Key Takeaways ROK's cloud-native tools and software growth are driving double-digit ARR and broad end-market gains. ABB's Process Automation orders rose 45% in Q2, but Robotics segment weakness and debt weigh on growth. ABB trades at 25.27X forward P/E vs. ROK's 31.49X, yet ROK shows stronger stock and estimate momentum.ABB Ltd (ABBNY) and Rockwell Automation, Inc. (ROK) are two prominent names operating in the industrial automation and electrification industries. While ABB focuses on power and automation ...

Core Insights - ABB Ltd's Motion segment reported revenues of $1.84 billion in Q1 2025, reflecting a 3% year-over-year increase, driven by strong performance in commercial building HVAC, power generation, and water & wastewater markets [1][7] - The operational EBITA for the Motion segment rose 5% year-over-year to $360 million, with an operational EBITA margin increase of 110 basis points to 19.6% due to positive pricing and improved operational efficiency [1][7] - The order backlog for the Motion segment increased to $5.72 billion from $5.61 billion year-over-year, with a book-to-bill ratio of 1.17 [1] Revenue and Orders - Total orders for the Motion segment decreased by 6% year-over-year to $2.16 billion, primarily due to a tough comparison with the previous year, which included a one-time $150 million order [2][7] - Weak demand was noted across various end markets, including oil & gas, food & beverage, chemicals, and rail [2] Market Position and Performance - Despite the decline in orders, the Motion segment is well-positioned for growth in the coming quarters, supported by solid momentum in the service business and a strong backlog level [3] - ABB's shares have gained 8.5% over the past six months, outperforming the industry growth of 3.5% [6] Peer Comparison - Eaton Corporation's eMobility segment reported net sales of $162 million in Q1 2025, up 2% year-over-year, but incurred an operating loss of $4 million due to launch costs [4] - EnerSys' Motive Power segment generated net sales of $392 million in Q4 fiscal 2025, down 0.6% year-over-year, with flat volume growth and a positive price/mix impact of 1% [5] Valuation Metrics - ABB is currently trading at a forward price-to-earnings ratio of 23.17X, slightly above the industry average of 23.12X [9] - The Zacks Consensus Estimate for ABB's second-quarter 2025 earnings has declined over the past 60 days, with current estimates at 1.29 for Q2 2025 and 2.43 for the current year [11][12]

Core Insights - ABB Ltd's Electrification segment is a key driver of overall growth, with strong customer activities in major markets such as utilities and buildings [1][3] - The segment's orders in Q1 2025 totaled $4.39 billion, reflecting a 2% year-over-year increase, while the order backlog reached a record $8.17 billion [1][7] - Revenue for the Electrification segment grew by 6% year-over-year during the same period [1][7] Segment Performance - The Electrification segment benefits from effective execution of its order backlog, particularly in medium voltage and power protection businesses [2] - Increased project wins and improving customer activity in short-cycle businesses are positive indicators for future performance [2] - The acquisition of Siemens' Wiring Accessories is expected to further support revenue growth in upcoming quarters [2] Market Challenges - There are concerns regarding muted customer demand in the hyperscale data center market and weakness in the residential building market in China [3] - Global trade policy uncertainties may impact the segment's near-term performance [3] - Despite these challenges, ongoing electrification trends and a strong order backlog position the segment for continued growth [3] Peer Comparison - Eaton Corporation's Electrical Americas segment reported net sales of $3.01 billion in Q1 2025, up 11.9% year-over-year, with a 6% increase in backlog [4] - EnerSys' Energy Systems segment generated net sales of $399 million in Q4 fiscal 2025, reflecting an 8% year-over-year increase, driven by data center growth [5] Valuation and Estimates - ABB shares have gained 13% over the past six months, outperforming the industry growth of 6.5% [6] - The company is trading at a forward price-to-earnings ratio of 23.61X, slightly above the industry average of 23.13X [9] - The Zacks Consensus Estimate for ABB's second-quarter 2025 earnings has declined over the past 60 days [10]

Ann-Sofie Nordh Greetings, and welcome to this presentation of ABB's First Quarter Results. Next to me here, I have our CEO, Morten Wierod, and our CFO, Timo Ihamuotila, and I'm Ann-Sofie Nordh, Head of Investor Relations. As per usual, Morten and Timo will talk through the results, and after that, we focus on today's announcement of portfolio change. So today, the presentation will be a little bit longer than we normally have before we open up for the Q&A. And with that said, I ask you, Morten, to kick off ...

