Ad hoc Announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange
Zurich, Switzerland, October 17, 2024
Q3 2024 results
Order growth and record level margin
- Orders $8,193 million, +2%; comparable1 +2%
- Revenues $8,151 million, +2%; comparable1 +2%
- Income from operations $1,309 million; margin 16.1%
- Operational EBITA1 $1,553 million; margin1 19.0%
- Basic EPS $0.51; +8%2
- Cash flow from operating activities $1,345 million; 0%
KEY FIGURES | |||||||||
CHANGE | CHANGE | ||||||||
($ millions, unless otherwise indicated) | Q3 2024 | Q3 2023 | US$ | Comparable1 | 9M 2024 | 9M 2023 | US$ | Comparable1 | |
Orders | 8,193 | 8,052 | 2% | 2% | 25,602 | 26,169 | -2% | -1% | |
Revenues | 8,151 | 7,968 | 2% | 2% | 24,260 | 23,990 | 1% | 3% | |
Gross Profit | 3,116 | 2,762 | 13% | 9,225 | 8,366 | 10% | |||
as % of revenues | 38.2% | 34.7% | +3.5 pts | 38.0% | 34.9% | +3.1 pts | |||
Income from operations | 1,309 | 1,259 | 4% | 3,902 | 3,755 | 4% | |||
Operational EBITA1 | 1,553 | 1,392 | 12% | 11% 3 | 4,534 | 4,094 | 11% | 11% 3 | |
as % of operational revenues1 | 19.0% | 17.4% | +1.6 pts | 18.6% | 17.0% | +1.6 pts | |||
Income from continuing operations, net of tax | 937 | 905 | 4% | 2,955 | 2,902 | 2% | |||
Net income attributable to ABB | 947 | 882 | 7% | 2,948 | 2,824 | 4% | |||
Basic earnings per share ($) | 0.51 | 0.48 | 8%2 | 1.60 | 1.52 | 5%2 | |||
Cash flow from operating activities | 1,345 | 1,351 | 0% | 3,138 | 2,393 | 31% | |||
Free cash flow | 1,173 | 1,186 | -1% | 2,642 | 1,954 | 35% | |||
1 | For a reconciliation of alternative performance measures, see "supplemental reconciliations and definitions" in the attached Q3 2024 Financial Information. | ||||||||
2 | EPS growth rates are computed using unrounded amounts. | ||||||||
3 | Constant currency (not adjusted for portfolio changes). | ||||||||
"ABB is on a good path, and long-term I am confident we can optimize the ABB Way further. Our strong performance in the third quarter triggers an upgrade of full year margin guidance, while the weaker than expected discrete automation market and a slightly slower pace of backlog execution impacted revenue growth."
Morten Wierod, CEO
CEO summary
In the third quarter, we had a positive year-on-year development on virtually all lines in our income statement. On a high level, I would summarize it by saying that the very strong development in our Electrification business more than offset weakness in the areas of Robotics & Discrete Automation and E-mobility. Despite some businesses not running at their optimal performance, we repeated the record level Operational EBITA margin of 19.0%. Cash flow from operating activities remained virtually stable at $1.3 billion. With an accumulated free cash flow of $2.6 billion so far this year we are in a good position to achieve our ambition of at least $3.7 billion this year.
In total, the book-to-bill was positive at 1.01, supported by the Electrification and Process Automation business areas. Order intake increased by 2% (2% comparable), with the short-cycle orders improving, while large order bookings declined from last year's peak level. Looking at the different customer segments, the areas of data centers, utilities and infrastructure stood out as strong positives, while the most challenging area was machine builders linked to discrete automation.
The revenue growth of 2% (2% comparable) was lower than anticipated, and this mainly related to our business in discrete automation, but to some extent also to the Motion business area. From an Operational EBITA margin perspective, the 19.0% was better than expected coming into the quarter. It mirrors solid year-on-year increases in three business areas offsetting a weak performance in Robotics & Discrete Automation and the E-mobility business. We also had some additional support from the lower than originally expected Corporate-related costs.
We have recently closed two acquisitions. One being Födisch Group in the Measurement & Analytics division in the Process Automation business area. Albeit modest in size, it expands our offering in advanced industrial emission measurement and analytical solutions, adding approximately $55 million of annual revenues. The other being in the Electrification business area where the Service division has acquired the SEAM Group, a US-based provider of asset management and advisory services across industrial and commercial building markets. The deal complements our already existing service offering and adds approximately $90 million of annual revenues.
As of August 1, we have new business area Presidents in Electrification - Giampiero Frisio and in Motion - Brandon Spencer. Being internal appointments, they are both off to a running start and I know they will bring high energy to their respective teams. Also I have completed the first couple of months in my new role, as CEO. ABB is at the center of the secular trends of electricity becoming the key source of energy, and resource efficiency through automation. We have made significant operational improvements through the ABB Way operating model, and I believe we can fine-tune and benefit even further from it. Like we have said before, we are increasing our R&D and capex investments to support profitable growth. We also have some way to go in making M&A fully integrated in our performance culture, while continuing to deliver on our targets. In my view, ABB is not yet firing on all cylinders.
Morten Wierod
CEO
Outlook
In the fourth quarter of 2024, we anticipate a low to mid-single-digit comparable revenue growth and the historical pattern to repeat for a negative book-to-bill and a sequentially lower Operational EBITA margin.
In full-year 2024, we expect a positive book-to-bill, comparable revenue growth to be below 5% and the Operational EBITA margin to be slightly above 18%.
The complete press release including the appendices is available at www.abb.com/news
ABB 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 over 140 years of excellence, ABB's more than 105,000 employees are committed to driving innovations that accelerate industrial transformation.
