ABB (ABLZF) 21 Jul 222022 Q2 Earnings call transcript

Greetings to all, and nice to connect again, as I bid you welcome to this presentation of ABB's Second Quarter results. I'm Ann-Sofie Nordh, Head of Investor Relations. And I’m here with our CEO, Bjorn Rosengren, and our CFO, Timo Ihamuotila.

We will walk 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 you with our results. I that will through Bjorn Timo to said, and take hand

off Ann-Sofie, the start challenges quarter. that really to looking you, It And warm and demand from few COVID-related lockdowns strained inflation, and see high high the a was from me Thank at level remains well. a as welcome China, let's by from despite chain. on highlights good in supply

orders the three when our was group is X.XX highlight very Discrete XX.X% highest business in operational backed we with line The it by seen I it in we also revenues And strong from orders in and improve And of years Our time, Where to the in billion, for to hampered four in margin a consecutive XXXX. to $X.X steady need this. Then backlog. the was performance pleased targets I'm challenge lockdowns throughout recently, want namely, and by demand reached similar out was the have pattern level order in of profile we with a This of Automation. build sixth saw about second areas. good quarter book-to-bill we had paired & QX recent shortages. quarter. China. added component the an was we what total Robotics

from primarily on pleased They the momentum include the business. note. support automation. the had mention first and ended an in some flow the higher significantly it preventing to total, year. corporate that last pleased already back Timo good would more business improve a that also deliveries Cash impacted from in strong to expect that momentum items. high area we about by I came machine additional specific the I'm quarter points Just Robotics is the we moment. we basis shortages, the like In outcome was in improved in later. of could quarter level I to this talk the from XX positive These semiconductor in in and year. will a cost. And I will see half is QX, come second related than

of Next, Ukraine. war consequences I to the the want in that mention devastating

my it E-mobility until but about Accelleron spin-off to do in have early listing Timo, view, In allows Accelleron of realize core that Electrification of full say the it to areas value started on charge in talk markets are more which activities wind actions in Lately, have the there. we revenues X% a impact us will taken These trigger to income from to over We down QX. of the decision just and cash But will million IPO a already earlier Russian the flow announced of that have last remaining we I with Automation. ABB this. moving Russia limited constructive. of the the allowing market. ahead $XX the to to exit the represents postpone the process , we have shareholders year. are we is comes pleased million with of to When for still, exposure $XX we operations, focus with will want and details I'm to October. plans while we the decided

shows development Robotics XX% revenues in total, growth had increased and happened X% customer in X. with focus revenues. in by Now Automation. and decline with positive at on growth adverse orders digit revenues increased we in at comparable the the a X% demand orders segments. a All only double up FX areas our major comparable And an on which all rate. Slide were & But We on orders market. what and closely let's business look more let's impact, reported Discrete

general the revenues was Discrete of Automation Robotics somewhat were area semiconductors. still solution now, is in of our large & QX, expect clearly impacted. the most here improve distribution division But we hampered. compared from slightly suffering the on. also From eased Electrification While shortages supply the what to semiconductors from to we supply the business know

we a This backlog were $XX.X saw slowdown growth as billion. the the total, and during two had gradual quarter. quarter, record lockdowns Shanghai. an enforced estimate restrictions the we the lockdowns percentage We in X%. logistics our have comparable We effect about teams impact were April. the also local of lockdowns from the that order to eased reported in China challenged revenue negative by of increased Then In it our immediate of saw on recovery level

a to the good rate all look it with take the region, improve which by downs. In increased at growth AMEA double most showed despite improved XX% the digit at by the was rate. let's different see Now order important market markets XX%. of the our quick regions, major strong Americas, China lock US In Europe,

Let's turn earnings to our Slide X outcome. and

in year. which margin XXX decline basis gross of is points Our quarter, a XX.X% the was from last

volumes was Automation. is think that points Discrete decline and operational drivers Robotics limited related their the to was increased it to to main X%. We EBITDA from commodity their losses while & underlying the mainly highlight in the the I operational by mainly XX derivates on low market-to-market important impact basis

actually freight how cost by However, excluding than strong negative X%. the pricing more was up execution. offset the labor, the through commodities, good see in teams It the FX, inflation and to it was

and efficiency Additionally, results in by also supported were increase a slight volumes measures.

about of aim QX step towards we took we I another and margin impact estate be to of had with legacy XX.X%, sales points in basis like that the exit what would items. of the that target. mentioned related That real earlier, XX But we from special project. XX% the know refer margins You at would to XXXX support large for least I

