Q3 2023 ABB Ltd Earnings Call

Speaker 1: this quarter.

Speaker 1: And we improved conversion and generated a record high cash flow of $1.4 billion. A good outcome.

And we improved conversion and generated a record high cash flow of $1 $4 billion a good outcome.

Speaker 2: From a market perspective, it was good to see another quarter where we increased comparable orders.

From a market perspective, I was good it was good to see another quarter, where we increased comparable orders. If we look under the surface. It was a mixed bag of drivers like in the previous quarter business was good for project and system offerings and <unk>.

Bjrn Rosengren: to this quarter. And we improved conversion and generated a record high cash flow of $1.4 billion, a good outcome. From a market perspective, it was good to see another quarter where we increased comparable orders.

Speaker 2: If we look under the surface, it was a mixed bag of dry.

Speaker 2: Like in the previous quarter, business was good for project and system offering.

Speaker 2: and this more than offset the weakness we saw in parts of the short cycle.

This more than offset the weakness we saw in parts of the short cycle business.

Bjrn Rosengren: If we look under the surface, it was a mixed bag of drivers. Like in the previous quarter, business was good for projects and system offerings. And this more than offset the weakness we saw in parts of the short cycle business. Overall, we improved comparable orders by 2%. And we delivered on our expectation of reaching a positive book to Bill. I'm pleased about the margin, being about 17% again.

Speaker 2: Overall, we improved comparable orders by 2% and we delivered on our expectation of reaching a positive book to build.

Overall, we improved comparable orders by 2% and we delivered on our expectation of reaching.

Positive book to Bill.

Speaker 2: I'm pleased about the margin being about 17% again. In my view, this is a strong operational performance.

I am pleased about the margin being above 70% again.

In my view this is a strong operational performance and I think it shows that we are a more efficient and well tuned unit.

Speaker 2: And I think it shows that we are a more efficient and well-tuned unit.

Speaker 2: During the quarter, we recognized for our sustainability stand.

During the quarter, we are recognized for our sustainability standards.

Bjrn Rosengren: In my view, this is a strong operational performance. And I think it shows that we are a more efficient and well-tuned unit. During the quarter, we recognized for our sustainability standards. Sustainability is embedded in everything we do. It drives demand for our products. It impacts how we produce. It impacts how we act.

Speaker 2: Sustainability is embedded in everything we do. It drives demand for our products. It impacts how we produce. It impacts how we act.

Sustainability is embedded in everything we do it drives demand for our products.

Impacts how we produce it impacts how we act.

Speaker 2: So, I was pleased to see this being recognized by the MSCI, who upgraded ABB to the highest ESG rating AAA.

So I was pleased to see this being recognized by the M. S. C I, who upgraded ABB to the highest ESG rating of AAA.

Speaker 2: This puts us in the top 10% of the Piers universe.

This puts us in the top 10% of the peers universe.

Bjrn Rosengren: So, I was pleased to see this being recognized by the MSCI who upgraded ABB to the highest ESG rating at AAA. This puts us in the top 10% of the PS Universe. A good achievement by the team.

A good achievement by the team.

Speaker 2: Now let's tune to page four for some more detailed comments on the market development during the third quarter.

Now, let's say June to page four for some more detailed comments on the market development during the third quarter.

Speaker 2: I mentioned earlier that there was a mixed bag of demand drives.

I mentioned earlier that there was a mixed bag of demand drivers.

Speaker 2: I briefly mentioned that we see continued positive demand linked to the medium voltage based

Bjrn Rosengren: Now, let's tune to page 4 for some more detailed comments on the market development during the third quarter. I mentioned earlier that there was a mixed bag of demand drivers. I briefly mentioned that we see continued positive demand linked to the medium voltage business. This reflects high activity in the traditional process industry segments, like oil and gas and chemicals, but also in growing low carbon segments like LNG and hydrogen, as well as the marine segments.

I briefly mentioned that we see continued positive demand linked to the medium voltage business.

Speaker 2: This reflects high activity in the traditional process industry segments, like oil and gas and chemicals. But also in growing low carbon segments like LNG and hydrogen as well as the marine segments.

These reflect high activity in the traditional process industry segments, like oil and gas and chemicals, but also in growing low carbon segments like LNG and hydrogen as well as the marine segment.

Speaker 2: On the softer side, there was weakness in part of the short-cycle business. The construction segment continues to be weak.

On the softer side, there was weakness in part of the short cycle business. The construction segment continues to be weak demand.

Speaker 2: Demand in residential construction dropped in all regions.

Demand in residential construction dropped in all regions.

Speaker 2: But in commercial building, it was more split picture. US continues to be robust. China. reshiv Lao, Haley Marathon at grabbing a

Bjrn Rosengren: On the softer side, there was weakness in part of the short cycle business. The construction segment continues to be weak. Demand in residential construction dropped in oil regions, but in commercial building it was more split-pature. U.S, continues to be robust, China weak, and Europe holding steady. Orders were significantly down in discrete automation. Customers continue to normalize water patterns after pre-ordering in the period of supply chain constraints. This means our machine automation divisions will continue to deliver from its auto backlog, which stretch as far as into the second half of next year.

But in commercial building it was more split picture.

U S continues to be a robust China weak in Europe holding steady.

Speaker 2: Orders were significantly down in discrete automation.

Orders were significantly down in discrete automation.

Speaker 2: Customers continue to normalize order patterns after pre-ordering in the period of supply chain construction.

Customers continued to normalize order patents after preordering in the period of supply chain constraints.

Speaker 2: This means our machine automation divisions will continue to deliver from its auto backlog, which stretch as far as into the second half of next.

This means our machine automation divisions will continue to deliver from its order backlog, which stretch as far as into the second half of next year.

Speaker 2: In the robotic business, the automotive segment was positive, supported by EV investments. However, general industry and consumer related segments declined due to significant drop in China. This includes softy with an added smell that hasotto to recentterms provided the

In the robotic business the automotive segments was positive supported by EV investment, However, generally industry and consumer related segments declined due to a significant drop in China.

Bjrn Rosengren: In the robotic business, the automotive segments were positive, supported by EV investments. However, generally industry and consumer-related segments declined due to significant drop in China. Nina, this includes a softening underlying market, but also channeled partners adjusting their inventory levels. We expect China to be challenging robotic market also the next couple of quarters. Revenues were strong at the close to 8 billion, and all business areas contributed to a comparable growth of 11%. On a positive book to build, the order backlog remains strong at about 21 billion. These supports are revenues going into 2024.

This includes a softening underlying market.

Speaker 2: but also channel partners adjusting their inventory.

But also channel partners adjusting their inventory levels.

Speaker 2: We expect China to be a challenging robotic market, also the next couple of quarters.

We expect China to be a challenging robotic market also the next couple of quarters.

Revenues were strong at close to 8 billion.

Speaker 2: and all business areas contributed to a comparable growth of 11%.

And all business areas contributed to our comparable.

Comparable growth of 11%.

Speaker 2: On a positive book to bill, the order backlog remains strong at about 21 billion. This supports our revenues going into 2020.

On a positive book to Bill the order backlog remain strong at about 21 billion.

This supports our revenues going into 2024.

Speaker 2: Now let's turn to slide 5 and look at the market patterns from a geographical perspective.

Now, let's turn to slide five and look at the market patterns from your graphic of perspective.

Speaker 2: On this side you see the positive development in the Americas and AMIA.

On this side you see the positive development in the Americas and EMEA.

Speaker 2: America's was the growth engine and comparable orders were up by 13%.

Americas was the growth engine.

Bjrn Rosengren: Now let's turn to slide five and look at the market patterns from a geographical perspective. On this side you see the positive development in the Americas and Amia. Americas was the growth engine, and comparable orders were up by 13%. We continued good development in the United States. Total Amia grew by 4%. As a slight decline in China was more than offset by strengths in, for example, India.

And comparable orders were up by 13%.

With continued good development in the United States.

Speaker 2: Total AMEA grew by 4% as a slight decline in China was more than offset by strains in, for example, India.

Total EMEA grew by 4% as the slight decline in China was more than offset by strength in for example, India.

Speaker 2: During this quarter, we have received lots of questions on the China market. Our orders in China declined.

During this quarter, we have received lots of questions on the China market, our orders in China declined by 3%, but actually three out of four business areas reported stable or positive comparable growth.

Speaker 2: But actually, three out of four business areas reported stable or positive comparable growth. It may be...

Bjrn Rosengren: During this quarter we have received lots of questions on the China market. Our orders in China declined by 3%. But actually three out of four business areas reported stable or positive comparable growth. It may be a timing impact and it's early days, but it seems like there was a sequential stabilization towards the latter part of the quarter.

It may be a timing impact.

Speaker 2: and its early days. But it seems like there was a sequential stabilization towards the latter part of the quarter.

And it's early days, but it seems like there was a sequential stabilization towards the latter part of the quarter.

Outside the robotic and construction business.

Speaker 2: Europe declined by 13%, impacted by the high comparables and the weakness in discrete ultimate.

Europe declined by 13% impacted by the high Comparables and the weakness in discrete automation.

Speaker 2: Now let's turn to slide six and our earnings outlook.

Now, let's turn to slide six and our earnings outcome the.

Bjrn Rosengren: Outside the robotic and construction business. Europe declined by 13%, impacted by the high comparables and the weakness in discrete automation.

Speaker 2: The chart shows our strong improvement in both earnings and margins.

The chart shows our strong improvement in both earnings and margin.

Speaker 2: Operational EBITDA was up by 13%. Our strong operational result more than offset the impact from the EBITDA.

Operational EBITDA was up by 13% our strong operational result, more than offset the impact from Dow.

Bjrn Rosengren: Now let's turn to slide six and our earnings outcome. The chart shows our strong improvement in both earnings and margin. Operational more than offset the impact from divesting the acceleron and the power conversion divisions. We improved the margin by 80 basic points to 17.4%. This includes a combined negative impact about 60 basic points from the spin-off of acceleron. And the settlement of an insurance claim which has supported last year's results. It is good to see how the strong revenues growth feeds into a sharp improvement of the gross margin.

Speaker 2: divesting the acceleron and the power conversion division.

Divesting the accelerant and the power conversion divisions.

Speaker 2: We improved the margin by 80 basic points to 17.4%. This includes a combined negative impact of about 60 basic points from the spinoff of Exeleron, and the settlement of an insurance claim which supported last year's results.

We improved the margin by 80 basis points to 17, 4%. This includes a combined negative impact of about 60 basis points from the spinoff of et cetera.

And the settlement of an insurance claim which supported last year's result.

Speaker 2: It is good to see how the strong revenues growth feeds into a sharp improvement of the gross margin.

It is good to see how the strong revenues growth feeds into a sharp improvement of the gross margin.

Speaker 2: higher volumes, improved cost observation in production.

Higher volumes improved cost observation in production.

Speaker 2: And pricing was up by about 4%. In total, we improved the gross margin by 120 basic points to 34.7%.

And pricing was up by about 4% in total we improved the gross margin by 120 basis points to 34, 7%.

Bjrn Rosengren: Higher volumes improved cost observation in production. And pricing was up by about 4%. In total we improved the gross margin by 120 basic points to 34.7%. In total this was one of ABB's strongest earnings and margin quarters ever.

Speaker 2: In total, this was one of ABB's strongest earnings and margin quarters ever. I would say we are on a good path.

In total this was one of Abb's strongest earnings and margin quarters ever I would say we are on a good path.

Speaker 3: With that, I hand over to Timo. Thank you, Björn. And greetings from my side as well. So let's start with electrification on slide 7. Electrification saw another quarter of strong demand surrounding our medium-voltage offering.

With that I hand over to Tamar, Thank you burn and greetings from my side as well so let's start with electrification on slide seven electrification.

Bjrn Rosengren: I would say we are on a good path.

Electrification, so another quarter of strong demand surrounding our medium voltage offerings.

Timo Ihamuotila: With that I hand over to Timu.

Speaker 3: From growth perspective, the strength in these areas more than offset the softness in some of our short cycle business.

Timo Ihamuotila: Thank you Björn and greetings from my side as well.

From growth perspective, the strength in these areas more than offset the softness in some of our short cycle businesses.

Timo Ihamuotila: So let's start with electrification on slide seven. Electification saw another quarter of strong demands surrounding our median voltage offerings, studies. From growth perspective, the strength in these areas more than offset the softness in some of our short cycle businesses. This sums up to a comparable order growth of 1% and book to build about 1. Particular strength was noted in the data center segment with high customer activity linked to the increased data processing needs of AI.

Speaker 3: This sums up to a comparable order growth of 1% and book to bill above 1.

These sums up to a comparable order growth of 1% and book to Bill above one.

Speaker 3: Particular strength was noted in the data center segment with high customer activity linked to the increased data processing needs of AI. Other positive segments were oil and gas, including orders related to low carbon LNG, as well as green energy, solar and e-mobility segment in rail.

Particular strength was noted in the data center segment with high customer activity linked to the increased data processing needs of AI.

Other positive segments, where oil and gas, including orders related to low carbon LNG as well as green energy solar and E mobility segment in rave.

Speaker 3: On the downside, we saw continued weak demand in the construction segment, also impacted by customers adjusting inventories.

On the downside we saw continued weak demand in the construction segment also impacted by customers adjusting inventories.

