Q1 2025 ABB Ltd Earnings Call

Unknown Executive: As per usual, Morten and Timo will talk through the results.

T Mo will talk through the results and after that we focus on today's announcement of portfolio change. So today, the presentation will be a little bit longer than we normally have before we open up for the Q&A and with that said I ask you Martin to kick off the presentation.

Unknown Executive: And after that, we focus on today's announcement of portfolio change.

Unknown Executive: So today the presentation will be a little bit longer than we normally have before we open up for the Q&A.

Unknown Executive: And with that said, I ask you, Morten, to kick off the presentation. Thanks, Annecy.

Morten Wierod: And a warm welcome also from my I would say that we had a strong start to the year. The team did a good job at staying focused in what has been a quarter with intense news flow. I would guess that we all have had tariffs on our radar screens, but if I was to pick up a few highlights from the quarter, those would be, first of all, market activity was high, and it was good to see that demand was strong throughout the quarter with a good finish in March. In total, we increased comparable orders by 5% from last Secondly, we beat our own expectation for operational EBITDA margin in all businesses.

Martin: Thanks Nancy.

Martin: And a warm welcome also from my side.

Martin: I would say that we had a strong start to the year. The team did a good job at staying focus in what has been a quarter with intense news flow.

Martin: Yes that we all have our targets on our radar screen and but if I was to pick up a few highlights from the quarter those would be I mean first of all market activity was high and it feels good to see that demand was strong throughout the quarter with a good finish in March.

Martin: In total we increased comparable orders by 5% from last year.

Martin: Secondly, we beat our own expectations for operational EBIT a margin in all business areas on top of this our margin got an extra boost from a one timer, which contributed 170 basis points to the margin of 22%.

Morten Wierod: On top of this, our margin got an extra boost from a one-timer, which contributed 170 basis points to the margin of 20.2%. The third point I want to mention is the free cash flow of 652 million. This is good for our first quarter, which usually is a softer period for our cash generation. And it puts us now in a good position to improve our annual free cash flow from the 3.9 billion we generated last year.

Martin: The third point I want to mention is the free cash flow of $652 million. This is good for our first quarter, which usually a softer period for our cash generation and it puts us now in a good position to improve over annual free cash flow from the $3 9 billion, we generated last year.

Morten Wierod: We also made good progress towards our sustainability target. My final point is that we continue to be active with the business portfolio. In early March, the team in Smart Building closed the acquisition of the Siemens wiring accessory business in China. This adds to our already strong product portfolio. And importantly, it gives us additional market reach through our distribution network across 230 cities.

Martin: We also made good progress towards our sustainability targets.

Martin: My final point is that we continue to be active with our business portfolio in early March the team and smart building close the acquisition of the Siemens wiring accessory business in China. This adds to over already strong product portfolio and importantly, it gives us additional market reach through our distribution network across 236.

Morten Wierod: The deal adds about $150 million in sales, and it is margin Today, we also announced our plan to spin off the robotics division as a separately listed company. In our view, this change will support value creation for both And as Anssi mentioned already, we will cover this separately later.

Martin: The deals adds about $150 million in sales and it is margin accretive.

Martin: Today, We also announced our plan to spin off the Robotics Division as a separately listed company you.

Martin: In our view this change will support value creation for both companies and as Anthony mentioned already we will cover this separately later on.

Morten Wierod: As part of the annual reporting suite, we published our sustainability statement. and we've made good progress in 2024. We are already close to fulfilling our 2030 targets for 80% reduction of CO2 emissions. At the end of 2024, we were down 78% from the 2019 base level.

Martin: As part of the annual reporting suite, we published our sustainability statements have been.

Martin: Made good progress in 2024, we are already close to fulfilling over 2030 targets for 80% reduction of <unk> emissions.

Martin: At the end of 'twenty 'twenty, four we were down 78% from the 2019 base level.

Morten Wierod: But it's not only about us. I'm proud to say that with our technology, we helped our customers avoid 66 megatons of emissions with our product sold in 2020. Over the last three years, we have accumulated nearly 205 megatons of avoided customer emissions.

Martin: But it's not only about us I'm proud to say that with our technology. We helped our customers avoid 66 mega tonnes of emissions with over products sold in 2024.

Martin: Over the last three years.

Emily: Emily to nearly 205 megatons of avoided customer emissions.

Morten Wierod: Also want to mention safety, as this is something we cover in all our internal reviews. Keeping our people safe is an important KPI that we follow carefully. Zero incidence is always the target. And it's good to see that we continue to track on a low score and we achieved 0.15 for 2020.