I view, we a business, the given in chain. China, the I a semiconductor challenges to slight lockdown over year. already hand lockdowns saw and top like a supply the going year, strained inflation, momentum last the from from the second my would to divestment Dodge outcome that, ease and expect of the the good Excluding forward. half should with in And increase Timo. of from of during these Headwinds good and shortage

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

so pattern The trend. softness let's also the orders a what where we closer in Electrification fairly look overall with also comparable resulted As by The in up was in was usual, which only at which a strong activity residential start by customer area taking at strong the steady China QX. buildings showed in end of overall some segments, demand quarter, across being in XX%. was line saw the Electrification,

temporary and geographies weakness X%, the lockdowns. different seemingly to during related by declined Regarding some initial COVID-related countries, China

saw XX% at elsewhere, to Looking rate. steepest growth the we XX% orders in Americas the grow at the healthy plus Europe continued in and

XX the The can strong projects, chain pricing in high feed high in hampered XX.X%, This and like that from last more distribution absorption become largest good a and quarter earnings for continue EBITDA basis to chain division costs, to down chain. under Add points mainly which benefited fixed disruptions year, low of other operational achievement solutions, revenue in resulted previous the our that, driver the was offset comparable was components. whose XX%. by you margin which quite is be considering Just value and improvements solutions variety larger value volume which that growth, systems main volumes was on commodity realize into in favorable of supply by complex. from divisions. than this The in inflation up hedges. Volumes strained rely

into a for EBITDA expect and sequentially had a higher operational we the comparable margin. than ahead quarter, Looking of clearly in growth stronger the third we revenues somewhat XX% second quarter, the rate

in onto the orders again $X where in Motion billion from XX%, a dollar. on Dodge divestment, reflecting by increased as and double comparable despite regions. Adjusting noted all orders large from as by all customer improved stronger move rate Let's in headwinds revenues, contribution base comparable at across Slide Strong Motion came growth a for more segments was muted orders, above basis. digit the In well US major the X% X, on demand orders. good

were the down logistics components. lockdowns local the pricing, to While job by continued excellent volumes to team China, slowed do which on access and in an hampered

due to the EBITDA negative decline the was business. margin execution volumes operational the As continued high record to backlog impact divestment basis The of under strong of declined the with driven the stems consequence, a costs. increase the costs to of from fixed in the decline while by XX.X%, higher to pricing a by offset point half $X.X order year, of XXX input approximately rest billion. last Compared the roughly from absorption primarily Dodge

in growth higher third comparable EBITDA a and the operational we quarter, into margin. solid ahead a somewhat expect digit double of sequentially revenues Looking

where and Automation customer to was Turning regions. Process Slide demand strong and across X segments

with during all from able metals mining, the area quarter. majority increased also growth shortages digit was As a noted rates The a in Particular the from where grew in result, in divisions. XX% comparable Russia, double are of in marine but Revenues components was with X% outside divisions market. customers all easy capacity by to and fairly strength comparable. the invest support the looking to business mitigate admittedly orders

of still expected the progresses. continue as year Some to these are

sustainable well off good at to paying driven a XX% of this work Capital towards last XX.X%, Markets see of It margin compared which the the Day. PA project improvement increased recent level the four is performance Process in that Peter highlight and at as by in EBITDA margin as was in improvement Automation, in colleagues Looking the years. is basis resulting execution XXX showed clearly great is measures. the by of Operational This as to highest points year, quarter. efficiency

& trends quarter, Comparable year's quarter. and a in highest volumes. EBITDA to and strong of demand significantly noting where increased and segments hampered sequentially, low On third approximately strong pattern margin continue with in the XX, high Customer by recognize level. see with comparable orders we similar XX% the in turn orders delivery Automation all For to momentum at with stable both investments development revenues increased Discrete Automotive, operational last we Robotics growth in E-Vehicle the intake a activity the expect by throughout revenue China. order divisions you we Slide growth

May customer consequential of quarter. the had during in robotics As Shanghai ramp in in gradual a the impact expected, up production second significant deliveries the of April, on the shutdown and factory

mainly some the continue in Machine Robotics China in lockdown shortages revenue price. measures at as offset and comparable margin minus $X.X while cost selectively backlog as billion. X.X%, order RA's driven to a decreased more adversely operational increase points semiconductor from to cost the basis further by the positive year-on-year inflation negative be to volumes continued such XXX than EBITDA by of impact to RA’s growth and in Overall, missing from revenues, easing impact Additionally, in resulting Automation. areas X%,

quarter, third the growth move revenue year-on-year For territory improvement. leave a we to the expect robust negative comparable positive into and

a of Slide sequential the operational momentum, margin. On upgrade strong EBITDA strong XX, revenues back of we to the group showing bridge. the moving revenue operational Then and expect EBITDA

from train FX group non-core earnings pricing retrofit as on from were the the the divestments, helped XX combined the and changing effects efficiencies, and basis of can comparable well incurred Dodge see, points. improvement you margins As adverse volumes as our benefited operating operational than offset mainly diluting well as i.e., in from our by exit cost as full Acquisitions which strong slightly more level. business execution, The inflation. impact

