ABB,ABLZF - Earnings call transcript Q2 2021

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Björn Rosengren

Thank you Ann-Sofie and warm welcome from me as well.

First, as you saw in the opening video, we have a new member of the ABB Robotics family. ASTI is a leader in autonomous mobile robots or as we call them, AMRs. This acquisition is a great example of our new division led M&A process.

So let's take a look at the Q2. see four performance business to in overall great our all areas. a a both strong and It's Even though our lowest during comparison from last pandemic. year the was the We year, versus sequentially. improve now slightly also up last saw demand but significantly top of building. impact On was stock the markets, strong there of an underlying components limit But teams impact customers certain on a the QX job in really our our in good and done handling have shortages managed to deliveries. of coming our see continued challenges supply quarters we in said, the part expect to That businesses. chain in in this is delivered in and which by We costs. and profit step QX, material a pandemic raw through was improvement volumes, high largely cost held in offsetting price the still by increases coming base increases which impacted cash flow. also deliver I'm managed we solid pleased that to of another quarter

generated this This delivery we billion. the for far sets promised. XXXX nicely year as have in have $X.X we up So

the total, in on a point on see of was In year. positive can activity were the increased year-over-year key customer the momentum drivers segments and side, had in since sequential you order business. the lowest up by cycle comparable we last have short XX% most chart As orders summer this

We service shakes as business as in orders up also XX%. which comparable much saw our

we that We have the this businesses process related the improvements earlier flagged second expected in during year. of half

strong deliver. numbers, shortages with secure ability Now order environment acts an is there building and that industries. a with In cost signals of this In we element combined of many see the markets positive development QX to with inflation, stocks. several customer underlying in component

in avoid the to an chain. volatility incoming end inventory are customer supply managing We in much effort orders to end too

We strong three at look slide regions on let's last the X. regions. Growth upon a in was Now touched impact pandemic different year. take the all already quick

and actually base by Europe Americas looking improved So than XX% XX%. and that up in the orders. Europe more was Note XX% comparables when both on low at

and China the noted China quarter EMEA strong RBAs. XX% You in the recovered by strong driven supported that sooner. of by all also growth region Still, remember in development

a the deliver a like that on shown that though benefited of we strong said, QX should we’ve there markets, company In the possible quality over numerous measures, quarter, ABB the is basis on I've fairly it efficiency are yearly slimmed the in pandemic. even margin thereby As and increases level occasion, on and of yet, back that basis. overall not XX%. from the is we I'm price reach while still the pleased cost a

strong gross was out improved. performance component freight increased materials, we shortage in QX. coming spend points But areas Importantly, the up come of face will an our impact All headwinds travel some and three margin levels we XXX by know all, quarters. raw four business we challenged. for the and basis will be Cost from in in

for of numbers I Although the take But long quarters. hard reaching targets coming that, our over in to see with details. we to ahead we we us working more these. are And term challenges mitigate Timo in through do schedule to hand substantial are

Timo Ihamuotila

levels see the at three a perspective. in was was results our the and oil a the This only we of all let's regions. improvements really on with absolute all where Thanks, start double the supported moderate of divisions slide, which to electrification are virtually let's this. by as side the also And high order look in led It solid digit can growth you historical segments. now areas And in a customer gas, business Björn. take and saw

impact Björn and a Now the where noticeable. area is mentioned from this EL stockpiling certain was

benefited low drove revenues grew still at X%. better increased orders. earlier In order all relatively higher order also the XX% The implemented the backlog materials raw partially from comparable total by book consciously remained and XX% a have EL when the tried hedged the level. price the to by safeguard volumes We orders quality and cost increases while taking absorption. of

rates have really-really materials EL to XX.X%. strong gradually in highlighted higher raw the we production. and good they used earlier, as XX% As this XXX margin points will continued are pleased operational and by QX see basis change a QX I'm EBITDA level year-on-year performance at increased both the to in from of improved as

orders and we Looking to ahead from rate fixed easy reach be base at the year will for growth with anticipate double growing last Sequentially, and there more orders cost. some comparable headwinds than from the both third commodities reflect and digit revenues a revenues. quarter, margin

delivered X and to turn which quarter Let's of business motion another area slide yet then solid performance.

offset impact through to It see in say the although here up revenues right This historical chart revenues customers, short mix a XX%. business on it stable billion. QX from a The among of also can the are as $X.X perspective There the by all indications and high total, and positive of side the focused business, high backlog. you both was in is levels increased remained some volume. the and segments. team in strong stockpiling around also project EBITDA geographical XX.X% from cycle by although consciously at is know operational come the In driven for on the see you compare history hand adverse XX% fair in to did in to numbers. by across you remains can quality it if charts slide. And the margin was on maintaining it that also additional by order the As the were contribution we were has comparable it in good the orders year-on-year the orders

our hedges tightening will to in times from areas impact motion deliveries electrification, longer for carefully electrical customer like do start which in raw term. good semiconductors the watching particularly division. increase material near sequentially We drive Just older when of also somewhat the of costs in out. supply phase We're headwind the steel product and lead expect the

revenues what it below somewhat quarter, orders in to was growth third QX. be For reported the we anticipate in and comparable

