6 116.2 143.0 172.4
- Investments ( after de- ductions for sales) In property, machinery
and e q uipment -51.4 -78.5 -74.7 -91.3 -92.5 -90.5 -134.3
In seeurities ( shares
and convertible bonds) - 3.4 - 4.1 - 6.8 0.2 - 6.3 5.3 - 31.8 In connectionwith ac-
quisition of Group
companies - 1.7 - 0.7 - 2.4 4.4 - 1.9 14.2 - 3.6
Remaining - 4.6 -24.1 -14.3 - 5.1 15.5 72.0 2.7
9
300 ---
-
Market value 200](){)
Book value
o
1975 76 77 78 79ASEA Group stockholdings in public ly traJled companies,
$millions •
Total 1977 1978 1979 1970-79
125.6 67.9 77.1 873.9 67.1 71.8 78.5 588.2 - 28.7 -23.7 - 19.3 -220.8 - 23.7 -23.7 - 23.7 -202.2 140.3 92.3 112.6 1,039.1
-162.1 -79.5 -103.4 -958.2
- 0.2 -12.3
-
4.6 - 64.0 - 0.0 -16.0-
1.7 - 9.4- 22.0 -15.5 2.9 7.5
Earnio g s
ASEA Group profit pershare after taxes bu t excluding nonrecurring items ( altered method of calculation compared with 1978, see page 21) was $2.25 in 1979, as compared with $2.10 in 1978. On! y the dividends received from the associated campanies are included in these figures (not equity accounting).
ASEA Group profit after finaodal income and expense increased 4 percent, to $81.9 million, as against $78.5 million in 1978. The corresponding profit in ASEA was $43.7 million in 1979 and $41.3 million in 1978. Group profit before allocations and tax e s amounted to $83.8 million (1978: $82.6 million), w h ile t hat of the ASEA was $38.9 million ($38. 4 million). As a result of a ch ange in the method of reporting capita l gains and financial expense related to credit contracts (see page 21), 1978 amounts have been adjusted for comparability. The depreciation period for factory buildings has been better adapted to the economic Iife. Consequently, the cost depreciation for the ASEA Group has be come $1.9 million lower and that for ASEA $0.7 million lower
than the y would have been if the earlie r principles h ad been applied. To meet the anticipated additional tax assessmen t, the sum of $3.4 million was allocated in ASEA 's earlie r accounts. When i t was subsequently clarified during 1979 that this risk does not exist, the allocation was liquidated .
Earnings were affected favorably by the higher utilization of capacity in man y ASEA Group companies. Better prices prevailed in the semifinished goods field d urin g most of the y ear. In contrast, the sharp international price competition for power and industrial plants depressed sales margins severely.
The increases in costs of raw materials and energy we re substan tia] and could be offset only to an unsatisfactory degree by higher prices.
Earnings of the Swedish subsidiaries improved, compared with the preceding year, bu t those of the campanies outside Sweden continne to be unsatisfactory.
N et interest in come for the Group during the y ear decreased by $6 .O million. Exchange differences on financialtransactions declin ed. On the other hand, the exchange differences related to customer contracts were substantial , amounting to $10.9 million for ASEA. Nonrecurring income and expense were lower than in 1978.
Net profit for the year for the ASEA Group was $47 .1 million, compared with $46.1 million in 1978. Net profit of ASEA was $36.2 million, as against $35.7 million a year earlier.
Certain revaluatlons were made in the stock portfolio. The shares in Voxnan were revalued upwards in the amount of $7.0 million, to $23.7 million in connectionwith a stock dividend, while the shares of Surahammars Bruk were written down by
$12.8 million, to $15.7 million.
Share of total Group sales, 35 percent
Operations: Plants and equipment
Power equipment
Plants and equipment for the generation, transmission and distribution of electrical energy.
($millions) Orders Sales
Operating earnings after depreciation Backlog at year-end
Ca pi tal expenditures Employees
Market conditions
1979
$1,244 993 20 3,384 31 13,118
1978
$782 754 37 2,939 32 13,500
Percent change
59 32 -44 15 - 2 - 3
The Swedish market for hydro power equipment was weak, while equipment for district heating power stations attracted increased interes
t.Hard price competition and stiff credit requirements, notably in the developing countries, prevailed in markets outside Sweden. As in the immediately preeecting years, the international market for nuclear power equipment was insignificant. Demand in Sweden for transmission and
distribution equipment increased substantially. The foreign markets for this equipment were characterized by stiffening competition.