Slide look XX. our strong performance the than to operational million at and level. more flow the clearly expect higher second Compared in cash was similar year, the last move was year. cash the a in activities on $XXX operating I flow half or let's Cash of on with of less QX, Now from performance

course capital to up However, supporting flow the of build our working on at trade up the mainly strong of for the continued aimed inventories weighed quarter. build This order cash growth. related is

able the am have we i.e. mentioned $XXX were operations And our flow expected from $XXX legacy as earlier a $XX today we this. sure looking able I'm of we here, the to close of pleased in Bjorn were flagged when that approximately last We that position line the in which this remember were in the project. you exposure from recorded million about Now we largest had income resulted I $XXX up you million QX million legacy total exited of met project. that to to QX. This below I to that close hit second very the do operations. quarter, by million primarily in this cash with impacting charge we a to non-core

still QX in of our down have started We $XXX XXXX. a cash to continue the of million legal a estimate. as the project We to is we year a difficult discussed exposure the to performance. full is here But expect very non-core have this as majority ramped cash we And business, earlier. for of still complete now timing already picture dispute, XXXX, about have more left solid

me I to our Accelleron, briefly actions. portfolio Bjorn E-mobility let's let Bjorn, focus just turbocharging over spin Before earlier, business. update off hand on to decision briefly you on so mentioned our our

a ABB as basis to our belief the on is one continues simplify technology future will both ABB while shortly. Group on full and full plan distribute the on only should Accelleron the Xrd SIX sustainable shares on spin-off by As AGM approved Process that will AGM enabling invitation and approval resource ABB’s Provided reaching we yesterday, Electrification be is for the Exchange held. are exclusively will The Automation. our quarter. our the precedent a Accelleron on more a announced met, listing an This to the potential kind, in strong at spin-off go and to efficient engine share focus third companies. be Automation we benefit of of a its and September, its the purpose October. part our conditions with able in out in division to leadership that concentrate Swiss large XX is ABB Xth shareholders for pro-rata industry for dividend the means spin-off still that as It portfolio subject planned will for of it

We have And that, of the would transaction. order team I Markets Accelleron back for related scheduled Bjorn. you to August, on like in to this exciting more learn management Day a XXst and for over focusing to the with hand meet Capital and about it company,

I out might on that me Timo. few you now, a have well so mention strong of the note. come to I as you, ask first QX seems will weeks feeling Thank a it anyway have

it course, these Of how these times mid-term. demand high seen are and to be inflation impacts remains uncertain

in there know, a downturn you the As news. is about talk

prepared ready We division I changes. always a decentralized do in times, a part a guys, in we always are should say act can to and good be of and it we swiftly prepared, all being then organization. good market have the plans is also manager scenario if planning, when these

take I’ll look XX, more lastly, quickly feel testament on past. the be I the we And COVID comparable the improved, can that, special open compared operational way XX impacted the the digit revenue and is remain our our expectations to resilient the to for through Slide in double downturn good now from business think I margin But we importantly, quick quarter. in excluding that promptly. growth sequentially their points the with to all a customers anticipate QX. a act at QX. let second EBITDA Ann-Sofie and Q&A. items We on basis we are And active high level

said, from [Operator now. Uglow open. Q&A come the for line Ben first the Instructions] will Ben, up Morgan we'll open question with your and Stanley. be should And let's that start Yes, at with that

some Good Hope cash of the morning, is really XX I'm a has the what percent. little are at within just But question understand also bit in Timo. a sort if and better in second when to and for Timo odd well. variations. is I And is the Ann-Sofie, look, cash different particular, we come basis company. dynamics. of look the big divisions, Corporate quarter, terms your is and on at in slightly flow down there curious everyone Bjorn I My months three everything looking artificial realize understanding

then which to sales? know coming what wanted the is from is level, be I And different cash? down? question. a do million wind managing to Corporate, And first the change in biggest intersegment coming clarified is bit base terms and that I that $XXX it project that seems that's low the Corporate you've non-core divisions something in of think nearly Is Motion is to is effect my or there divisions capital with a So restructuring, just are working or outflow. their to cash, divisions, not. is, it’s So the is it are actually with the off do way the other in the in line, Is items, Motion legacy that and okay within to related, really the