Martin: I also want to mention safety.

Martin: This is something we cover and all over internal reviews, keeping our people safe is an important kpis that we follow carefully.

Martin: Zero incidence is always the target and it's good to see that we continue to track on a low score and we achieved 0.15 for 2024.

Morten Wierod: So let's take a look at the market developments. And the short version is that orders were stable or up in most of our customer segments. Like I mentioned, comparable orders were up by 5%. This was driven by mid single digit growth in our short cycle orders, which improved in all business areas. We also had 11% growth in the service. But we had a slightly lower contribution from larger. Some of the stronger areas were utilities, marine, ports, commercial buildings, and most of the process-related areas. Although chemicals and pulp and paper are generally more muted. Our robotics business had increased orders from the automotive segment.

Martin: So let's take a look at the market developments and the short version is that orders were stable or up in most of our customer segments.

Martin: Like I mentioned comparable orders were up by 5%. This was driven by mid single digit growth in our short cycle orders, which improved in all business areas.

Martin: We also had 11% growth in the service business, but we had a slightly lower contribution from large orders.

Martin: Some of the stronger areas, where utilities marine ports commercial buildings and most of the process related areas, although chemicals in pulp and paper are generally more muted segments.

Martin: Our robotics Spacenet had increased orders from the automotive segment and our paint technology is the best on the market and we have customer choosing to remain with us as they expanded their international footprint.

Morten Wierod: and our paint technology is the best on the market. And we had customers choosing to remain with us as they expanded their international footprint.

Morten Wierod: One can say we travel with the Data center is usually a focus topic, and there has been quite some news flow in Q1. The general sentiment remains very strong. We see some customers even accelerating their investments, even if some slower activity from one of the hyperscalers is noted in this quarter. Rail remains a strong area.

Martin: One can say with travel with the customer.

Martin: Data center is usually a full focused topic and there has been quite some news flow in Q1.

Martin: The general sentiments remains very strong we.

We see some customers even accelerating their investments even if some slower activity from one of the Hyperscale is noted in this quarter.

Martin: Rail remains a strong area. One example from a retraction business is the collaboration with established in the U S. We will supply converters and pro series batteries for train sets in Illinois, and California, as the U S moves towards Greener rail transport.

Morten Wierod: One example from our traction business is the collaboration with Stadler in the U.S. We will supply converters and Pro Series batteries for train sets in Illinois and California as the U.S. moves towards greener rail transportation. But even if the market is strong, orders in rail dropped from a high large order comparability.

Martin: But even if the market is strong orders in rail dropped from a high large order comparable.

Morten Wierod: Switching to the revenue chart, the 7.9 billion and 3% comparable growth was a bit below our original expectation.

Martin: Switching to the revenue chart, the $7 9 billion and 3% comparable growth was a bit below overloaded rigid original expectation.

Morten Wierod: We did not convert the backlog or recent short cycle orders as quickly as expected. volumes were the larger driver to growth with some added contribution from positive Turning to look at the different geographies, we were actually up in all three regions. The Americas, with good support from the US, was again the main growth engine and increased by 11%. Asia, Middle East, Africa improved by 4% and China turned to positive order growth after 10 quarters in decline. All business areas contributed to the China growth of 13%. and Europe was up 1% with a mixed picture between the.

Martin: We did not convert the backlog or recent short cycle orders as quickly as expected volumes were the largest driver to growth with some added contribution from positive pricing.

Martin: Turning to look at the different geographies.

Martin: Actually up in all three regions the Americas with good support from the U S was again the main growth engine and increased by 11%.

Martin: Asia Middle East Africa improved by 4% in China turned to positive order growth of 10 quarters in decline.

Martin: All business areas contributed to the China growth of 13% in.

Martin: And Europe was up 1% with a mixed picture between the countries.

Morten Wierod: Looking at our large markets, Germany declined while for example Italy improved. Uncertainty triggered by the tariff news load has put focus on footprint and operational setup between regions. I've said to our teams to continue to focus on what we can control and take action to defend our market position and profitability. We have been successful in this area before. Our legacy of a local for local footprint serves us well. In the United States, we cover as much as 75 to 80% of our sales with local products. and we invest to increase this number. In Europe and China, we have already reached an even higher local value.

Martin: Looking at our large markets, Germany declined while for example, Italy improved.

Martin: Uncertainty triggered by the tariff newsletter has put focus on footprint and operational setup between regions.

Martin: To our teams to continue to focus on what we can control and take action to defend our market position and profitability.