Z U R I C H , S W I T Z E R L A N D | A P R I L 1 7 , 2 0 2 5 , | M O R T E N W I E R O D , C E O ; T I M O I H A M U O T I L A , C F O Q1 2025 RESULTS Strong start to the year; Optimizing value creation with portfolio management Important notices This presentation includes forward-looking information and statements including statements concerning the outlook for our businesses. These statements are based on current expectations, estimates and projections about the factors that may affect our future perform ...

Financial Data and Key Metrics Changes - 2024 was a record year for the company, with improvements in most financial headlines and a new operational EBITA margin of 18.1% [5][7] - Earnings per share increased by 6%, and free cash flow reached $3.9 billion, corresponding to a free cash flow margin of 12% [8][10] - ROCE improved to 22.9%, indicating better operational performance and effective networking capital management [45][46] Business Line Data and Key Metrics Changes - Electrification orders increased by 16%, with comparable revenue growth of 11%, surpassing $4 billion for the first time [27][29] - Motion orders remained stable at approximately $1.9 billion, with comparable revenues up by 6%, achieving a record quarter above $2 billion [31][32] - Process Automation saw stable orders, with a 4% increase in comparable revenues, driven by backlog execution [34][36] - Robotics and Discrete Automation experienced a positive order growth after eight quarters of decline, although impacted by de-bookings [37][38] Market Data and Key Metrics Changes - Comparable orders increased by 7% to $8.1 billion, driven by strong growth in short-cycle businesses, particularly in Electrification [19][20] - Regional performance showed Asia, Middle East, and Africa up by 4%, the Americas improved by 7%, and Europe increased by 9% [23][24] - China faced challenges with an 11% decline in orders, primarily due to backlog adjustments, but overall Asia showed resilience [23][24][132] Company Strategy and Development Direction - The company aims to optimize its business portfolio, focusing on energy transition and automation efficiency [11][12] - A new program for share buybacks of up to $1.5 billion was announced, indicating a commitment to returning value to shareholders [10] - The company is focused on becoming more transparent with ROCE and aligning reporting with operational performance [9][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving new records in 2025, despite geopolitical uncertainties and a strong U.S. dollar [50] - The company anticipates mid-single digit growth in comparable revenues and stable operational EBITA margins for the first quarter of 2025 [50][51] - Management remains optimistic about the data center market and the potential for increased energy efficiency through technological advancements [61][122] Other Important Information - The company has launched a new tagline, "Engineered to Outrun," to better position itself in the market [15] - There will be reporting changes starting Q1 to enhance operational focus on gross margin and networking capital [47][48] Q&A Session Summary Question: Insights on Electrification and Data Centers - The data center business accounted for 15% of order intake in 2024, up from 12% in 2023, indicating strong growth [58] - Lead times for data center products have improved from around 50 weeks to approximately 35 weeks [62] Question: Margin Improvement Guidance - The company expects a slight margin improvement in 2025, with operational leverage from revenue growth but also facing headwinds from increased corporate costs [66][70] Question: Cash Flow Guidance - Cash flow is expected to remain similar to 2024 levels due to increased CapEx investments, particularly in North America and India [81][84] Question: Electrification Growth Drivers - The electrification of buildings and industries is driving growth, with a focus on replacing traditional energy sources with electric solutions [92][95] Question: China Market Insights - The Chinese market remains mixed, with growth opportunities in utilities and data centers, but challenges in the construction sector [132] Question: ABB Way Contribution - The ABB Way has contributed to margin improvements, with ongoing efforts to enhance operational efficiency across business lines [138][146]

This presentation includes forward-looking information and statements including statements concerning the outlook for our businesses. Q4 2024 results Z U R I C H , S W I T Z E R L A N D | J A N U A R Y 3 0 , 2 0 2 5 | M O R T E N W I E R O D , C E O ; T I M O I H A M U O T I L A , C F O Ending record-high 2024 with strong order growth and positive 2025 outlook © 2025 ABB. All rights reserved. © 2025 ABB. All rights reserved. Important notices These statements are based on current expectations, estimates and ...