Timo Ihamuotila: Other positive segments where oil and gas, including orders related to low carbon LNG, as well as green energy, solar and immobility segment in rail. On the downside, we saw continued weak demand in the construction segment, also impacted by customers adjusting inventories. Looking specifically at residential construction, we saw weak demand across the regions, impacting primarily smart buildings and to some extent also installation product divisions. For commercial construction, the US showed good momentum, Europe hovered, watched the flat, from last year and China was the weak area.

Speaker 3: Looking specifically at residential construction, we saw weak demand across the regions, impacting primarily smart buildings and to some extent also installation products division.

Looking specifically at residential construction, we saw weak demand across the regions impacting primarily smart buildings and to some extent also installation products divisions.

Speaker 3: For commercial construction, the US showed good momentum, Europe hovered largely flat, from last year and China was the weak area.

For commercial construction the U S showed good momentum Europe Hubbard largely flat from last year in China was the weak area.

Speaker 3: Now looking at the chart in the middle, comparable revenues grew by 6%. This was driven mainly by strong price contribution as distribution solutions and smart power executed on their order backlogs, as well as positive development in the tightly linked service business.

Now looking at the chart in the Middle comparable revenues grew by 6%. This was driven mainly by strong price contribution as distribution solutions and smart power executed on their order backlogs as well as positive development in the title linked service business.

Timo Ihamuotila: Now looking at the chart in the middle, comparable revenues grew by 6%. This was driven mainly by strong price contribution as distribution solutions and smart power executed on their order backlogs, as well as positive development in the tightly linked service business. It's great to see electrification deliver another 20-plus margin quarter. Operational EBITR margin was 20.8%. This reflects a strong improvement of 210 basis points from last year. With the main drivers being strong pricing, as well as support from higher volumes, margin improved in most divisions and it's really nice to see distribution solutions performing so well on the back of its focused profitability efforts. All in all, another strong quarter for electrification.

Speaker 3: It's great to see electrification deliver another 20-plus margin quarter. Operational EBITR margin was 20.8%. This reflects a strong improvement of 210 basis points from last year.

It's great to see electrification deliver another 20 plus margin quarter operational EBITA margin was 20.8%. This reflects a strong improvement of 210 basis points from last year.

Speaker 3: with the main drivers being strong pricing as well as support from higher volumes.

With the the main driving drivers being strong pricing as well as support from higher volumes.

Speaker 3: Margin improved in most divisions and it's really nice to see distribution solutions performing so well on the back of its focused profitability efforts. All in all, another strong quarter for electrification.

Margin improved in most divisions, and it's really nice to see distribution solutions, but forming so well on the back of its focused profitability efforts all in all another strong quarter for electrification.

Speaker 3: Looking ahead into the fourth quarter, we currently expect a growth rate in comparable revenues to be similar to what we saw in Q3, and the operational EBITDA margin to be sequentially lower in line with historical patterns.

Looking ahead into the fourth quarter. We currently expect a growth rate in comparable revenues to be similar to what we saw in Q3 and the operational EBITA margin to be sequentially lower inline with historical pattern.

Timo Ihamuotila: Looking ahead into the fourth quarter, we currently expect a growth rate in comparable revenues to be similar to what we saw in Q3 and the operational EBITR margin to be sequentially lower in line with historical pattern.

Speaker 3: Let's move to slide 8 and the motion business area, which also had an excellent execution. Comparable orders declined by 7% from last year's high level. That said, if you look beyond the impact from large orders, order intake remained broadly stable.

Let's move to slide eight and the motion business area, which also had an excellent execution.

Comparable orders declined by 7% from last year's high level that said, if you look beyond the impact from large orders order intake remained broadly stable steaming.

Timo Ihamuotila: Let's move to slide 8 and the motion business area which also had an excellent execution. Comparable orders declined by 7% from last year's high level. That said, if you look beyond the impact from large orders, order intake remained broadly stable. Similar to what we saw in EL, also motion noted the pattern of strength in the long cycle versus weakness in parts of its short cycle offering. From a segment view, this meant that customer activity was high in the process related areas of chemicals, oil and gas, pulp and paper and mining.

Speaker 3: Similar to what we saw in EL, also motion noted the pattern of strength in the long cycle versus weakness in parts of its short cycle offering.

Similar to what we saw in E. L. Also motion noted the pattern of strength in the long cycle versus a weakness in parts of its short cycle offering.

Speaker 3: From a segment view, this meant that customer activity was high in the process-related areas of chemicals, oil and gas, pulp and paper and mining. Declines were noted in the electronics segment as well as HVAC linked to soft construction market.

From a segment view this meant that customer activity was high in the process related areas of chemicals oil and gas pulp and paper and mining.

Clients were noted in the electronics segment as well as H back linked to soft construction markets.

Speaker 3: Revenues were up by 11%, marking a fifth consecutive quarter with double-digit growth in the business area. Total revenues reached $1.9 billion and were supported by increases in both volumes and price.

Revenues were up by 11%, marking a fifth consecutive quarter with double digit growth in the business area.

Timo Ihamuotila: Declines were noted in the electronics segment as well as HVAC linked to soft construction markets. Revenues were up by 11% marking a fifth consecutive quarter with double digit growth in the business area. Total revenues reached $1.9 billion and were supported by increases in both volumes and price. The team has done a good job at executing on their order backlog and delivered revenue growth in all three regions. It was good to see emotions operational EBITDA margin reaching a high 19.8% up 200 basis points from last year.

Revenues reached $1.9 billion and were supported by increases in both volumes and price.

Speaker 3: The team has done a good job at executing on their order backlog and delivered revenue growth in all three regions.

The team has done a good job at executing on their order backlog and delivered revenue growth in all three regions.

Speaker 3: It was good to see Motion's operational EBITDA margin reaching a high 19.8% up 200 basis points from last year.

It was good to see emotions operational EBITA margin, reaching a high 19.8% up 200 basis points from last year.

Speaker 3: This was driven by an efficient execution of higher volumes, but also by previously implemented price increases, which more than offset the negative impacts from labor inflation and higher input costs.

This was driven by an efficient execution of higher volumes, but also by previously implemented price increases, which more than offset the negative impacts from labor inflation and higher input costs.

Speaker 3: The strongest profitability improvements came from the motors divisions, with the launch motors and generators division as a clear out performer.

Timo Ihamuotila: This was driven by an efficient execution of higher volumes, but also by previously implemented pricing crises which more than offset the negative impact from labour inflation and higher input costs. The strongest profitability improvements came from the motors divisions with the large motors and generators division as a clear outperformer.

The strongest profitability improvements came from the motorist divisions with the launch motors and generators division as a clear outperformer.

Speaker 3: Looking ahead into the fourth quarter, we anticipate absolute revenues to be broadly similar to the Q3 level, and the historical pattern of a sequentially lower margin to repeat.

Looking ahead into the fourth quarter, we anticipate absolute revenues to be broadly similar to the Q3 level and the historical pattern of a sequentially lower margin to repeat.

Speaker 3: Then turning to slide 9 and process automation, where the underlying customer activity was robust across most segments.

Then turning to slide nine and process automation, where the underlying customer activity was robust across most segments.

Timo Ihamuotila: Looking ahead into the fourth quarter, we anticipate absolute revenues to be broadly similar to the Q3 level and the historical pattern of a sequentially lower margin to repeat.

Speaker 3: Orders came in at $1.9 billion and were up as much as 38% on a comparable basis. This includes the added support from a large order of about $285 million. For this one, I think it's worth mentioning that the revenues will be generated across a multi-year period as we gradually fulfill the agreement.

Orders came in at $1.9 billion and were up as much as 38% on a comparable basis. This includes the added support from a large order of about $285 million for this one I think it's worth mentioning that the revenues will be generated across a.

Timo Ihamuotila: Then turning to slide 9 and process automation where the underlying customer activity was robust across most segments. Orders came in at 1.9 billion dollars and were up as much as 38% on a comparable basis. This includes the added support from a large order of about 285 million.

Multi year period, as we gradually fulfill the agreement.

Speaker 3: Segments to highlight on a positive note was oil and gas, where we saw good activity in the US. Marine demand was also strong, but we also saw good momentum in the low carbon related areas such as LNG, hydrogen and carbon capture.

Segments to highlight on a positive note was oil and gas where we saw good activity in the U S.

Timo Ihamuotila: For this one, I think it's worth mentioning that the revenues will be generated across a multi-year period as we gradually fulfill the agreement. Segments to highlight on a positive note was oil and gas where we saw good activity in the US. Marine demand was also strong but we also saw good momentum in the low carbon related areas such as LNG, hydrogen and carbon capture. Comparable revenues were up by 23% with strong double digit increases in all divisions.

Marine demand was also strong but we also saw good momentum in the low carbon related areas, such as LNG hydrogen and carbon capture.

Speaker 3: Comparable revenues were up by 23% with strong double-digit increases in all divisions.

Comparable revenues were up by 23% with strong double digit increases in all divisions.

Speaker 3: Growth was supported mainly by volumes, but also by a positive price development.

Growth was supported mainly by volumes, but also by a positive price development.

Speaker 3: It was another good margin quarter for process automation, achieving an operational EBITDAR margin of 14.6%.

It was another good margin quarter for process automation, achieving an operational EBITA margin of 14, 6%.

Timo Ihamuotila: Growth was supported mainly by volumes but also by a positive price development. It was another good margin quarter for process automation achieving an operational EBITR margin of 14.6%. I say this even though the margin declined 70 prices points from last year and I want to remind you that last year P.A, had about 190 basis points support from the now exited accelerant business. So they are clearly improving the underlying margin nicely year on year.

Speaker 3: I say this even though the margin declined 70 basis points from last year, and I want to remind you that last year PA had about 190 basis point support from the now exited accessor trumpet.

I say this even though the margin declined 70 basis points from last year and I want to remind you that last year P. A had about hundred and 90 basis points support from the now exited accelerant business.

Speaker 3: So they are clearly improving the underlying margin nicely year on year.

So they are clearly improving the underlying margin nicely year on year.

Speaker 3: Most divisions contributed to the underlying improvement on the back of better project execution and continued benefits from delivering higher volumes from the backlog with improved gross mud.

Most divisions contributed to the underlying improvement on the back of better project execution and continued benefits from delivering higher volumes from the backlog with improved gross margin.

Speaker 3: The Marine and Ports Division remains impacted by adverse mix due to lower Arctic marine propulsion.

The marine imports division remains impacted by adverse mix due to lower Arctic Marine propulsion business looking at our expectations for the fourth quarter, we foresee a mid single digit growth rate for comparable revenues.

Timo Ihamuotila: Most divisions contributed to the underlying improvement on the back of better project execution and continued benefits from delivering higher volumes from the backlog with improved gross margin. The marine imports division remains impacted by adverse mix due to lower Arctic marine propulsion business.

Speaker 3: Looking at our expectations for the fourth quarter, we foresee a mid-single-digit growth rate for comparable revenues and the operational EBITDA margin to be slightly up from the Q3 level.

The operational EBITA margin to be slightly up from the Q3 level.

Speaker 3: On slide 10 we turn to robotics and discrete automation.

Timo Ihamuotila: Looking at our expectations for the fourth quarter we foresee a mid single digit growth rate for comparable revenues and the operational EBITR margin to be slightly up from the Q3 level.

On slide 10, we turn to robotics and discrete automation.

Speaker 3: On the back of declines in both divisions, orders in RA dropped by 27% on comparable basis.

On the back of declines in both divisions orders and are a dropped by 27% on comparable basis. However to understand the market dynamics, we need to look at the robotics and machine builders segment separately.

Speaker 3: However, to understand the market dynamics, we need to look at the robotics and machine builder segments separately.

Timo Ihamuotila: On slide 10 we turn to robotics and discrete automation. On the back of declines in both divisions orders in RA dropped by 27% on comparable basis. However, to understand the market dynamics we need to look at the robotics and machine builder segments separate. The robotics division posted a mid-single digit decline in orders. This was primarily driven by a sequential weakening of the China market. On top of that further pressure to demand stemmed from inventory reductions among channel partners.

Speaker 3: The robotics division posted a mid-single-digit decline in orders. This was primarily driven by a sequential weakening of the China market.

The Robotics division posted a mid single digit decline in orders. This was primarily driven by a sequential weakening of the China market.

Speaker 3: On top of that, further pressure to demand stemmed from inventory reductions among channel partners.

On top of that further pressure to demand stemmed from inventory reductions among channel partners.

Speaker 3: These pressures in China are expected to continue for the next couple of quarters, putting pressure on the book and real business.

These pressures in China are expected to continue for the next couple of quarters, putting pressure on the book and Bill business.

Timo Ihamuotila: These pressures in China are expected to continue for the next couple of quarters, putting pressure on the book and build business. Outside of China, robotics demand was more resilient. Europe declined somewhat, but nothing like what we saw in China, and there was growth in both the US and other AMA markets. In total, the positive momentum we saw in automotive triggered by ED investments was more than offset by general softness in other segments.

Speaker 3: Outside of China, robotics demand was more resilient. Europe declined somewhat, but nothing like what we saw in China. And there was growth in both the US and other American markets.

Outside of China Robotics demand was more resilient Europe declined somewhat but nothing like what we saw in China and there was growth in both U S and other major markets.