Martin: We have been successful in this area before or legacy of our local for local footprint serves us well in the United States to cover as much as 75% to 80% of our sales with local production and we invest to increase this number in Europe and China. They have already reached an even higher local value chain.

Morten Wierod: So I feel we are in a relatively good situation when it comes to local for local. In addition, we'd also benefit from exemption, such as the US MCA.

Martin: So I feel we are in a relatively good situation when it comes to local for local.

Martin: In addition, we would also benefit from exemption such as the U S. MCA.

Morten Wierod: Turning to earnings, the chart shows that we continue the upward trend for both absolute operational EBITDA and marginal EBITDA.

Martin: Turning to earnings the chart shows that we continue the upward trend for both absolute operational EBITDA and the margin.

Morten Wierod: I said that I wanted us to become a plus 40% gross margin company. And that is what we delivered in Q1 when gross margin improved by 280 basis points to 41.7. Admittedly, there was about 110 basis points of improvement coming from FX and commodity timing difference. But we have shown we can reach the 40% level.

Martin: I've said that I wanted us to become a plus 40% gross margin company.

Martin: And that is what we delivered in Q1, when gross margin improved by 280 basis points to 41 seven.

Martin: Admittedly there was about 110 basis point of improvement coming from FX and commodity timing differences.

Martin: But we have shown we can reach the 40% level.

Morten Wierod: And now we have to work towards consistency. The team did a good job also on operation level EBIT A. Margin improved in three out of our four business areas, only robotics and discrete automation declined from last year. But importantly, they showed a positive sequential development and the machine automation division improved to a break even On top of the improved business performance, we had support from a property sale we completed here in Zurich, which added about $140 million. This was booked in corporate and other and supported the margin by about 170 basis points to the total of 20.2%.

Martin: Now we have to work towards consistency.

Martin: The team did a good job also on operational EBITDA.

Martin: Margin improved in three out of over four business areas, all the robotics and discrete automation declined from last year, but importantly, they showed a positive sequential development and the machine automation division improved to a breakeven level.

Martin: On top of the improved business performance, we had support from appropriately sale, we completed here in Zurich, which added about $140 million. This was booked in corporate and other and supported the margin by about 170 basis points to the total of 22%.

Morten Wierod: Even without this one timer, it has a good start to the year. And it sets us up to deliver on our guidance to improve margin from last year, assuming no significant changes in the global economy.

Martin: Even without this one timer it is a good start to the year.

Martin: And it sets us up to deliver on our guidance to improve margin from last year, assuming no significant changes in the global economy.

Timo Ihamuotila: And now, I hand it over to you, Timo. Thank you, Morten, and welcome to you all from my side as well.

Speaker Change: And now I'll hand, it over to U T Mo.

Speaker Change: Thank you Martin and welcome to you all from my side as well.

Timo Ihamuotila: Let's now talk through the different business areas, starting with electrification. And the EL team keeps delivering new records. In Q1, they achieved a new all-time high orders of $4.4 billion. This is up 2% on a comparable basis from the previous high, a testament to strong underlying markets. Customer activity was stable to positive in most customer segments. This includes our two largest segments of utilities and buildings. Demand in buildings continues to be driven by the commercial market outside of China. And the residential market was overall stable, although the China market is still weak.

Speaker Change: Let's now talk through the different business areas, starting with electrification and E. L. D M keeps delivering new records.

Speaker Change: In Q1, they achieved a new all time high orders of $4 4 billion. This is up 2% on a comparable basis from the previous high a testament to strong underlying markets.

Speaker Change: Customer activity was stable to positive in most customer segments. This includes our two largest segments of utilities and buildings.

Speaker Change: Demand in billings continues to be driven by the commercial market outside of China.

Speaker Change: And the residential market was overall stable, although the China market is still weak.

Timo Ihamuotila: Morten talked about the data center segment earlier and the slower activity we saw from one of the hyperscalers. I want to emphasize that outside of this specific event, we still see a very strong data center market. If we exclude this one hyperscaler, orders in data centers increased at mid-teen space. The base is now quite sizable, as we had data center orders of about 2.5 billion last year. So generally, it is still a very strong general environment in this tech segment.

Speaker Change: More than talked about the data center segment earlier and the slower activity, we saw from one of the Hyperscale.

Speaker Change: I want to emphasize that outside of these specific event, we still see a very strong data center market.

Speaker Change: If we exclude this one hyperscale or orders in data centers increased AD mid teen space.

Speaker Change: The base is now quite sizable as we had data center orders off about two 5 billion last year.