The Itaipu contract consolidated ASEA's leadership position in the field of high- vohage direct -current (HVDC) power transmission.
Significant contracts
Brazil Converter stations for a 900-kilometer HVDC transmission system from the ltaipu generating station.
Soviet Union Gas-insulated substation, one of the largest ever ordered.
People's Republic of China Three substations, ASEA's first major power equipment order from China.
Spain Turbine ordered from ST AL-LA V AL Turbin for an international solar energy project.
Notable deliverles
Indonesia 38 substations, including two gas-insulated substations.
United States The first planetary gears for wind power stations de livered by STAL-LA VAL Turbin.
Finland TVO l nuclear power station at Olkiluoto, delivered by ASEA-ATOM.
Technical development
The first unit of ASEA-ATOM's new boiling water reactor for the Finnish TVO l station wasplacedin commercial operation. The new reactor represents technical, economic and safety advantages.
ASEA-ATOM is nearingthe completion of anassignment from the state-owned utility in Mexico to conduct a study relative to a Mexican nuclear power program. A study pertaining to a nuclear fuel plant.in Mexico has been presented to the customer.
Under an agreement reached in January, 1980 ASEA-ATOM granted Westinghouse a license covering the technology for fuel for boiling waterreactors. Westinghouse granted ASEA-ATOM a similar license covering fuel for pressurized water reactors.
The cooperation begun in 1978 with Hitachi and Toshiba relative to the development of nuclear fuel proceeded according to plan.
The development and design ofhigh-voltage gas-insulated substations advanced to the point where i t was possible to obtain orders in the face of severe international
competition.
Development work is under way within STAL-LA V AL Turbin on an environmentally
Share of total Group sales, 12 percent
lndustrial equipment
Plants and equipment for the operation and control of industrial processes.
($ millions) Orders Sales
Operating earnings after depreciation Backlog at y ear -end
Capita) expenditures Employees
Market conditlons
1979
$362 330 12 333 9 4,701
1978
$288 292 9 274 13 4,850
Percent c han ge
25 13 35 21 -35 - 3
Demand in Sweden for industri al equipment for new investment programs continued to be weak throughout most of the year. Demand, prirnarily from the steel in dustry, increased during the seeond half of the year, however.
Outside Sweden, demand-like the competition-varied from one sector ofindustry to another. In the metallurgical sector , ASEA heJdits own weil in the market for induction stirrers and QUINTUS high-pressure presses, fieldsin which the company has special competence.
A l arge nu m ber of orders for in dustrial robots we re received in Sweden and other countries, mostofthem for we l ding operations particulad y within the automotive industry.
Significant contracts
Japan, Great Britain ASEA-S.KF ladle furnaces for steel companies.
Soviet Union, Italy, West Germany and France QUINTUS presses for the aerospace industry.
Soviet Union Electrical equipment for a !arge steel mill (as subcontractor to Krupp, West Germany).
Japan Stirrers for continuous casting.
Sweden Electrical equipment and process control systems for a hot stripmillat Svenskt Stål AB (Swedish Steel Co.)
Notable deliverles
Sweden World' sIargest control system forunderground transport network, at LKAB, Kiruna.
France T wo ASEA -S.KF 240-tonne la dl e furnaces, the largest ev er delivered by ASEA.
Dubai Rectifier equipment for an aluminum smelter.
Technical development
The ELRED process, a method of producing liquid iron less expensively, is now at the stage where a commercial prototype plant can be built. The process was developed in cooperation with Stora Kopparberg.
A new system for the speed contro l of DC industrial motors has been developed.
Systems for controlling the speed of AC motors with the aid of frequency converters are finding interesting areas of application . Development work is continuing on electronic systems with microprocessors and minicomputers for use in controlling industrial processes.
Hägglunds' development work in the area of mining and tunneling machines has now
reached the point where the first explosion-proof equipment for use in coal mines
has been delivered.
· · Trammg of customer personneJ
· has become
an
mcreasingly· · tmportantpartofASEA'sdelivery
· comnutments The sulphate pulp milloperatedbyCellucamS.A.m Cameroon is a typical examp/e ASEA has delwered all the . electncal eqwpment for the mtll
Share of total Group sales, 7 percent
Transportation equipment
Electric locomotives, electrical equipment for railway vehicles, military vehicles, mate- rials handling equipment, marine turbines and equipment for merchant vessels.