Next, and in from XX% based service broad X% and on The look the for growth QX we by low the pandemic. [admitted] the last by positive automation level positive slide where comparable territory quarter when year revenues driven product well was returned in improvements the development respectively at impacted at process X, to heavily businesses. was orders a as as

see the half earlier the the that we have indicated We of year to improve that signs and of we business for environment in expect related process now realizing. second business the

orders into for [growth] an actual uptick low QX, It discrete cruising like activities, see ‘XX you the as segment up looks also initial profit. positive revenues chart, We during past a growth QX delivered last and in segments. than in the machine are gearing for well triggered and the across of in growth higher business comparable in the we're strong which you the be into orders both service would divisions regions significant volumes, XXX the for range drive it business saw increase in EBITDA XX% measures. slide basis to was from from of And from both the in the the service we a mix quarters PA. robotics and cost was stronger automation know. higher operational signs weak in higher in to order robotics and at year and impact In of down been This XX, automation. as course sequential on half recovery. have as which expect supporting momentum QX. in in the target lift service On a positive customers second continued level very share and XX% strong PA Year-on-year points business as margin

Looking quality strategic segment which long And you orders deselect is term. approach already contribute only in this are drivers is to the year. ABB does revenues of this We systems at know drive really business improve a the last automotive before, as it to an from we started action with low applying the to content. to segment This profitability the not growth.

the margin the The development EBITDA on the cycle operational over the will cost from year-on-year of up of and strong from automotive last share generally phase of a factory machine a divisions level in orders deliveries by above volumes, due constraints, revenues QX, was XXX was absorption positive towards cost line year RA rise term implemented it automation. execution. should We into near from service rose delayed revenues. with Comparable business. of customer the in revenues business In orders divisions. XX% both basis points higher XX.X% risk while total business strategy year driven see previously by low and So particularly year's both early the over in next better for The semiconductor improving roll in growth short due bit improvements end some to in in measures. to mix primarily and were impact out orders contribution mentioned with bit area with XX% substantial higher

Looking QX, given slide expect next look bridge we be the and also revenues for comparable XX. comparables growth rates and operational orders QX revenues constraints. higher We for than mentioned to EBITDA earlier at lower supply into and group on

was our some earlier you cash. organic comes volume low As benefited from still. and this The we progression to from leverage development. see spending in Then the cost to good abnormally contribution table, strongest the the discretionary and would year-on-year also reductions

this we million. pleased have has job and the back. the After $XXX come made Now, while quarter. driver strong in growth Higher slide up cash from year. in so in the from And with previous this cash flow earnings but the is the key operating was through is capital to my amounted good it far broadly QX done networking favorite at activities really how QX I'm of a the stable containing year-on-year this strong period it keeping also team

leave compares short the so below about growth we year. cycle good what delivery. of expect we continuous X% from up first quickly is XXXX to I This see operations of in cash than our improvement more a thought in is be year for meaningful when and outlook just already the supportive to previous $XXX This the of is just comparable to the our Then from higher. We to discuss about For want cash statement a for the revenue to flow half The start by off, projection last very beginning our million the or statement. finish year. year, we at XX%. initially

feel stronger the recovery, we related the in service also have crew segment. conviction including the in process We business

impact growth about of growth rate QX, XX% revenues base the for from comparable growth benefit COVID-XX lower in with comparable to a year-on-year XXXX. our XXXX will Our a due start the In and a the is from year. reflects operational should XXXX towards steady margin pace This target. strong of change earlier statement improve to in EBITDA higher the at revenue rates anticipate and the margin strong for orders pace orders. We again

I keep On the QX, in key We good some a mix good anticipate mind. situation a recovering positive margin side revenues. items in from to to want service from and market year-on-year mention support

mentioned also On increasing for it costs we ease. pandemic as will sequential the we have in from hand likely components earlier hopefully most or and this other know related pressure [indiscernible] continue and we have from input travel restrictions the to higher some costs, example presentation,

how out. Let's And it at over I Björn. factors. these things to But back hand like pan with mention to see would I least that, to wanted

Björn Rosengren

just you, like slides Timo. share you. to would two I Thank with another And

in all them extends is the covers and the leading flexibility supplier going has XX% complements by example and that agenda. robotics year. mobile had being production. suits. aiming requires of offers for is of autonomous to this software mid versatile I how drive a a The AMRs. deal It size a these XXXX million forward. expect further major the revenues of close ASTI enabled RA well about growth increased to or annual ASTI more in see first portfolio $XX offering applications good deal, It since a the one M&A small and which businesses

and We to strong to balance add a it have and we value. use want sheet grow

I carbon the the Lastly, making keeping emissions on Paris you our the with would like towards reduction in are of of the progress we goals to update Agreement.