Speaker Change: So generally it is still a very strong general environment in this segment.

Timo Ihamuotila: Turning now to revenues. Electrification delivered 6% comparable growth with contribution from virtually all divisions. Volumes were driven by conversion of the order backlog related to medium voltage and power protection and also the short cycle business improved by mid-single-digit The profit chart on the right side shows the steady improvement trend electrification has achieved. at this quarter was no exception. Operational EBIT was up by 7% to $886 million with a margin of 23.2%. The gains from higher volumes and operational efficiencies more than offset higher expenses mainly related to SG&A. All in all, a very strong quarter for electrification, adding to our confidence for the year.

Speaker Change: Turning now to revenues electrification delivered 6% comparable growth with contribution from virtually all divisions.

Speaker Change: Volumes were driven by conversion of the order backlog related to medium voltage and power protection and also the short cycle business improved by mid single digit.

Speaker Change: The profit chart on the right side shows the steady improvement trend electrification has achieved.

Speaker Change: At this quarter was no exception.

Speaker Change: Operational EBITA was up by 7% to $886 million with a margin of 23, 2%.

Speaker Change: The gains from higher volumes and operational efficiencies more than offset higher expenses mainly related to SG&A.

Speaker Change: All in all a very strong quarter for electrification, adding to adding to our confidence for the year.

Timo Ihamuotila: Now looking into the second quarter, we currently expect low double-digit growth, incomparable revenues and the operational EBITDA margin to improve slightly from last year.

Speaker Change: Now looking into the second quarter. We currently expect a low double digit growth in comparable revenues and the operational EBITA margin to improve slightly from last year.

Timo Ihamuotila: Now turning to Motion, which delivered another quarter with order intake above $2 billion. That said, lower large order bookings, mainly in traction division, triggered a decline from last year's record high level. The strongest growth was noted in the service division, while the short cycle improved slightly versus the prior year. We saw favorable order development in HVAC for commercial buildings as well as in power generation. The software areas included the process-related segments of oil and gas, chemicals, and food and beverage. Rail also declined, but this was linked to the larger order comparable I just mentioned.

Speaker Change: Now turning to motion, which delivered another quarter with order intake above $2 billion.

Speaker Change: That said lower large order bookings, mainly interaction division triggered a decline from last year's record high level.

Speaker Change: The strongest growth was noted in the service division, while the short cycle improved slightly versus the prior year.

Speaker Change: We saw favorable order development in HVAC for commercial buildings as well as in power generation.

Speaker Change: The softer areas, including the protest related segments of oil and gas chemicals, and food and beverage rail.

Speaker Change: Rail also declined but this was linked to the larger order comparable I just mentioned.

Timo Ihamuotila: Shifting now to revenues, which was supported by both higher volumes and a positive price impact. The long cycle divisions improved as they executed on their high order backlogs, even if this was slightly below our original expectation. This improvement was partly offset by a decline in the service division while the short cycle areas were broadly stable. In total, this sums up to an increase of 3% in comparable revenues to just over $1.8 billion. The positive price development, coupled with continued operational improvements, contributed to a strong margin improvement of 110 basis points to 19.6%. And most divisions improved their profitability year on year.

Speaker Change: Shifting now to revenues, which were supported by both higher volumes and a positive price impact.

Speaker Change: The long cycle divisions improved as they executed on their high order backlogs, even if this was slightly below our original expectation.

Speaker Change: This improvement was partly offset by a decline in the service division, while the short cycle areas were broadly stable.

Speaker Change: In total these sums up to an increase of 3% in comparable revenues to just over $1 $8 billion.

Speaker Change: The proceeds the price development, coupled with continued operational improvements contributed to a strong margin improvement of 110 basis points to 19, 6%.

Speaker Change: And most divisions improved their profitability year on year.

Timo Ihamuotila: For the second quarter, we anticipate comparable revenue growth in the mid-single-digit range and the operational EBITDA margin to remain broadly stable year-on-year.

Speaker Change: For the second quarter, we anticipate comparable revenue growth in the mid single digit range and the operational EBITA margin to remain broadly stable year on year.

Timo Ihamuotila: In process automation, we saw a continued healthy market environment, and orders came in at the high level of $2 billion, increasing 23% year on year.

Speaker Change: In protest automation, we saw a continued healthy market environment and orders came in at the high level of $2 billion, increasing 23% year on year.

