ABB: Q3 2022 Results
ABB reported strong Q3 2022 results with orders at $8.2 billion (+4%; comparable +16%) and revenues at $7.4 billion (+5%; comparable +18%). Operating income was $708 million with a margin of 9.6%. The operational EBITA reached $1.231 billion, an increase of 16% year-on-year, resulting in a record margin of 16.6%. Cash flow from operations was $791 million, down 28% from last year. Despite a 45% decline in net income to $360 million and an EPS drop of 41% to $0.19, ABB anticipates achieving its 2023 margin target early, driven by improved operational efficiencies.
- Strong order growth of 4% (16% comparable) with a book-to-bill ratio surpassing one for the seventh consecutive quarter.
- Operational EBITA increased by 16% year-on-year to $1.231 billion, achieving a high margin of 16.6%.
- Cash flow from operating activities improved to $791 million from the previous quarter, signaling potential for further growth.
- Net income declined by 45% year-on-year to $360 million, indicating significant profit pressure.
- Basic EPS fell 41% to $0.19, reflecting reduced shareholder value.
- Income from operations decreased by 17% year-on-year to $708 million, undermining operational performance.
Strong order growth, high revenues and historically high Operational EBITA margin
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Orders
, +$8.2 billion 4% ; comparable1 +16% -
Revenues
, +$7.4 billion 5% ; comparable +18% -
Income from operations
; margin$708 million 9.6% -
Operational EBITA1
; margin1$1,231 million 16.6% -
Basic EPS
; -$0.19 41% 2 -
Cash flow from operating activities
$791 million
Ad hoc Announcement pursuant to Art. 53 Listing Rules of
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CHANGE |
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CHANGE |
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($ millions, unless otherwise indicated) |
Q3 2022 |
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Q3 2021 |
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US$ |
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Comparable1 |
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9M 2022 |
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9M 2021 |
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US$ |
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Comparable1 |
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Orders |
8,188 |
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7,866 |
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26,368 |
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23,611 |
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Revenues |
7,406 |
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7,028 |
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21,622 |
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21,378 |
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Gross Profit |
2,481 |
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2,294 |
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7,052 |
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7,070 |
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as % of revenues |
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+0.9 pts |
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-0.5 pts |
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Income from operations |
708 |
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852 |
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- |
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2,152 |
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2,743 |
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- |
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Operational EBITA1 |
1,231 |
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1,062 |
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3,364 |
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3,134 |
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as % of operational revenues1 |
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+1.5 pts |
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+0.9 pts |
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Income from continuing operations, net of tax |
420 |
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687 |
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- |
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1,469 |
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2,027 |
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- |
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Net income attributable to ABB |
360 |
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652 |
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- |
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1,343 |
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1,906 |
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- |
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Basic earnings per share ($) |
0.19 |
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0.33 |
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- |
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0.70 |
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0.95 |
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- |
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Cash flow from operating activities4 |
791 |
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1,104 |
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- |
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600 |
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2,310 |
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- |
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Cash flow from operating activities in continuing operations |
793 |
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1,119 |
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- |
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614 |
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2,305 |
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- |
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1 For a reconciliation of non-GAAP measures, see “supplemental reconciliations and definitions” in the attached Q3 2022 Financial Information. |
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2 EPS growth rates are computed using unrounded amounts. |
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3 Constant currency (not adjusted for portfolio changes). |
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4 Amount represents total for both continuing and discontinued operations. |
“In the third quarter, we delivered high order growth, a strong top-line development and a historically high margin. We have not seen any material changes in the underlying customer activity. It looks like we are likely to achieve our 2023 margin target one year early. We are now starting to see the real benefits of the
CEO summary
There were several positive takeaways from the third quarter 2022. Strong order growth of
I was pleased to see the Operational EBITA increase by
It was good to see cash flow from operating activities of
Orders increased in all regions, led by a very strong development in the
Customer activity was at a high level in the quarter with overall stable to positive development in most segments outside of discrete industries. In the latter we noted some customers normalizing order patterns in anticipation of shorter delivery lead-times as supply constraints ease. Overall, demand increased for both the short-cycle flow business and the systems-driven offerings. Changes in exchange rates weighed on total orders in all business areas, however the underlying customer activity improved. In total, our order backlog remained at a high level of
Income from operations amounted to
I am pleased about the multiple portfolio management activities in the quarter. Importantly, Motion signed two acquisitions – in the NEMA motors and Traction divisions – which will further cement their leading market positions. I also want to highlight our investment into an accelerated strategic collaboration between Process Automation and Canada’s Hydrogen Optimized launched in 2020. Together we are advancing the deployment of economic large-scale green hydrogen production systems to decarbonize hard-to-abate industries.
We also announced the early divestment of the remaining
CEO
Outlook
In the fourth quarter of 2022, we anticipate a low double-digit comparable revenue growth, impacted by the high level of revenues recorded last year. We expect the typical pattern of a sequentially lower Operational EBITA margin.
In full-year 2022, we are likely to achieve early the 2023 target of an Operational EBITA margin of at least
The complete press release including the appendices is available at www.abb.com/news.
ABB (ABBN: SIX Swiss Ex) is a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB’s success is driven by about 105,000 talented employees in over 100 countries.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221019006028/en/
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Source: ABB
FAQ
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