ABB Q1 2021 Results

May 4, 2021

Market activity continued to recover from its lowest point during the summer 2020. Demand was especially strong in the short-cycle business, beyond our expectations. The increased customer activity, in combination with the impact from previously implemented cost measures, resulted in double-digit growth in Operational EBITA, and a very high first quarter margin of 13.8%. I am pleased to see good performance also in cash flow, which was high for a first quarter at $523 million. That said, while there was no material impact on results in the period, the progressively tighter supply of certain components such as semiconductors and plastics, is a concern. We anticipate prolonged delivery lead-times to customers in parts of our businesses in the coming quarter. On a separate note, we made the important launch of our new collaborative robot families. Through this expansion of our offering, we aim to unlock customer groups with currently a low level of automation.

In total, we registered order growth of 6% (1% comparable), supported by a broad recovery in most of our short-cycle businesses. To some extent, demand is likely to have been driven by a stock build-up related to supply chain concerns. On the downside, growth was hampered by a weak development in the cruising and oil & gas segments – albeit initial signs of stabilization were noted. Overall, orders increased slightly in Europe and AMEA, with the latter supported by a stellar growth in China. Underlying business momentum improved in the Americas, driven by the US, although the region faced high comparable numbers in the previous period, which put pressure on growth rates.

I am pleased about the progress toward our 2023 margin target, with all business areas increasing operational EBITA margin by more than 100 basis points. That said, we are taking actions to further improve operational performance in Process Automation, which should also benefit from an anticipated improvement in end markets during the latter part of the year.

We made good progress with the divestment process for the three previously announced divisions and I expect us to sign the first deal during the second half of the year. Furthermore, we have turned our E-mobility business into a separate division and initiated a carve out into a separate legal structure. These steps will allow us to prepare for a possible public listing, creating a platform for accelerated growth and value creation in this business.

We held the Annual General Meeting at which the proposed dividend of CHF 0.80 was approved. Furthermore, we announced an additional share buyback program of up to $4.3 billion, whereby re-confirming the intention to return $7.8 billion of cash proceeds from the Power Grids divestment to shareholders.

• Orders $7.8 billion, +6%; comparable¹ +1%
• Revenues $6.9 billion, +11%; comparable +7%
• Income from operations $797 million; margin 11.5%
• Operational EBITA¹ $959 million; margin¹ 13.8%
• Basic EPS $0.25; +41%²
• Cash flow from operating activities $543 million; cash flow from operating activities in continuing operations $523 million

¹For a reconciliation of non-GAAP measures, see “supplemental reconciliations and definitions” in the attached Q1 2021 Financial Information. 
²EPS growth rates are computed using unrounded amounts.
³Constant currency (not adjusted for portfolio changes).
⁴Amount represents total for both continuing and discontinued operations.

Source