ABBN.SW - Earnings call transcript Q3 2022

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Ann-Sofie Nordh

Greetings to all, and nice to connect again, as I welcome you to the presentation of ABB's Third Quarter Results. I'm Ann-Sofie Nordh, Head of Investor Relations. And next to me here is our CEO, Bjorn Rosengren, and our CFO, Timo Ihamuotila. They will as usual take you through the presentation before we open up for the Q&A session. But before we begin, I should mention the information regarding Safe Harbor notices and our use of non-GAAP measures on Slide 2 of the presentation. uncertainties. include expectations which are, and to risks will the based therefore, call certain current company's certain and this forward-looking are statements on subject Also assumptions and over And to for with quarterly comments. I that will their Bjorn Timo later said, and on hand

Bjorn Rosengren

say, Ann-Sofie, quarter. to faster Operation ABB strength verifies very you, numbers I warm and is from our had anticipated. originally that the we even a show than me Thank pleased right moving well. with as welcome have I'm this direction, in performance and

any provisions this bit related to this, in resolved. quarter. that making the You being will that a company the a couple Accelleron. short, about record portfolio completed margin, said, ABB such indication the have pleased have still I speed. transparency, also in not accountability, matters will there are That noncore our confident year legacy strong price well we of One We performance we to XX.X%. technology additional In management. In we like probably acquisitions, very already one figured performance EPS item and out proof today's are later. we back of I'm related likely is operations, improving the It made that electrification which and my that way We view, and I'm impacted we of we new a reach needs divested and through leader happy points targets with a material we project. of But little high good focused broad matters. booked be of a a we our executed margin are more The is high have our on on be to result division working, Kusile these to margins lead come To spin-off early. performing focus promises some and that me, operational now looks feel provision our will execution. automation.

want comment E-mobility. I Before we on on, move to

We And it to have follow are market the But we'll volatility to circumstances this we we development see not part year. list committed high given remain in We come this the when company. that the do this. happening want capital closely we right. said of back and markets, we feel

segments. trigger stable it of We on saw Still, actually high-level. It in on backlog of normalizing order X. the of was Now orders up to let's seventh factor lead component our In our and orders another revenues was beyond times, with constraints delivery look reported a most Easing shorten to the quarter XX% pattern. period the will which book-to-bill continued FX, above positive big our revenues had swing and of closely development. especially a strong results, Slide more But we the X% with remains dollar compare when ratio development And should orders at with organic quarter strengthening was record growth a order the comparable looking the X. strong negative a customer you another orders. consecutive for XX%. that,

the at Looking the chart slide. revenue on

released This that pleased to comparable quarters. with in extent of also in see than was was to Deliveries strong electrical quarters the XX% a see I greater strongest by reflects one availability But positive business of the previous a contribution. You components. growth held all this development price were areas. finally better of volumes a

disruptions faced from business Another less business that our COVID China's lockdowns. was positive

region, most important In They X%. territory. China of segments. XX% clearly areas Americas, growth outpaced positive with a most Europe, Three quick improved across AMEA. on by let's in our at or take Now Americas market a strong X% in saw Motion increased the the different by U.S XX% a of the regions. increased in China Europe look Both orders and the AMEA declined lower only In major in by In orders development the businesses markets. more.

and And an management. earnings improvement already margin Group. price to improvement I and XX%. through an X% high mentioned good increased XX.X%. outcomes. FX, exclude margin our underlying to We negative of Slide close the basis XX.X%. is of see good volumes high stronger. achieved operational helped, the executed XX%. pleased important. from but by Gross the was performance, Let's were of up to But impact execution points even X, well price also for clearly very We earnings by turn actually the The we strong operational If XX EBITA this was I to volumes,

I the mentioned are efficient. project becoming more earlier. Kusile We clearly

legacy As are to dating is triggered million we provision back remaining the this this XXXX. of a reminder, resolving finally the quarter. topic. matters nonoperational the now $XXX project a And of in This

considerable EPS So over despite feel code time the It and year. of our to very our that to our happen there no confident implementing and provision I will that in not system to ABB efforts Tim. declined case important With the something prevent including employees confident to from is and of control Since charge, We hand additional reported, again. last was business. matters. spent -- any has performance, stakeholders that, conduct, launching these more educating similar a on new Kusile back feel ABB strong operational be material this related

