• Orders $8,974 million, -5%; comparable¹ -4%
• Revenues $7,870 million, 0%; comparable¹ +2%
• Income from operations $1,217 million; margin 15.5%
• Operational EBITA¹ $1,417 million; margin¹ 17.9%
• Basic EPS $0.49; -12%²
• Cash flow from operating activities $726 million; +157%

“Against high comparables, our Q1 performance shows the year has started off well with stronger than expected order momentum, record-high margin and strong cash delivery. This makes us confident to nudge up our margin expectation for 2024.”

Björn Rosengren, CEO
 

CEO summary

My key take-aways from the first quarter of 2024 are the better than expected order intake of $9 billion, positive book-to-bill of 1.14 and record-high Operational EBITA margin as well as the free cash flow of $551 million representing a strong delivery for a first quarter. We published our sustainability report, where a highlight was the proof point of one of our core customer value propositions - reduced greenhouse gas (GHG) emissions. From products sold in 2023, and through their lifecycle, we enabled our customers to avoid 74 megatons of GHG emissions. At the current total of 139 megatons, we are on a good path towards our ambition of helping customers avoid 600 megatons of CO₂e emissions throughout the lifetime of products sold from 2022 to 2030.
 

As expected, orders declined from last year’s record-high comparable, however the drop was limited at 5% (4% comparable). To summarize the quarter, we see a continued high level of customer activity in the project and systems areas, and I am encouraged by the positive order development in Electrification’s short-cycle businesses. So, while ABB’s total orders declined in the first quarter, I feel even more confident about 2024 than I did coming into the year.
 

It was impressive to see new record-high order intake in both Electrification and Motion business areas. Process Automation orders declined from the all-time-high comparable, but remained fairly consistent with strong recent quarterly levels. At the start of this year, we called the fourth quarter the trough for Robotics & Discrete Automation order level. This realized, and as expected order intake increased sequentially. However, it declined sharply year-on-year on the back of customers normalizing order patterns after a pre-buy period.
 

Revenues remained stable (up 2% comparable), with comparable growth supported in equal parts by price and volumes. I was pleased to see the positive gross margin improvement of 270 basis points to 37.3%, supported by a positive development in all business areas. A more efficient execution of slightly higher volumes and price contributed to the 160 basis points increase in Operational EBITA margin to the new record-high of 17.9%. In my view this is a good sign that there is still upside potential in ABB and we can make mid-term improvements within the new higher margin target range announced in November.
 

The strong cash flow start to the year positions us for what we anticipate to be another good annual free cash flow delivery of at least similar to last year’s level. Using the cash to expand know-how and footprint through acquisitions is an important path to creating long-term shareholder value. It was nice to see the announced acquisition of SEAM, which would add energy asset management and advisory services to clients across industrial and commercial building markets to the Electrification Service division. We have a good target pipeline, including some deals which are slightly more sizeable than most of the recent announcements. The share buyback program is a tool we use to distribute residual excess cash, and we announced another annual program of up to $1 billion which launched on April 1. The size of the program is consistent with last year’s, although the time frame for execution is shorter as it runs until the end of January 2025, to align with the announcement of Q4 2024 results and 2024 dividend proposal.
 

During the quarter we announced my decision to retire as CEO from ABB. I remain fully committed until the end of July when Morten Wierod takes the reins, and thereafter I will support the transition in an advisory role until the end of the year. I am happy to see Morten take this step and I am confident that the ABB Way operating model will be even further engrained in our ways of working under his already proven leadership. While we regret to see him go, I want to congratulate Tarak Mehta on his new opportunity outside of ABB. Tarak has made an outstanding contribution to the success of our company and I wish him all the best for this next step on his journey. The process to find new leaders to the business areas Electrification and Motion is ongoing and Morten looks to have a full team in place when he takes office in August.
 

Björn Rosengren

CEO

Outlook

In the second quarter of 2024, we anticipate a mid-single-digit comparable revenue growth year-on-year and the Operational EBITA margin to be slightly higher than in the first quarter 2024.

In full-year 2024, we expect a positive book-to-bill, comparable revenue growth to be about 5% and the Operational EBITA margin to be about 18%.
 

The complete press release including the appendices is available at www.abb.com/news


ABB is a technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. The company’s solutions connect engineering know-how and software to optimize how things are manufactured, moved, powered and operated. Building on over 140 years of excellence, ABB’s more than 105,000 employees are committed to driving innovations that accelerate industrial transformation.