neutrality target to our achieve that XXXX. know by already in a our You own carbon operations is

sourcing we and on energy the our the vehicles, delivering and energy fleet They joined sites. that, of our efficiency climate nonprofit systems all renewables of management XXX% at our have by establishing of XX,XXX targets from of international more group. include deploying electricity part electrifying As initiatives than

that, up a These us now confirmed Agreement. the science of our initiatives with are be targets are measures X.X is for on reduction aligned long targets open the with line Our the all with to Ann-Sofie to based and sustainability And scenario I ask deliver to term Q&A and degrees in targets. steps Paris session.

Ann-Sofie Nordh

to we I of Thanks summer. markets do Timo. to little just commercial this But opportunity a into the day, to and hosting you Q&A, like and move take actually, break we're which a bit Björn after before capital the would our welcome

we on and occasion, of on on the course, all But group. you both their we offering be the also of and On site of is Zurich on visit is Helsinki the the virtually. meet transport motion will September on this in Then top to XX, on will of able you this the first to this with for day, invite more permitting. will focus of host about the CMD will all, team. to here and X, operations you their group learn course sustainable December topic And and we that of strategic site. strategy update us a and process on And join secondly, COVID

open [Operator you questions can for I just best Instructions] for I do and And possible. we of you now we'll as have So two limit queue yourself get as now kindly ask through already many Q&A. a our that questions. we to see to to

we Alex, are on So the Bank go and now with we'll us? the Lynch. Alex of have first Merrill from you line America Virgo I question hope to

Alex Virgo

morning I much. Ann-Sofie am Good and indeed. thanks Timo. Björn very you to all,

questions in sequential a the wondered around little go also little China, just there then MO? I terms a first and if started in momentum wonder of Thank could one, So us just much we've two how you bit through you question, give indication detail give to bit us think if demand just divisional more QX. stockpiling contributed the please, I color development you've or to the you. inventory in And second seen performance the of how building EL could or about you thinking helped an and has growth

Björn Rosengren

businesses here see mean, course me we whole growth I a usual we XX development look the through to we in take at Thank of electrification motion, day of divisions, in the sticking the you, I Chinese mean, Alex. market. and have is go double four first, the market, each we have, them. have digit but as if it has Chinese will who But we great out,

the So yes, China, I mean, actually in growth numbers you that year should also last we know also. comparison had

we still been the have year, engine last for it's XX%. So growth the whole but

see to So continues this was growth in positive China. a that

it you with how Timo stockpiling maybe looked it's the On said like it. on electrification everything, the business to a Timo? it's group. X% say X% and effect we see mainly to we we something add Maybe That's want that in the bit little upon

Timo Ihamuotila

exactly or a and or more in maybe on that's so No, X the right, electrification. group, about X.X bit

QX So electrification. it's we actually said X when an as in from impact down about

Alex Virgo

very much. Thanks right. All

Björn Rosengren

Thanks Alex.

Ann-Sofie Nordh

Alex. you Goldman Thanks, next then question. we'll - And Daniela are take Costa Group there? Sachs the

Daniela Costa

Yes, first Thanks I'm ask everyone. the my taking I'll here. Good on morning, But questions. as one for wanted to understand. well. I two

end of far, you the can review mentioned being your October. would the going are you interesting kind to you doing Thank at far? are in already you so performance the there to hear you have think my already be the given quarter, what that what little bit then all board in upper you much. be some take And within within headwinds the exactly questions. a looking present give you But from of alluded the were color that Those to last you portfolio would strong done given XXXX. But more process margin you what think that to you from very in automation question, us second any? do mapped I you, away so that my XXXX, guidance still guidance if So could keep for

Björn Rosengren

on that correct that market over before think don't my this course hand, numbers. Daniela. a a great it That's reach it's me, said, about yes we should other on are yet. quarter. possible to in XX% as I XX%. see it's you, ABB is these though, And be Thank the -- is, is there to that like viewpoint, show I company the for of And

little quarters to prices are like of with well we challenging the all don't to comes and material everybody what it's there one real for supplies know when going is us quarter, it to a as the And come. next semiconductors the these quarters everything and it's us, still have we really So like bit else, as effects be.