Timo Ihamuotila

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

have changing ABB's you say in of normal to comment. one business. would item a mentioned painful of the years. course risk Fundamentally this First million Once I I past to before, Kusile connect journey during resolved, of to now which max already are $XXX been profile has want is noncore that we besides Bjorn's risk, we

we Now, much are done. pretty

have pension been doing coming We have a sheet, back. it a and [indiscernible] and while is a strong we have balance we not business position, positive in net not

are we into XXXX. good a So in going position

electrification, to and see to contributed well growth where which earnings XX%. then all let's activity, in the which as with the continue Okay, customer orders being comparable comparable actually as look performance we Starting strong at resulted improvement. in at areas, up business margin

segments, all all at we customer the double-digit strength at improved saw and Looking rate. total in regions picture, a

take improving U.S If that more than helped development has mention and saw X%. saw But This this X level. orders approximately generally But in a at years earlier chain been by old some slightly normalized to of Europe, that importantly, by comparable basis continued Germany This recent bringing in a growth all strong highest by seems total, comparable Electrification price solutions, declined which softness In a offset going a The of the basis as momentum billion strong included in XXX more insurance was high-level customer points distribution distributors cost X. stood result also strong quarter. in remained to It top good in of the actually easing points also should volumes play. In I of a strong a which sense now is China, a came also market, that still, to in inventories XX%. driven pricing level XX%. at by which margin expansion volumes we in above operational book-to-bill declined. also out the see granular $X.X the we Germany inflation. margin strong time semiconductor we look, very good was in be a from market what you line revenues admittedly primarily to a driver increased and forward lead very XX history. order shortages. supply was and as saw constraints. order deliveries distribution XX%, solution hampered in -- in grew backlog execution, the EBITA segments tailwind

the the meaning a margin. pattern to revenues sequentially expect we quarter, growth Looking ahead in lower operational into repeat, comparable fourth double-digit seasonal and EBITA

move billion, the came at then Motion's Motion Slide on stronger dollar. Let's X. from orders to despite $X the on around in again headwind

underlying XX% good In with supporting million comparable growth in a on A we large orders, how our example really mobility market, addition purpose. was the driven by approximately $XXX line including also sustainable traction orders. strong the are in to

efficient high that new reinforcing and traction than power more converters Our motors railway technology Europe's cutting will edge trains network. include XXX

of XX%. Looking to you'll at book middle comparable clear in in the acceleration chart this growth the slide, a revenue see

a strong XX cost volumes In absorption. the basis that fixed deliveries XX also as by also addition saw strong margin in but a also facilitated a volumes increased now as COVID China higher into demand, execution, this points related as offset chain improved of strong solid XX.X% last taking eased. Motion's customer impact margin triggered reflected basis continued helped contribute negative which well as includes by to improved from from operational growth, Price disruptions supply development increases mix high business The we to input by an the is was pricing was from The to slight higher sequential which line deliveries EBITA the costs, of year, dilution recovery in top points product motors. negative account electrical outcome divestment. continued Dodge about in

a ahead to is revenue comparable revenues. growth from Motion challenging comparable facing last fourth a we lower Hence, Looking the sequentially into quarter, year. anticipate rate

earlier We you slightly, recognize decline expect the pattern from operational EBITA years. a to QX margin

for total from high the and order PA's quarter, order down with slide growth year. both and Slide and intense Process are headwinds timing shortages, remained totally saw was the grew X% industries orders, declined on in metals the while decline The order signs X% see Particular end of end of the XX% out basis mainly on energy all of backlog strong. marine above up component sequential book-to-bill to the movements. compared yet. and last AMEA Services increased of Revenues refining, were the driven and be like comparable there a divisions. currencies, backlog XX%. impacted more energy contribution was orders market of gas, of ratio the the was divisions. Automation comparable of X. placing by by in a easing see sequential as while particularly then did Regionally, from continued strength high with industry. that but as this mining Europe FX was We the a which you In in not from comparable the five constant growth, second was to the woods the Americas single-digit China customers X markets can underlying noted segment Turning some activity in ports

see level at profitability, the history the EBITA year. from highest margin XXX last in basis operational that points at XX.X%, recent expanding can you reached Looking

in that moving that is reminder, As you have were in also turbo earlier the on revenues. mix to impact realized and benefits is margin from margin. gross the key improve see the we margin points measures. but team's volumes has Higher direction. to a trajectory backlog drivers, XXX taken basis is efficiency right some roughly mentioned earlier positive PA in It order efforts being the clearly the to great conscious now The profits

a Looking last at revenues I expectations high QX rate had consequently quarter, anticipate even or growth this that for year, year. slightly and comparable fourth note negative QX in we the low revenue the PA very in

