ABB - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Ann-Sofie Nordh

Greetings to all and welcome to the presentation of ABB's First Quarter Results. Most of you know me by now, I am Ann-Sofie Nordh, Head of Investor Relations. And next to me here I have our CEO, Bjorn Rosengren; and our CFO, Timo Ihamuotila. Like always they will take you through the presentation after which we open up for Q&As. But 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 2 of the ABB presentation. risks include company's and assumptions current therefore to will based statements and call subject the on expectations certain conference forward-looking these statements are are This uncertainties. and as certain to I that, over and our hand And take with through will you to you Bjorn Timo results.

Bjorn Rosengren

as a Ansi from few [ph]. me the warm to want quarter. welcome a you, I start highlights Thank from And well. off with

see First, the really I to customers good active. very remain was

that recent expect billion, But shortages quarter the was strong is business highest external are was in book-to-bill But with terrible well. Our years. that orders improve from performed all on discrete margin and by in moving somewhat component uncertain These fifth with which corporate and level automation. by had of three at reach The is it book-to-bill. resulted supported Ukraine low on, of of not top-line of have years. the consecutive we looking $X.X we minds. we our war robot levels many Then this Inflation The escalate. positive factors. areas actually These our to it orders, operations, in many was do quarterly weighing not XX.X% underperformance is Admittedly, a course, cost. a X.XX. I at times had seen here in hampered And challenges assuming in good.

are comprehensive with our imbalances deal in lockdowns businesses a global chain, basis. These now a the We supply challenges daily on COVID have and also in China. the whole must

in to mention so well a managed Then that new have want formed we I whole, the On we have Electrification. division far.

performance accountability now as improve both to running and division through to to leadership have to and this from see will as come that topic, This Tarak Morten looks to by Tarak service his a I forward the profitability. start level. business new to follow business the I the roles. area On pleased And transparency in both both next separated initiated have Morten was drive look he over We that to driving month. their off and growth own am and them

on I'm buyback April least power billion. Lastly, the we at up grids go of was the covers and This launched new the promise $X Xst to to means program. of the This $X.X pleased that about proceeds. beyond billion return

at Now and revenues on more X. let's orders in details Slide look

will As double-digit related we it segments toward of real cycle, mentioned, beginning. across orders It growth reached business end in by strong service. most the underlying process industry customer was was We as whole the strong market strong revenue a the talk in well period. execution. patterns compared quarter of within and volume high at XX% the semiconductors Timo pricing comparable positive later of throughout Revenues area positive improved All about comments. the growth, as where supply good as more automation, the areas reported is the except for shortages pace most of business saw level a no the in short business robotic to by well our And X% XX% regions. of between growth intake that as the a was the discrete in difference all notable. a driven which development record good driven and saw

Again, see Europe, by areas. in U.S. of Process of orders X. AMEA strong. That areas. in growth all by X%. good XX%. regions. includes that were de-booking important in In China, improved by Germany improved at the XX% Americas all growth that improved quick supported the to rates. all business a look In take only This the showed increased regions by in we double-digit saw let's overall region top three by XX most markets strong very see the business said, on which different XX%, strong strength Now on Slide the slide, Outside continued market supported The It underlying Automation. was you there by

the and X, outcome. Slide to earnings turn Let's

gross Dodge year. price was slight in was this total, basis to XX which when basis margin the business, decline In but quarter, to lower to we margin high through XX of divestment adjusting saw to slight primarily is the divestment a to in quarter in broad a also due Discrete for we impact is points managed from take corporate This the of the numbers of materials. biggest Timo the drop in volumes. in inflation management high XX.X% hand and successfully Our headwind year. & due us Robotics offset expected points than I to the XX Cost of with from last more challenge a and raw improvement costs the solid margin of the QX the But to over details. Dodge. was And through start that, Automation. with Overall,

Timo Ihamuotila

And everyone Bjorn. from my to Thank you, side. greetings also

talking Bjorn across generally And about different clearly Electrification. go will areas, let's the as this the looking heard You evident. board. at strong business be a But through demand we start by

of across And that formed another to headwind the hope input due saw at very a raw while a China business, actions to actually also the back do constraints. Electrification continued largest rates saw yet turned demand comparable also sales. managing basis XX growth in enjoying you contributed, growth all to solutions distribution was mainly order oncoming quarter prices, customer in was by supply and Orders pricing the execution. this higher from during low the divisions, see strong strong to unit. growth still were team versus a order subdued XX.X%, on in driving at loaded comparable I one a billion. record the relates system beat that and great service remember both of increased a backlog mostly were job a of And X%. tightly The see the to clearly in in into it with chain $X.X disruptions. rate of high rate. Volumes good material plus newly With orders the of with growth supported but Americas quarter. year, XX%. back their and impacted billion costs strength in margin stuff double-digit Europe a has segments, this comparable above to in QX including performance hedges steep somewhat EBITDA double-digit Revenues large declined from book-to-bill we ratio benefits by to still above the lists. territory yet while Here, year. $X distribution its operational last progressive all spread we points XX% price positive to again division the to took And last it on prompt Electrification to the to off I'm a pricing set component was easing due solutions sure Overall, due improved