($millions) Orders Sales
Operating eamings after depreciation Backlog at year-end
Ca pi tal expenditures Ernployees
Market conditions
1979
$417 202 - 5 490 13 3,921
1978
$208 223 5 251 14 4,000
Percent ch ange 100 - 9 95 - 8 -2
Rising oil prices and increased demand for energy-efficient mass transpartatian have resulted in greater eostomer interest in electric locomotives and electrical equipment for urban transportation.
The Swedish market for forklitt trucks was weak, as was the market for hoists .. The market for cranes was characterized by increased demand accompanied by bard price competition. Demand for deck cranes was depressed.
Significant contracts
Australia Electrical equipment for 33 suburban trains.
Sweden 40 thyristor locomotives for the Swedish State Railways.
Sweden Orderfrom the Swedish Arrned Forces for series delivery of Hägglunds' tracked all-terrain vehicles. Order amounts to about $190 million.
Notable deliverles
Sweden Thyristor locomotives for the Swedish State Railways, mine Iocomotives for LKAB.
United States Electrical equipment for thyristor locomotives being built for Amtrak, the American railroad company.
Australia Electrical equipment for suburban trains.
Technical development
Project work on a new generation of thyristor locomotives has been completed and new propulsion equipment has been developed and tested.
In cooperation with General Motors, ASEA has developed a locomotive designed for a speed of 200 kilometers (125 miles) per hour to be used by Amtrak. Suburban trains have been developed for a narrow-gauge railway in Australia.
STAL-LA VAL Turbin's development work on new proj)Ulsion machinery for ships has
resulted in a license agreement with Surnitarna Heavy Industries Ltd, the Japanese
company.
Sftflre: of total
Orovp :ttilks, 25 percent
Operations: Products
Finished goods
Off-the-shelf items and spare parts.
Orders Sales
Operating earnirigs after depreciation Backlog at year-end
Capita] expenditures Employees
Market conditlons
1979
$692 709 54 81 43 11,738
1978
$605 582 33 79
26
11,150
Percent change 14 22 64 3 68 5
Demand in Sweden for ASEA's standard products and spare parts was weak, bu
tpicked up during the seeond hal f of the y ear. Stiff price competition is the rule , not l east from certain Eastern European countries who appear to be sellingin Sweden at prices which do not cover manufacturing costs. The growth in demand in foreign markets was somewhat betterthan in Sweden.
The electrical wholesale business during 1979 was charactyrized by a sharp recovery, compared with the depth reached in 1978. Sales of ASEA SKANDIA increased 21 percent. There was also an increase in the wholesale market forCEWE-SELF A's products.
Cables
The Swedish cable and wire market increased by about 10 percent, calculated in
volume, as did ASEA KABEL's orders in Sweden. There was active interest on the part of customers outside Sweden , but orders were lower than in 1978, when the order bookings included a very large contract.
Low-voltage switchgear and controlgear
The Swedish market for cable accessories and switches has increased. CEWE-SELFA enlarged its share of this market. There was a sharp increase in orders for low-voltage switchgear and controlgear from customers outside Sweden. Sales of distribution boards continued to decline in Sweden, due to low expenditures for capita! projects.
Li.pting
lmproved economic conditions, combined with increased marketing efforts, resulted in a 20 percent increase in Järnkonsfs orders for lighting fixtures. The most expansive seetars are schools, day care centers and the medical care field.
Bovsehoki appliances
J unga Verkstäder and ASEA SKAND IA recorded high er sales of capita] goods for
borne u se. A completely new ''Cylinda'' washin g rnachine and dishwasher program was
developed. Junga's sales in Australia increased.
Semifinished goods
Raw materials and goods requiring further processing.
($millions) Orders Sales
Operating loss after depreciation Backlog at year-end
Capita! expenditures Employees
Market conditlons
1979
$335 325 - 2 61 13 3,798
1978
$267 261 -10 57 12 4,000
Percent change
25 25 7 8 - 5
The market for the ASEA Group's semifinished goods continued to rise during most of 1979 but declined towards the end of the year.