We target I my a might in we Yes, before. all in So the long did still little have I where the from are should think perspective, we said on Everybody's that businesses. Where term, ABB this a bit just part. there, that ahead step of I this from the I've be that schedule, cautious XXXX. we margins? are When make great margin is quarter. feel it's well a we adjustments. But during we corridor for been is think but the direction contributing believe improvement you

So I'm with I've on understand these business the what of this a very different Then PA. forward. is businesses It's for with PA these for the is a working learning bit many me makes before. from of lot been potential going takes pleased actual what that to little for performing.

journey. need business spent in we do these the to levels quite the are business And profit to So what group. time we up where of understanding we lot to these actually get a that's and a

think ambitions that business like have business they have. I that great to we in other improve every

XX.X% to said potential understand to service also for the really coming review of board It's what will again. stage, kicking add continue in in we to are do future. that special the the good at the to I back because this a correct the we to this So wants that. else September Nothing from have see business but this

that's ABB. the hope that's So answer I that's okay. news for good

Daniela Costa

Perfect. Thank you.

Timo Ihamuotila

Thank you.

Ann-Sofie Nordh

there, to JPMorgan. Are Andreas then at you Thanks, we move Willi Andreas? Daniela. And

Andreas Willi

and to first the raw at around for Björn material more component empowerment the material time. the Timo morning Good question My raw maybe Yes. is impact.

bit normally some the a we for margins could sequential clarify to you Maybe on expect a more in of to term your electrification. impact Timo, what speech growth. the relative the still near You given from bit, negative earlier positive divisions outside revenue little commentary continued likely particularly little give you have impact be that the

the kind you indication not the impact you been ASTI highlight So QX, this in a what if paid revenue that's acquisition, into planned of the question. from expansion broader an one assembly this could were there still much first And would the my or assembly indication for business? kind of protected of [hedges] multiple on on the by logistics have maybe of give some historically? And kind second you range robots expansion targeted into focus

Timo Ihamuotila

Yes. with Thanks, I Andreas. Why impact start material don't raw question. the

area So go the bit by little about business driver. a and we'll talk business area

of XX.X So also when a steel negative we first little look expecting electrification, in also that there bit at course a of from to see the if and to impact. we high this all, you copper a on sequentially, very at we're look level materials will raw we are the said have coming of particularly

mix impact And managed say, revenue would into expect materials. there of impact the the deliveries. we'll maybe course other raw of then now far, PA, team the side really, the getting, divisional with at teams more at On difficult motion, also positive there. we if has QX also better like the hand, there, a because the a again the is have the we stronger overall far, motion have not a look have on can equation. growth. going on the really, bit well. I question the was PA growth, you done semiconductors think then less that other say And a we Then to pricing see is so so QX. could impact price look growth, really mark growth job And everything stronger in if and than But really of that then is impact. going really bigger you into negative also would but in compensating services more good in But expect, already order I as We the

the much factory impact that may expect be more this the on in bit topic And RA, on PA. the in also side, raw not machine and would always especially automation. and on bit on we component So it material less price

So those really are dynamics. the

Björn Rosengren

towards we if look strategy at ASTI Good. see. working and M&A We And hard. divisions they've the great to the it's been of process moved

divisions objects. global good company one mode, our to potential first growth all is acquisition is And of encouraged drive think identify This growth and nice we here. utilize structure good we in the platform are I This can the and the this. we of improvements think about more good technology. to course, robotics is that

disclose we expensive with So their didn't clear. pretty But line everything it's in the price. strategy. know well That's is that We all today.

for good business a course also, hand, of So other not multiple on It's reasonable. we paid this crazy. the

I of to and is all I this one a related also. We opportunities strategic will bit in typical, this this this And spot black in think think add ABB presence of a forward? this they and that forward. transports is and we will have technology this logistics material of this How didn't way. value lot will to where Yes, lot up speed was to we our think a go growth going a these need of little us.

customer become lot a and on. robots, are distribution more much can where with the also and it really areas helps this combination facilities use production we in and their our applications there So so of flexible in that's to centers

a good add it's on. So

I about was acquisition. expected. this that excited hope So very you question what we're

Andreas Willi

Yes. Thank you very much.

Ann-Sofie Nordh

moved Ben hope Stanley. Yes. Morgan And then Andreas. open. your to Thanks, is line Please, we at Uglow

Ben Uglow

Can me? hear you

Ann-Sofie Nordh

hear can you. We

Björn Rosengren

well. Very

Ben Uglow

question Alex's of hope a the I A your please. answer questions going couple well. to deeper all everyone. Björn I'm beginning. in little on dig to Hi,

sequentially look it the trend. trended is is is quarter at fair first is at think if it question. if level better. how Americas Number And other if know was assume orders, bit two want that second was what a growing? i.e. getting You I China the Europe XQ? is So has is the then just regions, is, overall more But idea about fair is to of the one XQ kind for that XQ guess getting improving but Really the I us versus demand all we your us first versus of quarter. an stabilized? we it my on XQ we kindly told demand to that look better, around versus still