second ahead into of we somewhat Looking improvement. a QX margin similar expect growth the quarter, rate sequential in as and

basis was to segments to nor stellar the and have quarter was That high customers positive slowdown by materials current supported and well implemented in XX cancellations. highlight days contributed quarter, alternative preordering Let's activity strong least Like across we from the points, assume did as by pricing Motion end business validation that redesigns, This activities, volumes of we in Job last impact see started some strong the any of a by regions. the not semiconductor said the somewhat to the the to in quarters, and early probably basis order in towards we activity in all environment. freight. inflationary fair the all offset from higher is shortages Neither also well of previous revenues April. year customer XX period impressive suppliers. X%, the ease both sequentially, than XX.X%. as without in last not margin by raw when level. on the the which the high the improved team. seen business. it then means orders quarter on execution, missing customer year, The points low to the comparable of The that had to the the inflation from fact Motions order very a product and you large which cost really XX% pricing from first this Dodge supported This increased contribution done relatively the and full Motion, growth move Comparable of same consider Dodge order strong volumes is particularly more by due

and segments, as marine to see Slide metals. as revenues QX, in We of strong remain the X quarter, the continue rate, For mining with and least we demand where to at a and we to margin broadly grow customer as well in Process QX. turn second Automation, to most now particularly similar stable expect across at comparable

total the base As in of X%, progress of comparable the for business But than give grow volume The PI last efficiency a underlined XX%, course implemented end while year than all quarter was towards mitigate are development same by fact by the result the both driven EV by sequential continue we of at These be well semiconductor benefited orders to Process the high margin five order resulted hardest the to year. expect to still strong. investment Peter structured QX. similar in In Automation. we shortages comparable will how on increase in mid PI for XXX Markets performance team Overall, of revenues expected a to and to at very EBITA from with single-digit comparable impacted measures high by really these divisions. work rates segment caused in of the deliveries that time, continues towards impact margin progresses. the revenue were in double-digit semiconductors. shortages. Robotics, and they in billion. up Capital result to On in higher basis, double-digit to both area operational revenue expect Higher anticipated. turn increase particularly the environment to semiconductor Robotics area that continue hard another the the orders order The basis in situation risk. team of result, At as to EBITA deteriorated & Automation. rate XX% driven growth somewhat I'm see supply less $X.X auto Slide positive color as was delayed QX segments resulted shortages territory. a million. by China, divisions And growth strong points the this their RA de-booking in to operational PI Day for continues be basis, for we The be May. weighted margin by In continues somewhat. XX, pleased rate, high to the on non-auto a earlier. as upon The are On headwinds the up generation the of customer adversely the of the demand driving Discrete more the and combination continue and hit by from activity is a XX% still growth deliveries approximately business a orders as customer to in $XXX the backlog the

Although not the basis see margin in cost further first should and Robotics to contribution than the the declined the under in chain Overall, of inflation volumes positive in offset for we Adding to impacts and remain XXX total, situation. input the assuming from of & expect freight, RA. EBITA Discrete more measures deterioration point measurement absorption of price quarter and lockdown the by were do that costs strained, X.X%. fixed low the China Automation, the supply decline cost triggered be from points operational to we

we into RA's some anticipate COVID effects from related the area. operations Looking in on lockdowns Shanghai the operation QX,

was for related earlier also Bjorn. Strong XXXX improved cashflow we separations. wanted pricing and volumes. a incurred it cost backlog. to points, particularly approximately approximately said, help a inventories be when in Turbocharging outcoming actions. as the say mentioned divestment. left be also We likely acquisitions the while the as to have QX remember strong reflects certain, Slide impact and on of the revenue large, quarter, $XXX surprise. complete inflation a improvement happens, when absolutely both Capital from to the Slide a you quarter non-core than paid businesses receivables of COVID is projects related full significant due where losses expected quality. during million reflects financial expected to operational there impact but the a is And income Dodge the level, higher of legacy the EBITA two to comparable cash settlements. tends The year reduction in negative, restructuring corresponding first order implemented had low costs trigger I'm call the diluting And we cashflow that a E-Mobility good Delta expenses, performance expect we a the as year-on-year of usual impact seasonally while primarily expect looking support And successfully our so non-operational on exit from bridge. This cost as to to paid. earlier The million softer and remain operations, non-core. relating to by business. impacts from in XX buildup the from XX the $XXX well margin showing see the still group XX, in sequentially moving that one through higher That EBITA cast I'm managed we $XXX move XXXX, Markets Day second would that margins activities our is of million by revenues pleased payout in two exposures quarter, large weaker of in still than at cashflow doesn't a mainly due taxes of but We divestments corporate to from offset On our sure, We to to of to anticipated. negative the inventories in come charge growth Hence, higher operating improve. to main our increase in operational then as being if picture. This bit to had non-core we employee well were to the about the and it the it XX not basis out, contract points I incentives mainly group to basis negative