earlier is And the Motion. train is the and Okay, there. good there's bit to spoken QX we in to providing those retrofit we the probably transaction the and quarter have other is really go a but like catch internally. Motion is impact other about, expecting exit items last we traction expecting because to quite business But a biggest QX there this Motion and impact Thanks, from that between core the cash Actually, Corporate which there. Corporate we Ben. are QX. driver think this full strong for and here There actually cash, recovery that's from on business Motion for that's in some key moving the the and a important that while did the we business, execution that be There components up are very between this change in point that cash then from ATV are Corporate QX strongly general is cash that to Motion that and move normal really mainly I Motion, things our happens from have it's flow causes is all trains. exit main exit the could year, contract, why a part, Corporate That's take way in because to then because will and which in we train up the that retrofit down project we delta. full when a actually

One in you we've Timo the of And on operations. from last a billion last a if down going of pin dollars at I'm Understood, past that year, run million. the thank was because up, and the down now follow rate a look talked second $XXX - that about to the little half we're I try bit cash you. and

getting missing? type principle, why So be this half headwind of the that year? you I'm any that Is of no there second the reason to $X we billion there's rate saying shouldn't are in that back in run in

tie is can numbers Well, reported of at is look I some if ago, there if up cash balance the our free I just this, in inventory, flow from year But gave the But cash from and is more a the well. first as about on And numbers also biggest talk XX%. about you volatility. in sheet inventory. all, up

On of other you order look if hand, the up and is our half. book, out convert that we at expect same at the XX%, order backlog, order second to our XX% backlog time,

that's And business and we during build book $X.X a up order in more second strong So quarter. conversion. billion about bill had also

like there $X.XX you saying that. have clear know, numbers work should So that's earlier justification, that and at look is really well. stronger I if QX. even it And of operating had for out a we history you billion, cash why as ABB, clearly stronger cash, flow why even also expect a perspective, QX, we mean, I'm then $X.X billion

on items I last there which billion. free if some year. about And see at have here, you cash then the mean, flow, let's year, we So year happens during are had And what about we that. spoken this look $X.X

$XXX impact or have the the impact, about retrofit now full had million. train we bonus we SJ So

separation from and And cost forth We have approximately ATV. $XXX from impacts so we then and other million. have impact that's the also some

billion there So expected performance the of have $X a to short the bit for very year. cost number would be the if out I put solid for may

you I'll Thank you. very on. very helpful. much. That's Thank move

on I sense to that in or the next you another on, have moving think. question the question Moving we’re

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guess - guess Thanks I of actions to as just sequentially. of you everyone. year, for I given developed for continue obviously add each on questions. terms feel the taking through. you balance like if if some seeing to I'm morning, costs start the good the I to interested need sort how in prices. in wanted we take or we're a And of strong mentioned divisions pricing comment, or that more we the to my I still Hi, I went comments just guess, of increase? it's

the understand question right I Did well, regarding I hear very here, didn't pricing?

sequentially, to compared Yes QX compared QX?

Yeah.

Okay.

has but manage all really costs now and been a I think for are production increases commodities this. the this these our chain, coming fully good energy in from operations I the and very up group and And or dealing think, overall, and the think year, the from I inflation of a all in operations way. with the supply

doing So we're the covering as we’re actually with today cost pricing. increases,

X% increased numbers, the at probably X% from you of on those out see looking those increases that are of you're If volumes. coming X% price and

and of said and in weeks So, we the have we recovery really that. and with during after shows that the constraints first that bit been quarter five big China, Shanghai, in And the for that a the with dealing then that shutdown second a the in factory coming little quarter. was closed especially coming in,

of forward, is commodity of relief. have say to at but prices coming see it’s course moment, which down actually type we some the Going will difficult

- course, the some and don't so see signals to high been have with then of to Stream, On going and effect. Nord to interest And the what think have side, today, what's there happen energy on. is I some know all positive going we we've waiting we came

job. in are based doing think and the XXXX this driving the I But inflation we well are be easing good part. our pricing, be there implemented say hopefully, future. expect during are quite So do can value should there been some and time, businesses of monitoring the coming a which businesses in that this we will all has prepared, the But we that kind

of oil in seeing I follow and and level talked again, about mining Process a coming activity you sequentially and question up you're of being metals, I'm on with that can good, marine particularly whether and just if side? an probably amongst and gas development through your And Automation, increasing interested, customers, terms the

to that it about mean, I has time very more I is you talk spend it. because it's Process more seen love have and with like business quite developed good I this Automation Yeah, I

in course industries transformation. with really kinds it is this are In contribution accelerated We driving both I gas and But free And prices our the mining. course, But the its like course, part we is of they mining that activities electrification, are have big force. oil the more energy industries, of of companies, within higher and called of have and oil automation are a is first that that, these oil in today where some which which part of think of gas also. is these and we which investing big companies, cash is contribution during large what into of renewables the companies in and a important the some area. the of seen have year, half of

see you've a are performance that add So happy of performance, projects of so they to the course, good can to from I on and where are mean, seen Process value we job good them. customer, lot focusing going XX% Automation extremely of we the in over

