Q2 2023 results
ABB Ltd / Key word(s): Quarterly / Interim Statement Zurich, Switzerland, July 20, 2023 Comparable order growth from a high base and record-high Operational EBITA margin1
“The positive book-to-bill ratio and new record-high Operational EBITA earnings and margin add to our confidence about ABB's 2023 outcome allowing us to sharpen our margin expectations.” CEO summary Order momentum was strongest in the systems- and project-related businesses, driven predominantly by the medium voltage segment and process-related industries. This offset some softening from last year's high order level in the short-cycle business, mainly evident in the residential construction segment and across the board in discrete manufacturing where customers normalize order patterns in the face of shortening delivery lead times. In total, the book-to-bill ratio was 1.06 driven by three out of four business areas, and we further increased order backlog. It was good to see our cash flow from operating activities improve by $378 million from last year and I expect us to improve cash conversion from here onwards. Over the first six months we have generated just over $1 billion in Cash flow from operating activities, which helps position us well for what I expect to be a good cash delivery this year. As announced earlier in the quarter, we experienced an IT security incident. I am grateful to our teams for the handling of the challenge and containment of the incident, and as a result we have had no consequential material financial impact in the quarter. Just after the end of the second quarter, we successfully closed the divestment of the Power Conversion division at around $500 million. As a result, we expect to record a non-operational book gain estimated at approximately $50 million in Income from operations in the third quarter of 2023. With this transaction, we have completed all divisional portfolio divestments announced at the end of 2020. That said, we continuously review the product groups within all divisions to optimize the portfolio. The small acquisition of Eve Systems is another example of our portfolio actions, this time by the Smart Buildings division in business area Electrification. With around 50 employees, Eve generated approximately $20 million in revenues in 2022. It is a pioneer in the new Matter connectivity standard which enables smart home products to be fully interoperable, irrespective of the manufacturer and user operating system, via Thread wireless technology for consumer-facing products tailored to the retrofit market. I was pleased to see Process Automation unveil its new revolutionary propulsion concept initially aimed primarily at small- to medium-sized vessels, complementing its current market leading Azipod® offering for larger vessels. This industry-first electric propulsion concept ABB Dynafin™ mimics the movements of a whale tail for ultimate efficiency and emissions avoidance as it is set to reduce propulsion energy consumption by up to 22% compared to conventional shaftlines. The first commercial prototype is expected to be available in 2025. Outlook In full-year 2023, despite current market uncertainty, we anticipate comparable revenue growth to be at least 10% and we expect Operational EBITA margin to be above 16%. The complete press release including the appendices is available at www.abb.com/news (ABBN: SIX Swiss Ex) is a technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. The company’s solutions connect engineering know-how and software to optimize how things are manufactured, moved, powered and operated. Building on more than 130 years of excellence, ABB’s ~105,000 employees are committed to driving innovations that accelerate industrial transformation. www.abb.com End of Inside Information |
Language: | English |
Company: | ABB Ltd |
Affolternstrasse 44 | |
8050 Zurich | |
Switzerland | |
Phone: | +41 43 317 7111 |
Internet: | www.abb.com |
ISIN: | CH0012221716 |
Listed: | SIX Swiss Exchange; Stockholm |
EQS News ID: | 1683727 |
End of Announcement | EQS News Service |
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1683727 20-Jul-2023 CET/CEST