just for full-year. we actions. active you management said, before we the confident And achieve hand also Bjorn, me solid update Bjorn will flow over on to our As I still that are cash let portfolio

our we planned conditions, change i.e. listing second market continue during quarter, to of the Regarding constructive e-mobility, timeline. the for aim assuming no completion in

hand, not a is other off a will between it turbocharging final idea this have rush Accelleron of make the On the called. spin now we sale decision we or to or that as We decision we the AGM. QX still off the mentioned lean before the towards now, on end of looking listing the Swiss also exchange. make has spin final are and at Bjorn But to

environment, market is uncertain the the direction. moving despite overall, to So ABB right

backlog also in right our you in growing hand to with margin and businesses and to like the Bjorn. long-term revenues. is continued stability, ABB on profitability note, back are would strategy We line quality growth improvement gross improving I And of in testament to our that

Bjorn Rosengren

XXXX. to megatons A of XXXX. reduce on report this their our We on every some the estimate Thank our baseline. carbon by want climate And least sold a before by that also products XX, sustainability made after with I I It Greenhouse you, first we our year, on towards up Timo. We potential the the to XX% XXXX through emissions the finish that year impact supported is published ambition products our our good neutrality emissions we largest mention sell slide, we start COX on targets. towards comments not progress which change megaton the our day. but of XX.X will long-term XXX The I customers the target Slide with is last at step in to end And reduced clear outlook. that QX with own by reduction pleased in sustainability compared I'm towards is gas March.

to percentage share gender increasing by senior progress of diversity We also made position points the women in three with XX.X%. about management in

a it's ESG Finally, that the We to already in this activity and a market This view, we part is to just of on QX. In to our sustainability just I short-term weight intake. of will At level is high going our take plan. want forward, incentive strong current in everything operation. foresee at remain do. mention the have we slide, And XX% long-term expectations quick our on metrics signals look order our metrics XX, underlying my support incorporated in had our we Slide we our incentives. this embedded how lastly, addition in of for

a with in margin I significant to escalation China. us improve not just course slightly expect that seasonally QX environment, I see this to be do revenues, lockdowns the I of to in the the that quarter-on-quarter. compared to tends it assumes noted And this that that, Ansi the this For let guide through QX. take Q&A. case over we also stronger In with of we expect be year. This

Ann-Sofie Nordh

in now Thank you the question just questions question. Instructions]. can screen field there who for your the let's online To will you. the that a And the put that where the to of have want Q&A. I open right to of said, a secure through of And through webcast, [Operator should sound questions. corner see those I with your questions people to the want we your And mute is can who already you then. the I please through. line bottom in put type for webcast you quality. here And be tool from line open up put for that as using remind want through

And you you I Are Merrill So kindly to from that limit questions. Alex? said, to kick with ask yourself the Lynch. America Bank of off Alex on it we two line with

Alex Virgo

Thanks and morning, the Bjorn, Timo. Morning for Ansi. questions. Thanks, taking

in first affect obviously going talk you if instance dynamics could the lockdown, wondered is to about in I everything. So to China, the

then EL divisions, market too. could around color in a would the about really You and in a be you if specifically and if helpful. difference And in helpful. -- Thank particular, And an talk end bit of if follow-up, RA. exposure could could little markets you wonder what residential cancellation construction I it between this be there? Well, happened is? bit process. the would what for would I What just guess That But you. to Why, you that? the talked explain to order the like and more is that I that little about us hear de-booking and give just

Bjorn Rosengren

start I'll the with de-booking. maybe Okay,

that is it bankrupts for another that word take company we'll put So going one. that way. a Yes,

our financial So $XXX we bankrupt, if no and that of an million. to on went shipyard, revert it's And from a had that actually, impact order one. profit

a China. little about talk bit Let's

intake, up during very robotics. just which quarter, bit First, strong the a the order saw China XX% had exaggerated it's little a from is

robotic So very had we lot from great also automotive a taking some China, orders. in very, China. A orders really in strong where e-mobility coming actually

If is perspective, have three to from then mostly where which robotic at you we the would look hubs, is we Xiamen, One I more have side, it's Shanghai, China ABB say. production related which Motion and now had our Electrification, and is factory, course of other weeks. then we happened What shutdown has affected the Shanghai, been closed for also robot in there three which Beijing.

start to breakout that vision of which zero of it up it's of an kind but any factory COVID means on signals, in would expect in opening the factory. your course, Monday, the We immediately that's China, shutdown course,

other This we our to for it. the at part we from taken showed when yes, has And of flat I'm a when good last different year, that from look in looked course sure outlook or at the it's QX as it's residential the certain So part. therefore. bit which And that less is growth. businesses of coming that little while compared the Electrification is was businesses, more uncertain consideration is business, been correct

well our we two But it's it's to second orders to back market have -- just us, later. come the also during We is about first during China the of we've very we'll also, people, XX% develop turnover. quarter a XX,XXX also big for weeks. say that seen

it's quite for So big us.