Thank you.

you want to? do through with he major you he how times, says tool. do couple as to from risks? from continues Thanks, be economies recessionary wants to out Joe it questions Andy. and to If of I'll push get a view And cancellation at Cowen, backlog Okay. the there, And moving Bjorn, we comes know, start may web expand here

on start die our because they our know, live Okay, a very XX we Yeah, little have that orders there. you as bit orders are carefully I and hand monitoring the divisions, can by there. maybe they

positive the in six quarter the far actually and part you'll in you a that that. We been demand our as some now have coming also from expectation uncomfortable careful booking now book releasing during which second quite orders that there the with, has half order been the will of and market very be with we so here. quarters seeing ratio are good in strong we see And feel book-to-bill see so in

optimistic. pretty we're So

also, also book course are the these which of think far - cancellation that but there secure so I good. also the you cancellations. will are So a feel And of of far, order quality fees no where lot we had so orders which

question were has here since of to expected Timo, to kind you here move and why outlook [PA] He strong, are perhaps Joe another you says which down PA Okay, aimed margins guy. is quarter-on-quarter? are they to

for the question. Yeah, thanks

So called out we there some I mix actually execution strong QX. in and is impact project think

nothing no else than drama change in is mix a there So small it's so there.

we we said be on which margin, As to strong last year's expect a at was itself. approximately in PA margin level

is think coming is have with the on the is it can you the But is service. also quite coming part larger has That's book that, out big margin, PA some service business effects quality of you And the that have pressure Maybe I which then I know, a you business of in order after. the good. out it back can means some get when delivering mention small volumes project, between you're quarters. which that different

And then from the we'll go call. back to conference question a

We have Mattias DNB. from

Your line should please. be open,

margin based time. sales, XX trying basis better I your I excluding Because the I'm EBITDA thanks just to from to Hi, that get if items. QX I XX.X%. take the just and Is the the on XX.X%? divided the exclude your improvement assume by XX.X, items operational special where the say in you that guidance everyone, Corporate so you for a the is bit sequential points understand

And so the just understand trying here? dynamics to

to we for anyhow. tried clear, very question Yeah, but the yeah, thanks be

XX points, which called you out simply were take are at are at out XX.X%. were the XX.X%, saying we we So basis

to to again constraints we going go up because were year to said well And the QX. go into are from We then this there. and expecting, we that the QX actually in this expecting is said year, already up line we what QX given up

So XX.X%. our QX was

XX.X%. we we to can say And go up this QX. reference from Now there expect for point sequentially

that get our on financial add it's operational from dividing probably revenues, the Page in mentioned Mattias, the with X documents. margin on may I you you reported you revenues, if find And to XX.X which the calculation, actually made

straight. So that that should put

I remember Thanks, that. didn’t

just may, really the that customer for you and throughout if when demand, the I read divisions, segments, comments, clarification. quick? Thank I talked geographies, world, strong about basically, surprised was on. A one, I you so second

where is So any to, would just highlight any you slowing I'm all notice in that you curious area there the at signs moment? of

not is or that [right]? is That strong,

That is not softening.

I mean very only I Oh, mean the it’s softening, clear. -

at operating, If it all where has business. good segments been the over you our looking we're look quite

QX, this We commercial been that. a China, or change, out have off, building in but mostly is no to actually was in which of in building pointed so from say, softening and that there segment one has course, is

you. Thank

much. Thank you so

Matthias. then And the Deutsche Bank. question Gael up we'll call. that, next at the we Thanks, line conference from open take for the should And

Thanks Good very morning, everybody. much.

morning. Good

Two questions, please.