Electrical steet
Orders received by Surahammar ro se 10 percent, bu t prices are still unsatisfactory. In a longer perspective, the build-up of productian capacity in the industry in such countries as Poland, Romania and Brazil is a disturbing factor.
Iosulating materials
Orders received by ASEA-ISOLATION were high er in 1979, following three consecutive years of decreases. The im provem en
twas du e in part to the fact that concentration on new customers began to yield results.
Castings
Demand for castings improved during the year. Orders received by Näfveqvarns Bruk for aluminum and copper alloy castings rose 15 percent and there was also increased demand for Kohlswa Jernverk's steel castings. ASEA's east iron productian in Västerås is being discontinued.
Fiberglass
Scandinavian Glasfiber' s sales offiberglass increased slightly. Excess capacity in the international market eaused severe price competition.
Copper and aluminum wire
Deliveries from both Blektrokoppar and Dahrentråd were high er duringa period of active demand. The sharply higher prices of copper and aluminum boosted the sales figures.
19
./
Share of total Group sales, 11 percent
Share of total Group sales, JO percent
Other products and services
Power station operations, service and installation work and computer services.
($millions) Orders Sales
Operating earnings after depreciation Backlog at year-end
Capita] expenditures Employees
Market conditlons
Power sales
1979
$300 299 26 36
136,128
1978
$260 259 29 35 lO
5,600
Percent change
15 15 -11 35 3 9
The volume ofpower sold by the Voxnan group increased 6percent. Of the total power productian of2,603 GWh, hydro power produced in the group' s own stations accounted for 40 percent, le a sed power for 22 percent, and nuclear powerfor 38 percent.
Purchases of power totaled 2,274 GWh.
Service and installation work
Despite a rather weak market, there were increased orders for ASEA Group
installation work. The scope of after-sales service operations expanded, notably outside Sweden.
Computer services
Sales of computer services by INDUSTRIDATA increased only insignificantly, due to
interruptions of operations in connection with a change of computer equipment.
Accounting principles
New method of accounting
The valuauon of inventones has been changcd during the year.
Calculatt>d intetest on borrowcd capita! and replacement depreciauon on inventories have been replaced by corre- spondtng tnterest expense and cost depreciation The ad justment resull i ng from this ch ange tn method has been bao;ed on the inventory atJanuary l, 1979. Tht~
nonrecurring amount has directly reduced the inventory reserve Ca pi tal gains from the reurement of the Company·s own bonds are attributable to the item ·•Interest expense."
The recovery of accumulated excess deprectation arismg in connectionwith the sate and scrapping of fixe d assets ts taken up as a special item am o ng altocations, m contrastwith the prevtous practice of including it in the amounts shown for capnal gains and losses.
In connectionwith cred!t sales, the buyer may during the credn period pay interest t hat is lower t han that the Company has to pay for refinancing. In those ca ses where export credit support does not apply, the manufacturing cost~ of each delivery are charged with the current pornon of the future interest deficit.
As regards export credtt support.
eithcr the seller refmances his receivable through Svensk Exportkredtt lSEK) atessentJally the same rate agreed wnh the seller (the SEK system), or the seller utilizes export credit support allowable under tax legislation (the deduct10nl contnbution system) The two systems pro'~< ide approximately the same results after taxes, a factor to be taken mto con- sideration from an accountmg standpoint. According!y, when the deduction/contributton system is appbed, net interest expense--that portion of the refmancing interest whtch exceeds the interest recerved-;s not chargedagatost the" Interest expense" ttem m the Profit and Loss Account bu t is included in a new nonrecurring item under the heading ·'Financmg costs for export credttcontract~ where equtvalcnt tax cxempllons apply."
Groupcontributions to and from substdianes are shown m ASEA
under "Allocations," in contrast to the cadier pracllcc (l f mcl ud mg thcm among nonrccurnng itcms Ltquid funds place d in
promissory no tes have been transferred from "Other current recetvables" and are shown under
"Short-term placements."
That part of long-term receivables which is du e for payment dunng following years has been transiened to "Other current receivables."
Comparable figures for 1978, except for the changed valuations ofinventory and the calculations of current portions offuture creditcosts, have been adjusted to conform with the new accounting method.
Consolidated accounts
The consolidaled account~ have been p repat ed in accordance with the par-value method and are bas ed on the year-end accounts of all Group companies. Group companies are those m which ASEA has a stockholding of mOJe t han 50 percent. or m which it otherwr~c has a controiii ng intet est.