Speaker 3: In total, the positive momentum we saw in automotive, triggered by EV investments, was more than offset by general softness in other segments.

In total the positive momentum we saw in automotive triggered by EV investments was more than offset by general softness in other segments.

Speaker 3: Now turning to the machine builder segment. The team is working hard to reduce the order backlog that extends into second half of next year. As a result, we were able to communicate to customers that delivery lead times are gradually coming down, which triggered further normalization of order pattern.

Now turning to the machine builder segment. The team is working hard to reduce the order backlog that extends into second half of next year as.

As a result, we were able to communicate to customers that delivery lead times are gradually coming down which triggered further normalization of order patterns similar to the robotics segment. This normalization is expected to continue for the next couple of quarters.

Timo Ihamuotila: Now turning to the machine builder segment. The team is working hard to reduce the order backlog that extends into second half of next year. As a result, we were able to communicate to customers that delivery lead times are gradually coming down, which triggered further normalization of order patterns. Similar to the robotic segments, this normalization is expected to continue for the next couple of quarters. Now moving to revenues, RA achieved a 9% comparable revenue growth, execution of the high order backlog triggered strong growth in Europe and the Americas, which was further helped by earlier implemented price increases.

Speaker 3: Similar to the robotic segments, this normalization is expected to continue for the next couple of quarters.

Speaker 3: Now moving to revenues, RA achieved a 9% comparable revenue growth. Execution of the high order backlog triggered strong growth in Europe and the Americas, which was further helped by earlier implemented price increase.

Now moving to revenues are a achieved a 9% comparable revenue growth execution of the high order backlog triggered strong growth in Europe , and the Americas, which was further helped by earlier implemented price increases.

Speaker 3: Growth in the other AMEI markets did not offset the book and build weakness in China.

Growth in the other arm air markets did not offset the book and build weakness in China.

Speaker 3: We saw double-digit revenue growth in machine automation helped by good backlog execution.

We saw double digit revenue growth in machine automation helped by good backlog execution.

Speaker 3: Turning to the margin, Robotics and Discrete Automation delivered a solid 190 basis points improvement from last year, reaching 14.7%.

Turning to the margin robotics and discrete automation delivered a solid 190 basis points improvement from last year, reaching 14, 7%.

Timo Ihamuotila: Growth in the other AMA markets did not offset the book and build weakness in China. We saw double digit revenue growth in machine automation, helped by good backlog execution. Turning to the margin, robotics and discrete automation delivered a solid 190 basis points improvement from last year reaching 14.7%. Benefits from strong price management and improved operational efficiencies, more than offsetting labor information and slightly higher R&D investments. For the fourth quarter, we expect a slight negative growth in comparable revenues on the back of continued weakness in the Chinese book and build robotics business, which most likely also will put some sequential pressure on the operational EBITR margin.

Speaker 3: benefits from strong price management and improved operational efficiencies, more than offsetting labour inflation and slightly higher R&D investment.

Benefits from strong price management, and improved operational efficiencies more than offsetting labor inflation and slightly higher R&D investments.

Speaker 3: For the fourth quarter, we expect a slight negative growth in comparable revenues on the back of continued weakness in the Chinese book and bill robotics business, which most likely also will put some sequential pressure on the operational EBIT-AMAD.

For the fourth quarter, we expect a slight negative growth in comparable revenues on the back of continued weakness in the Chinese will can build robotics business, which most likely also will put some sequential pressure on the operational EBITA margin move.

Speaker 3: Moving on to slide 11, showing the group operational EBITDA bridge.

Moving onto slide 11, showing the group operational EBITA bridge the.

Speaker 3: The profile is very similar to the last couple of quarters, with the earnings improvement driven by strong operational performance.

The profile is very similar to the last couple of quarters with the earnings improvement driven by strong operational performance.

Speaker 3: The impacts from our strong price execution with the price impact at about 4% and leverage on higher volumes more than offset the adverse effects from cost inflation.

Timo Ihamuotila: Moving on to slide 11, showing the group operational EBITR bridge. The profile is very similar to the last couple of quarters with the earnings improvement driven by strong operational performance. The impact from our strong price execution with the price impact at about 4% and leverage on higher volumes, more than offset the adverse effects from cross-inflation. All in all, a 13% improvement in operational EBITR with an 80 basis points reported margin increase. This does not take into account the adverse impact of 30 basis points from the diversity accelerant business, as well as 30 basis points from the insurance claim, which both benefited last year's margin.

The impact from our strong price execution with the price impact at about 4% and leverage on higher volumes more than offset the adverse effects from cost inflation.

Speaker 3: All in all, a 13% improvement in operational EBIT with an 80 basis points reported margin increase. This does not take into account the adverse impact of 30 basis points from the divested accelerant business, as well as 30 basis points from the insurance claim, which both benefited last year's margin. And now, let's move to cash flow on slide 12.

All in all a 13% improvement in operational EBITA with an 80 basis points reported margin increase.

This does not take into account the adverse impact of 30 basis points from the divested accelerant business as well as a 30 basis points from the insurance claim which both benefited last year's margin and now let's move to cash flow on slide 12.

Speaker 3: Some of you may recall Björn challenging me on this topic when we met here in Q2. I dare to say that the ABB teams rose to the occasion. Cash was stellar in the quarter with cash flow from operating activities reaching 1.4 billion dollars, a record high quarterly level. The increase from last year was 560 million supported by all business areas and driven by higher earnings and a reduction of networking capital.

Some of you may recall, a beer and challenging me on this topic when we met here in Q2.

I'd have to say that the ABB teams rose to the occasion casuals stellar in the quarter with cash flow from operating activities, reaching $1.4 billion a record high quarterly level the.

Timo Ihamuotila: And now, let's move to cash flow on slide 12. Some of you may recall beer and challenging me on this topic when we met here in Q2. I dare to say that the ABB teams rose to the occasion.

The increase from last year. It was 560 million supported by all business areas and driven by higher earnings and a reduction of net working capital.

Timo Ihamuotila: Cash was teller in the quarter with cash flow from operating activities reaching $1.4 billion, a record high quarterly level. The increase from last year was 560 million supported by all business areas and driven by higher earnings and a reduction of networking capital. It was good to see that the teams were able to slightly work down the inventory balance during the quarter, compared to the build-up we had last year. The positive impact from inventories was partially offset by higher trade receivables and contract assets and liabilities, which is linked to the higher revenue growth continued reduction in networking capital should support a strong cash flow also in the fourth quarter.

Speaker 3: It was good to see that the teams were able to slightly work down the inventory balance during the quarter, compared to the build-up we had last year.

It was good to see that the teams were able to slightly work down the inventory balance during the quarter.

Compared to the buildup, we had last year.

Speaker 3: The positive impact from inventories was partially offset by higher trade receivables and contract assets and liabilities, which is linked to the higher revenue growth.

The positive impact from inventories was partially offset by higher trade receivables and contract assets and liabilities, which is linked to the higher revenue growth continued.

Speaker 2: Continued reduction in networking capital should support a strong cash flow also in the fourth quarter. And I expect us to achieve an annual free cash flow of about $3 billion for the full year. And with that, let me hand over to Björn to round off this presentation. Thank you, Timo. Let's finish off with slide 13 and some outlook comments.

The reduction in networking capital should support a strong cash flow also in the fourth quarter and I expect us to achieve an annual free cash flow of about $3 billion for the full year.

And with that let me hand over it to burn to round off. This presentation. Thank you came on late.

Let's finish off with slide 13, and some outlook comments.

Timo Ihamuotila: And I expect us to achieve an annual free cash flow of about three billion dollars for the full year.

Speaker 2: As we approach the end of the year, we fine-tune our growth guidance for comparable revenues in 2023 to be in the low teens. And we expect the operational EBITDA margin to be in the range of 16.5 to 17%.

As we approach the end of the year.

Bjrn Rosengren: And with that, let me hand over to Bjrn to round off this presentation. Thank you, Timo Let's finish off with slide 13 and some Outlook comments. As we approach the end of the year, we fine tune our growth guidance for comparable revenues in 2023 to be in the low teens. And we expect the operation EBITDA margin to be in the range of 16.5 to 17%. For the fourth quarter, we anticipate a low to mid single digit growth in comparable revenues. Those of you who knows us well are familiar with our historical pattern with shows that the fourth quarter tends to somewhat softer margin. Consequently, we expect the operation EBITDA margin to be around 16% in Q4.

We fine tune our growth guidance for comparable revenues in 2023 to be in the low teens.

Operator: Without said, let's open up for questions.

And we expect the operational EBITA margin to be in the range of 16, 5% to 17%.

Speaker 2: For the fourth quarter, we anticipate low to mid-single digit growth in comparable revenue.

For the fourth quarter, we anticipate low to mid single digit growth in comparable revenues.

Speaker 2: Those of you who know us well are familiar with our historical patent, which shows that the fourth quarter tends to somewhat softer margin. Consequently, we expect Operation Liberty Dime margin to be around 16% in Q4.

Those of you who knows us well are familiar with our historical patent which shows that the fourth quarter tense to somewhat softer margin.

Consequently, we expect the operational EBITA margin to be around 16% in Q4.

Speaker 4: With that said, let's open up for questions. Hansi. Yes, let's do so. And for those of you who have dialed in on the phone, you press star 14 to register to ask a question. And to secure the sound quality, may I just remind you to mute the webcast as your line is open for questions.

With that said, let's open up for questions I'll say, yes that stays high and for those of you who have dialed in on the phone you Press Star 14 to register to ask the question.

And to secure the sound quality may I, just remind you to need the webcast as your line is open for questions.

Operator: Yes, let's do so. And for those of you who have dialed in on the phone, you press star 14 to register to ask the question and to secure the sound quality. May I just remind you to mute the webcast as your line is open for questions. But you can also put the questions through the online tool in the webcast. This should now be visible in the bottom right corner of the screen. For the phone lines, we really want to let through as many of you as possible. So I kindly ask you to limit it to one question and then get back in line for any additional.

Speaker 4: But you can also put questions through the online tool in the webcast. This should now be visible in the bottom right corner of the screen. For the phone lines, we really want to let through as many of you as possible, so I kindly ask you to limit it to one question and then get back in line for any additional questions.

But you can also put a question through the online tool in the webcast. This should now be visible in the bottom right corner of the screen for the fine lines, who really want to let through as many of you as possible. So I kindly ask you to limit it to one question and then get back in line for any additional <unk>.

Speaker 4: And with that said, we'll kick off with the first question. And today we'll start off with a question from the online tool, and it comes from Daniela at Goldman Sachs.

And with that said.

We will kick off with the first question and today, we'll start off with a question from the online tool and it comes from Daniela at Goldman Sachs.

Speaker 4: And two questions. So I'll take one and then get back in line just to stick to the rules.

And two questions.

Operator: And with that said, we'll kick off with the first question.

So I'll take one and then get back in line just to stick to the rules.

Daniela Costa: And today we'll start off with a question from the online tool and it comes from Daniela at Goldman Sachs. And two questions. So I'll take one and then get back in line just to stick to the rules.

Speaker 4: And we start with this, maybe this is for you, Bjarne. What is your level of confidence on process automation trends beyond the large orders this quarter and going into 2024?

And we start with this maybe this is for you beyond what is your level of confidence on process automation trends beyond the large orders this quarter and going into 'twenty to 'twenty four.

Speaker 2: Thank you Daniela. Yeah, my confidence in the process automation and I think I've been expressing that pretty clear. It's quite high and I'm really glad that we have the process automation that is taking a major...

Thank you Daniela.

Bjrn Rosengren: And we start with this. Maybe this is for you, Björn. What is your level of confidence on process automation trends beyond the large order this quarter and going into 2024? Thank you, Daniela. My confidence in the process automation and I think I've been expressing that pretty clear. It's quite high and I'm really glad that we have the process automation that is taking a major step in the transformation, the green transformation that's taking place.

Yeah, My my confidence in our process automation and I think I've been expressing that pretty clear, it's quite high and I'm.

Really glad that we have the process automation that is taking a major.

Speaker 2: step in the transformation, the green transformation that's taking place. So it's actually two things. It is also the base industry that secures the energy side and then you have new projects for it. And as you can see for the quarter, we had a huge growth, a lot driven by large projects, which is of course the basis for this business. But we also have an underlying service business.

Step in the transformation of the Green transformation that has taken place. So it's actually two things. It is also.

<unk> based industry that secures the energy side, and then you have new project for Us and as you can see for the quarter. We had the huge growth a lot driven by large project, which is of course the basis for this business, but we also have an underlying.

Bjrn Rosengren: So it's actually two things. It is also the base industry that secures the energy side and then you have new projects for it. And as you could see for the quarter, we had a huge growth, a lot driven by a large project, which is of course the basis for this business. But we also have an underlying service business, which is about 50% of that business. And we saw actually double digit growth in that business also. So it's very, very good.

Service business, which is about 50% of that business and we saw actually a double digit growth in that business also saw its very very good and I think going forward into next quarter and to the future. These are many of these transformational.

Speaker 2: which is about 50% of that business. And we saw actually double digit growth in that business also. So it's very, very good. And I think going forward into next quarter and to the future, these are many of these transformational.

Yes.

Speaker 2: steps that need to be taken. I'm just referring to certain segments. You have the hydrogen, you have the batteries, you have the mining market, you have the green steel. All of this that is taking place now is actually the customer segment for process automation.