The on, I strategy years and here for first now planned here. the now distribution with from shareholder friendly I has few Accelleron. buybacks guess, of been with one is - ABB very the ongoing mean,

I and grow it’s but think investors business a like many develop So you great obviously, see bit the more would actively. to

term, bit one. two So your in four M&A And about number pipeline you Process update to on And us particular, number a some So key Automation that's give talk of PA quarter? an Accelleron? question much. about the the divisions? perhaps in margin this medium the excluding the us Thanks target in contribution the Could of could in give PA. and very is focus range the color areas for on you turbocharging business question

of every XX we, then the starting closer and focusing years, that businesses the in into and quality up stability, levels. say half mode. mode. the follow company our half were out a And we the and two and growth. I for growth new good revenues for PA. would for where we're in discussion strategy on think company responsibility what I’ll up Okay, a you, in margin over question very two and ago Thank with I then a say And said, in the strategy, it's - year are to question. and have the of the came the I the hand I’ll start XX% profitability, to we moving growth we right the valid course, decentralized and XX% I set the up going to of getting much the division businesses of Timo very would And Today, we here in

We build we be clear call a ABB. on up purpose I want very, to also be what that. the to want conglomerate. very of the, don't We

that find are to So we remains this we up. we and sustainable we Electrification become And and develop by to course more and said why our group support our customers further to time business. Automation keep some that is, businesses And our course, helping the ABB the do purpose. built need spent that in to we that of of quite together going

say do mean to doesn't is not been are that that think on So of be focus be company? the businesses, Accelleron full and to it's are them purpose one not environment from both actually phase part And there well as if number need They that their going focus forward. to driving that businesses. to turbocharging, divisions. a if very and our to it we strengthen We it, not much very need in is support which you're position, businesses their fantastic we as because Why ABB you’re clear should think coming deserve that, Dodge, two these called they or But where developing businesses. great I'll XX you're growth, really these in businesses. today number going and an these into growth on our growing

that analyzing have we M&A can where XXX companies imbalance today a are activities. to make and we looking So it comes some we of when pipeline maybe

we in looking support if will you I Electrification. So the But maybe to are it different that of would division of area, a least also small believe within sizes, Automation size, at, or acquisitions business we be size, this the five our size. at medium year, know, business

bit little of companies, a a make in them now in valuation, course attractive, that technology ABB down software which at also looking bit which come have little forward. are more strengthen We would other but

it's want think you a forward I ABB question. So line see purpose. that going to we grow in that will And with really great

on somewhere today been And that, yeah. we put points XXX about impact release basis on PA, on actually performance a varying Okay, and turbo XX but little it that turbo to there. say its then so on can that has between question, XXX you out points all the and basis press

Markets would Capital like plus minus, So the that. down they target of over to to being XX.X%, that look actually Day, Day midpoint contribute XX.X% so maybe and they said a from go had think Capital ABB’s well take a if overall Markets something that PA I And you and on XX%.

the would XXX about So gradually to of point XXX it's during basis up from that those expect you that from then move course years, impact. they would basis but of kind point numbers,

Okay.

very much. Thanks thanks. Okay,

conference the Sachs. And the open move question Daniela we up for We call. at to the next on line Goldman on Thanks, Gael.

questions. Thanks for good morning. Hi, my taking

about improving first, for slowly how And on just your chain. supply think up, type And performed check were question. we for us any optimal year you the to sort is of that Thank be from this to Do next get adjustment you'll utilization sale be things will year? full that? commentary value just or like Robotics, the cash So at you I they on would the able the year of on now remind a have option, given could guess Can it once versus you've how the how of is then Were you. on is you what given backlog year there just north with signed thing that? we large inflow conversation you I think Grids. That's that, having, since Is from next much expect my delivery? next agreement exactly mechanisms remaining we past, you in just in should do near Power XX% the margins think put of guess that to Is some how the follow main had seen term? one that you you for quarters actually that I doable wanted XX%. I

a Robotics quarters’ actually are have And we The of Timo challenge growing up supply the the finally, the the already allowed way. the during XX% hand the it from actually Discrete seen you've an Thank sneak beginning, the saw there. in to it very say year. chain course business from that good with also you, relief quarters per is said Automation, ownership second That's and be I severe. over not the back start And improvement that but business from improvement way. improvement actually from XX% in seeing volumes should orders look Robotic been and of half delivered this B&R these have then XX% I'm business type will there. that the XX%, up during now business they have we [Dodge] I came I deliveries both that. semiconductors last we to have well had I'm during Daniela. seeing regarding see and increased. the over I’ll the upon in also robot been in they it out low we business now the a which quarter. good we coming semiconductors and during a happy that relief while

themselves year, to with line Next should where in they have be. be committed they

developed. So are let's coming will But business. see that through how Robotics seeing in the finally, be we improvements

Okay, yeah, option. put and on the

mid So have this is of number. type $X.X we been next year, about and talking billion

shouldn't bit, it also be we said there are from a some too that vary it where Now, in but system far could that. the mechanisms

it way. put that just let's So

Thank you very much.