Timo Ihamuotila: The PA team delivered yet another quarter with a positive book-to-bill, at this time 1.24, and the backlog is now 8.1 billion dollars. The marine and port segment continues to be a growth driver. In this segment, we are mainly exposed to passenger vessels like cruise and specialized vessels, which could, for example, include icebreakers or coast guards. Both automations also continue to see strong underlying demand. As for the other segments, we saw a stable to positive order development in most of the energy and process related industries.

Speaker Change: The team delivered yet another quarter with a positive book to Bill at this time, one point 24, and the backlog is now $8.1 billion.

Speaker Change: The marine and Port segments continues to be growth driver. In this segment were mainly exposed to passenger base that was like cruise and specialized vessels, which good for example include ice breakers or coast Guard.

Speaker Change: Both automation also continued to see strong underlying demand.

Speaker Change: As for the other segments, we saw a stable to positive order development in most of the energy and process related industries. The business climate, However remains more muted in chemical pulp and paper and mining.

Timo Ihamuotila: The business climate, however, remains more muted in chemical, pulp and paper and mining. revenues got off to a good start and increased by 5% on a comparable basis. The team executed on their steadily increasing order backlog with added support from price. The team has done a really good job on quality of revenues, as the order backlog gross margin has been increasing. As they now execute on this backlog, we see this supporting profitability in the business area. The contribution from the backlog more than offset the impact from lower volumes in the product division.

Speaker Change: Revenues got off to a good start and increased by 5% on a comparable basis. The team executed on their steadily increasing order backlog with added support from pricing.

Speaker Change: The team has done a really good job on quality of revenues as the order backlog gross margin has been increasing as they now execute on this backlog, we see the supporting profitability in the business area.

Speaker Change: The contribution from the backlog more than offset the impact from lower volumes in the product Division.

Timo Ihamuotila: All in all, it resulted to a new record operational EBITDA margin of 15.8%, improving 20 basis points year on year. Looking at our expectation for the second quarter, we foresee comparable revenues to improve in the mid single digit range and the operational EBITDA margin to be stable or slightly up year on year.

Speaker Change: All in all it resulted to a new record operational EBITA margin of 15, 8%, improving 20 basis points year on year.

Speaker Change: Looking at our expectation for the second quarter, we foresee comparable revenues to improve in the mid single digit range and the operational EBITA margin to be stable or slightly up year on year. If we flip now the robotics and discrete automation. It was good to see that this time both divisions contributed.

Timo Ihamuotila: If we flip now to robotics and discrete automation, it was good to see that this time both divisions contributed to the strong order growth of 17%. The robotics division saw positive order developments in the automotive and consumer electronic sectors. Both of these important segments remain generally challenging. But we were able to grow orders as customers stick with our leading technology as they expand their geographical exposure. Other positive segments included food and beverage, the fashion industry, as well as industrial machinery. In machine automation, orders increased sharply from last year's low level. Inventory levels at our customers are normalizing, but we will have some inventory adjustments spilling over into the second quarter.

Speaker Change: Two the strong order growth of 17%.

Speaker Change: The Robotics Division saw a positive order development in the automotive and consumer electronics sectors.

Speaker Change: Both of these important segments remain generally challenging.

Speaker Change: But we were able to grow orders as customers stick with our leading technology as they expand their geographical exposure.

Speaker Change: Other positive segments included food and beverage the fashion industry as well as industrial machinery.

Speaker Change: Imagine automation orders increased sharply from last year's low levels inventory levels at our customers are normalizing, but we will have some inventory adjustments spilling over into the second quarter.

Timo Ihamuotila: but we still expect orders to continue to slightly improve sequentially.

Speaker Change: But we still expect orders to continue to slightly improve sequentially.

Timo Ihamuotila: Moving now to Revenue. The Robotics Division reported a mid-single-digit growth rate driven by higher volumes from the book and bill business. This was, however, clearly offset by significantly lower volumes in machine automation. In total, this resulted in comparable revenues being down 11% year on year. Although the profitability was down sharply year on year due to the lower production volumes in machine automation, the sequential improvement was better than anticipated. The previously announced cost savings measures in machine automation helped improve the margin, and this business is now back at breakeven level. The robotics division increased margin from last year, supported by higher volumes and efficiency measures.

Speaker Change: Moving now to revenues.

Speaker Change: The Robotics Division reported a mid single digit growth rate driven by hour of higher volumes from the book and Bill business.

Speaker Change: This was however, clearly offset by significantly lower volumes in machine automation.

Speaker Change: In total this resulted in comparable revenues being down 11% year on year.