The accounts of the foretgn subsidiaries have been translated at year-end rates of exchange.
All inter-Group transaction~ of con~ohdated companies have been ehminated.
Depreciation
Cost depreciation is based on the on gina! cost of the assets. Fix ed assets are depreciated by the stratght-line method, baseden the esttmated economic hfe of the assets. Depreetation periods vary for different types of assets.
amounttng to between five and 20 years for machinery and equipment. and norrnally 33 years for factory but!dings Book deprectation is apphed in conformit} wtth the law and practice m the respecttve countries.
Replacement deprecratton shown in the Note pertaming thereto is u ..ed for pricc and profitabtlity calculatJons and ts based on estimated t eplacement costs w1th the same assumption~ of ewnomtc h fe of the assets that are used m ealculattng cost depreciatton.
Valnation principles
Jnvemorie.1
lnvt~ntorics are \'alued in accordance with the first-in, ftrst -out principle, goods purchased being valued at the lower of cost or replacement, w h ile manufactured goods are valued at the lower of manu- facturing costs or ~ales pnce, reservation being made for the degree of processing in volved on unprofitable orders. A stan- dard deductton of five percent for obsolescence is then tdk.en.
Rece1vables and ilabillties in jottlf!.n current)'
Current receivables are show n at the lowet ofyear-end exchange rates or rates at the date w hen the recetvable was booked. whtle current hatnitties are shown at the higher of year-end cxchange rates or rates at the date w hen the liabilittes were incurred. As re gards Iong-term receivables and liabtlittes. unreahzed exchange losses are eyeled over the remaimng term of each tecet~able and hability. As a whole, thts me ans that on l v unrealized exchange losses are shown in the accounts. Profits and losses have not been offset against each other. Liquid as~ t s are shown at year-end exchange rates, wlule recervables and Iiabihties covered bv forward contraels are valued at stipulated rates. Advanccs from customers have not been revalued but are shown at rates at the dates the respecttve advances we re received, since there is no presumpbon of tiability for tepayment.
Profit per share
Profit per s hare m the ASEA Group is calculated on the basis of proftt before nonrecurring items less minonty interest and
·taxes, where the tax deducuon JS calculated at a standard rate of 50 per<:<~nt No tax ts apphed to dtvtdends recetved. In accordance with an alternative method of calculatton, k no\\ n as the equtty accounting method, the undistnbuted sh are of e arm ng~ m assocrated companies •s also included This ad justment means that dividends rccewed from a~soctated
compames--companies whtch are not suhsidiane~ bu t in whrch ASEA owns at least 20 percent of
21
the vottng rights-~are exdudcd.
but are replal~d by ASEA ·~'hare of earnings in t hese companic' before nonrecurrmg rtems less a 50 percent tax deduction.
Because ASEA's Annual Report
~~ published so soon after the close of the fiscal y ear that earnings from all ofthe associated compames are not a~ailable, it is not possible to show profit per share, for the year covered by the Report, in accordance with the eqmty accouoting method. This will be don e in a 1 eport to the stockholders to be pubhshed following ASEA 's Annual Meetmg.
Profitability
ASEA policy r equires that profttabtlity be based on the yield-demanding capital avatlable to t h e Group companies. T a k mg m to account ASEA ·~ substant1al stockholdmgs tn non-Group companie~. there is a difference between the definitton of ·•rotat yield-demanding capttal" and o{
''yield-demanding capita! used m operations." The stockholdings constrtute the ditference. The yield-demandmg capita! use.d m operations i~ thus the capita~wned by the Company orsupphed by others-which is mvested in industrial operattons.
The dtagram and table on page 6 show the trend of return on yield-demanding capital, both nominal and real. The profit concept used is proftt t>efore nonrecurring items plus interest expense, less dividends r ece1ved.
since the yield-demandmg capita! does not include the corresponding stockholdings.
In the calculation of the nominal profrtability the eamings art charged with cost depreciation and in the calculation of the real profitability, Wtth re placement deprecration.
"Capita!'' ts the average value, at the first and last of each year. of the total assets less deductions for secunt:tes, current non-interest- hearing liabilities, advances from customer~. and deferred tax habrlity m report ed untaxed reserves Htdden reserves 111 the physical hxed assets less deductrons for deferred tax liabrhty are also mcluded in the calculatton o t the real profit- ability
Consolidated Profit and Loss Account ($millions)
Externalsales Not e 1
Manufacturing, selling and administration costs Operating eamings before depreciation
Deprecmtion Nate 2
Operating eamings after de preciatian Financial income and expense, etc.