Steps that need to be taken I'm, just referring to certain segment you have the hydrogen you have the battery. So you have the mining market you have the green steel all of this that is taking place now is actually the customer segments for process automation.

Bjrn Rosengren: And I think going forward into next quarter and to the future, these are many of these transformational. The steps that need to be taken, just referring to certain segments, you have the hydrogen, you have the batteries, you have the mining market, you have the green steel, all of these that is taking place now is actually the customer segments for process automation. But I've been saying for a long time, I think we are well positioned with EPA, also to see growth in the coming quarters.

Speaker 2: But I've been saying for a long time, I think we are well positioned with the PA's also to see growth in the coming quarter.

But I've been saying for a long time, I think we are well positioned with a P H or so to see growth in the coming quarters.

Speaker 4: Okay, thank you. And then we'll take the first question from the conference call and we open up the line for Alex at P

Okay. Thank you and then we'll take our first question from the conference call and Yeah. We open up the line for Alex at Bank of America Merrill Lynch with Alex.

Speaker 3: I am indeed, thanks very much, good morning, good morning Timo. A question for Timo, I guess, just on your free cash guide of 3 billion, obviously it implies a bit of a step down in Q4, I wondered if you could just help us understand the moving parts there and why perhaps if I might be permitted to describe it as caution on that, thank you. Okay, sure, thanks for the question. Yeah, I kind of know where you are maybe coming from, so we are close to 2 billion free cash flow by now, first 3 quarters.

I am into Etfs, thanks, very much and good morning, good morning.

Alex: Okay, thank you, and then we'll take the first question from the conference call and we open up the line for Alex at Pancomeka Merlinch, you with us Alex?

A question for Chemo I guess.

On your free cash guide.

3 billion, obviously implies a bit of a step down in Q4 I Wonder if you could just help us understand the moving parts there.

Alex: I am indeed, yeah, thanks very much, and a good morning, good morning Timo.

Uh huh.

Timo Ihamuotila: A question for Timo, I guess, just on your free cash guide of 3 billion, obviously it implies a bit of a step down in Q4, I wonder if you could just help us understand the moving parts here. So there, and why, perhaps if I might be permitted to describe this question, I'll know that, thank you. Okay, sure, thanks for the question. Yeah, I kind of know where you are maybe coming from, so we are close to 2 billion, free cash flow by now, first the 3 quarters.

Perhaps if I might be permitted.

To describe it as caution on that okay. Sure. Thanks for the question Yeah, I kind of know where you are may be coming from so we are close to 2 billion of free cash flow by now first three quarters and if you look at sort of how the operating cash it should go away come in then it of course depends on.

Speaker 3: And if you look at sort of how the operating cash should come in, then it of course depends on the networking capital reduction. And we had 12.8% networking capital revenue.

The net working capital reduction and we had 12.8%.

Net working capital to revenue.

Timo Ihamuotila: And if you look at sort of how the operating cash should come in, then it of course depends on the networking capital reduction, and we had 12.8% networking capital revenue at the end of Q3. And if that would go down, say a point point and a half, we should kind of be there. Okay, I understand our history has been that it's gone down from Q3 to Q4, sometimes even 2 points. So yeah, there is also a scenario where it could be a bit higher, but you know, let's see how it comes through. But it's a 3 billion, it's a new level, huh? 3 billion, it's definitely a new level, that's great.

Speaker 3: at the end of Q3 and if that would go down say a point, a point and a half, we should kind of be there. Okay, I understand.

At the end of Q3, and if that would go down say a point point and a half we should kind of be there. Okay. I understand our history has been that it's gone down from Q3 to Q4, sometimes even to a point. So yeah. There is also a scenario where it could be a bit higher but let's see how it comes through.

Speaker 3: our history has been that it's gone down from Q3 to Q4, sometimes even two points. So yeah, there is also a scenario where it could be a bit higher, but you know, let's see how it comes through.

Sure.

Speaker 3: But the three billion is a new level, huh? Three billion is definitely a new level. That's great.

But it says 3 billion is it.

It's a new level 3 billion, it's definitely a new level.

That's great.

Sure.

Speaker 4: Okay, thank you. Thanks Alex. We'll take the next question from Will at Cap-de-Cirrus.

Okay. Thank.

Okay. Thanks, Alex we'll take the next question from well and kept us.

Speaker 5: Are you there, Will? Yes. Good morning to you all. Thank you very much for the time.

Are you there well.

Yes, good morning to you wanting very much for the time.

Will: Okay, thank you, thanks Alex, we'll take the next question from Will at CAPTISERRUS. Are you there, Will? Yes, good morning to you all very much for the time. My question would be directed at your sense of the distributor trends that you see across the various businesses that are most relevant for distribution solutions, smart power and smart buildings. Could you perhaps provide a little more indication of or color on how you see distributor stock levels and how you see the differences between regions. Thank you. Yeah, thanks Will, maybe I'll go for it.

Speaker 5: My question would be directed at your sense of the distributor trends that you see across the various businesses that are most relevant for distribution solutions, smart power and smart buildings. Could you perhaps provide a little more indication of or color on how you see distributors' stock levels and how you see the differences between regions? Thank you.

My question would be directed at your sense of the distributor trends that you see across the various businesses that are most relevant for distribution solutions smart power and smart buildings could you, perhaps provide a little more indication of or color on how you see distributors.

<unk> levels and how you see the differences between regions. Thank you.

Speaker 3: Yeah, thanks Will. Maybe I'll go for it. I wasn't sure if this was like electrification only question or broader, but let's go with electrification first. So we called out today that we have seen some inventory deductions impacting these quarters numbers. Regarding electrification, overall, we think this is now pretty much done and we should be sort of on normalized stock levels with distributors. Now there can be maybe some pockets here and there which are related to residential constructions where some of this could still be happening. But let's remember that residential construction is only about 15% of the electrification business.

Yeah, Thanks will maybe.

I'll go for it but I wasn't sure. If this was like electrification only question or broader but let's let's go with electrification first so we called out today that we have seen some inventory reductions impacting this quarter's numbers regarding electrification. Overall, we think this is now pretty much done and we should be so it alone normalized stock law.

Timo Ihamuotila: I wasn't sure if this was like electrification on the question or broader, but let's go with electrification first. So we called out today that we have seen some inventory reductions impacting these quarters numbers regarding electrification overall. We think this is now pretty much done and we should be sort of on normalized stock levels with distributors. Now, there can be maybe some pockets here and there which are related to residential constructions where some of this could still be happening.

Levels with distributors now there can be maybe some pockets here and there which are related to residential constructions, where some of this could still be happening, but lets remember that residential construction is only about 15% of the electrification business and then if you look at some of the other business areas there could still be some <unk>.

Speaker 3: And then if you look at some of the other business areas, there could still be some destocking happening in construction related stuff in the US which is HVAC related in motion for us.

Got destocking happening in construction related stuff in the U S, which is HVAC related emotion for us So say HVAC related drives and NEMA motors, but not a lot and then as we called out the biggest part is in robotics in China, where there's probably still take could take sort of quarter or.

Timo Ihamuotila: But let's remember that residential construction is only about 15% of the electrification business. And then if you look at some of the other business areas, there could still be some de-stocking happening in construction related stuff in the US, which is HVAC related in motion for us. So, say HVAC related drives and NEMA motors, but not a lot. And then as we called out the biggest part is in robotics in China where this probably still could take sort of quarter or two to flash out. Thank you.

Speaker 3: So, say, HVAC-related drives and NEMA motors, but not a lot. And then, as we called out, the biggest part is in robotics in China, where this probably still could take sort of quarter or two to flash out.

Will: Thanks, Will.

To flush out.

Speaker 4: Thanks Will. And we'll move on to the next question in line on the conference call, which would be Gail DeBray, Deutsche Bank.

Thank you thanks will.

And we'll move on to the next.

Question in line on the conference call, which would be Gael de Bray Deutsche Bank.

Speaker 6: Um, can you can you hear me now? We can hear you now.

Can you can you hear me now.

Gael de: And we'll move on to the next question in line on the conference call which would be Gael de Brae, to continue into the next couple of quarters in robotics and district. I mean, do you see some sort of bottoming out this quarter or do you actually expect orders to trend further down the quencherly in Q4 and Q1? And specifically in China, I think you also said in the press release that you noted some indications of the underlying Chinese market stabilizing.

Speaker 7: That's great. Can I have some kind of clarification on your statement that this talking and ordered normalization should continue?

Oh, that's great.

Some kind of clarification on your statement that Destocking and ordered normalization should continue into the next couple of quarters and robotics and discrete I mean do you see some sort of bottoming out this quarter or do you actually expect orders to trend further down.

Speaker 7: to the next couple of quarters in robotics and discrete. I mean do you see some sort of bottoming out this quarter or do you actually expect orders to trend further down sequentially in Q4 and Q1 and specifically in China. I think you also said in the press release that you noted some indications of the underlying Chinese market stabilizing. Is it applicable to the discrete information.

Sequentially in Q4, and Q1 and specifically in China.

You also said in the press release that you noted some indications of the underlying Chinese market stabilizing.

Is it applicable to the discrete automation business.

Very much.

Speaker 3: Maybe I'll start with the robotics channel stuff that was sort of related a little bit to the previous question. So at this moment in time, and this is of course difficult to call and it's early in the quarter, but we are not expecting when you look at the RA orders further sequential decline on absolute numbers. So that's where we are sitting there.

Yeah, maybe I'll start with the robotics channel stop vessels that were sort of related a little bit to that.

To the previous question so.

Gael de: Is it applicable to the district automation business? Thanks very much. Yeah, maybe I'll start with the robotics channel stuff as that was sort of related a little bit to the previous question. So at this moment in time, and this is of course difficult to call and it's early in the quarter, but we are not expecting when you look at the RRA orders further sequential decline on absolute numbers. So that's that's where we are sitting there.

At this moment in time and this is of course difficult to call and it's early in the quarter, but we are not expecting when you look at the our raw orders further sequential decline on absolute numbers. So that's that's that's where we are sitting there and when you look at the robotics business. Overall, then if you take the whole picture actually is.

Speaker 3: And when you look at the robotics business overall, then if you take the whole picture, actually, as we were down in China in orders quite a bit, on the other hand, we were actually up 6% on the other market. So this is really sort of a bit of a dual situation.

We were down in China in orders quite a bit on the other hand, we were actually up 6% on the other market. So this is really sort of a bit of a dwell situation.

Speaker 3: And then now I actually forgot what was the other part of the question. So can somebody remind me if you had to kind of like sneaked in there.

Gael de: And when you look at the robotics business overall, then if you take the whole picture actually as we were down in China in order quite a bit on the other hand, we were actually up 6% on the other market. So this is really sort of a bit of a dual situation. And then now I actually forgot what was the other part of the question. So can somebody remind me if you had to kind of like sneak in there?

And then now I actually forgot what was the other part of the question. So can somebody remind me if you had to kind of like sneaked in their I D.

Speaker 7: The other part was actually around the statement you had in the press, which noted some signs of stabilisation in China.

It was actually around the <unk>.

<unk> you had in the price.

Some signs of stabilization in China.

Speaker 2: Yeah. And do you want to take that? I'm just going to say that when you look at China, we were down 3 percent, which was less than we expected. And of course, less than we saw during previous quarter. And we can see that three out of four business areas actually show flat to growth. And only one, which was the robotic and discrete automation, which showed weakness in that market. So some good signals, I think.

Yeah, and then do you want to take the parameters can say that when you look at China, we were down 3%, which was less than we expected and of course less than we saw during previous quarter.

Gael de: The other part was actually around the statement you had in the press release. Oh, yeah. So it needs some signs of stabilization in China. Yeah. And do you want to take that? I just can say that when you look at China, we were down 3% which was less than we expected. And of course less than we saw during previous quarter. And we can see that 3 out of 4 business areas actually showed flat to growth.

Gael de: And only one which was the robotic and discrete automation which showed weakness in that part. So some good signals I think. Okay. Thank you. Yeah. And are you going to sneak a third question in there, Gail? Yeah. I think he's going to ask if this is going to continue like this. If this is going to continue like this interview for. I think in the semi-promise, it's just the stabilization. Is it the comment applicable to discrete automation?

And we can see that three out of four business areas actually show flat to growth and only one which was the robotic in discrete automation, which showed weakness in that market.

Some some good signals.

I think.

Speaker 7: Okay, thank you. And are you going to sneak a third question in there, Gail? I think he's going to ask if this is going to continue like this. If this is going to continue like this into Q4. Yeah. I think we'll do the same, I promise. It's just the stabilization. Is it a comment applicable to discrete automation?

Okay. Thank you and Oh, yeah and.

And.

Youre going to sneak a third question in there I think he is going to ask you to leave is going to continue like this.

To continue likely to enter Q4, yeah, I think listen I promise. It shows the stabilization is yes is it a comment pretty cable to discrete automation.

Speaker 3: Well, if you just take discrete automation, first of all, we are not that big in that if you put outside robotics in China, that's more a European business for us. So we might not be the right indicator here when you look at this discrete automation that...

Well if you just take discrete automation first of all we are not that big in that if you put the outside robotics in China, that's more of a European business for us. So we might not be the right indicator here. When you look at distillate discrete automation, that's how I would put it in on that sort of then when you.

