“The COVID-19 pandemic impacted our first quarter results, lowering revenues and operating margins in all our businesses, although order growth held up well. We are doing our utmost to ensure the health and safety of our employees while maintaining business continuity, serving our customers and continuing to invest in R & D for the long-term,” said Björn Rosengren, CEO of ABB.
“In the second quarter, we expect ABB’s operations to be significantly challenged by a sharp drop in demand due to lockdowns in many parts of the world. Nevertheless, we will accelerate our efforts to manage our costs and safeguard liquidity, while moving ahead with decentralizing the group and our target to complete the divestment of Power Grids at the end of the second quarter.”
KEY FIGURES CHANG
($ millions, unless otherwise indicated) Q1 2020 Q1 2019 US$ Comparable Orders 7,346 7,613 -4% +1%
Revenues 6,216 6,847 -9% -7%
Income from operations 373 590 -37%
Operational EBITA 1 636 766 -17% -16% 3
as % of operational revenues 10.2 11.2 -1.0 pts
Income from continuing operations, net of tax 326 415 -21%
Net income attributable to ABB 376 535 -30%
Basic EPS ($) 0.18 0.25 -30% 2
Operational EPS ($) 1 0.30 0.30 -2% 2 -1% 2
Cash flow from operating activities 4 (577) (256) -125%
On December 17, 2018, ABB announced an agreed sale of its Power Grids business.
Consequently, the results of the Power Grids business are presented as discontinued operations.
Summary
Against the backdrop of COVID-19, orders for the first quarter remained robust, with Motion and Industrial Automation both benefiting from strong large orders. However, revenues declined in all businesses, reflecting a drop in product demand due to the pandemic, at first in China, and then across other parts of the world, with mobility restrictions also constraining system installation and services activities. These developments, in turn, weighed on operating margins in all businesses, reflecting that certain costs remain essential for business continuity.