Björn Rosengren

had growth engine though for remember, great seen let's last when Ben. but you a QX we China, remember, slight and in we at growth reports as we has start you in growth Okay, like see What's to made that in last with the in look actually China that, was market, maybe have year, perspective. year. at Yes, read maybe even we that hot world. huge QX big the a saw that had last growth actually here to which see China numbers. drops remember we, of down, that some comparison bit in very And look grow the saw look here even though we parts while more here, also, that the hit growth did first the become we slowed us already the quarter China China the other month at have we from started of pandemic little the pandemic then time, really we

and Second quarter, China was running up again.

challenging that a little bit from perspective. it more was So

out really it's sticking see side. motion strong, one and very is XX% the all businesses, only the though thing four think we bit we even a of little there electrification our on some good the surprisingly even maybe businesses, And it's strong. growth the China So of not

course a we that couple So the going trend that is draw how see, of will quarter into and month any read difficult the the be can how of this difficult course then of basis, then, weeks question to that's see see forward. we on a through continues conclusions. And strong is only to

while which QX time first I but On QX, normally have U.S. you from in to even the market. base indicator look we demand second normally, But the a better Europe at revenues orders higher normally than are real XX%, But QX the shows these we we that orders quarter some big think impacted we last have traditional the which orders. difficult normally I was and year, ABB grew the from lower market of sequentially think not year. at If see of see looks two if QX looks was severely on say Yes. orders it's pandemic up. but more mean, slightly actually paper. very we markets quite it's even severely And revenues. good. to coming course last is so. China impacted quarter, we remember look you This strong in the And clear I QX up

should strong we expect. So QX Timo? continue to both see add what I and That's in that QX. you on growth numbers don't Why

Timo Ihamuotila

large orders Europe, QX, in think I I order didn't have Just comment. but actually note, really now a back because comment, in four you Europe Björn I correctly, in had goes to during Europe QX, correctly, any quick remember if Björn, remember had whereas your we in minus if we base sequential this down

Björn Rosengren

be honest. of better a indicator is to order the base So real demand

Timo Ihamuotila

if And really the at I growing nicely. countries all look are Europe,

moment. based it's Europe the at So in really really, broad

Ben Uglow

of of capital let's XXXX, it a and helpful talk it AMRs Thank And guess one picture and consumer/retail. of that material Andreas February wanted just very the relates clarification. the big of in a a then from was little space? to not more How maybe potential I the towards bit more big part the in and I beginning particular. getting you customers logistics customer is What question. remember that day, asked move this of vertical terms picture different sort warehouse has back question Is industrial of warehousing to beyond? you base, That's strategy the you. about away thinking were sort the space. whole the to in similarly more markets it about I are kind that ASTI I call of just warehousing from actually but guess the area that handling sort know about is

Björn Rosengren

in strategic We components. from clear. but is Sam other business. but into to in warehousing. are Amazon a industry not that success see margins I from low it's new the say much margin better a looking sales wanted we the just great team that where system had general electronics, we and wouldn't lately is his transports customers this automotive in within looking packing, And in are of but area, this this see also I strategy, also that's clear. think a very a as And been at we yes think and clear, the we overall the while many automotive, with away I get has also area we And

so [indiscernible]. the And from

So, strategic also growth yes well see it for this area. a we It's good as AMRs. as is very where potential robotics both area very

Ben Uglow

you helpful. Thank it very on. Super pass I'll much indeed.

Timo Ihamuotila

Thanks Ben.

Ann-Sofie Nordh

Ben. And we Wilkie Citi. Martin up for open at then Thanks

Martin Wilkie

Yes. Citi. mornings. is Martin Good This from

is disposals thinking getting so. the about course first the more in just morning. years and the going that when some be later question generally, you the you're billion maybe next realize obviously When or are I How of the of of year. you even dollars coming not But you already, price back to you've could disclosing the acquisitions process The just get in of the environment. several those of you those robotics got some this more you think do review M&A over couple

of we these price can the businesses there an reasonable return? [fluid] they That's on tech buy is environment that where commented might really You or still rate of will But first being be. higher question. you whatever or

Björn Rosengren

you Martin. Thank

like the doing think for yes, margin. the it's there. is But haven't of disclosed course, it I reasonable that But our we It's price acquisition into good that. it's drive and we multiples, business time Yes, integrated it's And but think we not multiples which very it's technology that. these think growth, we also which high selling of smaller business high drive super question. we're the good will be but easily divisions bigger technology development a buying in businesses, places.

compensation our we be And these have definitely have also part been M&A I action this candidates a expected divisions to going It's the of think on So in is forward. variable the to say business. software side. this working potential year. All their

them. some on approaching we money by the very But is course, Timo? day drive candidates kinds how We're lot So of have, potential we clear hopefully division we that to what think exciting there This looking acquisitions. have we cost here. an can at this? and every going don't, getting always of been encouraged is So add I and are a are synergies, opportunities are growing and are this a bank. don't forward. the of to If list the we going money use going what we growth for of that. think the businesses the part. are And opportunities these strategy from said yes, Why We these divestments the can you aren't the we be are