Speaker Change: Although the profitability was down sharply year on year due to the lower production volumes in machine automation, the sequential improvement was better than anticipated.

Speaker Change: The previously announced cost savings measures in measurement and mystic in machine automation helped improve the margin and this business is now back at breakeven levels.

Speaker Change: The Robotics division increased margin from last year supported by higher volumes and efficiency measures.

Timo Ihamuotila: It remains well into the double-digit territory. Combined, this resulted in an operational EBITDA margin of 9.9 percent, down 330 basis points year-on-year, but up 200 basis points sequentially. For RA, in the second quarter, we expect a slight sequential increase in absolute revenues and operational EBIT.

Speaker Change: It remains well into the double digit territory.

Speaker Change: Combined this resulted in an operational EBITA margin of nine 9% down 330 basis points year on year, but up 200 basis points sequentially.

Speaker Change: For our E. In the second quarter, we expect a slight sequential increase in absolute revenues and operational EBITA.

Timo Ihamuotila: Now let's move on to the cash flow. All business areas had a positive operating cash flow. It was supported by strong earnings, which offset the typical buildup of networking capital in the first quarter. The 652 million of free cash flow was, in my view, very good for a first quarter. The year-on-year increase of $101 million was mainly driven by the real estate sale. The improved operational performance was mostly offset by higher payments related to taxes and interest. Networking capital remained broadly stable.

Speaker Change: Now, let's move on to the cash flow all business areas had a positive operating cash flow.

Speaker Change: It was supported by strong earnings, which offset the typical build up of networking capital in the first quarter.

Speaker Change: The 652 million of free cash flow was in my view very good for a first quarter.

Speaker Change: The year on year increase of $101 million was mainly driven by the real estate sale.

Speaker Change: The improved operational performance was mostly offset by higher payments related to taxes and interest.

Speaker Change: Net working capital remained broadly stable.

Timo Ihamuotila: I think the first quarter puts us on a good path to improve our annual free cash flow from last year's 3.9 billion.

Speaker Change: I think the first quarter puts us on a good path to improve our annual free cash flow from last year's 3.9 billion.

Timo Ihamuotila: The last time we met, we mentioned some reporting changes, including return on capital employed. We now report Group Rosie on a quarterly basis and it remains a focus area for us. The chart here shows that the strong trend continued in the first quarter. Roche reached 23% and improved 250 basis points from last year. The increase was driven by three out of four business areas as a result of higher earnings, the positive one-timer and focused networking capital management.

Speaker Change: The last time, we met we mentioned some reporting changes, including return on capital employed.

Speaker Change: We now report group Rosy on quarterly basis, and it remains a focus area for us.

Speaker Change: The chart here shows that the strong trend continued in the first quarter.

Speaker Change: Roche it reached 23% and improved 250 basis points from last year the.

Speaker Change: The increase was driven by three out of four business areas. As a result of higher earnings the positive one timer and focused networking capital management.

Morten Wierod: And with that, I hand it back to you, Morten. Thanks, Timo.

And with that I hand, it back to you Martin nice.

Morten Wierod: And with that, let's talk about today's portfolio announcement. Our plan to spin off the robotics division as a separately listed We start these preparations now, and we'll work towards a proposal for the 2026 AGM. If all goes to plan, we will distribute the business to shareholders as a dividend in kind, meaning shareholders in ABB will receive shares in the robotics company in proportion to their existing holdings. We plan for the robotics company to start trading during the second quarter of 2020.

Simo: Simo and.

Simo: And with that let's talk about today's portfolio of announcements or plan to spin off the robotics division as a separately listed company.

Simo: They start these preparations now and we'll work towards a proposal for the 2026 AGM. If all goes to plan, we will distribute the business to shareholders as a dividend in kind, meaning shareholders and ABB will receive shares in the robotics company in proportion to their existing holding.

Simo: We plan for their a bit robotics company to start trading during the second quarter of 2026.

Morten Wierod: But we have not yet decided where the listing will take. We are now looking at different alternatives, including Sweden and So why are we doing this? The prerequisite is of course that we think that it will benefit value creation in both Robotics is a strong performance in its industry. And this will become more transparent. And we think it will be rewarded for its strong position and performance as a pure play robotics. As you see in the chart to the left, robotics represents 7% of ABB group revenues and 5% of earnings.

Simo: But we are not yet decided where the listing will take place. We are now looking at different alternatives, including Sweden and Switzerland.

Simo: So why are we doing this the prerequisite is of course that we think that it will benefit value creation in both companies' robotics is a strong performer in its industry and this will become more transparent and we think it will be rewarded for its strong position and performance as a pure play robotics company.

