Zurich (dpa-AFX) - The Swiss industrial group 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 has been confirmed. However, analysts criticized the development of incoming orders in particular. The share, which has performed very well this year, fell significantly at the start of trading, most recently by a good 6%.

Sales rose by 1% to USD 8.24 billion from April to June, as ABB announced on Thursday (18.07.2024). Adjusted for currency and portfolio effects, sales even increased by 4%.

Higher capacity utilization and margin

Profitability also increased with the higher capacity utilization. The operating margin (Ebita) increased by 1.5 percentage points to 19.0%, as ABB reported. Net profit advanced by 21.0% to 1.096 billion US dollars. 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, the company said, 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, according to the press release, which quotes CEO Björn Rosengren, who is stepping down at the end of the month. "Overall, I am very satisfied with the result."

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 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.

Weak development in the Machine Automation division

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.

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% and revenue growth of around 5% 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% or slightly below.

SHARES IN THE FOCUS: ABB also weighs on Siemens with weak quarterly results

Zurich/Frankfurt (dpa-AFX Broker) - A surprisingly weak quarterly report from Swiss ABB <CH0012221716> weighed on shares across the industry on Thursday. While ABB shares fell by 7% in Zurich, Schneider Electric <FR0000121972> lost almost 4% in Paris. On the German market, Siemens <DE0007236101> was the worst hit, bringing up the rear on the Dax <DE0008469008> with a fall of 3 %.

The Swiss company was the first of the major European industrial groups to present quarterly figures. Analysts highlighted order intake and sales as weak points in their comments. High profitability and a positive ratio of orders to sales were seen as positive.

"We think that investors will react negatively to the results," predicted analyst Alasdair Leslie from investment firm Bernstein before the start of trading. This is because both orders and sales were two percent below consensus estimates.

According to Leslie, demand in the electrification business did not significantly exceed market expectations, which was a disappointment. At the same time, the robotics and automation segment had clearly missed expectations. However, he also attributed the price losses to profit-taking.

ABB shares had outperformed the industrial goods sector by 15 % over a three-month period. ABB had gained 37 % since the beginning of the year. Schneider is up around 22 % in 2024, Siemens only 2 %. /bek/ag/jha/