"As expected, the Covid-19 pandemic significantly impacted our earnings in the second quarter. At the same time, however, we have consistently focused on reducing costs, thereby increasing our resilience. The Group's operating margins were better than expected, with the Drive Technology business performing particularly well," commented Björn Rosengren, CEO of ABB, on the Group's results at the end of July.

The second quarter was also characterized by the uncertainties caused by the pandemic. This was reflected in a decline in demand in the short-cycle business and led to lower product sales at ABB. The global lockdown also had an impact on system installations and service activities. Overall, this led to a decline in order intake and sales: order intake fell from USD 7.401 billion in Q2/2019 to USD 6.054 billion, while sales fell from USD 7.171 billion to USD 6.154 billion.

Drive technology on the rise

The fact that the result is better than expected compared to the same period of the previous year is also due to the absence of a charge that was booked in 2019 in connection with the sale of the solar inverter business. The result from operating activities rose from 123 to 571 million dollars. The increase compared to the same quarter of the previous year was also boosted by net income of USD 86 million from timing differences on raw materials and foreign exchange and lower restructuring and integration costs.

Operating EBITA (earnings before interest and taxes) fell by 21% (-20% on a comparable basis) from USD 825 million to USD 651 million. The company particularly highlighted the Drive Technology division, where margins increased compared to the same period last year, while all other divisions reported declining margins despite increased cost-cutting measures, mainly due to lower sales volumes.

The sales markets at a glance

Orders fell significantly, particularly in the automotive and automotive supply industry as well as in mechanical engineering. The Group also describes the 3C sector (Computers, Communications, Consumer) as challenging, although positive trends were emerging there at the end of the quarter.

Activity in the process industry weakened considerably in the quarter under review. The service business was slowed considerably by both lockdowns and customers reducing their operating expenditure. In addition, several investment projects were postponed.

In the transport and infrastructure sector, investments continued in the rail, electromobility, water and wastewater and data center segments. The order situation was also robust in the energy distribution companies segment. In contrast, activity in the shipping and renewable energy sectors fell sharply.

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