Dividend income Interest income
Interest expense N o te 5
Differences in exchange rates Nate 6 Capitailasses on sales of machinery and equipment Profit after financial in come and expense, etc.
Nonrecurring income/expense Nate 7 Profit before allocations and taxes
Allocations
Depreciation and write-down in excess of Note 2 planned
Utilized from investment reserves, etc.
Withdrawal of accumulated excess depreciation of sold fixed assets
Allocations to general investment reserves Allocation to Marcus Wallenberg's Fund for ASEA Group Employees
Changes in general inventory reserves
Other allocations Nate 9
Profit before taxes Taxes
Minority interest in Iosses/profits Group n et profit
1979 1978
1)$2,857.5 $2.370.5 -2,673.4 -2,195.9
- - -
184.12) 174.6
78.5 71.7
105.6
2)102.9
12.1 12.3
65.7 63.3
93.3 85.0
6.8 12.8
1.4 2.2
81.92) 78.5
1.9 4.1
83.8
2)82.6
13.1 15.2
12.8 12.5
4.6 8.0
11.6 9.7
0.7
7.2 13. 8
0.7 20.3
67.9 71.7
19.3 23.7
1.5 1.9
$ 47.1 $ 46.1
1) Values adjusted to conform to changed accounting practlces (see page 21)
2) After the publlcahon of the ASEA Group report on 1979 operations, the Board decided to i nerease the reserve for m ventory profits by $4. 8 mlll!On, whrch has been charged to the earnings.
Consolidated statement of changes in fmancial position
($millions)
Source of funds
Profit heforc allocations and laxes
+ Deprcciation
+ Depreciation on balanced issue costs of bond loan -!Capita! gains on sales offixed assets. etc.
- Extra power fee paid associated campanies - Taxes
+ Change in blocked accounts - Dividends
Profit from operations during year Sales of s hare s
Sales of machinery and property Decrease in long-term receivables Increase in long-term Iiabilities Total source of funds
Application offunds lovestments in shares
lovestments in machinery and property Balanced issue costs of bond Joan Increase in long-term receivabtes Total funds applied
Ch ange in working capita!
Specification of change in working capita!
Increase/decrease in inventory Note 16 lncrease/decrease in current receivables
Increase/decrease in other current assets excluding liquid assets
l nerease (-)/decrease in advances from eostomers l nerease (-)/decrease in current Iiabilities
Increase/decrease in liquid assets
Ch ange in composition of ASEA Group, differences in exchange rates, etc.
l) Values adjusted to conform to changed accounting pract"es (see page 21) 1J After allocation of $0.7 ro welfare {und
1979 1978 ')
$ 83.F) $ 82.6 78.5 71 .8
0.2 0.2
- 6.0 - 14.7
- 2.4 - 19.3
- 19.3 - 23.7
3.1 3.6
-23.7 - 23.7
113.5 76.8
7.2 8.5
19.1 27.5
55.3
87.7 87.5
227.5 255.6
2.6 20.8
122.5 107 .0
0.2 3.1
0.5
125.8 130.9 101.7 124.7
9.3 183.1
93.5 43.3
- 12.3 - 3.1 - 29.7 -168.8 - 59.1 - 45 .2
97.3 87.4
2.7 28.0
$101.7 $124.7
23
Consolidated Balance Sheet, December 31 ($ millions)
Current assets Cash
Short-term placements seeurities
Trade bills
Customers in Sweden Customers outside Sweden Prepaid costs and accrued earnings Other current receivables
In ventories and work in progress Advances to suppliers
Blocked accounts Fixed assets Trade bills
Customer receivables Other long-term receivables Convertible bands
Shares
Bond loan issue expense
Note 10
Note 11
Balanced costs for investments in tcchnical and commercial development work, AB ASEA -ATOM Patents, goodwill, etc.