Timo Ihamuotila

Yes.

here and that to often you in R&D here. to quite And question course, we some this we're, speed. really businesses, But comparisons will our we when So time, I on how want pull to we at doing exactly ASTI. to like and at organic organic I look of buy. have just remind good get trigger. environment, view it's you our complement a think are on that's with with And talk note we the have structured this one. aligned do And that we fully important I look the up not R&D we better think versus what as the that before again, And is well. with I get we is then And return all think make stuff going the it's

Martin Wilkie

really I think that's helpful.

the hand volume. One margin. to are and [GDIS] The in obviously performance GIS M&A now done that the benefits second the from electrification, question good is past another all related in

benefit still lot opportunity acquisition So is from GIS people as well? this to a we incremental of beginning of from of the sort cost savings those see

Björn Rosengren

very acquisition replacing a for I close one both clear have factories GIS footprint both journey consolidate still not in is, think also where going switch great American of of to We new for to value in forward. are The technology. drivers for products and that think we market there that been but this improvement ABB yet. the especially at good I've and still the ABB the one on the the is they've done potential biggest also putting with there the is and North old the gear moment replacement there future, place in the job technology

it when to from more to these come So there comes putting are synergies together.

electrification actually On tremendous fast. me the and from that surprised we development has the seen people a even other the gone that have improvement hand,

Martin Wilkie

very that's Great, helpful. you. Thank

Ann-Sofie Nordh

have from see Thank McKenna if Are let's line. And Shane you there we you. Barclays on the Shane?

Shane McKenna

I actually question and automation. am on here. robotics My first discrete Good morning Björn, Timo and Ann. is

QX given versus what current feel profile if to turnkey where on you're then stacks [B&R]. how and from as of in seeing margins one management had well these wondering that margins add within terms the as was ago up legacy margin now target and delivering midterm that that on, you're are XX% [B&R] book a and orders I up what in for Just now the the we an drag the sort of their can of and order changes range the seeing quarters that tracking growth several question give as XX% on the the you us follow have then

Björn Rosengren

that on take don't back first. well. robotic come I'll Why as we the

start We very hand business me clear to we XXXX. XX over that's robotic plus our then and the for and Timo. target business our and Let said is a that I

certain we will yes, I think faster drag. the this direction. becoming moving year. during be over is but there there. bit revenues, little still is in We our this And automotive less gone are we amount of in said a a It's XX%

on bit little a clarification give you don't Timo? why So that

Timo Ihamuotila

Björn Yes. the Shane Thanks question. thanks for and

than million. business this So that we of $XXX said is sort maybe earlier more

you on basis, annual maybe could So $XXX like say number million that.

and margins. robotics is now to at important discrete is to it used note to go meaningful automation that area XX% orders automotive to XX. it's I'm our I and exact when XX% But the there. think of business going orders the you So between look about in not be

this is now as So is have on of margin margin. we that order matter. back the say honest given And which gross then meaningful would I to of trending timing said we the machine strategy without course And we at will the also backlog change, this The up. of in corridor towards clearly clearly be giving follow to it target general. to really clearly when the in is is margin gross factory and to RA, us any here And that us improving, get in B&R. look how and automation then help the stamp

Shane McKenna

clear. Very Perfect.

reasons how is sort and In divisional for think around North to and and get terms from generation a peers? of North EL it's that are the in growth NPA division North that lower larger you EL in gas in expecting EL? of with recovery similar in slightly America a as conventional we feel I you're just for segment go demand one America? to America guiding XX%. trying power as in into HX of as memory level large the for for that it Is oil relative Is a

Timo Ihamuotila

So not you make the for are now sure process question, checking automation gas oil just electrification right. to and we get for

Shane McKenna

Correct. in you've you it's of been that's holding sort been some Because that been Correct. back. the out market calling time

Timo Ihamuotila

Yes. It is not.

Björn Rosengren

think I electrification. It PA than is more probably in

Timo Ihamuotila

versus clearly, that proportionately, voltage course, driver our the EL bit I bigger little medium it's a clearly is, growth, driver there gas in voltage yes, at not as the But I proportion oil businesses automation. electrification. which overall, But bit. stuff a low probably voltage But say in is bigger not look medium in in say and of growth market U.S. maybe the we process huge more for but U.S. bit Well, the in would have has impacted the would significant you Yes. when part. a well

Shane McKenna

All a right. on. Thanks it lot. pass I'll

Ann-Sofie Nordh

the Shane. Thanks the on line at are Giordano for Joseph please? question, Cowen, you next

Joseph Giordano

you me? Can guys I'm here. hear

Ann-Sofie Nordh

indeed. can We

Björn Rosengren

you hear I Joe. fine

Joseph Giordano

morning. Hey, good

levered. kind levered. business to of questions in it? a see as auto this you of robotic you Perhaps business? be few and mostly kind like have a side. that the slides acquisitions Europe for in bolt -- a Currently, Do So geographic in broaden aspirations into flagship see market it's I other an you and from the it's expand this Do for that perspective mostly