of But it's QX. will Shanghai. so that little now far, getting bit any And during if have of will a course, there better impact shutdowns regions in in be other

it. I think that's

it. about that's think I

Ann-Sofie Nordh

what corporate Sebastian question line chat Timo. And is same the this How cost than at That's lower costs be It And expected? perhaps we you, from RBC. take we'll position did then very can from have a one here. surprise? good. for says, And

Timo Ihamuotila

of estimate the $XX that happened things going Yes, And we There $XX this and that million. a were cost didn't to cost said a lumpy. question. lot simply in corporate part be corporate we good course an quarter, gave of in were that's two QX. know which Because have million line on we to that can always came happen at

in And that also was areas. So we decrease these to we first in cost impacted a cost, And exactly of approximately going all, it in didn't And were of of in provision X had real time. point had of then then real those million million one estate did execute corporate also maybe release in game, we like we kind a XX this XX non-core at two which area had know to Delta. million. the that

So why, going that's reason why didn't the coming fully. quarter into we the this see

Ann-Sofie Nordh

Great, from thank from we question on Costa you. And Daniela with that, the we'll take line. have do And the call. the Goldman conference next Sachs

Daniela Costa

to Hi, XXX the ask question. these I the weak. still wanted quite like you're taking good a my number this first cash flow free solid and will to there on But million going morning. half of sounds that it have be in exceptional year. because the also for on guidance Thanks

possibly up for this comment that P&L weaker you levels point. seeing if do Do still that. That's this now capital like overall? my how the implies? are ask I year are that first guidance have working on would you still see normal where I'll staying the the still you to cash on year? than can second restocking you conversion be? to go on after. some further a capital Or see them give one. cash you following-up working year-on-year could your like would do on If So bit we Or Actually

Bjorn Rosengren

Thanks, Daniela. Okay.

you out correct not go cash headwinds have were which free that point you couple are to of to when we So way there 'XX. all flow, the

this flow free very, in out the flow a cash we should to than simply, now low strong expect little correct move And networking could very so if if delivery. have a similar we start equal drop we we if look lower you because would impact had a things cash we we and here cash comparable And bonuses, very 'XX. we order and mentioned, other direction. had grew just take And it. $XXX the bit also all million what QX possible see assume you But through, for strong And capital, then that other growth, be a as I'm to still see then see we XX%. it at saying We X% QX. should to

As you saw is And for now we comparables XX% growth rest comparable the for QX, then order the the of than XX%. more have year.

sense, start should situation. closer of that move normal let's would a in to So against book-to-bill course the which more type one, be of now to say

then So releasing that capital. should to networking us lead

course, again like on China that impact assumes in our nothing something the lockdown deliveries. which a would external Of of full doesn't extraordinal course, market then this or happen

Daniela Costa

can you terms growth? us And have ABB you. are in Understood. I if that a significant, of Europe that's flow question material? up. of how but seeing Thank you. energy regarding terms have And a and in just you regasification LNG talks speaking was of like LNG do wave what How transition and we're some we regarding through know what if in big lot and the second there, they remind on CapEx. could of Thank general CapEx liquefaction exposures more

Timo Ihamuotila

We the towards seeing renewable Yes. I trying Russian that, energy transition will of And on accelerate. Europe think course, more sources a to in believe first, less gas. we be depending

us. positive on that So a have we will effect think

ships will business, being I there ASTI have LNG delivered And they side, them. port, that's be undersea dealing related our in on the will in have built be ASTI Korea, where of will who mean, up where is the are been more those that already, ships which being they they're number marine their that. and are we a Korea, port where done end to On today with

So port forward. we port on for going limited have exposure that ASTI

Daniela Costa

So and regasification sort on wouldn't exposure the Automation? of you on liquefaction get land, Process the on plants,

Bjorn Rosengren

as DCS some most them will mean, will. those things of automation need likely I if Well, and

a that more think ABB, I shale it is for the should example, lack side. On a at Europe. look this, U.S., area reshoring thing especially our the for in oil energy you let's and So word, more exposure in of because positive overall, if for be in call better and gas in

So all a positive. be, should of those would I rather say

Timo Ihamuotila

to to course start Yes, will But of surely buying and take on from export. America. into drive up be U.S. gas North the might time little be right the if build it able terminals to that the will shale a bit Europe And but more

Ann-Sofie Nordh

Okay, thank you, Daniela.

Daniela Costa

All right thank you.

Ann-Sofie Nordh

here about the reasoning we'll Daniela. Pareto guess Motion. Electrification exchange another that's at you from from asking motivation the is Thanks, And the for it's line. chat And And I behind Christian who and take leadership question in and Bjorn?

