In This Article:
-
Operational EBITDA: Increased by 10% with a new record margin level of 18.1%.
-
Gross Margin: Reached an all-time high of 37.4%.
-
Earnings Per Share: Up by 6%.
-
Free Cash Flow: $3.9 billion, corresponding to a free cash flow margin of 12%.
-
Return on Capital Employed (ROCE): 22.9%.
-
Comparable Orders: Increased by 7% to $8.1 billion.
-
Revenue: $8.6 billion, up by 5% on a comparable basis.
-
Electrification Orders: Up by 16% with a revenue growth of 11%.
-
Motion Revenue: Up by 6%, achieving a record quarter above $2 billion.
-
Process Automation Revenue: Improved by 4%.
-
Robotics and Discrete Automation Orders: Turned to positive growth after eight quarters of decline.
-
Dividend Increase: Proposed increase to CHF0.9 per share.
-
Share Buyback Program: New program announced up to $1.5 billion.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
ABB Ltd (ABBNY) achieved a new record operational EBITDA margin of 18.1% for the full year 2024, driven by a 10% increase in operational EBITDA.
-
The company reported a strong free cash flow of $3.9 billion, maintaining a double-digit free cash flow margin for the second consecutive year.
-
Electrification was a significant growth engine, with comparable orders up by 16% and revenue surpassing $4 billion for the first time.
-
ABB Ltd (ABBNY) improved its return on capital employed (ROCE) to 22.9%, indicating strong long-term performance.
-
The company announced a new share buyback program of up to $1.5 billion, following a $1 billion buyback in 2024, demonstrating confidence in its financial health.
Negative Points
-
Robotics and discrete automation underperformed expectations, with a significant backlog adjustment impacting order growth.
-
The e-mobility business was a drag on group performance, with substantial losses reported in 2024.
-
China remains a challenging market, with a decline in orders due to persistent weakness in several customer segments.
-
The company faces geopolitical and market-related uncertainties, with the strong US dollar putting pressure on financial results.
-
Higher corporate costs are expected in 2025, posing a potential headwind to margin improvement.
Q & A Highlights
Q: Can you provide insights into the data center market, particularly regarding backlog and lead times? A: Morten Wierod, CEO, explained that the data center market remains robust, with investments in AI and machine learning driving demand. Data centers accounted for 15% of electrification orders in 2024, up from 12% in 2023. Lead times have decreased to about 35 weeks from a peak of 50 weeks, indicating a normalization in supply constraints.