Gael de: Well, if you just take discrete automation, first of all, we are not that big in that if you put outside robotics in China. That's more a European business for us. So we might not be the right indicator here when you look at this discrete automation. That's how I would put it. And on that sort of then when you look at the robotics market in China, there's also two parts there. The EV market for EV because it's actually going quite strong.

Speaker 3: how I would put it, and on that sort of thing, when you look at the robotics market in China, there's also two parts there. The EV market for EV vehicles is actually going quite strong, and then the other stuff which is closer to consumer demand is at the moment a little weaker. But I think what Björn said on the overall sort of stabilization trend on the ABB level should look what we know now pretty similar also going into Q4.

At the robotics market in China. There's also two parts there the EV market for E vehicles is actually going quite strong and then the other stuff, which is closer to consumer demand is at the moment, a little weaker but I think what <unk> said on the overall sort of stabilization trend on ABB level should look.

Gael de: And then the other stuff which is closer to consumer demand is at the moment. A little weaker, but I think what Bjorn said on the overall sort of stabilization trend on the ABB level should look, you know, what we know now. But the similar also going into Q4. Thank you very much.

What we know now pretty similar also going into Q4.

Speaker 4: Thank you very much. Thank you. And we'll take one question here from the online tool from Phil Buller at Berenberg. He says, where are we on pricing and can that be negative on aggregate in 2024?

Thank you very much thank you.

And we will take one question here from the online tool from failed Blackberry and that he says.

Where are we on pricing and can that be negative on aggregates in 2024.

Unknown Executive: Thank you, and we'll take one question here from the online tool from Field Buller at Berrenberg. He says, where are we on pricing? And can that be negative on aggregate in 2024? Yeah, I just can mention that the pricing was up 4% for the quarter and I think three is coming from last year and one percent up during this phase. So it keeps up the pretty good.

Speaker 2: I just can mention that the pricing was up 4% for the quarter and I think 3% is coming from last year and 1% up during this period. So it keeps up pretty good. So it's a combination with improvement of the profitability is pricing and volumes.

I just can mention that the pricing was up 4%.

For the quarter and I think Q3's is.

Coming from from last year, and 1% up during this period. So it keeps up with pretty good. So it's a combination with improvement of the profitability is pricing and volumes.

Speaker 3: Yeah, and maybe to mention on that topic that actually if you take input cost outside labor Because our pricing went to kind of like it was five last quarter now It was four but also the input cost actually went down outside labor So in that sense, it's sort of moving in in tandem you could say

Yeah, and maybe dimension on that topic that actually if you take input cost outside labor because our pricing went to kind of like it was five last quarter now it was four but also the input cost actually went down outside labor. So in that sense, it's sort of moving in tandem and if you could say so.

Unknown Executive: So it's a combination with improvement of the profitability is pricing and volumes. Yeah, and maybe to mention on that topic that actually, if you take input cost outside labor because our pricing went to kind of like it was five last quarter, now it was four, but also the input cost actually went down outside labor. So in that sense it's sort of moving in tandem, if you could say so.

Speaker 4: And then we move to the next question and we will open up for Max at Morgan Stanley .

And then we move to the next question.

It's been up for Max at Morgan Stanley .

Speaker 8: Thank you and good morning. I just wanted to ask about the America's growth because you obviously called that out as particularly strong, but I think it contains the large process automation order. So could you just talk about the base business and how that's evolved in the US through the quarter? Thank you.

Thank you and good morning.

Just wanted to ask about the Americas growth because you obviously called that out as particularly strong, but I think it.

Max Yates: And then we move to the next question and we will open up for Max at Morgan Stanley. Thank you and good morning. I just wanted to ask about the America's growth because you obviously caught that out as particularly strong, but I think it contains the large process automation orders. So could you just talk about the base business and how that's evolved in the US through the quarter? Thank you. Yeah, it's correct that the US is driven by large orders, a lot of these transformations, both when it comes to energy security, which is mainly in the LNG, but also in new infrastructure, especially for electrifying America.

It contains the large process automation orders. So could you just talk about the base business.

That's evolved in the U S through the quarter.

Speaker 2: Yeah, it's correct that the US is driven by large orders. A lot of these transformations are both when it comes to energy security, which is mainly in the LNG, but also in new infrastructure, especially for electrifying America. That's been the driving force. If we're looking just at the short-cycle business, it's more negative on that side.

Keith.

Yes, it's correct that the U S is driven by large orders a lot of these transformation of the ball when it comes to energy security, which is mainly in the LNG, but also in our new infrastructure, especially for Electrifying America.

America, that's been the driving force if we're looking just at the more the short cycle business, it's a small negative on that side.

Speaker 8: And I think you call out quite a big decline in the motion division. Maybe what is driving that in the US?

And I think you call out quite a big decline in motion and the the motion Division.

Max Yates: That's been the driving force. If we're looking just at the more the short cycle business, it's a small negative on that side. And I think you call out quite a big decline in motion in the motion division. Maybe what is what is driving that's in the US? Yeah, as I spoke about this earlier a little bit. So it is really relating to these these talking situations in the construction. And really, we have a very strong position in eight solutions in motion and that's really one part of it.

Maybe what is what is driving that in the U S.

Speaker 3: Yeah, as I spoke about this earlier a little bit, so it is really relating to these talking situations in the construction, resi construction mainly, but construction-related business. We have a very strong position in HVAC solutions in motion and that's really one part of it. I don't now remember if we had a stronger comparable last year in the US, it could be that that's driving it as well, but I can sort of check it while we move forward on the call.

Yeah, Yeah as I spoke I spoke about this earlier a little bit. So it is really relating to this.

Destocking situations in the construction resi construction, mainly but construction related business, we have a very strong position in HVAC solutions in motion and that's really one part of it I don't know remember if we had a stronger comparable last year in the U S. It could be that that's driving it as well, but I can sort of.

Check it while we are more forward on the call.

Speaker 4: OK, thank you very much. Thanks, Max. And the next question comes from Sebastian at RBC.

Okay. Thank you very much thanks.

Max Yates: I don't now remember if we had a stronger comparable last year in the US. It could be that that's driving it as well, but I can sort of check it while we move forward on the call. Okay. Thank you very much. Thanks, Max.

Thanks Max.

And the next question comes from Sebastian at RBC.

Speaker 9: Morning everyone. My question relates to the momentum in Europe . You mentioned that Germany was very weak on on motion or the intake coming from way. But if you adjust for that you just for that weakness where do you see European growth. And were you surprised by that.

Good morning, everyone. My question relates to the momentum in Europe , you mentioned that Germany was very weak.

Sebastian Kuenne: And the next question comes from Sebastian at RBC.

On the motion order intake coming from rate, but if you adjust for that.

Sebastian Kuenne: Good morning, everyone. My question relates to the momentum in Europe. You mentioned that Germany was very weak on motion order intake coming from rail, but if you adjust for that, you just for that weakness, where do you see European growth and were you surprised by that? Let me talk a little bit. Yeah, it's what you're seeing a little bit on Germany, which has been the, let's say, the most negative in Europe, which was down 33%.

Weakness, where do you see European growth and are you surprised by that.

Speaker 2: Let me talk a little bit. What you're seeing a little bit on Germany, which has been the most negative in Europe , which was down 33%, we had a huge traction order in Germany last year, so the comparable is quite tough. But even if you take that out, you are on a double digit.

Let me talk a little bit what you're seeing a little bit on Germany, which has been the let's say the most negative in Europe , which was down 33%. We had a huge traction order in Germany last year. So the comparable is quite tough, but even if you take that out you are.

On the double digit.

Speaker 2: decline in Germany, which is of course also related to the real estate construction business, which is a bigger part of electrification in Germany than we have in any other market.

The decline in <unk> in Germany, which is of course also related to the real estate construction business, which is a bigger part of electrification in Germany than we have in any other market saw some effect of that but I think it's pretty clear, Germany is more and more challenging.

Sebastian Kuenne: We had a huge traction order in Germany last year, so the comparable is quite tough. But even if you take that out, you are on a double digit decline in Germany, which is of course also related to the real state constructions. Business, which is a bigger part of electrification in Germany than we have in any other markets or some effect of that. But I think it's pretty clear. Germany is a more challenging part of Europe.

Speaker 2: some effect of that. But I think it's pretty clear Germany is a more challenging part of Europe . If you look for instance at the Nordic region you saw good growth and many of these new transformational projects that are taking place. So many of the basic are investing heavily.

Part of Europe . If you look for instance at the Nordic region, you saw good growth in many of these.

New transformation of projects that are taking place in many of the base of this are investing heavily is our.

Speaker 3: That's why it's a little bit mixed bag when you see Europe . Maybe on most orders overall just to throw a number in here. So we had minus seven but if you take the traction division out.

That's why it's a little bit mixed bag, when you see Europe and.

Sebastian Kuenne: If you look for instance at the Nordic region, you saw good growth and many of these new transformational projects that are taking place. So many of the basic, these are investing heavily. So that's why it's a little bit mixed bag when you see Europe, maybe on motion orders, overall, just to throw a number in here. So we had minus seven. But if you take the traction division out, the motion is actually pretty much flat or slightly up, liking a one. Point.

And maybe on most of the orders overall just to throw a number in here. So we had a minus seven but if you take the traction division out the motion is actually pretty much flat or slightly up liking of one point.

Sebastian Kuenne: Thank you very much.

Speaker 3: the motion is actually pretty much flat or slightly up like you know one.

Sebastian Kuenne: Thank you.

Speaker 4: Thank you very much. Thank you. And we open up now for Martin at City. The line should be open Martin.

Thank you very much. Thank you and we open up now for Martin that Citi. Your line is imbalanced and Martin.

Speaker 8: Thank you. Good morning. It's Martin. And just a question on the time you called out.

Yeah. Thank you good morning, its Marshall.

Just a question on the planes you've called out in what it takes.

Speaker 8: robotics and machine builders that you can show at lead time. Could you get some numbers on that to where this has come from and where they're now at and is that now fully back to normal? So when we think about the lead time contraction and what that does to order fading, are we kind of now normal or are we still more to go?

Martin Wilkie: And we open up now for Martin at City. You along should be open, Martin. Yeah, thank you.

Jim builders shorter lead times could you put some numbers on that as to where they've come from within.

Timo Ihamuotila: Good morning, it's Martin at City. And just a question on lead signs, and you've called out in robotics and a proximity machine builder as short of lead signs. Could you put some numbers on that to where they've come from and where they've within now at? And it's that nice. It's fully back to normal. So when we think about in contraction and what that does to order feeding, I'll be kind of know normal or there's still more to go there.

And is that not really back to normal so when we think about.

And contraction that.

The order phasing or are we kind of know normal or there is still more to go there.

Speaker 2: No, I think today the...

I think they are.

Today the.

Speaker 2: All the times are short, I mean, why it should be in line with that. And as you know, for a little bit over a year ago, it was a totally different situation. So many of the Chinese dealers were actually stocking and that is being de-stocked now.

Order times are short I mean, where it should be in line for that and.

As you know for a little over a year ago. It was a totally different situations. So many of the Chinese dealers refractories talking and that is being a destock now, but I think Robert you said for what the business is a little bit of a mixed bag. If you look at the global yen I think Tim you said that but if you look outside China.

Timo Ihamuotila: Thank you. No, I think today, today, the order times are short. I mean, why should be in line with that? And as you know, for a little over a year ago, it was a totally different situation. So many of the Chinese dealers was actually stocking and that is being destocked now. But I think robot is a robot business is a little bit a mixed bag if you look at the global and I think Timon said it, but if you look outside China, we actually have 6% growth in the robot business.

Speaker 2: But I think robot is a robotic business is a little bit a mixed bag if you look at the global. And I think Timo said it. But if you look outside China we have actually have 6 percent growth in the robotic business. So Europe and North America is actually moving quite well. So.

We actually have 6% growth in their water business or so Europe , and North America, it's actually moving quite well. So the the weaker market is very much contained to the to the Chinese market at the moment. So we believe that the destocking of the.

Speaker 2: the weaker market is very much contained to the Chinese market at the moment.

Speaker 2: We believe that the de-stalking of our dealers will take a little bit more time before we are there.

Timo Ihamuotila: So Europe and North America is actually moving quite well. So the the weaker market is very much contained to the Chinese market at the moment. So we believe that the destocking of the of our dealers that will take a little bit more time before we are there. Yeah, no, I was going to throw in something on the bad luck dynamics because I think that might have been a part of the question here as well.

Of our dealers that will take a little bit more time before we are at.

Are there.

Speaker 3: No, I was going to throw in something on the backlog dynamics because I think that might have been part of the question here as well. So if you look at the robotics...

Yeah, No I was going to throw in something on the backlog dynamics, because I think it might have been part of the question here as well. So if you look at the robotics robotics are a robotics and machine automation Dippold business area. It's sitting at the moment at about 2.4 billion backlog and the backlog before we went.

Speaker 3: robotics, RA, robotics and machine automation, the whole business area, it's sitting at the moment at about 2.4 billion backlog and the backlog before we went into this whole Covid and you know this sort of supply constraint stuff and all that was actually about 1.4. So we have about billion still to work to sort of get into.