Advances to contractors Construction in progress
Machinery, e q uipment and power lin e s Buildings
Land and other property
Assets pledged Blocked accounts Receivables seeurities
Chattel mortgages
Land and buildings mortgaged Other assets pledged
Note 13 Note 13 Note 13
1 ) Values adjusted to conform to changed accormting practice.s (see page 21)
Consolidated Balance Sheet with and without nuetear power equipment ($millions)
Liqmd a~sets
Current recetvables
lnventone~. work in progress and advanccs to suppiters
Blocked acoounts
Long-term receivables and seeurities Machmery and propert}
Other assets
Total 1979
$ 610 9 638 l
1.528.0
"2.777.0 3.6 286.4
sn.s
~ Excluding nuclearpower equtpment 1979
$ 413 8 616 7
71l3.8 1.734.3 3.6 2fin 2 804.8
~2.5
Current hahihtie~
Advance~ trom cu~tomcrs
Long-term habihtJes
Convertt hl e subordinat ed loan Untaxed reserves
Minorit} interest Stockholders' equity
1979
$ 490.4 120.5 0.2 23.7 186.2 368.1 15.2 44.7 1,515.4 12.6 2,777.0 3.6
46.9 10.4 42.7 14.7 171.7 2.9 1.2 0.0 7.5 13.1 446.1 323.5 67.9 1,148.6
$3,929.2
$
$ 14.0 38.7 0.0 137.9 264.7 1.2 456.5
Total 1979
$ 648.5 1.166.7 952::!
8.2 58<) 8 3:!.9 :"30 9
$3.929 2
1978
1)$
333.6 180.0 0.5 22.9 162.3 305.1 18.4 35.7 1,529.5 24.6 2,612.6 6.7
47.1 5.6 46.9 14.7 165.7 2.9 2.7 0.0 8.9 8.7 430.9 311.6 64.0 1,109. 7
$3,729.0
$ 2.4
47.1 0.0 112.8 252.9 2.2
$
417.4
Excludmg nuc\ear power eqmpmcnt 1979
$ 551 9 286.7 937 9 8.2 519.4 19.8 527.5
$2.851 4
C'urrent liabilities 1979 1978
Bills payable
$ll.6 $ 7.3
Trade payablcs 243.0 221.7
Tax liabilities 6.2 12.6
Accrued costs and prepaid earnings 230.7 197.6
Other current liabilities 157.0 150.2
648.5 589.4
Advances from customers Note 11 1,166.7 1,137.0
Long-term liabilities
Secured loans Note 14 237.4 219.6
Unsecured Ioans Note 14 437.7 397.8
Provision for pensions 277.1 247.1
952.2 864.5
Convertible subordinated Joan Note 15 8.2 8.2
Untaxed reserves
General in ventory reserves Note 16 318.6 333.8
General investment reserves Note 17 29.7 29.5
Inventory investment account 0.5
Special investment reserves 0.2 0.2
Work environment reserves 0.5 1.2
Accumulated excess depreciation Note 18 240.8 238.9
589.8 604.1
Minority interest 32.9 31.6
Stockholders' equity RestTicted equity
Capita] stock
( 19,687,500 shares at a par value
of Skr 50 ($12.08)) 237.7 237.7
Other legal reserves 138.4 119.1
Non-restricted equity
Free reserves 107.7 91.3
Group net profit 47.1 46.1
Note 19 530.9 494.2
$3,929.2 $3,729.0 Contingent liabilities
Discounted bills $ 24.9 $ 18.9
Other contingen t Iiabilities 136.5 135.0
$ 161.4 $ 153.9
25
ASEA Profit and Loss Account ($ millions)
Invoiced sales
Manufacturing, sclling and administration costs Operating earnings before depreciation
DepreciatiOn Note 2
Operating earnings after depreciation Financial income and expense, etc.
Dividend in come N o te 3
Interest income Note 4
Interest expense Note 5
Differences in exchange rates Note 6 Capita! loss on sales of machinery and equipment Profit after financial income and expense, etc.
N onrecurring income/expense N o te 7 Profit before allocations and taxes
Allocations
Depreciation and write-downs in excess Note 2 of planned
Utilized from investment reserves, etc.