Bjorn Rosengren

as good that we that. Yes, I a would I as think I Yes, think good was this -- well I move. Morten. think say, have two leaders, Tarak both

some as the that you you quite I you been have lift important you firm me, Tarak position. should has be a sitting And dirt that in there stones, be too not long position it know, should It's that time. am put I for a yourself. believer that when think in not

this to Morten, putting see and I that also think actually the our we is growth, going -- see implementing forward. a non-open much thoughts Motion of great it's fresh will some acquisitions eyes, more business on Tarak as business that were good. hands within his that expect businesses And we focused that with on acquisitions, the the meaning he do goes great of Motion. important, off is number and it Electrification think And very acquisitions his knowledge I about with So profitable his into

to So that. good a I can be think support Tarak

looking And of a will their new in positions. have them far, of so out energy, very think come lot both of what motivated to I forward are see that. and we really

Ann-Sofie Nordh

then open Martin we line for at up the Citi. And

there, you're Martin? If

Martin Wilkie

you. it's thank Martin. Yes, morning, Good

on demand board, was would or but whereas we're the So when Italy, potential Germany, growth? double-digit issues is question in elsewhere. Europe the backdrop, across in of were things still strong the I obviously, first had lots orders about And hearing

developing base my are what Europe European Given in expecting both the you're the quarters? what saw couple how now of but in So for the that's order question. quarter, you next first strength customer seeing your also you first

Bjorn Rosengren

you in mean that three one, I North strong orders the regions, actually at all a XX% during we and the which saw over over actually included de-booking. Europe see if America XX% strongest the was look quarter, was even we that though

So XX%. Then that. saw it's China we over than XX% in stronger and even

So overall, to happening and the the is me really for see the demand market. in what is underlying

a market, the XX%, of over very from that at activity service business. It strength quite an big very think market. And was our interesting of us I the which which XX% is a it's to and much aftermarket. look part in shows have up

yes, quite Discrete Motion. we in for you in Automation. it it's as and saw strong less different or actually if Process you de-booking, see a strong overall, XX%. Electrification in number also So very, we growth as it's record But more very see see & Automation also revert do that our you businesses, Electrification, Robotics strong

looked a level. So the mean, of lead coming demand that, the much is same course, this times it's I this, amount longer high continues is not how quarter there to into bad. but on certain of it's of we difficult and from say start

to a because end long-term, So for make, I too little difficult But orders. to in market. be we far it's the for expect bit year, may quarter, it it's But uncertainties have think robust the to a see. until away second of on the of the

Martin Wilkie

mean, delivering. number a if a you pass on as since second hopefully some you Obviously, Can began orders this And normalize in under there's will excise are But of equal? drag, utilization you. is of sort to that under cost see the able at inflation would drivers that just you I absorption, the look just here of the it are effectively capacity, through absorption. you Thank robotics. question

Bjorn Rosengren

for mean, dramatic course inventory little middle both for I it's quite Yes, volumes standing bit the And are from some XX%, and because driving tough components. been the is be And they suppliers a get that first, which were which struggling the de-commitment, is means bit suddenly semiconductor their down waiting of quarter, they XX%, half commitment they the them, with get with be robots, built honest. for Robotics the in then to supplier. of is to and which a they

the also production, a order out today becomes to when before it that negotiate to being delivery, taken of difficult quite deliveries, means access was is expect you And started. on the price, So which that a it year. believe but long, will half book orders will inflation through. which certain inefficiencies that committed from second are prices during when was they the the have And what's taken, then this. And price better to do we up the be focusing with were customers semiconductor means go for order delivered in which we many increases of the we can to actually already

is during second robotics. performance in part the improvement significant So expected from

Martin Wilkie

Great. That's you. very helpful. Thank

Ann-Sofie Nordh

for growth it's Timo. the the to question we tool [ph]. pricing. we little of And by BA? then If chat revenue the he And know a have could wants you. give from from an price again. group Thank the Mackey contribution idea please And the Will level and about to of

Timo Ihamuotila

Yes, When look time. easy bridge, the you for math actually thanks at fairly this question. it's our

about about about have from about to went and from impact means And X% So is million is XXX pricing from pricing roughly. million up our XXX volume X% that impact. we that

the being So contribution an also that. the was all margin as with -- than earlier had points course correct I offset today. us like take said And for impact, this material the corporate on important good Dodge, that out But able and you XX, then also we actually we to time on a basis up the comparable freight it pricing. when and cost raw of XX job this on we material, course And have area. teams were in done other increases of some more think

Ann-Sofie Nordh

from Okay. we'll from comes question Willi the call take And conference then a at and it JPMorgan. Andreas

Andreas Willi

Yes, of is the good follow-up bit on question first Europe. morning, on everybody. for earlier the a time. My Thanks a question

process side, to you just happen competitive Europe, energy having potential customers As businesses. stop one What producing to impaired is all, fertilizers, you've the look customers terms but higher on at efficiency? you downstream between positive assess them maybe energy your How risks get competitiveness also your business, of from we something businesses in into whose year. these energy that to time, If quite at like industries particularly invest downsides this do gas if in has or for that do for and maybe any other later expect and here exposure particularly, of costs? in in these more chemical some intensive upsides Europe you a not got sell some rationing being