Simo: As you see in the chart to the left robotics represent 7% of ABB group revenues and 5% of earnings.

Morten Wierod: And I should also mention that numbers on these slides are pre-carve-out estimates. Some balance sheet numbers may change for the stand-alone. Robotics performance profile is different versus the three larger business areas we have. And we believe it will benefit from being evaluated on its own merits, instead of competing over capital allocation within. Also, while it's a strong contender in its industry, there are limited synergies with other businesses in ABB. It almost already has a standalone profile, but without getting the full benefit. Last year robotics generated about 2.3 billion in revenues. And in my view, they have proven themselves under the ABB way decentralized operating They have delivered a double-digit margin in most quarters since 2019.

Simo: And I should also mention that numbers on these slides are pre carve out estimates.

Simo: Some balance sheet numbers may change for the Standalone entity.

Simo: Robotics performance profile is different versus the three larger business areas, we have and we believe it will benefit from being evaluated on its own merits instead of competing over capital allocation within ABB.

Simo: Also while it's a strong contender in this industry. There are limited synergies with other businesses in ABB. It almost already has a standalone profile, but without getting the full benefits.

Simo: Lastly, robotics generated about $2 3 billion in revenues and in my view they have proven themselves under the ABB way decentralized operating model.

Simo: They have delivered a double digit margin in most quarters since 2019 a.

Morten Wierod: Strong Achievement in what has been an unusually volatile market. First it was COVID, then they had to shut down the hub in China. Then the component shortages with a significant prebuy followed by the normalization periods. No, they have shown order growth in the last four quarters. They've also been active on their portfolio. The low margin system business has been They now have the broadest mechatronics portfolio after expanding with Cobots and AMRs. on top of the already most advanced robotic offering with its control and software platform. So, ABB Robotics is well positioned to help customers improve productivity and flexibility to solve operational challenges such as labor shortages and the need to operate more sustainably.

Simo: A strong achievement in what has been an unusually volatile market first day was COVID-19 when they had to shut down the hub in China than the component shortages with the significant pre buys followed by the normalization periods no. They have shown order growth in the last four quarters. They have also been active on their portfolio.

Simo: The low margin system business has been exited.

Simo: They now have the broadest mechatronics portfolio after expanding with cobalt and Amr's on top of the already most advanced robotic offering with its control and software platform.

Simo: So ABB robotics is well positioned to help customers improve productivity and flexibility to solve operational challenges such as labor shortages and the need to operate more sustainable.

Morten Wierod: I mentioned earlier the double digit operational EBITDA margin. It is good to see that this has been supported by a strong gross margin improvement. Since 2022, the robotics gross margin is up by 600 base Free cash flow margin is at the average of 10% since 2019. And the business is well invested. They have state-of-the-art hubs for manufacturing and R&D in China and US. And we recently started the construction for a major upgrade of the European hub in Sweden. They have spent 5% to 6% of revenues on R&D and launched this unique Omnicore platform last year.

Simo: I mentioned earlier, the double digit operational EBITA margin. It is good to see that this has been supported by our strong gross margin improvement.

Simo: Since 2022 their robotics gross margin is up by 600 basis points free.

Simo: Free cash flow margin is that the average of 10% since 2019.

Simo: And the business is well invested.

Simo: They have state of the art hubs for manufacturing and R&D in China and U S.

Simo: And we recently started the construction for a major upgrade of the European hub in Sweden.

Simo: Theres been 5% to 6% of revenues on R&D launched its unique omni core platform last year and Theyre Picker technology is a good example of their strong AI based solutions.

Morten Wierod: And their Picker technology is a good example of their strong AI-based solution. So all in all, we think a listing of the robotics business will support its ability to create customer value, growth and attract talent. We also think it will benefit ABB, which would consist of three business areas with sales and technology synergy. And why do I say three business areas? We will move the machine automation business to be a division in process automation to build on their software and control synergies, for example, towards hybrid industry. While robotics is only 7% of group revenues, this portfolio change will have a slight positive impact on ABB's performance.

Simo: So all in all we think our lifting of their baltics personnel will support its ability to create customer value growth and attract talent.

Simo: We also think it will benefit ABB, which would consist of three business areas with sales and technology synergies.

Simo: And why do I say three business areas, we will move the machine automation business to be a division and process automation to build on their software and controls synergies for example towards hybrid industries.

Simo: While robotics is only 7% of group revenues. This portfolio change will have a slight positive impact on <unk> performance.