Withdrawal of accumulated excess depreciation of sold fixed assets
Groupcontributions, etc. Note 8
Allocation to Marcus Wallenberg's F und for ASEA Group Employees
Change in general inventory reserve
Other allocations Note 9
Profit before taxes Taxes
N et profit for year
l) Values ad)usted to confonn to changed accounting practlces (see page 21)
1979
$1,014.7
- 942.0
72.7 29.5 43.2
24.6 28.5 47.1 4.1 1.4 43.7 4.8 38.9
2.9 2.9 l. O
1.5 0.7 0 .0 37.7 1.5
$ 36.2
1978
1)$977.5 -907. 2 70.3
- 27.1 43.2
25.1 29.0 - 46.1
- 8.7
-
1.2
41.3
-
2.9
38.4
- 5.1
5.1
1.7 - 10.9
10.6 0.0 39.8 - 4.1
$ 35.7
n
~
l
J
ASEA statement of changes in fmancial position ($ millio ns)
Source of funds
Profit bcfore allocations and taxes
+ Depreciation
+ Depreciation on balanced issue costs of bond loan
+ Capitallosses/ gains on sales of fix ed assets, etc.
- Group contributions, etc.
- Taxes
+ Change in blocked accounts - Dividends
Profit from operations during year Sales of shares
Sales of machinery and property Decrease in long-term receivables Increase in long-term liabilities
Transfer ofinventory reserve from Group company Transfer of investment reserve from Group company Total source offunds
Application of funds lovestments in shares
lovestments in machinery and property Balanced issue costs of bond loan Increase in long-term receivables Total funds applied
Change in working capita!
Specificatton of change in working capita l
Increase/decrease in inventory Note 16 Increase/decrease in current receivables
Increase/decrease in other current assets.
excluding liquid assets
Increase (-)/decrease in advances from customers Increase ( - )/decrease in current liabilities
Increase/decrease in liquid assets
I) Values adJusted to conform to changed accountmg practu:es (see page 21) 2) A/ter allocation of $0.7 to welfare fund
1979
197~1)$38.2
2)$ 38.4
29.5 27.1
0.2 0.2
3.2 - 8 .2
- 1.5 - 10.9 - 1.5
-4.1
0.5 1.2
-23.7 -23.7
44.9 20.0
8.0 8.9
3.9 6.3
42.3
40.8 39.2
0.7 3.9 97.6 121 .3
21.3 43 .5
35.0 46.4
3.1 5.3
61.6 93 .0
36.0 28.3
12.0
- 41.029.9 49.0
- 1.0 2 .4
- s.s 6.1
-12.4 - 22.0
13.0 33.8
$36.0 $ 28.3
27
ASEA Balance Sheet, December 31 ($ millions)
Current assets 1979 1978
Cash
$137.2 $ 107.7
Short-term placements 46.8 63.3
seeurities (Nate 10) 0.0 0.2
Trade bills 12.1 9.2
Customer receivables (Group companies: $83.3) 253.9 227.1 Prepaid costs and accrued earnings
(Group companies: $1 . 9)
Other current receivables (Group
8.0 9.9
campanies: $22.9) 32.4 30.2
In ventories and work in progre8s 311.8 305.1
~k-·Advances to suppliers (Group
companies: $1.9) (Note 11) 9.4 10.1 - .
811.6 762.8 Blocked account with Bank of Sweden
General investment reserve 0.3 0.3
Work environment reserve 0.2 0.7
o.s 1.0
Fixedassets
Trade bills 43.7 44.0
Customer receivables
(Groupcompanies: $1.0) 8.2 5.3
Other long-term receivables
(Groupcampanies: $59.4) 60.6 58.0
Convertible bands 14.7 14.7
Shares in Group campanies (Note 12) 269.1 250.0
Shares in associated and other
non-Group campanies 139.1 146.6
Bond Joan issue expense 2.7 2.9
Advances to contractors 1.9 3.6
Construction in progress 1.7 1.4
Machinery and equipment (Note 13) 173.9 173.2
Buildings (Nate 13) 98.1 97.6
Land and other property (Note 13) 17.4 17.2
831.1 814.5
$1,643.2 $1,578.3 Assets pledged
Receivables $ 29.7 $ 31.4
Chattel mortgages 26.6 25.6
Land and buildings mortgaged
(Group companies: $0.0) 59.4 55.8
$ US.7 $ 112.8
Currcnt liabilities 1979 1978
Bills payable $ 0.0 $ 0.0
Trade p a ya b les (Group companies: $23.4) 99.5 86.3
Tax Hability 4.6 7.3
Accrued costs and prepaid eamings 95.6 83.1
Other current liabilities (Group companie'l: $6. 8) 54.1 64.7 253.8 241.4
~