Björn Rosengren

Now let's bit. little talk a about robotics

has maybe business of group. know, been was you area. from robots odd little bit of As the placed it up a actually really some started one with within within in said people pioneers the been always ABB It ABB this

I think We point. think it's coming robot more broader a driving our the it transforming business automation the core into when viewpoint. comes to really one businesses of taking is industries and

don’t but robotics this where and of number group I that is always I one areas have business more businesses think on pretty agenda. our I where see up in people more think forward. in and we and is the it’s flexibilities I focus a I that we mean, not one said mean, areas after of on number potential, the has getting great even in growth I it's the the That's operate. it businesses clear. Yes, XX I profit the there. pandemic one now two going growth definitely the we Why strongest ABB see add are we even you think coming have higher businesses there's

Timo Ihamuotila

away starting this that On think great this I the already gotten today inbound we kind than said customer our as AMRs a it's are we it's this in presentation has million approximately, because that China totally ABB we as particular right that we course with now this have in revenue said year. now also and ABB, go as is of to offering China company of which different to $XX in

in actually of have overall term earlier. spoken we get quite call, in to So was revenue and our we exposure also as that we help to as broader position us offering think discussed diversify quality longer that to market will expand the even can impact we and nicely customer earlier the think through a us the better channel diversity automotive, will AMRs better this

Björn Rosengren

mean, I to you add mentioned that, on And geographically.

very been market in are in clear China that that Europe leader part think and I that on is we we've spot.

areas of not other world. we And where Our strengthen in strong market the our to share the planning in parts are America as as North one of that's is presence.

Joseph Giordano

it's and Björn and bit want whether are construction progressing mentioned based of curious you. and partnerships; there. one exposure see how competitors you robotics about in in-house a maybe Can software severe automation different the just you you markets release you Thank where to or a that lastly, talk cloud there. you recently of solution. buying your maybe in I broadening in however kind mean, think press that obviously your And that. on But tackle you

Björn Rosengren

also, move tried risk, from automotive low and is very than the the mean, low but in more automotive whole Yes robot, margin I the that a which away within is to margin, side strategy the big been segment clear segments. other systems

not being So a growing, moving are very area some building in about we have modules, a being the talk And construction. for And But there because Difficulty] Then it's the very that electronics out but very be exciting, I a construction fields software clear new more segment that we'd I it, in building or which modules said with field. for side software. industry a potential us. there used. and house is They think are we that. one then think a these the the we we are robots little to assembled maybe [Technical much logistics, the are on built is new general today, on is out bit it's strategy

We are growing pure software solutions.

in software, pod. software that We lot included continued product in our to building our the of is have domain grow expertise, a and embedded

well-positioned course potential operate see that and software companies the with businesses synergic that looking lot, a in from embedded that. and We are, the also products think for But that automation. like where Anything in can pods especially we offering pure and both is there. today also well the we process fits of and to our growing strong of you'd in add we software lot is software a

from You're coming guy the software Nokia.

Timo Ihamuotila

strategy. but path on good are are No, executing think it a clear as I think a I think you you on covered I said, that one. we well, we And

Ann-Sofie Nordh

hope Are so. Joe. happy with you I that

see And quiet. then James. got You we

Joseph Giordano

am. I you. Thank Yes.

Ann-Sofie Nordh

line Hope [indiscernible] good. James your who open is Very please. now.

Unidentified Analyst

indicator so question demand. was agree, orders think And of stopped got we'd I if them. mentioned, one morning, Yes questions. to I've you all better bold you thanks. could shame and two so be I Good when everyone. a are base a it Björn

So robotics and if questions raw And great. material and you are automation. could be bring on them that would factory back, my

to the three size, auto much growing and Thanks. not, the material faster but maybe automation really, you asking, if for talking exposure. the numbers, be on I'd love we any RA. color in way I and if material. factory or does you $XX hard it year year could which to you $XXX in auto non-robotic third real I robotic, pressure, big be a second order Thanks year going is just Timo they I [indiscernible] growth about XX% to trying factory are really some What the pricing understand that but between differences the is no- million of in year to other you understand is robotic? And a Could side buck million it's idea bigger than because quarter automation on and flavor quarter? material you impact? your or million side raw get the that the in wondered raw globally how changes second no have So there will dollar in saw could the and growth increase impact automotive that the question versus flavor. the organic

Björn Rosengren

thanks materials? the don't Yes. Why with start the raw I James. And question, for

of you think from can kind proportionately said or impact like at around was I would high I copper pricing even higher is impact started now, the now all definitely do stuff a at QX your and look copper. least well and pricing if level. if raw for our the XXX. somewhere least bridge math. you about some of between has the million, Steel course, we compensated. that impact jokes a is, in say, XX now at bigger than very it's $XX material to And positive aside, now So in And But stabilize $XX and you on calculate that compensating it's million, this

about closer going what that to it's So QX say to but we than exactly it's QX number know number it. I to be is be the mean, the come so don't going we to how going definitely this out, can much out, go

Unidentified Analyst

Thanks.

