Notes from the latest results and conference call transcripts:
- The order book grew by 10% compared to Q1 2019 and by 22% as compared to Q4 2019 (ABB follows Jan to Dec FY).
- Seeing gradual reopening of the industry in the last 1 and half weeks
- Had a smooth restart of operations and also supply chain
- “looking into how the market is responding in terms of taking up the equipment they already ordered, which is in our backlog and how they are going to place new orders and how the cash and credit situation is emerging in the marketplace”
- Robotics is exposed to the automotive industry and it is reflecting the slowdown in that industry. Focussing on cost rationalization in this business.
- Learned a lot from Chinese and Italian operations (of ABB), assuming that these conditions will remain for many months to come
- Post lock-down focus will go in the market segments, which are going to bounce back quickly and need the support from us
- Had an exceptional item on profits on the sale of the solar business, also had an income tax refund
- A certain percentage of customers may delay accepting the delivery of the equipment and some of them even may kind of postpone there. Our view is that majority of it will go and some of it might get affected, but not with a large percentage.
- Will have a much clearer view of it by the end of May or mid of June as most of the customers open up
- Demand environment
a) Electrification & Motion: These are products that go to the end-user, the EPCs, OEMs, channel partners, distributors, panel builders, integrators. Seeing good uptake by these market segments and also gaining market share.
b) Industrial Automation: Exposed to oil and gas, pulp and paper, cement, steel, metals - all these areas last year had a bit of soft demand, demand is still not that dominant as we like it
c) Robotics and Automation: Exposed primarily to auto and auto ancillaries which are seeing a slowdown. However, we have diversified into the new areas, be it in food and beverage, be it in many other packing and pharma areas. We are investing and not pulling it back. - Things will be difficult for the next 2 quarters, expecting green shoots in the Oct-Dec quarter
- The last point was on moving products to India in the context of international businesses diversifying their supply chain. Instead of paraphrasing the text, I thought I will put the screenshots from the transcript so that the management intent and clarity is not distorted.
Breakdown of revenues and earnings (Source)