reflects at chain ahead. growth level to shorten reported Accelleron customer as returning lead we easing order overall We the activity Robotics high-level. high supply On year's the remained order constraints similar expect Automation, That to of pattern, even normal a seemingly times Discrete last operational margin excluding said, turn to the where be they XX, EBITA more to the Slide comparable margin & anticipate lower to delivery business. customers

opportunity we there customers still In signs but orders, some pipeline. longer taking to robust of were addition, see a slightly place

at after lockdowns revenues, having recent electrical of RA quarters. comparable been shortages see was Looking to positive of China back it XX% components COVID-related by held in in growth to return and good

would to increased positive volumes transferred also to situation RA's it is fully XXX expect operational robotics business no operational manufacturing this is the divisions deliveries quarter. improved support the points in happy to by the still in were impact EBITA Similar park, higher during to that profitability from sustain supply Shanghai the volumes in underlined walk XX.X%, divisions. double-digit site basis I'm backlog and by say we in While both and new now the and benefited margin from areas, territory. both price other a the as

margin For the improvement. an even had revenues fourth quarter, stronger in we growth we some sequential rate QX comparable than what expect for supporting

Moving Group XX, EBITA the to operational bridge. showing Slide

the pricing diluting in which you slightly as adverse the from the effects As and changing than see, divestments, FX on as the strong impact more benefited Acquisitions earnings and mainly can inflation. a our cost from recovery improvement level. volumes, from offset Dodge, well Group comparable execution were

reasons the expectations from Let's however, for continuing by end million. on operating third now our last look through quarter was Compared flow activities the offset flow Slide see year, buildup noncore performance It order better the at cash at movements the support and In operational with one receivables good coming QX. higher cash this quarter, in as being cash less cash The impact we million XX. trade with about levels. in of cash legacy a in and year announced our primarily loaded negative negative working change than trade intake capital. in more to strong operations $XXX back businesses exit from in favorable was, higher to inventories $XXX continued had of impact from a revenue

about Looking will ahead, impact cash remind I which couple of flows. our you items, want to future

from positive the is quarters impact of $XXX stake transaction First, as Bjorn now to in $X.X about mentioned coming about in activities settlement. as cash a the QX. note, expected the received Hitachi the also in more cash of Kusile million. we This Energy, provision sale investing finalize expect earlier, flow remaining from flow the the we close to in we our On billion

have about you more active on talk Now M&A us being heard side. the

So I you walk what let to done hand before over we through me briefly have here. Bjorn,

Admittedly, be easier since the tends is pace. find to are and tickets, this smaller natural, close. are picking small they actually We to up but

processes thing M&A. work our important work. significantly have the with The Way, new is we of how change implementation the we ABB that Through

this right market. voltage new we is quarter. to this close the this is we Both accurate PowerTech acquisition the divisional in buyer. investment first different long acquisitions. growth. motor the further target Each the our deals focused see earlier division i.e., Numocity in for can this that to the will and We mentioned result the will NEMA setup First, as then looking their decentralized and simply have investment to lead divisions, to in better We model, Way secure Bjorn future believe responsibility that division think have ABB on operating analytical and we And the divisions side that that firmly has activities. more acquisitions many Motion needs have acquisitions earlier increased a respective the growth acquisitions examples and InCharge driven for smaller doing at Then, of low different build pipeline announced transferred the business market leading consequence the slide, are of minority these two year lenses. Energy through time. their the Both dots acquisition to a help you targets. also later majority minority can investment good cement the Siemens' become Converter positions. made also grey discipline

Bjorn summary, So me that, in through some are inorganic over to also the to on feel value drive creation comments. And I let growth. we to hand final with track right

Bjorn Rosengren

the And Timo. QX. on a you, lastly, expectations for look Slide we at XX, Thank take quick

to low year. is recorded this the pattern We impacted revenues margin expect with by also repeat expect comparable QX, double-digit growth and EBITA the in high-level operational year. revenue typically of QX compared The lower we last this

to good our already far And in this targets had so likely margin have we are year. XXXX. achieve performance We

XXXX achieving normal the should prevent I And market start targets mean is Q&A. what at us operational will of the Ann-Sofie EBITA not fluctuation any our leave with let unchanged. XX%. margin will least we We from that, And that

Ann-Sofie Nordh

ask to let's to press that on for And please questions. the line in for do you webcast the your is secure just as to "*" "XX" the those have to And quality, phone, a register for Yes, dialed reminder Q&A. the open as remember a you open mute of sound up question.

one the the in here. And for for the your screen. limit I that Martin the as to want a think in have question of from -- I through you open already we off really corner and put And please queue the your you online question time as want we the we conference we through bottom using question to from line with call to your in ask to right then If start get field through by there, up through you of the person. will said, put question at kindly that many as will this as you a question Are Martin? put with I per And questions. try your Citi. you possible, webcast, instead type see tool I long