Financial Data and Key Metrics - Orders increased by 2% in Q3 2024, with a positive book-to-bill ratio and record-level margins [3] - Revenues improved by 2% in the quarter, but excluding Robotics & Discrete Automation (RA) and E-mobility, revenues were up 7% year-to-date [3] - Operational EBITA margin reached 19%, with Electrification contributing significantly at 24% margin [4] - Free cash flow year-to-date was $2.6 billion, with a target to match last year's $3.7 billion [5] - Earnings per share reached $0.51, up $0.03 from last year [14] Business Line Performance - **Electrification**: Orders grew by 10%, with revenues reaching a record $3.9 billion, up 10% YoY. Operational EBITA margin hit 24.1% [15][16] - **Motion**: Orders decreased by 4%, but short-cycle orders remained stable. Revenues were up 1% to $2 billion, with a record margin of 20.7% [17][18] - **Process Automation**: Orders remained stable at $1.8 billion, with revenues growing 6% YoY. Operational EBITA margin was 15.2% [19][20] - **Robotics & Discrete Automation**: Orders dropped by 4%, with Machine Automation facing significant challenges. Revenues declined by 20%, with a focus on cost-saving measures [21][22] Regional Performance - **Americas**: Orders declined by 6%, but excluding timing impacts, orders grew at a double-digit rate [12] - **EMEA**: Orders increased by 8%, driven by strong performance in Australia and India [12] - **China**: Orders declined by 2% YoY, but sequentially remained stable [12] - **Europe**: Orders grew by 6%, with significant improvement in Germany [12] Strategic Direction and Industry Competition - The company is focusing on the electrification trend, with strong demand in data centers and utilities [9][10] - ABB aims to outgrow the data center market, which is expected to grow in double digits in the midterm [11] - The company is investing in R&D, with 55% of R&D employees focusing on software and digital solutions [67] - ABB is also focusing on sustainability, targeting an 80% reduction in Scope 1 and 2 greenhouse gas emissions by 2030 [80] Management Commentary on Market Environment and Future Outlook - The company expects full-year revenue growth of below 5%, with operational EBITA margin slightly above 18% [25][26] - Management highlighted challenges in Discrete Automation, with normalization expected by Q2 2025 [32] - The company is optimistic about the long-term growth of automation and robotics, despite short-term challenges [90] Other Important Information - ABB completed the acquisition of Födisch Group, adding $55 million in revenues, and closed the SEAM deal, adding $19 million in revenues [5][6] - The company welcomed new business area Presidents for Electrification and Motion, both with long careers at ABB [6] - ABB is focusing on cost-saving measures, including a 25% reduction in headcount in Machine Automation [22] Q&A Session Summary Question: Electrification Margins and Capacity - ABB has added capacity in North America, particularly in the U.S. and Mexico, to meet market demand with shorter lead times [28] - The company does not believe it has reached the peak of benefits from volume drivers in electrification [29] Question: Machine Automation Trends - Machine Automation is facing prolonged inventory adjustments, with normalization expected by Q2 2025 [31][32] - Germany showed a 33% growth in orders, but this was from a low base, indicating stabilization at a lower level [33] Question: Pricing Trends for 2025 - ABB expects pricing to remain a positive driver in 2025, with a focus on better project execution and cost control [35] Question: Order Backlog and 2025 Outlook - The order backlog shows growth in Electrification and Motion, but a significant decline in Robotics & Discrete Automation [38] - ABB does not provide specific guidance for 2025 but expects to remain within the 5% to 7% growth range [37] Question: Cost-Saving Measures in E-mobility and Robotics - ABB is focusing on reducing variable costs and streamlining fixed costs in E-mobility and Robotics, with a focus on R&D investments [40][43] Question: Seasonality in Q4 Margins - Q4 margins are expected to be lower than usual due to higher corporate costs and losses in E-mobility [44] Question: Competition in Robotics in China - ABB is facing increased competition from local players in China and is focusing on a "China for China" strategy to remain competitive [46][47] Question: Data Center Revenue Split - ABB's data center business is growing rapidly, with strong demand in medium voltage switchgear and low-voltage UPS [51][52] Question: Medium Voltage Profitability - ABB's medium voltage business has seen significant profitability improvements, driven by trends in data centers and utilities [91] Question: Software Strategy - ABB focuses on combining hardware and software to solve customer problems, with 55% of R&D engineers working on software [104] Question: E-mobility Recovery and Industry Consolidation - ABB is focusing on renewing its E-mobility product portfolio and will consider IPO or industry consolidation when the market is ready [109][110] Question: M&A and Leverage - ABB has capacity for M&A, with a net debt to EBITDA ratio of 1.4, and could comfortably increase leverage for the right deals [112]