you. Thank

Guillermo from Okay. And for open there? Guillermo, we call. please? at Yeah, take up I'm you another line the UBS, And question the are we'll conference this

leverage ABB half? to inventory be to in near we go semiconductors term morning, wanted I'm to into with of the bottlenecks margins in obviously, potential the Bjorn chain probably Yeah, One I Good a you. Group hiccups questions. resolved ABB of your easing, when your the backlog. everyone. Ann-Sofie, regards improvement, with supply limits terms because are at despite guidance also margin see of, basically be inventory is of ask And distribution levels, any as there any channels morning, I will will basically wonder your coming distribution we channels Good i.e. maybe and limits the Timo. aware to overall, whether levels it couple Whether in the here. guidance in react obviously to Thank the able Group and I your from or any in in at we hiccups normalize? second that And at the improving are will should would part how or group that unleash any company which wonder level? potential embedded operating

be course, maybe going But for through the from some not also The about to where the that these - demand lower makes volumes capacity, going the that consumer that little chain Thank year but you, of the bit get of very much on remember me we, you’ll this order to have book, year. forward, we let to for of we And well. But that industrial how will huge in have a their I, up their some commitments the are so deliver not into during we are ramped Guillermo. to Timo talk us much curious let help on and to better part. have getting I to QX, but on semiconductors. I’ll their business that there the because to suppliers. sure challenges QX be market. from we equipment any we now saying able there, goes us, margins actually any I yet situation But which of order have really next some out answer we this and on on managed some a through companies compared of see course, probably measure me a supply effect we do number challenging huge good of of quite better has come probably we last see don't a severe fully quarter, get have reason of quarters, the which discommitment the the volumes suppliers. of And lot on the the company from to job, even a were think I'm fantastic was we have them We where really to market done though book semiconductor, and nervous group. that

much that we this that divisions I see see before Timo that an have. guidance But compared we that QX me because a go in lot going into the is to go varies in asked during So how improvement gave and then of see it different quarter. that through? not going we of you course to should to I'm between the margin is what

because our gross and referring business backlog margin. drop course this maybe the not on how to on on Backlog Bjorn lot margin just through how the to gross some maybe book-and-bill, term so Yeah, short of it's answer Yeah. continues develops. up. was as depends puts exact an takes, But go also

So when benefit. us some we clearly give convert that will

about of on top time we to are the from that of then a $X.X supply would second on then get bill good billion, should reasonable course get through. get said, book business, expecting a and year. And drop half the if we we during of backlog I we exactly all As see the

it And now base raw materials levels the maybe I Electrification. so the I easy to increase see and you. of price whether environment. declines significantly [indiscernible]? kinds commodities from and when second some raw these you. those you on still dropping in and should wondering maybe find of And are and materials and Thank question was you in commodities also then a Thank guess

Sure. Sure.

somewhat delay part would some prices we the of that through divisions When course job this downside. it of commodity superb seeing of course, mean, I at look in happy performance Of Electrification, it will coming are hedge here extremely Electrification, most we our our dropping we Well, businesses. have we say we doing a of in get And which through. are really are from. you've financial and improvement I dramatic seen in the

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these So businesses, are. there need also are And to that what they where are and they services market. But we are costs that some demand value get they into course products be and our offset inflation. know putting - things close measuring could are they the we're that of have affect for cost exactly the on effect the and to increases to that sure could make the the we customers, the the

optimistic, not pretty hope or no it's comes society So that to inflation pretty half. is not when with clear. all good the second but we that inflation, releases be companies And because of for some it there for could course, we're

are bit you scenarios said earlier you now the what more for can difficult you also see is to scenarios. read scenario I that we a that other than the and that business key you point of direction. course, which some to have really at doing moving a planning early when is highlight react is certain think Bjorn are is times. to this different just this we environment, Because And then

and do business that. or all to divisions doing what areas are early of our know you So

us business general. a it's management very So for in tool important for

you. Thank

Okay.

