Industry ABB significantly increases profit in the second quarter
ABB is more profitable than ever before. The company grew slightly in the second quarter of 2024 and significantly increased its profit. The operating profit margin even reached a new all-time high. The forecast for the year as a whole is confirmed.
18.07.2024, 06:53
18.07.2024, 07:45
SDA
Sales rose by 1 percent to 8.24 billion US dollars from April to June, as ABB announced on Thursday. Adjusted for currency and portfolio effects, sales even increased by 4 percent.
Profitability also increased with the higher capacity utilization. The operating margin (EBITA) increased by 1.5 percentage points to 19.0 percent. Net profit increased by 21.0% to USD 1096 million.
The operating leverage effect of higher volumes and a positive price effect more than offset the slight increase in research and development expenses and selling, general and administrative (SG&A) costs, according to the statement explaining the record-high margin.
The second quarter is further proof that the operational changes resulting from the introduction of the "ABB Way" in 2020 have made ABB a well-functioning company in the long term, CEO Björn Rosengren, who is stepping down at the end of the month, was quoted as saying in the press release. "Overall, I am very satisfied with the result."
Positive book-to-bill ratio
Despite the high level of turnover, a positive book-to-bill ratio of 1.02 was achieved. Rosengren is "confident that we will achieve a positive book-to-bill ratio in 2024 as a whole."
Order intake, i.e. the basis for future sales, remained stable on a comparable basis at 8.44 billion, but decreased by 3% in US dollars. This was supported by significant improvements in the Electrification and Process Automation divisions.
On the other hand, development was weak in the Machine Automation division in the Factory Automation business unit and in the e-mobility business in particular. Order intake in the Drive Technology division was also down on the strong previous year.
Short-cycle business picks up again after a long time
In the short-cycle business, orders increased again for the first time after several quarters of decline. According to ABB, the project and systems business also has an "intact and robust project pipeline".
With regard to robotics, orders from the automotive industry have declined, but have increased in the general industry and consumer-related segments.
ABB confirms the forecasts for the full year 2024. It continues to expect an operating EBITA margin of around 18 percent and revenue growth of around 5 percent on a comparable basis.
For the third quarter of 2024, ABB expects higher comparable revenue growth than in the second quarter and an operating EBITA margin of around 18.5 percent or slightly below.