Martin Wilkie

Yes, taking question. I'm here. the Thank you for

As crisis could to about I'm energy limited impact. the I ask one, perhaps

we You've automation, this seeing way about strong touched you an When back efficiency like on can lead quarter though months, customers? remarks. you your you a support large and Should a or demand think scaled coming your in the over at could If at obviously perhaps capacity that process little in negative. of the for your even that bit therefore forth, orders. on concern pipeline, impact of more your some customers in opening energy look being of so How actually the is are we intense. disruption, are so orders much more a look [indiscernible] the you impacting creating itself this of we of that perhaps opportunity not talk Europe, even to energy if

very [indiscernible] hear that? we're how to you. Europe Thank interested So

Bjorn Rosengren

thanks, Maybe Yes, for crack Martin take at the question. that. I'll a

quite for want I energy So itself all, low. first is that say of intensity just to the ABB

this like, point our of base. half So is cost a

really from dual as this think you really situation. I mentioned. side, the a comes And a is customer So bit this of

So have metals the today, as yes, we customers, we some industry. in mentioned like

intense. something of a if and these seeing So stuff, like aluminum bit on energy that are think kind we And of about smelters, you little very ones, so slowdown.

like I as just On really on market the driven are growth. market, and seeing products we of by new that this energy some And we mean the in some lot of so parts also other the type XX% order we mentioned driving had U.S in forth. a growth of seeing I energy. are Middle East areas efficiency our because and are big hand, in Africa,

is So us a think like for I one don't this answer.

we're on of we But pretty I think course situation. have the I plays out. to overall, think balanced how it see

Ann-Sofie Nordh

we with you hopefully have back ask Alex, on of back Merrill to Martin? at realize and good for please. America kindly we'll questions, Are you that to I'd Bank have to more get I those. in line Lynch. move Alex but you We come to time

open. Your line should be

Alexander Virgo

okay, talk pricing Thanks very Yes, you question. everyone. your morning, then. Good if could I bit wondered much. a little one about

I a that level. pricing find you wondered pushback any at expand I differences against comment that deceleration You or deterioration, guess, any you. Thank the regional that or around said Group if bit where coming perhaps could you around any in X% is, indication little of up regard.

Bjorn Rosengren

Thank a little you, talk pricing. Alex. I about bit can the

we lifting probably each pricing work concept in and prices, we pricing XXXX. value just of these pricing our put on know, in in divisions. have implemented is you As strategy based not division already a our And all we strategies

already course, then. happy Of that we it did are we

So that you cost think, handle we inflation less to was we the came, And the have had increases I prepared divisions years. or that when many of have has to I can see, been well done more been offset and of as that. able the all last our think during

forward, cost, are though more must down, better, neutralized. see some Freights being little course, I see going of inflation, increases we where are even in Of getting it's parts going prices we say. a certain are commodity some there the see we bit

there, is are prices some as in other the of energy still inflation see up going and On the you hand, numbers.

is that division is far have that professional in this way. I the done divisions which think a a so quite So,

I actually Going think divisions. the all is that dealt with forward,

to and more them some will with of be need some less So deal they it. impacted,

all U.S picture that than I We for there's a general had instance, can a Asia. inflation wouldn't and say in we've Europe seen, though, So for say bigger ABB.

Ann-Sofie Nordh

decentralized now, different received Thank And question think within is now we And Mounsey would downturns, will through how plans. behaviors it's BNP very likely demand previous slowdowns. you. heading online. good. recent into says, year. … next things to different put companywide softens that we'll here Okay, a guess over from we Jonathan He the I of are downturn to I yield management Exane compared In a efforts a at If And to that announce very set moved this years time? the be will this Group previous Group restructuring Paribas.

Bjorn Rosengren

question. that answer should I maybe [Indiscernible]

strong new businesses. decision Of the our course, meaning operating in Way, have a making are ABB we the our we to confidence moving all model,

working know, people in of businesses. you As XX% all our our today are

activities not Now, corporate kind we it size to the are comes of any company. of planning the when

planning, already plans think since their divisions heavily based of I working looking our scenario on have a market And more the or little half back kind year a they different in that. just softening bit. of made have been with at different

these are if make that comfortable businesses. impacted, And we the impacted. operating an model Some more about in into And softer and forward. some that be divisions we times decisions will go will This is going less going will they works. feel

Ann-Sofie Nordh

Deutsche And should we question conference up coming call the for from be open which Bank. Gael, next from

Gael de-Bray

Good Thanks everybody. very Can morning, much. you hear me?