Timo Ihamuotila

efficient, good shows the of two it course, part about newer actually are it's different the lot varies And these and process today. a mean in course, you're spare down. there's XX%. of company PA of types, becoming to businesses. lot. quite very energy a reflecting gas But ups in energy And think in and of relating the I active. PA profitable a It are in lot going. these from out normal, the of and at many process parts that of today we we parts seeing transition of revenues And a I business renewables. the the transition more XX% of industries to the we here growth oil look is supporting agile towards are that the of service strong but divisions, And PA, from at activity also PA moment. both and And course, is When industries, Yes, we

of an transformation a has Nordic So steel, we lot projects, battery many of active really driving There's companies are manufacturing that green active part. these the are in very and there renew. in in part, in least not it's the ABB these

low other we not we businesses have with is are looking The and every part to important prepared that which said take we at margins. us, for are project

but they can So value we in, and help we that the we of the are really and the has customer are have our that looking customers going that strong at businesses value And we relation offerings with. quality these drive in And in soon book. Capital actually really the for we us having very margin May taking And in the Markets are is quite up Day about our the PA. we're order excited place helped what to PA.

a look give business exciting the to So chance in if forward. and of you business you that participate, this we in some going and why believe will have part

Andreas Willi

everything which Is a what supply that China at in currently now the from terms we included Obviously, that impact here forward beyond is the seen lockdowns are we April? have this guidance. on Thank in we're further COVID from in that you. potential we your the of seen So of lockdowns you around basically look already spoke not imply have comments seeing? just sense. the that just clarification second restrictions, And question about mentions. your easing despite Expect in chain April when some is part going which

Timo Ihamuotila

one believe things to we couple more what where hubs we of lot but weeks from how Andreas. Yes, have important, today, where a of course, And capacity you, one big outbreak, we we've again. we until and there. are China's promising will seen drive. what's difficult to factory up area. it, which of Shanghai the an opening expecting we But XXX% for in improvement -- been happen. we if know in that But it's zero It's that to And of Thank next a And are means is course, includes predict. that's and think going end in up go we vision, can we the of week happen knows no which we open be Shanghai China more them. have going three don't where is to a manufacturing

today in have course, there But there to other will we know still tending be say this is any so them, want far, impact just it anything of two we will of quarter. in big of on the if don't nothing an production major that So direction. is that that the a hubs, lockdown

Andreas Willi

in would that in in with the Robotics? that to year. this you improve terms of too you sense? Or expect Is still profitability is on And case the mentioned half the -- that the earlier improvement year, all second late areas business

Bjorn Rosengren

No, XX.X%. been saying a they part, last are Robotics, Robotics first And still that. we is business are pushing we XX-plus in the and saw absolutely. coming year, up very clear this when remember the up quarter already I've volumes were I'm if that and you

have the and was issues underlying So And good. on they definitely very is this. improvement And business then see the supply trend an going down all and second the XX%. suffering the this half. definitely we in were But the and been quarter volumes believe that that during then came will believe plus we I chain

Andreas Willi

Thank much. you very

Ann-Sofie Nordh

at Okay. to Yes. move Stanley. Thanks, Ben Andreas. we And Morgan then

Ben Uglow

taking Good Thank morning, everyone. for you question. the

Sami went At issues. They back was going place is update I division. where measures XX%. buckets. was fairly in time, put was on a then, I we Capital to management laboring for measures the apologies the what is divisional February Those to the are And Day what back and to margin of goal years doing still the a of of a out. the to those be Robotics, And So sort Markets division qualitative for think come execution hoping outlined interested to were were XX% two XX% we understand I three XXXX. pricing. was were and fixing program cost for the the if in point, interesting but in that finally,

the the Ex years, out, execution? at in fixed chain all look and have the years today two we where effects, are So if are cost you Robotics where two ago? got have last we say versus we we supply

Bjorn Rosengren

Yes.

Let a little me about Robotics. talk bit

that First, I good a think we offering. have

I that on and general And our think difficult to that that from in focus we're believe have automotive, complain products adding forward. the forces we the strategy about demand and is the the one that that more a order low-margin We demand, I of so believe it's moving some book. reflects actually strongly on. margin automation the this going of And like I in forward. and to strong customers. industry for the business also think segments be profitable away Also strong lot be we of will going to driving value these believe mean going the we system logistics that. And

customers orders that before inflation was you delayed them, were looks frustration Capital of being new the you of in that for will of living course, Day, are environment that division. cumbersome we at I is, that up think XX%. When they is, the when Market part, had I The met in today. course, course, are this that deliveries. the And have you cost -- when with

the semiconductors are of they've that, black gone totally market besides all course, which for buying up. that So prices material And has on been horrendous.