Into this whole COVID-19 and and you know, there's sort of a supply constraint stuff and all that was actually about one four so we have about 1 billion still to work to sort of get into a normal level. So there is some support coming from <unk> for the coming quarters from the backlog the backlog is longer in machine automation then Rob.

Timo Ihamuotila: So if you look at the robotics robotics R a robotics and machine automation, the whole business area, it's sitting at the moment at about 2.4 billion backlog and the backlog before we went into this whole COVID and you know, this sort of supply constraints stuff and all that was actually about 1.4. So we have about billions still to work to sort of get into a normal level. So there is some support coming from to the coming quarters from the backlog.

Speaker 3: a normal level so there is some support coming from the coming quarters from the backlog. The backlog is longer in machine automation than robotics but it's giving a bit of support also to robotics.

Timo Ihamuotila: The backlog is longer in machine automation than robotics, but it's giving a bit of a bit of support also to robotics business. And if we think about the math on that, we look at your book to build and the backlog would normalize kind of by next summer, I mean, is that the right way to look at it. If it leads times around normalize, and you know, historical backlog ratios are kind of where we're going to go back to that, the right math, think about when the backlog actually normalizes.

It takes but its giving a bit of support also with the robotics business.

Okay.

Speaker 8: And if we think about the maths on that, if we look at your book to build, then the back globe would normalise by next summer. Is that the right way to look at it? If lead times are now normalised and your historical back global ratios are the way we're going to go back.

And if we think about the math on that we look at your <unk>.

Ill then.

Backlog with normalized kind of by next summer.

Is that the right way to look at it if lead times are now normalized.

Historical backlog ratios are kind of where we're going to go back to the right math.

Speaker 8: that the right mass think about when the backlog is effectively normalized.

Well actually no.

Speaker 3: Yeah, that's kind of like where the math takes you if you take the current order level of about 670 million and you put it to 900. I mean, we can, of course, pick whatever revenue we want. So that would then be.

Yeah, that's kind of like where the math takes you. If you take the current order level of about $670 million and you put it to 900 I mean, we can of course pick whatever revenue. We want so that would then be about four quarters here, but whether I've drawn billion I still also want to say that this is a short term issue because we.

Speaker 3: about four quarters. Yeah, but I've drowned billion. I still also want to say that this is a short-term issue.

Timo Ihamuotila: Yeah, that's kind of like where the math takes you, if you take the current order level of about 670 million, and you put it to 900, I mean, we can of course pick whatever revenue we want. So that would then be about 4 quarters. That's what I've drawn billion. I still also want to say that this is a short term issue, because we are very confident about the robotic market going forward.

Speaker 2: because we are very confident about the robotic market going forward. So we do expect that this market is 10% growth over a business cycle. So, you know, we are investing in additional production and development capacity within this business because we think it's...

We are very confident about the robotic market going forward. So we do expect that this market is 10% growth over a business cycle. So.

We are investing in additional.

Production and development capacity within this business because we think it's hyper interesting for ABB in the future.

Speaker 2: hyper interesting for ABB and the future.

Timo Ihamuotila: So we do expect that this market is 10 percent growth over a business cycle. So, you know, we are investing in additional production and development capacity within this business because we think it's hyper interesting for ABB and the future.

Speaker 4: Thank you very much. Thanks. Thanks, Martin. And then we open up the line for James at Redbone.

Great. Thank you very much thanks, Thanks Martin.

And then we open up the line for James said Fed Bank.

Speaker 3: James, are you there? Hey, good morning. Good morning. Can you hear me? We can. Hear you well.

James are you there.

Good morning, everyone.

Timo Ihamuotila: Thank you very much. Thanks.

James Moore: Thanks, Martin. And then we open up the line for James, said Redbine. James, are you there? Yes. Good morning. Can you hear me? Can you hear me well? It's just a question on electrification, particularly DS. Gael, the medium voltage, all the growth in the quarter and talk about your visibility next year for orders. I mean, I asked because this has been a great market for everybody in two or three years. And there are two schools of thought.

Speaker 5: Just a question on electrification, particularly BS.

It's just a question on them.

Occasion.

Particularly T S.

Speaker 5: Can you scale the medium voltage order growth in the quarter and talk about your visibility to next year for orders? I mean I ask because this has been a great market for everybody.

Scale.

And both of your order growth in the quarter and talk about your visibility in the next year or does I mean, I asked because this is a great market everybody two or three years and there are two schools of thought one is and I know, we had 2030 years of Underinvestment in medium voltage that we now have to spend a hell of a lot on.

Speaker 5: two or three years and then two schools of thought. One is...

Speaker 5: And I know we have 20, 30 years of underinvestment in medium voltage, that we now have to spend a hell of a lot on the automation, the software, moving to power semiconductors and the electrification of the planet. This is going to be a great decade. It's going to keep on growing. That's just the story that it takes.

Automation software moving to power semiconductors, and the electrification of the planet. This is going to be a great decade, Okay, Oh, let's just.

James Moore: One is, I don't know, we had 20, 30 years of underinvestment in medium voltage. That we now have to spend a hell of a lot on the automation, the software, moving to power, some of the conductors, and the electrification of the planet. This is going to be a great decade is ongoing, although it's just the thought that it's cyclical.

It's cyclical.

Speaker 5: and I'm just wondering how much you thought the aimless progress.

And I'm just wondering if you can.

Got it.

Speaker 2: Thanks, James. Just a little bit on the medium voltage. When you look at the medium voltage for ABB, it's actually between 20-25% of our total business. So it's a significant part of that.

Yeah. Thanks, James just a little bit on the medium voltage and when you look at the medium voltage for ABB is actually between 20% to 25% of our total business. So it is significantly part of that and that is a very strong it's being driven by the whole electrifying the world where the infrastructure needs.

James Moore: And I'm just wondering, how much does it cost to aim this group? Thanks, James. Just a little bit on the medium voltage. And when you look at the medium voltage for ABB, it's actually between 20-25% of our total business. So it's a significantly part of that. And that is very strong. It's being driven by the whole electrifying the world, where the infrastructure needs to be built out. DS is of course benefiting that, but also on the medium voltage drive business.

Speaker 2: and that is very strong. It's being driven by the whole electrifying the world, where the infrastructure needs to be built.

To be built out D. S is of course benefiting that but also on on that.

Speaker 2: DS is of course benefiting that but also on the medium voltage drive business is also a lot.

The medium voltage drive business is also a lot and you may recall that when it comes to D. S.

Speaker 2: And you maybe recall that when it comes to DES...

Speaker 2: a year ago from now it was a little bit of a crisis division. Today is definitely not a crisis division and of course part of the over 20 percent margin for electrification so you know they are up on there about 15 percent so it's a good achievement there. If you want to go a little bit into the dynamics in the growth numbers for the future.

Year ago from now it was a little bit of a crisis division today is definitely not the crisis division and of course part of the over 20% margin for electrification. So they are up about 15%. So it's a good achievement. There if you want to go a little bit into the.

James Moore: It's also a lot. And you maybe recall that when it comes to DS a year ago, from now, it was a little bit of a crisis division. Today is definitely not a crisis division, and of course part of the over 20% margin for electrification. So they are up on about 15%. So it's a good achievement there. If you want to go a little bit into the dynamics in growth numbers for DS.

Dynamics in the growth numbers.

Speaker 3: Yeah, it's been sort of, as we know, strong double-digit growth in D.S. But of course, if you threw in a 10-year sort of storyline there, James, and I really don't have anything to add to what Björn said. I mean, we see this as a strong market going forward as well. I mean, there will be a lot of need for infra.

Yes, yeah, it's been being sort of as we know strong double digit growth in D. S. But of course, if you threw in a 10 year sort of storyline, there James and I really don't have anything to add to what Bjorn said I mean, we see this as a strong market going forward as well I mean, there will be a lot of need for.

James Moore: Yeah, it's been sort of, as we know, strong double digit growth in DS. But of course, if you threw in 10 years sort of storyline there, James. And I really don't have anything to add to what Björn said. I mean, we see this as a strong market going forward as well. I mean, there will be a lot of need for infrastructure on distribution in many ways, both for the industry as well as for transport.

Speaker 3: on distribution in many ways, both for the industry as well as for transport. So we see it as a strong market where we continue to invest behind it and we think we can improve performance of that division going forward as well.

In fraud on on distribution on in many ways, both for the industry as well as for.

Transport, so we see a strong market, where we continue to invest behind it and we think we can improve performance of that division going forward as well.

Speaker 5: You don't see any sort of signs of cyclical slowing in the tender part. You think it can stay as a good market through 24 on orders.

You don't see any sort of signs of cyclical slowing in the tens about do you think it can stay as a good market through 'twenty four on orders.

James Moore: So we see that there's a strong market where we continue to invest behind it. And we think we can improve performance of that division going forward as well. You don't see any sort of sign of cyclical slowing in the tender power. You think it can stay as a good market through 24 on orders? Yes, absolutely. Because many of these big projects that we are seeing are actually the medium voltage, the core of some of these projects, the most of these projects.

Speaker 2: Yes, absolutely, because many of these big projects that we are seeing are actually the medium voltage, the core of some of these projects, or the most of these projects, because we are talking high power into hydrogen.

Yes, absolutely because many of these are big projects had we all see are actually the medium voltage at the core of some of these projects or the most of these projects because we are talking.

High power into if.

If it's hydrogen or if it's green steel or if it's the infrastructure in the mine and so on but also the whole electrification when it comes to EV charging.

Speaker 2: green steel or if it's the infrastructure in a minus and so on. But also the whole electrification when it comes to EV charging. When we talk about EV charging we normally talk about the charging station. But for ABB maybe the most or the best part of the business is actually the whole infrastructure that needs to be built up to support all these charging stations everywhere. And there you have medium voltage in large scale. Thank you.

James Moore: Because we're talking, you know, high power into if it's hydrogen or if it's green steel or if it's the infrastructure in a minus and so on. But also the whole electrification when it comes to EV charging. You know, when we talk about EV charging, we normally talk about the charging station. But for ABB, maybe the most or the best part of the business is actually the whole infrastructure that needs to be built up to support all these charging stations everywhere. And there you have medium voltage in large case.

When we talk about EV charging we normally talk about the charging station, but for ABB, maybe the most or.

James Moore: Thank you. That's really helpful, thanks. Thanks, James.

The best part of the business is actually the whole infrastructure that needs to be built up to support all these charging stations everywhere and there you have medium voltage.

In large scale.

That's really helpful. Thanks.

Speaker 4: Thanks, James. And we go back to Alex at Banco America, Maryland.

Thanks James.

And we go back to Alex at Bank of America Merrill Lynch.

Speaker 3: Thanks very much for the follow up. I just wondered if you, we've sort of talked a little bit about robotics and machine automation. I mean the implied declines in that machine automation business in order intake is significant if I've got my calculations correct. I wondered if you could just give us the actual numbers. Timo, sorry. Yeah, it is significant. Your calculation.

Thanks, very much for the follow up I just wanted to ask.

You talked a little bit about.

Alex: And we go back to Alex at Bank of America, Mary Lynch. Thank you very much. [inaudible] you very much. Thank you very much. [inaudible] So, that's how it works.

Robotics and machine automation I mean, the implied declines in that machine automation business and order intake is significant.

Calculations correct. So I wondered if you could just give us the actual numbers.

Timber alright, yes. It is significant your calculation is correct.

Speaker 3: No, but you have to really look at this in a way that in machine automation business, which should be sort of delivery times, I don't know, four weeks to 14, 16 weeks type of stuff, we're still working a really long backlog. So even if the order intake at the moment in machine automation is down, double digit as you are correctly pointing out, calculating from the whole robotics, so it's like 50 or there or thereabout, you know, broad lumber.

No, but it's it's it's you have to really look at this in a way that in in our machine automation business, which should be sort of delivery times I don't know four weeks to 14 16 weeks type of stuff, we're still working a really long backlog. So even if the order intake at the moment and machine automation is down you know double double.

<unk> as you are correctly pointing out calculating from the whole robotics. So it's like you know 50.

Or there or thereabout, and our broad lumber numbers, but that does not mean that we would not expect that business to perform well going into next year because.

Speaker 3: But that does not mean that we would not expect that business to perform well going into next year because

Speaker 3: big part of that 1 billion backlog reduction which I was talking about is happening exactly there.

Part of that 1 billion backlog reduction, which I was talking about is happening exactly there.

Speaker 2: To be adding on this, I think when you talk about our discrete automation, it's very specific. Because we talk about machine automation and more or less all our customers in this segment here are OEMs. So we're working close with these companies and we are supplying into their machines. And we do not feel that...

To be adding on beef I think when you talk about our discrete automation is very specific because we're talking about machine automation and more or less all our customers. In this segment here are Oems.

So we working close with these companies and we are of course applying into their machines and we do not feel that we have lost market share. Among these customers, who we are still with them but of course, when we had huge problems during the last year many of them that place you pick orders to secure.

Speaker 2: market share among these customers. We are still with them. But of course when we had huge problems during the last year many of them that place you big orders to secure their own deliveries of their machines.

Their own deliveries of their machines that is of course, a new situation today and we are supplying quite well out then you can you'll probably see on the on the on the invoicing there so for them. They can do a big deal Destocking and today with the short lead times that you have they will order when when they need so we.

