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I
Market activity continued to recover from its lowest point
during the summer 2020. Demand was especially strong in
the short-cycle business, beyond our expectations. The
increased customer activity, in combination with the impact
from previously implemented cost measures,
resulted in
double-digit growth in Operational EBITA,
and a very high
first quarter margin of 13.8%. I am pleased to see good
performance also in cash flow, which was high for a first
quarter at $523 million. That said, while there was no
material impact on results in the period,
the progressively
tighter supply of certain components such as semiconductors
and plastics, is a concern. We anticipate prolonged delivery
lead-times to customers in parts of our businesses in the
coming quarter. On a separate note, we made the important
launch of our new collaborative robot families. Through this
expansion of our offering, we aim to unlock customer groups
with currently a low level of automation.
In total, we registered order growth of 6% (1% comp-
arable), supported by a broad recovery in most of our short-
cycle businesses. To some extent, demand is likely to have
been driven by a stock build-up related to supply chain
concerns. On the downside,
growth was hampered by a
weak development in the cruising and oil & gas segments
-
albeit initial signs of stabilization were noted. Overall, orders
increased slightly in Europe and AMEA, with the latter
supported by a stellar growth in China. Underlying business
momentum improved in the Americas, driven by the US,
although the region faced high comparable numbers in the
previous period, which put pressure on growth rates.
I am pleased about the progress toward our 2023 margin
target, with all business areas increasing operational EBITA
margin by more than 100 basis points. That said, we are
taking actions to further improve operational performance in
Based on the current market situation, ABB anticipates
growth rates in the
second quarter of 2021
level of business activity in Q2 2020. Comparable orders and
revenues are expected to grow >10%, with orders growing
The Operational EBITA margin for the Group is
expected to significantly improve year-on-year, to
approximately 14%.
As announced in the recent trading update, ABB anticipates
comparable revenue growth of ~5% or higher for
full-year
2021
, with the process industry related part of the business
expected to recover during the second half of the year.
In 2021, ABB expects a steady pace of improvement from
2020 toward the 2023 Operational EBITA margin target of
upper half of the 13%-16% range. This excludes the
combined adverse impact related to the Kusile project and
stranded costs, which weighed on margin in 2020.
Outlook
Process Automation,
which should also benefit from an
anticipated improvement in end markets during the latter part
of the year.
We made good progress with the divestment process for the
three previously announced divisions and I expect us to sign
the first deal during the second half of the year.
Furthermore, we have turned our E-mobility
business into a
separate division and initiated a carve out into a separate
legal structure. These steps will allow us to prepare for
a possible public listing, creating a platform for accelerated
growth and value creation in this business.
We held the Annual General Meeting at which the proposed
dividend of CHF 0.80 was approved. Furthermore,
we
announced an additional share buyback program of up to
$4.3 billion, whereby re-confirming the intention to return
$7.8 billion of cash proceeds from the Power Grids divestment
Björn Rosengren
CEO
CEO summary