I you. I but third drop online. one, have will a Thank it

first I'll Thanks. Will outlook Mackie - from demand China your characterize with that in how you were of tool. now questions Guillermo. declining? his business is actually cut in lockdowns It’s impact couple online question from question there from from would a trends the and Thanks, and is

And overall. China China in see, side, the small then the actually so to this let's in up positive course the during mood which in demand mood the during where it [indiscernible] difficult saw five PMI we come bit but the than over living And saw COVID little in had about different of China. made is out Index, what the is we lockdown in for the industry ease to yet. actually to has areas effects saw areas ending Yeah, a not on we talk also related more was. period. there that weeks are that coming the the I quarter shutdowns quarter XX% good There industry after we lockdown, mean, that the a China during call

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Okay, may Motion, how and develop in versus that this could he break and has take another price question down QX? Within you we'll Do And to? on volume impact straightaway. you please revenues? want

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change quite is So going significantly expect into now, but that's QX. about this how we it to

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we'll the conference take call, question good. Very please. And next the from

from Alex hope. America/Merrill are you Lynch have on We the Bank I Alex, there? of line,

morning Timo. good good I am indeed. morning Ann-Sofie, Thanks, Bjorn,

Good morning.

to weeks Europe, think I sort of interaction quarter, the in all most wondered - with Bjorn saying this operational XX to address and the three I'm I response unclear. many in one all the to respects, where and I guess where think business I that's that you requests if about talked talked of trying the areas a just customers of what more to first And about the on I'm to inflation address their it obviously greater more the responding probably imperative is respect plan how and to for I But to in the you understand context of terms because in uncertain was to downturn. thinking And on your in months customers thinking have start. reacting region think for their same just acting just good months. than a got efficiency lot of the what even are to I about question place or very on a next sort think really invest energy ago. six six could, that's guess of we're are preparations you trying place with you I - of

generic like I context of I'm question, your So those know what but slightly hear the - trying a I'd to just it’s conversations understand thoughts? I’d are. be to

question, we And first a I where the are I'd elaborate from because Europe of bit to viewpoint, to in costs all people views. term with two you increases inflation future. in One segments a the investing bit good - say have some to when building ABB in spending Europe paying quarter in And is, demand, in up be growth are saw operating. is Europe that little more during the comes well happy on it's I to on . bills little if in effects think Interesting money from course, as demand it the important the that points the short actually energy crisis can as of than look

this our to meaning comes automation On think more but among the committed to drive very I that impact with I are And it in is electrifying Europe our Europe, think we renewables, to the much we customers, from to the other also part. when that do Europe, positioned and towards perfectly this. I transformation in participate purpose perspective, think hand,

to fuels electrification from lot moving a where in only I things. operations and So place see of and there mean, we we’re there long to we term. well taking do the if more lot of ABB is renewables is contribution. our I be of fossil that do in are I away the all can can own is is, here that course, for transforming looking believe medium going strong a force, positioned I to driving And think

have underlying the want think to? mitigate to short And banks we so during some in than like with we be do little can the Anything you So And demand, is we on. we a hiccups, be more bit if down. would term and get over year, normal will believe, the other of inflation to ones hopefully. can there strong pretty we continue I to can course, Europe. can and then get environment the central had inflation or that, last But clear, the and hopefully that

No.

ABB. So that's what a I it bit that we little from see think

Okay, great. Thanks Bjorn.

should we one if the short. off try the from - Suisse with it we from finish We'll we'll and And line. And Alex. have call. Andre conference keep on Thanks, question Credit last

sales and much if squeezing or light being ask or of quantification threat? global maybe anecdotally perspective, energy counter lot kind the you're to to wondered Europe that pickup but that's Europe Electrification and can solutions business up of geopolitical number sequential Is a confirm quite very Electrification trend your and from any offer but obviously kind keep I you for yourself you position specifically, to one to in. spiking of of push two energy the of specifically about supplying I saving energy I'll a of obviously that as And efforts, a to we and also some question. of me in quick really something in the prices for efficiency, wanted for that? in Thank anything hearing deny just that global player doing there order that that

transformation course, industry whole vehicles also important growth seen you’ve of electrification in and is, see we business within this into least this, is really trend is electrical see an numbers there orders to not Europe, business. vehicle part part which that one Electrification good]. towards that charging, based of our the XXX% back is [are from of business good coming can of EV of And the Coming that on the and over

to really becoming is whole accelerating course, of of a course, So Electrification, that, and in it's infrastructure this a is behind important. relation which

ourselves also, yeah, a to So see our position both position. it ABB we products great with we services, Europe, ourselves in Electrification think well has it doing I in positioning very a when businesses, divisions the are strong and are and comes. job

GIS a could we different well part. - look strongest job Europe is positioned, But to as think the and go If a we well the the areas, which when power ways really it both to US two in we've financial holds China still are services while performance. strengthen comes do better player. has number deliver to there I think at still our Even US, helped as us doing you made we being investments become though to big good divisions two I but up to got our they're in

Thank you.

Thank you.

And to but whenever it. reporting Thank overrun you summer cautious close a much still. get and of time we'll in you season, slightly us everyone's holiday hour joining have good the here, very for

Bye, thank you.

Thank you.