Q4 2024 Abb Ltd Earnings Call Transcript
Key Points
- ABB Ltd (ABBNY) achieved a new record operational EBITDA margin of 18.1% for the full year 2024, driven by a 10% increase in operational EBITDA.
- The company reported a strong free cash flow of $3.9 billion, maintaining a double-digit free cash flow margin for the second consecutive year.
- Electrification was a significant growth engine, with comparable orders up by 16% and revenue surpassing $4 billion for the first time.
- ABB Ltd (ABBNY) improved its return on capital employed (ROCE) to 22.9%, indicating strong long-term performance.
- The company announced a new share buyback program of up to $1.5 billion, following a $1 billion buyback in 2024, demonstrating confidence in its financial health.
- Robotics and discrete automation underperformed expectations, with a significant backlog adjustment impacting order growth.
- The e-mobility business was a drag on group performance, with substantial losses reported in 2024.
- China remains a challenging market, with a decline in orders due to persistent weakness in several customer segments.
- The company faces geopolitical and market-related uncertainties, with the strong US dollar putting pressure on financial results.
- Higher corporate costs are expected in 2025, posing a potential headwind to margin improvement.
Greetings to you all and welcome to this presentation of ABB's fourth quarter results. I have our CEO, Morten Wierod; and our CFO, Timo Ihamuotila; here next to me and I'm Ann-Sofie Nordh, Head of Investor Relations. Morten and Timo will take you through the results presentation after which we'll open for Q&A.
So with that said and without further ado Morten, will you kick it off?
Thanks Ann-Sofie, and a warm welcome also from my side. Let's start by taking a look at the full year 2024 which was a new record year for us in many ways. We improved on most of our financial headlines and on the sustainability side, one of the highlights was to get our scope 1, 2 and 3 targets approved by the SBTI. Taking a high level markets perspective. I would say it was a continued robust trading environment in three out of our four business areas.
Orders in our short cycle, businesses improved in the mid-single digit range
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