Ann-Sofie Nordh

can. We

Bjorn Rosengren

We do.

Gael de-Bray

orders Okay. very if dynamics. X%. and Thanks by the question seasonality, organic appears mean, up order were much. That's have maybe that for nearly I great. a I sequentially, adjust I it on try

it So development. heard of nice that in sort defies expectations this I my talking segments, some mean, you in it [indiscernible] about but really order appears we've I positive seen industries, of normalization normalization. clearly

which in greatest see the regions I Thank mean, which did and speaking? in So you. segments positive you question particular, in my is, sequentially developments,

Bjorn Rosengren

very had to And we Europe, very, XX%. this development have markets Spain, a places southern Also, Italy, the seeing like I in you in more very will so we all thanks are time strong think growth, U.S., with U.S at first some look development, strong forth. in But question. U.K our for strong. if a sequentially, strong at and we very in close look was start We this year-on-year. of been also I the development Yes, this sequential

over in XX% strong actually years in India We growth. a have very growth X already, row

that QX were from performance orders, I areas. going So come when is, of -- bit have But will we sort expecting strong year But these this into constraints. understand not the some happen out we of of this also we of in the course, I of the a a also really are some mean, I revenue. little

on and some industrial some and are the continues electrification earlier, then strong demand OpEx areas I we mentioned strong. these demand mining, industrial very oil we're And strong as So also seeing or of automation, gas. are seeing in

I look sequentially, XX% Motion, the at If over trends you twice particular, growth. think, now in in have we

areas are seems even continuing some I of on these the Motion very a where more coming mix to but on had think The it's really electric So now through. that be trend, really, if we strong, motors, looking bit it's a good trajectory.

Gael de-Bray

much. Okay. Thanks very

Ann-Sofie Nordh

We you line call. Morgan and Ben conference thanks, Okay, the Thank the from And -- Gael. next open question we Stanley. take at up for the

Ben Uglow

sense Good you development morning. what's the weakness? order really, more relative I'm XQ? how Bjorn see was strong? in which Hopefully well, China during base the which strength taking on guess, of I question. accelerating were think can orders -- the things is a do and for and throughout during things quarter? areas it's give how the local for the for did the thank we and in best. If So in the China. But were going it's about quarter, -- you. of you color, us feel just if a Thank -- The kind Motion relatively it's areas of And similarly, you assuming trend

Bjorn Rosengren

Ben. you, Thank

course position in in driven know little industrial weakest mainly little actually, is in I down of But America, was the businesses was of time, most Europe seeing you should feel the XX% same robot And down which the look varies North & [indiscernible] if Robot, the as during and market. a China Asia We are, quarter. [indiscernible]. that If we which by on Robotics China, the biggest residential part stronger had part. and that weaker bit on the where different our is you're of all the during is sticking know, a a we'd one. order Discrete so These on at look mean, have much as is, think somewhat orders an at it market, a China construction one then businesses. between positive you we quarter. we book, bit you up our at I the the It very Motion the strong out know, Automation, couple

are we and nervous normalizing think order forward mean, any we bit not going so forward. about is not China. the but we steady So pretty to We are expect huge side. a going it moving growth on I number, little see on

Timo Ihamuotila

They Yes, maybe base very orders. on this comment quarter. actually similar were now the just

no had on China there base but was we bit lot had we a delta delta large this big -- is time. regarding orders. So there dynamic the not had We a in because order, of a Germany, a have this

Ben Uglow

That’s Okay. Thank you very much. helpful.

Ann-Sofie Nordh

Okay. Thanks, Ben. Guillermo we at UBS. a And then open for up question from

Guillermo Peigneux

Hi. Good question. my for taking you Thank morning, everyone.

Ann-Sofie Nordh

morning. Good

Guillermo Peigneux

infrastructure, backlog interesting. cancellations there about cancellations. then you bit during in clear I that patterns segments guess, and maybe guess I I very that think gave a think country was an you've wanted electrification. but the is wondering from increasing Do to growth regional elaborate of And I little residential, points the on coming [indiscernible]? the seen any within other you picture, I you. in which non-resi was and industrial similarly, Thank whether risk describe you

Timo Ihamuotila

thanks, one. Yes, start least this Maybe I'll at Guillermo.

of broad it's first on a strong based all, So electrification, demand.