Speaker 2: That is of course a new situation today and we are supplying quite well out and you can you probably see on the on the invoice in there. So for them they can do a big disc stocking and today with the short lead times that you have they will order when they need. So we are also on the discrete automation which is very much in line what you see on the robotics market and that we do expect a lot of growth in this business in a couple quarters.

We are also on the discrete automation, which is very much in line what you see on the robotics market.

That we do expect a lot of growth in this business in a couple of quarters.

Speaker 4: OK, thank you. Thanks, Alex. And we have one question remaining from the conference call. And it comes from Sebastian again. Let's go to that first question.

Okay. Thank you.

Thanks, Alex.

And we have one question remaining from the conference call and it comes from Sebastian again.

Your line should be open.

Speaker 9: Yeah. Hi. I have a follow-up question on robotics again. So, if China is weak and its threshold cycle is weak and its inventory adjustments are coming...

Yes.

I have a follow up question on robotics again so.

Last week, and it's a short cycle, that's weak and inventory adjustments that come in.

Speaker 9: You could use the robotics from Shanghai, I assume, from your factory there, to give us an idea of the backlog of that factory and whether there's a risk that you may have to adjust capacity of that facility in the next six months.

You you could choose to robotics from Shanghai I assume from your factory there.

The backlog of that factory and what about the risk that you may have to adjust capacity.

Okay.

Six months.

Speaker 3: I really don't know what the backlog of a factory is, so I can't give any number thing here. But I don't think in general, of course, we want to run a business model where we have as much variable cost as possible. And of course, when the demand changes, we will have to, in multiple places of ABB, adjust our manufacturing.

Yeah I I.

Really I I don't know what the backlog of our factories as a factory. So I can't give any number of things here, but I don't think in general of course, we want to run a business model, where we have as much variable cost as possible and and you know of course when the demand changes we will have two in multiple places of ABB.

Just our manufacturing situation.

Speaker 2: situation. I think this is one of the strengths of the decentralized model, that you have 19 divisions and some of the divisions are in big growth mode and some divisions have a more tougher market.

I think this is the one of the strengths of the decentralized model that you have 19 divisions and some observations are in big growth mode in some.

Division's habit or tougher market. So the one that have a tougher market they adjust their capacity what they need to.

Speaker 2: So the ones that have a tougher market, they adjust their capacity what they need to.

Speaker 2: and the other one they invest for growth. So that's nothing special for them. They will take the measures they need to continue to deliver good margin. But this goes up and down and we have big confidence that they will adjust those costs in line with the demand.

And the other one they invest for for for growth. So that's nothing special them. They will take the measures they need to continue to deliver good margin, but this goes up and down and and we have the confidence that they will adjust those costs in line with the with the demand so.

So that's how it works.

Speaker 9: Are there other business units where you currently see, let's say, a lot of people are looking

The brief follow up all the other business units, where you currently.

Okay.

Speaker 9: It's surprisingly low capacity utilisation, we say this might need some work.

Presently low capacity utilization rates.

There's some work now it's actually only.

Unknown Executive: The brief follow-up, are there other business units where you currently eat, exaggerate the low capacity utilization, where you say this is not in some work? that we are actually getting quite the good volume leverage as well at the moment. And we should not forget, we have still an order book, you know, of over 21 billion, which we had, you know, it has not gone down actually during the last six months, so it's very strong from that which we will carry with us into 24. Thank you very much. Thanks. Thank you.

Speaker 2: No, it's actually only if you very much contain it to China and robotics. If you look at more or less every segment we have and every division, they have a pretty full capacity today in the way they are running. Yeah, volume actually contributed about 170 million into the margin this quarter. So it definitely is the case that we are actually getting quite a good volume leverage as well at the moment. But we should not forget we have still an order book.

If you very much.

Dana to China, and robotics, if you look at more or less every segment we have in every division.

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Full capacity today in the way that Romney, Yeah volume actually contributed about 170 million into the margin. This quarter. So it definitely is the case that we are actually getting quite a good volume leverage as well at the moment and why we should not forget we have still an order book.

Speaker 2: you know, of over 21 billion, which we had, you know, it has not gone down actually during the last 6 months.

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We had.

It has not gone down actually during the last six six months so.

Speaker 2: it's very strong from that which we will carry with us into 24.

It's a very strong from that which will carry with us into 'twenty four.

Speaker 4: Thank you very much.

Thank you very much. Thanks, Thank you and we'll have a follow up question from Gael Deutsche Bank.

Speaker 7: Thanks very much for the follow up. Could you talk a bit about the impact coming from the mix because I suspect mixed effects are now turning negative right. Even the faster growth you're seeing in projects and systems and the ongoing distorting in the short cycle businesses that have been historically more profitable.

Thanks, very much for the follow up.

Could you talk a bit about the impact coming from the mix because I suspect makes the effects are all now turning negative right given the faster growth youre seeing in projects and systems and the ongoing destocking in the short cycle businesses.

Gael de: And we'll have a follow-up question from Gail Deutsche Bank. Thanks very much for the follow-up. Could you talk a bit about the impact coming from the mix? Because I suspect the mix effect are now turning negative, right? Even the faster growth you're seeing in projects and systems and the ongoing destalking in the short cycle businesses that have been historically more profitable. Do we consider impact in your bridge?

Timo Ihamuotila: So I think that would be helpful if you could provide maybe any color on this phenomenon in Q3 and how to think about it going into next year. Yeah, first of all, in Q3, mix continued to be a slight positive for us when we look at the margin bridge inside that bridge. But if you look at the mix overall, so the question absolutely valid, we have more stuff, you know, on those, let's call it medium voltage type divisions.

Has it been historically more profitable.

Yeah, but we consider the impact and in your bridge. So I think that would be helpful. If you. If you could provide maybe any color on this.

Speaker 7: We can't see the impact in your bridge, so I think that would be helpful if you could provide maybe any color on this.

Speaker 7: uh... send a man in Q3 m and uh... how to think about it going into next year

Phenomenon in Q3, and and how to think about it going into next year. Yeah. So first of all in Q3 mix continued to be a slight positive for us when we look at the margin bridge inside that that bridge, but if you look at the mix overall. So the question absolutely valid we have more stuff you know on those.

Speaker 3: Yes, first of all in Q3 mix continued to be a slight positive for us when we look at the margin bridge inside that bridge. But if you look at the mix overall, so the question is absolutely valid. We have more stuff on those, let's call it, medium voltage type divisions. And earlier the delta between margin of the short cycle type of divisions and these longer cycle divisions was...

Call it medium voltage type divisions and earlier the delta between margin off the short cycle type of divisions and these longer cycle divisions was bigger. So these have really improved performance. So it doesn't necessarily mean that even.

Speaker 3: bigger. So these have really improved performance. So it doesn't necessarily mean that even if we mix-wise have more of this stuff and less of this stuff it will negatively impact margin because large motors and generators, I mean Bjorn spoke about ELDs.

Timo Ihamuotila: And earlier, the delta between margin of the short cycle type of divisions and these longer cycle divisions was bigger. So these have really improved performance. So it doesn't necessarily mean that even if we mix wise have more of this stuff and less of this stuff, it will negatively impact margin because large motors and generators, I mean, Björn spoke about ELDS, system drives. All these divisions have significantly improved their margin performance, which is of course on positive on this equation.

If we mix wise have more of this stuff and less of this stuff it will negatively impact margin because.

The large motors and generators, I mean beer and spoke about E. L. D S.

Speaker 3: system drives, all these divisions have significantly improved their margin performance which is of course on positive on this equation.

Suits them drives all these divisions have significantly improved their margin performance, which is of course positive on this equate equation.

Speaker 2: But I think we should not forget, especially in PEA, and the service business, which is 50%, and we have a good double digit growth in the service business, which shows that the underlying activity in the market is actually great.

But I think we should not forget.

Especially in NPA as well of course, Yeah service business, which are 50% and we have a good day digital.

Double digit growth in the service business, which shows that the underlying activity in the market is actually great. Yeah. Yeah of course, the sauce Youre IPA has also improved margins significantly altered durable being kind of like closely.

Timo Ihamuotila: But I think we should not forget, especially in PIA as well, of course, service business, which is 50%. And we have a good digital double digit growth in the service business, which shows that the underlying activity in the market is actually great. Yeah, of course. So as you say, PIA has also improved margin significantly, outside turbo, being kind of like close to the different things outside the turbo. And I think it would be good, of course, we measure our gross margin, of course both in our revenues, in our order intake, but also in our order book. And we don't see any worrying signs there. Thank you, and that's great.

Speaker 2: Yeah, of course the SUSE PEA has also improved margins significantly, outside turbo being kind of like close to that 15% outside turbo. And I think it would be good, of course we measure our gross margin, of course both in our revenues, in our order intake, but also in our order book. And we don't see any worrying sign there.

Unknown Executive: Thank you.

The good of course, we measure our gross margin of course, both in our revenues in our order intake, but also in our order book and we don't see any worrying signs there.

Speaker 7: Thank you. That's great, thank you.

Thank you.

That's great. Thank you. Thanks.

Speaker 4: And we'll take the final question from Will at Cap de Chavre.

And we'll take the final question from will add kept the chevrette.

Speaker 10: Thank you again for the follow up. I wanted to ask if you can just provide more insight into how the businesses that you've been working hard and successfully turning around are developing, namely the progress with large motors and generators in terms of its profitability against plan and the progress in this installation products and lastly within the measurement and analytics segment.

Yeah. Thank you again for the follow up I wanted to ask if you can just.

Will: And we'll take the final question from Wil at Keppeshevra. Thank you again for the follow-up.

Provide more insight into how the businesses that you've been working hard and successfully turning around developing namely.

The progress with large motors and generators in terms of its profitability against plan and progressing.

Timo Ihamuotila: I wanted to ask if you can just provide more insight into how the businesses that you've been working hard and successfully turning around are developing namely the progress with large motors and generators in terms of its profitability against plan and the progress in this installation products and lastly within the measurement and analytics segment. I'd be happy to talk about your question. I'd be very happy. On the measurement and analytics, which was the crisis a couple of years ago, we have new management in place, they have a new operating model and they have been delivering margins around 20% on that division.

Installation products and lastly, within the measurement and analytics segments.

Speaker 2: I'd be happy to talk about your question. I'd be really happy to talk about that because we see a significant improvement in all these three businesses.

I'd be happy to talk about your question.

We're really happy to talk about that because we see a significant improvement in all these three businesses.

Speaker 2: I mean, on the measurement and analytics, which was a crisis a couple of years ago, we have new management in place, they have a new operating model, and they have been delivering margins around 20% on that division. I'm not allowed to say it, but I do say it anyway.

On the measurement and analytics, which was the crisis of couple of years ago, We have new management in place they have a new operating model and they have been delivery margins around 20% on that division, maybe I'm not allowed to say it but I do say it anyway.

Speaker 2: If you look at DES, which was a big...

If you look at the.

D S, which was a big.

Speaker 2: challenge for us last year. I said it before, you know, they are up around 15% today, which is fantastic development so far and we think there's more to come.

Challenge for US last year I said it before you know they are up around 50% today, which is fantastic development, so far and we think there's more to come.

Timo Ihamuotila: Maybe I'm not allowed to say it, but I do say it anyway. If you look at DS, which was a big challenge for us last year, I said it before, they are up around 15% today, which is fantastic development so far, and we think that is more to come. If you look at the installation product, which was a problem two or three years ago, Matsujas and his team, they actually got this one about 20%.

Speaker 2: If you look at the installation product, which was a problem two or three years ago, Matsuyas and his team, they actually got this one about 20%. So it shows that with the right management, with the right operating model, and the way they take it, it improves the business.

If you look installation product with trust.

Problem, two or three years ago, My two Jos and his team they actually got these roundabout, 20%. So it shows that with the right management with the right operating model and the way they would take it.

Improves the businesses on large motors that was a crises actually a year ago, where we had really low margin and therefore, it but he and the team have.

Speaker 2: On large motors, that was a crisis actually a year ago, where we had really low margin and but Heike and the team have really made sure that we concentrate on the businesses where we make good money and make sure that we really get paid for the value that we are delivering. And I mean really good thing they're over.

Timo Ihamuotila: It shows that with the right management, with the right operating model and the way they take it, it improves the businesses. On large motors, that was a crisis actually a year ago where we had really low margin and thought, but hey again, the team have really made sure that we concentrate on the businesses where we make good money and make sure that we really get paid for the value that we are delivering.

Really made sure that we concentrate on the businesses, where we make yeah.

Good money and make sure that we really get paid for the value that.

That we are delivering and I mean really good thing there over 10% I probably wouldn't have it shouldn't have said that but still I see sneaking out organically.

Speaker 2: I probably shouldn't have said that, but still I think it's all good that I'm really happy about those performance improvements.

Good that I'm really happy about those performance improvement unique I mean, if you if you think about it that way.

Speaker 2: I mean, if you think about it, we delivered 17.4%.

Timo Ihamuotila: Really good thing, they're over 10%. I probably wouldn't have shouldn't have fed that, but still I think it's all good that I'm really happy about those performance improvements. I mean, if you think about it, we delivered 17.4% and I think you last quarter 17.5%. I think this is a huge step change for the group and absolutely the best performance way out that we have ever done before. That's because of all the different divisions that are now starting to deliver. I'm quite proud of that. Thanks for the additional insight.