out were So have lot. prices gone increases mentioned the order are quite taken to They at also books have this the the many as market yes, part. of in I price the orders costs implemented. today. in course, moment the that is, these before means before, are But of that a lifted difficult delivering which dramatically we up long, renegotiate And

the that some tough from customers And pretty end perspective. are of that

believer So strong in I'm Robotics. a

is this a we going reach our one also divisions I'm And we as XX% from forward. strong of believer that growth will committed XXXX think really our I to. have at

So that is direction. this

of So I stuff like a doing but in lot they're a storm. good the division, perfect think it's

a great shut Then business. cumbersome in same down everything to hits But contemplate it China. the semiconductors. time, course, at then yes, it's of First, is, And and mitigate.

Timo Ihamuotila

And [indiscernible] market black secondary market.

Ben Uglow

a on Are from way a beyond? switching through way say, we execution long follow-up systems that systems around one should all [indiscernible]. noted or Duly holds just mix, automotive. Is stuff process? And through the long the we the side That Robotics. lowering of that and that

Bjorn Rosengren

think not yes, have business, we of are -- we taking any this system those I orders.

very course, good growing is orders electric side, the saw a have actually quarter, market And that where on big vehicle So moment. at during from and out. segment vehicles, a is this we China, automotive, good Still, electric orders of we the pretty especially share.

a being part of is place, of are lot investment there and taken So that. we

still industries our in So order of there book. are, course, automotive

Ben Uglow

Understood. Thank you.

Bjorn Rosengren

Thanks.

Ben Uglow

I And Thank one may. then if Timo, for you.

Just the flow. on were at she of the you the and -- effect fair? bonus -- growing above going cash was I clarify, or you If in question that Are just that year. But per that $X charge, operating delivering second Daniela's think last was half plus talking you we cash. around ex be Is million forward? about look are think free operating flow the you restructuring it that to were should cash $XXX I billion cash or saying level the at quarter saying -- flow, if at I

Bjorn Rosengren

Yes.

answered was I time, Timo? continue, -- you Okay. last you don't so why

Timo Ihamuotila

Yes, thanks, Ben.

are So, what saying. we yes, that's

that. into course, receivables And are of really, Of inventory really good at not also our that visibility is is the what of super is the quality. good is But exactly important our moment quality.

look our actually at, went of you backlog receivable, Our quality. days receivables down. late is good if Actually,

So in quality that sense, improved. the

So which had this late well. QX. into a bit then it other I And to this backlog. by fairly as is quarter, really then in of mentioned the of an extra bit cash remarks revenue in we a had the actually quarter. side driven of the dropped impact Electrification the quite the sort

know moment, we flow. with see postulation at that So all operating your should kind of is cash the correct, i.e., we

Ben Uglow

Understood. And final question.

vast the flow, million of accrued this accrual? Is the employee majority the, Within cash there is call $XXX of the incentive the let's liability. that it, is by -- explained that

Timo Ihamuotila

Yes.

Ben Uglow

the mentioned also tax in not the you That's effect. Or --

Timo Ihamuotila

the so level for when -- in That good because No, ever was flow there. we And the is the that targets delta now of because, low of of had COVID came, quite that had the the impact we practice company, upper had payout. didn't that's quite it's than our is performance even is think low bigger XXXX, COVID when the we on first, actually course, this impact not year. statement. cash And quite then any a change we I payout. And high is

to 'XX even delta the cash 'XX bigger course, flows of So QX. became between QX,

Ben Uglow

much. very you Thank Understood.

Ann-Sofie Nordh

DNB. we Ben. And at the line Thanks, for open Holmberg Mattias then up

are there you If Mattias?

Mattias Holmberg

about you my what to supply Bjorn, situation and you been concerned worsening the QX. inflation have of from seems at in light perspective, least you. a don't issues -- very chain reported to of since be cost seem Thank

helpful. compared if curious guidance to the can in also, this very I'm share the or details could target, any year equally when you towards on you say, here you, help more reasoning for conjunction or your in XX% here, margins if set QX? reiterate would confident are less you with So you improved be us, this ambition when And

Bjorn Rosengren

we situation a a was XX And increases because, and in it years, Yes. XX I is ago, concerned mean, inflation, is What these issues. successful about the is I'm been very increases. for been with of in deal have I very I've during years. increased price statement of some that in what that course, confident time we cost this correct to business here offsetting long a seen very the costs, about in so not not seen QX costs, these we have had feel haven't divisions

-- your of course, deliveries is and good a So in if what that, possible there value are. only

the divisions quite you pricing a little But have handling really are more in think our an time be way? beginning strategy I the very this lot nervous mean right well forward. perspective, that we I also of a bit from going always in on inflation, So that. we a of can working spent

general are want rates we be might now handling drive We Is from in an maybe interest don't course, inflation economy? that demand Of good good think the this will way. in for medium I So not. world go up a long-term. where that to and to

these that ability of we So higher is kind my offset course, ABB's in things there confidence of. are costs. are of But nervous to