Bjorn revenue area and had So I discussing order China both would much was topic over growth a you bit XX% this where growth. say saw, as growth. is pretty the And what lower we seeing only are we

nice conversion in it's see the also in. divisions pretty actually, coming And are improving performance. to So really now much all the

both is really situation the in it's better getting revenue So electrification. now actually margin, solution the that good fact and distribution

little the then than impact to the of was channel in in slightly the in Now, There markets then the expecting bit quite if normalize market, if X% in are other more deeper the you electrification negative. we Base a order was I into correctly. looking are bit go seeing growth Germany, growth. we U.S had QX, a actually even strong. going And XX%, really QX. remember electrification think I And we're into but

are [ph] that the course, of happy And in on some we're, of really good the performance these XX% margin super really, So about dynamics electrification. there.

Ann-Sofie Nordh

for turnaround and done question Is ABB a and Nick now? he looks wish that comes a like Bjorn can for is now move you're the the work coming on you lifting to from progress we there [indiscernible]. says, in years? your Or known from here being more it Bjorn with turned around. guy, see And online tool. And is heavy

Bjorn Rosengren

an people. let respect even this ABB, this we the me a very performance, foundation in why great peers. came good interesting couldn't start line I always has I we our joined financial that question. with directly, than I I have and company, But baffled a I before about is company. better deliver strong huge that's or said, bit when saying a it had Okay, in was for little

an is that part. So important

I taken on to And much has this long think I'm course, journey. of are the ABB more only having right of forward. this potential a -- my levels. a giant And think than that a of to coming start now this step is we've I but go And side. time I up life. the we believe

place at company don't to we're for I and work stage. leave I I company here a can the is a while will I So hope great a I while having this have time hope to continue -- the for. more, good

for So ABB. big respect

Ann-Sofie Nordh

with the going two the cash are from spend lines, comes of the people. the power from the on boys? the spend And similar grid. of from you online tool to on take question sale of we'll intentions How to the sort XX% along another proceeds final But actually our how

Bjorn Rosengren

[indiscernible]. sitting Can you're you Well, it. on

Timo Ihamuotila

Okay, change our capital in sure. that. principle. allocation for No We'll go

a acquisitions, are of organic to execute continue to value bit little share, and we continue dividend So pay continue course should on as of all earlier growing expecting growth. discussed the also want look drive adding more then do share have per first that we all areas. will we divisional how and to and finally then were, of these lens And buybacks we sustained spoke to foremost and that these capacity to have we to about we on

but in no decision course, really the it AGM Of buybacks, regarding Board end, and a is always the really, there. change share

balance to and end with the course, flow cash with strong year [indiscernible] expect the We a of strong QX money sheet. a adding

Ann-Sofie Nordh

Moore James should your open. from take we'll And lines James, at question good. be Redburn. Very the next

James Moore

whatever impact, pricing, well. the are year? Good last of in how that been from peers to about back PA And third and revenue morning, in last price have you X I around to prices? or And in On lower quarter, come numbers and order wondered revenue everyone. and mid prices were, the Hope single-digit into how the than Could please? next RA Electrification that higher quarter? your average X% degree to might guess or sort developed maybe Motion I into that fourth And you're quarter. I you what expect develop

Timo Ihamuotila

yes. Yes,

we So division area disclosing price are division of -- based now not so levels, course, business [indiscernible].

just So I to X. can maybe refer the

more. bit and higher. then now I businesses that little the dynamics, When is you good as say pricing little say, in little see what with cycle margin is would at a the look are we were lower. really, actually a gross to all our And and covering So the that shorter PA RA we costs really

didn't So our Also actually down. a cost to has come from the increase impact. started big freight have commodities

have nice factories, covering and revenue. salary But inflation pricing on remember We through that the we XX% a drop ABB was additional understandable. on had that's the if well the the on I level,

situation seeing. totally sense have that, in that is the Of fairly been the that unless it's demand say how -- quite then shorter something depending equation takes in sort the on of I would will well. normalization, in But business And of it [indiscernible]. that this well which stick? this cycle course, we’ve the experiences working So kind we

Bjorn Rosengren

any is, I order for a important we is customer. course, this which of and we believe an develop, the margin utmost look of can future. can that to gross into to measurement be good able strengthening that also course, businesses see important And actually for book, that the value the pricing -- our gross margin and the say at your you’re in is of we in you

at looking looks you're book, if it promising. So our quite order

James Moore

to, going on? And and if inflation up, like pass goes to which I that may, on requires it pass you is can harder if labor Or that labor productivity? it's pricing costs, with looks

Bjorn Rosengren

all everything mean, in, of now a our labor. it's pricing cost divisions. factors. needs it is of total to if there's freight, kind priced professional the we deal And in expect have its picture, these all that of sub cost energy we increases I they if do with at course, suppliers, from it's It's or we be and inflation, else look cost, that lot departments from material

James Moore

Thank much. very you

Ann-Sofie Nordh

Will Kepler move we at And James. Mackie to Thanks, Cheuvreux.