Timo Ihamuotila: Thank you.

Delivered 17, 4%.

Speaker 2: and I think the last quarter 17.5%. And I think this is a huge step change for the group and absolutely the best performance way out that we have ever done before. And that's because of all the different divisions that are now starting to deliver.

And I think the last quarter.

17, 5% and I think this is a huge step change for the group and absolutely. The best performance way out that we have ever done before and that's because of all the different divisions are now starting to deliver so.

And I'm quite proud of them.

Yes.

Speaker 5: Great, thanks for the additional insight. Yeah. Thank you. And I know I said it was the final question, but then we had one more coming in from James. And since we have a few minutes left, I think we'll only be fair to take it. So, James, your line should be open. Oh, very kind of you. Thanks for squeezing me in.

Great. Thanks for the additional insight yeah. Okay.

Thank you and I know I said it was the final question, but then we had a one more coming in from James and since we have a few minutes left I think.

To be fair to take it so James your line should be open.

Alright, Thanks for squeezing me in.

James Moore: I know I said it was the final question, but then we had one more coming in from James, and since we have a few minutes left, I think we'll only be fair to take it.

One clarification.

Two clarifications and a question did you say that.

Speaker 5: Did you say that on distributed inventory levels, you think that we're now at a normal place in low voltage, but we still have some destocking in motion HVAC and discrete automation still to go? I think you do, I just wanted to double check.

James Moore: James, your line should be open. Very kind of you. Thanks for squeezing me in.

Inventory levels, you think but we're now at a normal place.

Our low voltage or we still have some destocking in motion HVAC.

Timo Ihamuotila: One clarification, two clarification from the question. Did you say that on just due to inventory levels, you think that we're now at a normal place in a low voltage, or we still have some de-stocking in motion HVAC, and this great automation still to go. I think you did a different double check. Maybe on that first. That's what I said, but on top of that, I said that in electrification in parts, which are related to residential construction, we can't of course see everything from here exactly, so there could still be something, but residential construction is only about 15% of the electrification overall. Business.

And discrete automation still to go.

Thank you Dave I, just wanted to double check.

Speaker 3: and could you just yeah maybe on that first yeah yeah yeah so that's that's what I said but on top of that I said that in electrification in parts which are related to residential construction I mean we can't of course see everything from here exactly so there could still be something but residential construction is only about 15% of the electrification overall

And could you just.

Maybe on that first year, yeah. So that's that's what I said about on top of that I said that in allocating their vacation in parts, which are related to residential construction I mean weekend of course see everything from here exactly so there could still be something but residential construction is only about 15% of the electrification overall business.

Speaker 5: That's clear. And you called that Arctic. We're talking as a part.

That's clear.

Cuda architecture, which has it cold, which I think is quite profitable.

Speaker 2: that have any ramifications and how long does that last for profitability? Yeah, I can give you a little bit that of course they were pretty hurt of us moving out of Russia because there were some of those ice-breaking LNG vessels which was both a super profitable part of the business but also quite a big business for us at the time.

Any ramifications and how long does that last profitability. Yeah, I can give you a little bit that of course, they were pretty heard of us moving out of Russia, because there were.

Timo Ihamuotila: That's clear and you called an architect and we're talking as a part which I think is quite profitable, but have any ramifications and how long does that last for profitability? Yeah, I can give you a little bit that of course they were pretty hurt of us moving out of Russia because there were some of those that are ice breaking LNG vessels which was both a super profitable part of the business, but also quite a big business for us.

Some of those.

There's the ice breaking LNG vessels, which was both a super profitable part of the business, but also a quite a big business for us at the time. So the good thing is that we are seeing a great orders from the cruising industry coming in.

Speaker 2: So the good thing is that we are seeing great orders from the cruising industry coming in, but it takes a little bit of time before the ships are being built and they are being delivered. So we have had margin.

But it takes a little bit of time before the ships are being built and they are being delivered so we had margin.

Timo Ihamuotila: That's at the time. So the good thing is that we are seeing great orders from the cruising industry coming in, but it takes a little bit time before the ships are being built and they are being delivered. So we have had margin on the acid pods side because of under utilization of the factory this year and we will also see some of that next year about 2025. We should have the volumes now when we see what we have in the order book, but the production should be fully up and running. We're good capacity in the 25. That's excellent clarity. Thank you.

Speaker 2: on the Acipod side because of the underutilisation of the factory this year and we will also see some of that next year. By 2025 we should have the volumes now when we see what we have in the order book but the production should be fully up and running with good capacity in 2025.

On the asset side because of the under utilization of the factory. This year and we will also see some of that next year, but 2025, we should have the volumes now when we see what we have in the order book, but the production should be fully up and running we have good capacity in the 25.

Speaker 5: That's excellent clarity. Thank you. And just on acquisition.

Excellent. Thank you and just on acquisition.

Speaker 2: We talked about maybe doing whatever 10, 15 small deals. We haven't done so many. How are you feeling about capital allocations at M&A with your current balance sheet? I think we said 5 to 10 first. I think that's where we are. And then we do a lot of small and let's say minority stakes in startups. But that is driven solely by the division.

So we talked about maybe doing whatever 10 15 full deals we haven't done some M&A. How are you feeling about capital allocation to M&A, you have kind of a balance sheet.

Timo Ihamuotila: And just on acquisition and disposal, we talked about maybe doing whatever, 10, 15 small deals, we haven't done so many. How are you feeling about capital allocations at the M&A? Do you have a balance sheet? Yeah, I think we said five to 10 first. I think that's where we are. And then we do a lot of small and let's say minority states in the startup, but that is driven solely by the divisions.

We said five to 10 first I think that's where we are and then we do a lot of small, let's say minority stakes in startups, but that is driven.

As solely by the divisions.

Speaker 2: We've done two so far on the acquisition side. Maybe we'll get in a couple more, hopefully. I think we have a potential acquisition which is quite long. We're working with a lot of projects. If you don't know how it is, you need to have...

Yeah, we've done two so far on the acquisition side and maybe we'll get in a couple more if we're hopefully.

I think we have a.

Potential acquisition is which is quite long, we're working with a lot of projects, but you know how it is you need to have both the seller and buyer who is agreeing on what the value of the businesses and as you know in many of the new technologies, where we are actually focusing on its been some description from what the owners.

Timo Ihamuotila: Yeah, we've done two so far on the acquisition side and maybe we'll get in a couple more if we're hopefully. I think we have a potential acquisition is quite long. We're working with a lot of projects, but you know how this you need to have both a seller and buyer who is agreeing on what the value of the business is. And as you know, in many of the new tech technologies, but we are actually focusing on, it's been some description from what the owners think the business is worth and maybe some of the markets and you guys, how you look upon some of these business, if you understand what I mean. So you have to find the right dynamics there, but I can assure you that the divisions have a strong focus, especially the 70% of the divisions that are have a strategic growth mandate. That's very helpful.

Timo Ihamuotila: Thank you very much.

I think the business is worth and maybe some of the markets and you guys are you look upon some of these business. If you understand what I mean, so you have to find the right dynamics there, but I can assure you that the divisions are have a strong focus, especially the 70% of the divisions that are have a.

Speaker 4: and you guys, how you look upon some of these businesses, if you understand what I mean. So you have to find the right dynamics there. But I can assure you that the divisions have a strong focus, especially the 70% of the divisions that have a strategic growth mandate. That's very helpful. Thank you very much. And now we will take the final question. And it comes from Max at Morgan Stanley . Place your vote. And David, would you hold theogo

Speaker 2: 70% of the divisions that have a strategic growth mandate.

ITD growth mandate.

That's very helpful. Thank you very much.

Speaker 4: And now we will take the final question and it comes from Max at Morgan Stanley .

And now we'll take the final question and it comes from.

Yeah.

Speaker 10: Thank you. I was going to ask on M&A, but I guess given that was just asked about, could I ask about cancellations and I guess the backlog in RA? Given orders are coming down quite sharply now, are you seeing any kind of pick up in cancellations from that backlog?

Thank you.

Thank you I was going to I was going to ask on M&A, but I guess.

Max Yates: And now we will take the final question and it comes from Max at Morgan Stanley. Thank you. I was, I was, thank you.

Given that was just asked about could I ask about.

Cancellations in the backlog.

Great.

Given given orders are coming down quite sharply now are you seeing any kind of.

Max Yates: I was going to, I was going to ask on M&A, but I guess in given I was just asked about could I ask about cancellations and I guess the backlog in R.A. Given given orders are coming down quite sharply now, are you seeing any kind of pick up in cancellations from that backlog? And maybe kind of an extension of that. Are there any other areas where you see risk that we could have seen some of this kind of early ordering lead time sort of extension that we may subsequently see some normalization of the next couple of quarters.

Pickup in cancellations from that backlog.

Speaker 10: And maybe kind of an extension of that, are there any other areas where you see risk that we could have seen some of this kind of early ordering lead time sort of extension that we may subsequently see some normalization over the next couple of quarters? Are you able to get good visibility on that in some of the other divisions where it's kind of the smaller base orders that those weren't also normalized?

Maybe kind of an extension of that are there any other areas, where you see risk that we could have seen some of this kind of early ordering lead time sort of extension. We may subsequently see some normalization over the next couple of quarters are you able to get good visibility on that and some of the other divisions, where it's kind of the smaller.

This order is that those tools are normalized.

Speaker 2: I think if you go back one year ago, I think the risk was much bigger. And at that time, we had a huge order book and a lot of distributors and companies building up because of our bad deliveries.

I think if you go back one year ago, I think the risk was much bigger and at that time. We you know we had the huge order book here and a lot of.

Max Yates: Are you able to get good visibility on that and some of the other divisions where it's kind of a smaller base orders that those won't also normalize. Thank you. I think, you know, if you go back one year ago, I think the risk was much bigger. And at that time, we, you know, we had a huge order book here and a lot of, you know, distributors and companies by building up because our bad deliveries.

Distributors and companies by building up because our bad deliveries now he's gone one year and we have for quite sometimes we have.

Max Yates: Now it's gone one year and we have to quite sometimes we have a, you know, pretty good supply chain of of our products and things are moving out. So we don't see that as a risk. And on the robotic site, it's a, as I said, it's a very isolated problem on the robotic side to China and that part. And there, there is a lot of distributors also handling out is who has a lot of units in their inventory.

Speaker 2: Now it's gone one year and we have quite some times we have a...

Speaker 2: you know, pretty good supply chain of our products and things are moving out. So we don't see that as a risk. And on the robotic side.

Pretty good supply chain of of our products and things are moving out so we don't see that as a risk and on the robotic side.

Speaker 2: It's a very isolated problem on the robotic side to China.

As I said, it's a very isolated problem on their body side to China and that part in there. There is a lot of distributors also handing out there who has a lot of units in their inventory. So we are not afraid a cancellation, but they might hold back a little bit on the buy to deliver here.

Speaker 2: in that part. And there is a lot of distributors also handing out who have...

Speaker 3: a lot of units in their inventory. So we're not afraid of cancellation, but they might hold back a little bit on the buying factor. We actually follow this stuff as well, because we kind of believe in numbers and many things. And this has not grown. It's actually like super, super low number. So we have nothing major in cancellations, and it has gone down from 22 to 23.

We actually follow this stuff as well because we kind of believe in numbers in.

Many things and this has not grown it actually is it's like Super Super low number. So we have nothing major in cancellations and it has gone down from 22 to 23.

Max Yates: So we're not afraid of cancellation, but they might hold back a little bit on the buying. We actually follow this stuff as well because we kind of believe in numbers in many things. And this has not grown. It's actually, it's like super, super low number. So we have nothing major in cancellations and it has gone down from 22 to 20. 33. Yeah, and of course we have now for a number of quarters had a lot of large orders coming in.

Speaker 2: And of course, we have now for a number of quarters had a lot of large orders coming in. So of course, in our order book, there is a lot of large projects that is actually running and many of these are transformational and they will take place.

And of course, we have now for a number of quarters had a lot of large orders.

Coming in so of course in our order book there is a lot of large projects that is actually running in many of these are transformational.

Max Yates: So of course in our order book there is a lot of large projects that is actually running and many of these are transformational and they will take place. Yeah, but the answer is no nothing there. Yeah. Okay. Thank you. Thanks, Max. And thanks everyone else for hooking up with us today. And we'll see you in about a quarter. It's time. No, no, no, no, no, no, we'll see you in November and November. See you indeed. So hope we'll see many of you down in Italy. Yeah, it's indeed. Yeah, I'm excited. Indeed. Take care until then. Bye.

And they will take place.

Yeah. Thank you very much no nothing there.

Speaker 11: Okay. Okay. Thank you. Thanks Mike. Thanks. And thanks everyone else for hooking up with us today and we'll see you in about a quarter's time. No, no, no, no, no. We'll see you in November , end of November . The CMD. So I hope we'll see many of you down in Italy. Yeah, Italy. Yeah. So some exciting days there. Indeed. Take care until then. Bye. Bye.

Okay. Okay. Thank you thanks, Mike and thanks, everyone else for hooking up with US today, and we'll see you in about a quarters time.

No no no no no we'll see you in November .

Sandy So I hope, we'll see many of you down in.

Italy, Italy.

So some exciting data indeed.

Until then goodbye.

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