Björn Rosengren

the was And was? the What other other? question

Unidentified Analyst

on and was robotics the It growth?

Timo Ihamuotila

Robotic growth.

Unidentified Analyst

automation. factory And

Björn Rosengren

Yes.

a Yes. a Sure. bit little you clarification. And Okay. of give

total XX%. grew about business out take you the If actually automotive it part the of

flavor. So you a that gives

approximately that And I correct we part was XX% I the bit If got XX%. a around XX%? are if of include or the part then, automotive you out that say think business, it grew that. automation take part about the, just whole somewhere XX%-XX%, XX%. system little the or you

factory think it to I is. we growth. are where XXX% When closer you that's see automation

that two has the been moment. So quarters for business growing at like crazy

Unidentified Analyst

That's Thank you great color. so much.

Björn Rosengren

Thanks.

Ann-Sofie Nordh

a we of have left. now And only couple minutes

open promise please up we'll your be to Thanks. if [indiscernible] quick, you line. Jonathan So fairly

Unidentified Analyst

address to sub to have is given you in automotive, or ambition AMR. here? trying you're your maybe still of into. acquisition the number sales for is of one people billion synergies? about kind just And release, How your what try. been maybe you talk there's two scope we're ambition, ambition that and this I mean, are you press your business this on really trying billion a I segment. mean, one, of $XX also a ASTI a maybe XXXX. very to the platform player in what the understand achieve questions what in segments of by in number guess you've what just Really I'll market become to much you robotics, AMR number the two upscale the understand can a go a are depending really of $XX Okay, million is mean, doesn't mentioned much verticals in terms the I your business the going number during $XX call market, about few I

Björn Rosengren

so many a the in small business. that. players various AMR First There business scattered is are

So can you to probably everything Yes, it's region industry. of a quite market. but different consolidation a see from all use logistic And you general going it some also also big to will kind forward. in automotive

a also that this platform So I have North to that's where over our meaning go America. in is all in that in using Europe, growth growth China, area. technology ambition but is And we the utilize platform drive on acquisitions this and then definitely we think

business growth it if be to it's going from successful because this the robotics yet. go can team haven't So growth we difficult it's I that them to leave But are expecting the forward. numbers is We in old think given quite excited. going out clear, big on we

Timo Ihamuotila

comment Yes. a Can here I now. software throw

Björn Rosengren

okay. that’s Yes,

Timo Ihamuotila

and this software kind going from smaller on technology, Because on when it's sort why the similar a you I tougher will this new to mapping where street of benefit be software technology, more would that's do will mapping That which all my to for the of complex stuff was wise, in players and get gut is be area earlier involved And LIDAR whole used that and tougher here. these comment technology bit. survive. applications

So there's to lots of technology expand opportunities this from perspective.

Björn Rosengren

this different could is definitely And a and lot and time very the technology we both spend quite wise we well potential the at suits to grow. one looking opportunities that us of the think here

Ann-Sofie Nordh

in that. that for again spend to very us for we off two will Thank the and with much Thank with we you taking for you round see it today. time. And about quarters time

Björn Rosengren

a vacation. and Yes you wish good

Timo Ihamuotila

you. Thank

Björn Rosengren

Bye. Bye.

Ann-Sofie Nordh	Head, IR
Björn Rosengren	CEO
Timo Ihamuotila	CFO
Martin Wilkie	Citigroup
Joseph Giordano	Cowen and Company
Ben Uglow	Morgan Stanley
Alex Virgo	Bank of America Merrill Lynch
Andreas Willi	JPMorgan Chase & Co.
Shane McKenna	Barclays Bank
Daniela Costa	Goldman Sachs Group
Greetings to you all and welcome to the presentation of our Q2 results. I'm Ann-Sofie	Head of Investor Relations and as per usual I have our CEO - Björn Rosengren and CFO Timo Ihamuotila with me here today. They will take you through the presentation after which we open up for a Q&A session.
However	before we begin - I would like to draw your attention to the information regarding Safe Harbor notices and our use of non-GAAP measures on slide two of the presentation. This conference call will include forward looking statements and these statements are based on the company's current expectations - uncertain assumptions and are therefore subject to risks and uncertainties. And with that said - we will now kick off today's session and we will do so with a short video related to the RA's recent small acquisition of ASTI.
[Video Presentation]
And with that	I will now pass you over to Björn and Timo to take you through the results.

ABB (ABBNY) 22 Jul 212021 Q2 Earnings call transcript