William Mackie

quarter, how next XX to Hello, over in the receivables. the you. good how morning. and normalize the million working question you you capital to nearly and $XXX to months Thank the the increase of Thank talk year-to-date see The balance to how you evolution relate for $X.X capital of specifically inventory fourth in the supply the may the and relates you Perhaps primarily trade that could expect the time. to -- of supply chains chain? XX working sheet, billion and

Timo Ihamuotila

Yes, was kind at point. of thanks that come question, would for I that the expecting some

look in relation thing measure, of the inventory, the are actually with at has is pretty the X, X we it all, during the at first the important when last when line that inventory inventory that is we So of stayed backlog, i.e. with course, the seeing inventory look years. we similar most to And the growth backlog.

we So around on it then when our level are of term. at look constant shorter look more at order you And XX% conversion actually if we type backlog, expecting currency.

XX sitting standing now were here our we numbers, XX% and Last we about So as we backlog are expect current at XX. and expecting conversions. year, conversion looking from

expectation closer. think happen start we coming already in demand that picture in will and to So QX expect And well the like normalize. start to we in of our it's to kind the would conversion that when is actually line sense, now in

And have And have for plays then why would how moved we net continuing. working been this cash revenue let's expect to given see year I Now from historically. that we can't a a ABB's capital see XXXX level any reason out. long-term higher strong to where

have further then expect come XXXX. boost normalize down to again So to some, continue we number order provided, call QX, additional then that I now. and let's to it surprise, don't would

William Mackie

you. Thank

Ann-Sofie Nordh

large at table? you. Thank deals? on on Morgan, says all no, where on And we attractiveness that smaller rules sizes here have if deal J.P. one comment all deals who can the the question are the out from you -- acquisitions, pipeline on Or larger Andy

Bjorn Rosengren

I side. a talk little bit can Maybe about acquisition you. Thank the

the division that and been our full growth we mode think to clear we of talked about growth. XX% acquisitions. I we've profitability and divisions look About when say we growth stability are and each call organic at and is of now what we in

accelerate course XX are and seeing course, market. doing to -- where fully it year we we more we the the in their deals strengthen divisional of of per competitive at to X a they expect this, is And from place situation taking are the moment. And is of level, to driven So reasonable more think course, side. into

by the is, the or division But market certain it's are go to now be that if quite driven business be deals divisions. of it is that any areas. which going phase can think, for stable size it But these So if on see, into overall. bigger. is when size area profitability area corporate I'm natural The in somewhat could also a by be course, driven technology stage business to of this, in could strengthen are business small to smaller this and we that share I we coming driven saying the there may at instance, added ABB not at

I So good process good I a moment. a at we the it's think control have think pretty over this and

small to medium little bit So bigger. size we some will many and experience maybe

Ann-Sofie Nordh

year says XX% full another from And for margin at full take online outlook least we'll exclude year? for the Accelleron which does the then 'XX tool, question

Bjorn Rosengren

we Yes, this our It's year target about the very year. then one. XX%, I reach exclude whole we for Accelleron when can answer for important say if that will that we the

on percentage points So Group. that is important. And that Accelleron the impact has approximately X.X

Ann-Sofie Nordh

line the call Joe, we we'll as from then you question are up the Cohen. us? for open another take Joe with And conference

Joe Giordano

I am. Good morning.

Ann-Sofie Nordh

Good morning.

Joe Giordano

ABB other broader that? continue Are -- square with companies see ASM are do results one term yet to while this of are you the it's short orders, demand. very looking to do things cycle. like outperforming you look you Or [ph]. with what doing? Is suggest expect companies kind just in that feel in when way. has you I I is larger mean, can of sort like your that I what positively still grow, own macro be indicators other? cycle When of with to I mode, like, saying seem while talking meet look at the I your feel how here, that, about you at the what significantly some kind contraction you're at competitors markets inevitable indicators struggle like are going mean, short the

Bjorn Rosengren

and about that -- is yes, have about But we talked the much seven Maybe I which growth too with talk a little about bit not book-to-bill we mean quarters forward. going expectation X. ratio,