Timo Ihamuotila

make I here? comment an additional on Can

Bjorn Rosengren

please. Yes,

Timo Ihamuotila

an growth. Because I think part important also revenue had here X% we is

the expecting fixed cost well, are have course, then year We growth drop-through also I'll today. leverage, during QX. it, say through And get happened we of as to call also as we should during good which revenue a,

other that's pushing So a direction sort here. the of to little bit

Mattias Holmberg

Thank you.

issues from your the from in customer to Have sort moving if seen the -- and or of months? back say couple China any of Europe U.S. or of Second we've is question, you increase impact demand seen just quickly. past production, onshoring or the on

Bjorn Rosengren

our bit I where actually making from factor. of and a coming to of risk sourcing, do little more components think the had from of also raw operations, we looking we region that this to the access a have component little bit at in is course historically sure material are course, factories a just looking area. And China own maybe that a are We operating. as

is, changing. course, of So that

at companies to we part same I orders other as the some in So moment. these, are the the way that think offset that's we maybe also. also of trying are strong are seeing And of

Mattias Holmberg

so Thank you much.

Ann-Sofie Nordh

Mattias. Thanks,

Bjorn Rosengren

you. Thank

Ann-Sofie Nordh

in more squeeze one from on the Gael see Bank if we'll And think line. Deutsche to we'll time And question. have is I

Gael de-Bray

morning two everybody. very I thanks have much, Ansi. Yes, questions, Good please.

of noted question is number particular? The have efficiency solutions two you see in is question. a that And possibly RA, between in you on first pretty spreading other divisions? consolidations the accelerated what and given other do they Is that one energy times? costs, about about That's growth order the Andreas specific do clients growth there. follow-up widening to the basically feedback de-booking risk the shift deliveries? a delivery order a energy the growing in of particular, current demand Process for actually to could get I co-additions of earlier Electrification order with number risk rising I mean, suppliers and for you but exceptional, In from any there delayed at sort Automation context one. is get Question gap revenue the growing better dynamics.

Bjorn Rosengren

which customer, bankrupt. from actually has de-booking Let's a the start with gone of side, coming side. The one the with de-booking course,

earlier So make of think because We that our in I to their some they spent a have stage. order that But, and a belief at they are that. which and businesses, divisions is time it's there And not from reviews means of our in healthy probably that order of effects we from that said, a books. of quite book. lead longer our strong books cancellation through an sure some coming to go moving have the lot orders order times,

that's… think I

Timo Ihamuotila

comment please. one here, make I more Can

Bjorn Rosengren

Yes, sure.

Timo Ihamuotila

situation take in in in are backlog, we place we Also contractually actually new this are fees higher businesses. many now we with orders, -- where putting cancellation

where are not course, if a more cancellation book billion, small a we year, that $X.X will, So way of look clearly managing the in last mean, difficult. number. up is from at you I become it's order

orders new taking new to be and course, certainty. orders, better So of the have better quality

Bjorn Rosengren

they careful. maybe trying not then unique. is we're else. that our someone But not should mean, -- you to buy I from when be So situation But and say

I issue. think delivery everyone today same have the

you So who's an you supply another today. prepared even give can't to earlier supplier it's find --

course, of how course, might that's bit at The price but increase, yes, maybe when up are, course, little a of the dealing is areas. investments with about prices, and going and supported course, Yes, different, moment. are, future of the also on Process oil and course the being is be these ago. this is that, which of future, these energy energy are in And the in drive a and operations customers it goes. good optimistic gas we than real price of today more So Automation, year case customers

transformation our demand are we customers, sources. both this efficiencies Process from also these in of in in increased renewables, energy yes, traditionally Automation, but all towards the So energy energy the some gaining

So I is think case. that probably yes, the

Gael de-Bray

within And do same dynamic efficiency? you energy for see Or the Electrification? [indiscernible] you

Bjorn Rosengren

Electrification I a in during saw quarter, which on mean growth the you the part. level was record

towards this So transforming new yes, I'm is sure that Electrification, maybe a of there to and energy efficiencies in also energy this sources. transformation lot

which year. small where e-mobility areas course, orders is, part we've were last seen a very as enormously are the growth, the as ABB, of they is double where One of that high the of high

on soon. business And that's mean, stock the that's the put market we'll I numbers. very So huge growth

Gael de-Bray

Thank you very much.

Ann-Sofie Nordh

welcome you. hope you want haven't CMDs Thank all if we you thanks or XXth we ABB the please to us on to even see you PA Motion as Gael. of time today. with Helsinki And so. We Thanks, and you for to Okay. XXth already, May. do hope time And spend to on registered spending you there. with more And in

Bjorn Rosengren

much. very you Thank

Timo Ihamuotila

you. Thank

Bjorn Rosengren

Bye.

ABB (ABBNY) 21 Apr 222022 Q1 Earnings call transcript