ABB(US:ABBNY)2023-04-25 12:00Financial Data and Key Metrics Changes - The company reported a record high order intake of $9.5 billion, representing a 9% growth in comparable order intake despite high comparables from the previous year [3][4] - Revenue growth was strong at 22%, with an operational EBITA margin of 16.3%, the highest ever for the first quarter [4][12] - Cash from operating activities increased significantly to $282 million, up by $855 million from the previous year, supported by higher earnings and lower net working capital buildup [5][35] Business Line Data and Key Metrics Changes - Electrification: Comparable orders grew by 5% to $4.1 billion, with strong demand in most segments except residential construction [16][18] - Motion: Comparable order growth was 8%, reaching $2.3 billion, with revenues increasing by 29% [22][24] - Process Automation: Orders surged by 55% to $2.1 billion, driven by high customer activity, particularly in energy industries [27][29] - Robotics and Discrete Automation: Orders declined by 20% year-over-year, but the order intake of $1 billion was one of the highest levels ever for the segment [31][33] Market Data and Key Metrics Changes - Orders in Asia, the Middle East, and Africa increased by 11%, while Europe saw a 10% improvement, and the Americas were up by 5% [10][11] - China experienced a 3% decline in orders, which was considered acceptable given the high comparables from the previous year [10][11] Company Strategy and Development Direction - The company plans to simplify its market presence by delisting from the New York Stock Exchange and deregistering with the SEC, while maintaining commitments to the U.S. market [6][7] - ABB is focusing on energy efficiency and sustainability, with significant investments planned in the U.S. to support growth and local production [41][87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong market outlook, raising guidance for 2023 to expect at least 10% revenue growth and improved operational EBITA margins [45][46] - The company noted that while there are challenges in certain markets, particularly in residential construction, overall demand remains solid [18][64] Other Important Information - The company reported a strong improvement in gross margin, which increased by 190 basis points to 34.6%, driven by higher volumes and improved pricing [12][50] - ABB's sustainability efforts have led to a 43% reduction in greenhouse gas emissions, with a target to further improve supply chain emissions [43][44] Q&A Session Summary Question: Regarding gross margin progress and cost increases - Management confirmed that the gross margin of 34.6% is satisfactory and that pricing increases are expected to cover upcoming staff cost increases [47][49] Question: E-mobility business performance - The E-mobility business reported an order intake of around $190 million, with management clarifying that this figure is primarily from E-mobility [52][54] Question: Net working capital dynamics - Management indicated that the net working capital buildup was in line with expectations, with inventory levels starting to decline towards the end of the quarter [56][57] Question: Medium voltage segment performance - Management highlighted strong demand in the medium voltage segment, particularly related to infrastructure electrification [58][60] Question: Trends in electrification and residential construction - Management noted that while residential construction is weak, other segments are performing well, contributing to overall order growth [64][66] Question: Order inflow growth in India - Management reported a 40% growth in India, driven by strong internal market dynamics and diversification in supply chains [68][69] Question: Outlook for China - Management expressed optimism for growth in China, particularly in the second half of the year, despite a decline in Q1 due to high comparables [70][72] Question: Pricing strategies and customer willingness - Management indicated that pricing strategies are now more focused on value-based pricing, with a positive outlook on maintaining margins [76][78] Question: Robotics business profitability - Management confirmed that the current margins in the robotics segment are sustainable and not artificially inflated by inventory destocking [90][92]