So very levels. we've seen good last on growth and the quarter high

play the Of order now when yet, have different I say be in when will with look a the also but course, This scenarios pattern too way, see we kind normalization we going and start to revenues forward. should to early of coming at out we that. of right think

think I think outperforming ABB anyone. is are keeping to don't we itself well I up in probably competitors. relation

and trends. execute global we to when and the way well-positioned good at think I we operate have look a

see and short-term, downs And that. the model should So today the of that should to be, will the of we have we operating one be we we been believe way. professional And coming you lifted that why divisions the Then course to deal that growth them. do with are cycles a over we also years. market reason X% need there markets. believe in for targets in in are is has and business where growth the because X%, where ups the will a with in to good we always we deal need do we to And them

we seen we So, news, But what's order pattern. buying in of mean, that that so the taking going everybody the I in see behavior or last QX the else what XX year-on-year we in place the haven't far, world forward, there's they're we read be course of some we we the changes seen ensure -- it's X any months. course to during expect in going difference not have to --

Ann-Sofie Nordh

question the because on anyone little to remember of has we don't a it tag -- bit QX has how And can think I only, I’m asked unless yet. started I

So to you. the I'll put question

Bjorn Rosengren

growth, even the now we normalized Yes, we though pattern order a see during more to continue expect quarter.

Ann-Sofie Nordh

a you in at to Simon And from discrete place on says, you markets seeing the orders? bit comment you’re can taking Thank where end question customers longer Right. a Jefferies industries

Bjorn Rosengren

a Yes, very that's little & I the that before. Robotics bit robot, to related mentioned much And Automation business. Discrete

You it that when chains semiconductors parts. divisions comes where the also the two are challenges to you probably we had know biggest supply these have and

a huge book. we during built time order So the up have

So to needs that be executed.

I lot X So need be mention just robots, but into that our year quarter, year. we have had can I order also up. executed thousands determines next that here and from been that during to book mean, a next have of we XX%

this You is not normal can imagine of trends. course market

laying was So there deliver. of which to our lot limited is course, of placed of also orders possibilities there, a because

are automation in So course the on market the we delivered of it need to out. positive. build then market, trends we And be comes to believe of that have course to when which

Ann-Sofie Nordh

a question is the of think dynamic coming normalization quarters, in inventory actually And that we that say it next if for by How one, given I the we completed seems any, it to on demand through the be levels. have about comments or of much here end risk, final on distributor and Electrification QX?

Timo Ihamuotila

over hand comment maybe to then this specific was and that [Indiscernible] to Germany Bjorn.

Bjorn Rosengren

growth, there seen, most this that through this within where seen especially strong more effect America. partners and levels. is, that Rest on -- with our we've Talking China, Germany. is of to [ph] certain you’ve that the Yes, for seen forward. very market, now and course, least going in very, the North course, specific the it's we've pattern or less we of is completed a besides of do normal their electrification, as This more not order on our very expect industry the business, them, discussions have in electrification, Germany, in of normalization been inventory is Electrification businesses

Ann-Sofie Nordh

comes then last Yes. conference line be And one open. from actually at call. It we Daniela, your Daniela the quick have should from Sachs. Goldman question

Daniela Costa

much. very you Good morning. Thank

target. just think we call a and you the potential opportunity going is going bit where forward, more commentary to from growth? XX% growth remains left or forward, the any more to growth there the Is earnings significant fair on 'XX, there's guess say seem commentary growth up improvement margin margins here towards following you about the the in looking So it But said are lean side? regarding places when the I over to

Bjorn Rosengren

good Thank you, a question. Daniela. It's

And today, stronger. And mean that As will mandate. of financial profitability the you’ve I improve right to that and is call our course, growth But expectations have mentioned we growth. more the continue focusing, growth getting growth that division are push more we they drive the this seen stability, businesses. they're meeting they these we about is moving of And mandate. here XX% doesn't levels that level divisions what to because also have their for performance. of number margins kind is our to That divisions approach call not they cemented of what for more not where before and to really have course, are part they driving of the they still a in, But their of it.

is has us, Of this just course, that We target. ABB for great X early to the on the in we between are reaching with happy believe an target. But year the be potential.

above demands We that will for different tougher drive in to it's to not. market, us, XX% the continue despite and or stay important gets it if

to develop the that the business sure and margin So protect downturns. -- we in to but also make need has continued

will expect they have tougher no continue do also so to year, it roof they that. would that a improve. we hopefully if deliver So, should next time But [ph], on be we

Daniela Costa

Thank you. clear. Very

Ann-Sofie Nordh

session. much. Thanks, quarters see you us much with we that joining today. We And for the time. in about thank Daniela. you very And you we very the Thank will closed

Bjorn Rosengren

Thank you. Bye, bye.

ABB (ABBNY) 20 Oct 222022 Q3 Earnings call transcript