Company Performance - ABB has returned approximately 22.5% since the beginning of the calendar year, significantly outperforming the average return of 6.8% for the Industrial Products sector [4] - The Zacks Consensus Estimate for ABB's full-year earnings has increased by 3.3% over the past quarter, indicating improving analyst sentiment and a positive earnings outlook [3] - ABB belongs to the Manufacturing - Electronics industry, which has gained an average of 14.4% this year, further highlighting ABB's strong performance within its specific industry [5] Industry Context - The Industrial Products sector includes 218 individual stocks and currently holds a Zacks Sector Rank of 9 among 16 different groups [2] - The Manufacturing - General Industrial industry, which includes Applied Industrial Technologies, is ranked 94 and has moved up by 6.7% this year [6] - Applied Industrial Technologies has returned 18% since the start of the year and has a Zacks Rank of 2 (Buy), indicating solid performance within the sector [4][5]

Financial Data and Key Metrics Changes - The operational EBITA margin reached a record high of 19%, an increase of 150 basis points year-over-year, driven by strong performance in three out of four business areas [16][78]. - Earnings per share (EPS) increased by 22% to $0.59 [19]. - Free cash flow for the quarter was $918 million, contributing to a total of almost $1.5 billion for the first half of 2024 [36]. Business Line Data and Key Metrics Changes - **Electrification**: Orders grew by 7% on a comparable basis, reaching $4 billion, with a strong performance in data centers and infrastructure [21][24]. - **Process Automation**: Orders increased by 10% year-over-year to $1.8 billion, with revenues surpassing expectations at $1.7 billion, a 12% increase [28][29]. - **Robotics and Discrete Automation**: Orders showed slight growth, but revenues declined by 8% to $833 million due to challenges in the Machine Automation division [31][33]. - **Mobility**: Performance was weak, with a noted decline in the E-mobility business, which faced a quarterly loss of $87 million [20][11]. Market Data and Key Metrics Changes - The U.S. market remains robust, with good demand in short cycle business, while the American region overall declined due to timing of large orders [15]. - AMEA region saw a 9% increase in comparable orders, particularly strong in Australia and parts of the Middle East [15]. - China experienced a year-over-year decline, particularly in Process Automation and residential buildings, although it remained stable sequentially [83]. Company Strategy and Development Direction - The company is focusing on capital allocation towards growth, including investments in sales, market coverage, and technology with a target of increasing R&D spending to 5% [7]. - There is an emphasis on M&A and bolt-on acquisitions to enhance growth, with a strong pipeline already in place [8]. - The company aims to support customers in decarbonization and resource efficiency, aligning with sustainability goals [11]. Management's Comments on Operating Environment and Future Outlook - The management acknowledged a challenging external environment due to COVID, wars, supply chain issues, and inflation, but expressed confidence in the company's positioning for future growth [2][11]. - The outlook for the third quarter anticipates a sequentially higher growth rate in comparable revenues and an operational EBITA margin around 18.5% [39]. Other Important Information - The company has made strategic investments in technology startups and announced an acquisition in the Smart Building division, expected to add over $150 million in revenues [12]. - The company is committed to reducing emissions and enhancing energy efficiency through innovative product offerings [79]. Q&A Session Summary Question: Commentary on construction performance in non-residential sectors - Management noted strong performance in commercial construction, particularly in the U.S. driven by Electrification, despite some leading indicators showing weakness [47][49]. Question: Areas for further progress in the portfolio - The outgoing CEO highlighted the successful transition towards a purpose-driven structure and expressed confidence in the current portfolio's alignment with market trends [50][52]. Question: Short cycle business performance - Management confirmed that short cycle business showed positive growth both year-on-year and sequentially, particularly in Electrification and Motion [58][60]. Question: Profitability protection actions in Machine Automation - The company is adjusting operations in Machine Automation to protect margins amid a challenging market environment, with restructuring efforts underway [68][70]. Question: Impact of trade tariffs - Management indicated that tariffs are not a significant issue due to a local-for-local strategy, ensuring self-sufficiency in key markets [74][75].