Morten Wierod: The main target is to allow for both companies to optimize this value creation.

Simo: The main target is to allow for both companies to optimize value creation.

Morten Wierod: We start working towards this now, and we'll come back with more details in due course and in good time before the AGM in 2020.

Simo: We start working towards this now and we'll come back with more details in due course and in good time before the AGM in 2026.

Morten Wierod: So finally, let's finish off with the outro. We leave our 2025 outlook unchanged. Best acknowledge the increased uncertainty for the global business environment. We still expect a positive book-to-bill, and we see comparable revenue growth in the mid-single-digit range, and we expect to further improve the operational EBITDA margin from last year. Since we had a positive one-timer in the first quarter, I want to mention that the Margin Outlook for the year is supported by improvements in our business plan.

Simo: So finally, let's finish off with the outlook, we leave our 2025 outlook unchanged biotechnology the increased uncertainty for the global business environment.

Simo: We still expect a positive book to Bill and we see comparable revenue growth in the mid single digit range and we expect to further improve the operational EBITA margin from last year.

Simo: Since we had a positive onetime or in the first quarter I want to mention that the margin outlook for the year is supported by improvements in our businesses is not only driven by one off gains.

Morten Wierod: It's not only driven by one of gay. For the second quarter, we foresee comparable growth in the mid single digit range and the operational EBITDA margin to remain broadly stable with 19% last year. Some of you may say that that stable margin development is underwhelming. But actually, it means we need to improve our business results in Q2 2025 to offset the positive impact of 30 basis points from a non-repeat loss.

Simo: For the second quarter, we foresee a comparable growth in the mid single digit range and the operational EBITA margin to remain broadly stable with 19% last year.

Simo: Some of you may say that that stable margin development is undeveloped me, but actually it means we need to improve our business results in Q2 2025 to offset the positive impact of 30 basis points from a non repeat of last year.

Unknown Executive: So now, Anthe, let's open up for questions. Yes, let's do so.

Simo: So now I'll see.

Simo: Let's open up for questions, yes that stay side and just as a quick reminder, that he said he would have dialed in on the phone. Okay Press Star 2014 to register to ask a question.

Unknown Executive: And just as a quick reminder, for those of you who have dialed in on the phone, press star 14 to register to ask a question. And please also remember to mute the webcast as your line is open.

Simo: And please also remember can use the webcast at your line is opened.

Unknown Executive: and I kindly ask you to limit it to one question, that way we will allow for as many of you as possible to be heard and I can see there's a queue already.

Speaker Change: I kindly ask you to limit it to one question that way, we will allow for as many of you as possible to be had and I can say there I'll say there is a queue already.

Unknown Executive: You can also put questions through the online tool in the webcast and I will then voice them over from here.

Simo: You can also put questions for Ed.

Simo: The online tool in the webcast and I will then have always familiar that from here.

Max Yates: And with that, we open up for the first question and we have Max from Morgan Stanley first in line. Max, can you hear us? Yes, I can. Can you hear me? Yes, indeed. Yeah, good.

Speaker Change: And with that we open up for the first question and we have Max for Morgan Stanley first in line Smacks can you hear us.

Max: Yes can you hear me yesterday.

Max: Yes, good morning, everyone.

Max Yates: Good morning, everyone.

Max Yates: So just the first question I'd like to focus on is just the data center business. And while I appreciate kind of the business is up in order terms, mid-teens x this large customer, we obviously know it is a very large customer that we're talking about. So I just wanted to understand, I think you mentioned this customer had paused we now expect that kind of data center orders as a whole will be more in that kind of double-digit order growth range for the rest of the year? So because obviously, while we don't want to kind of talk about one specific customer, it obviously is moving the needle on what's happening to the overall business.

Max: Just the first question I'd like to focus on is just the data center.

Max: Business and while I appreciate kind of the business is up.

Max: I know what the terms mid teens ex this large customer we obviously know that it is a very large customer that we're talking about so.

Max: Just wanted to understand I think you mentioned discussed about post ordering by 30 to 45 days during the quarter.

Max: Have we now seen that go back to normal and should we now expect that kind of data center orders as a whole.

Max: We will be more in that kind of double digit order growth range for the rest of the year, so because obviously.

Max: While we don't want to kind of talk about one specific customer is obviously is moving the needle on what's happening to the overall business. So just trying to kind of understand is that a good approximation of what we should see for the rest of the year or do we think about particular customer will continue to be the exception in the industry and be a bit more volatile. Thank you.

Max Yates: So just trying to kind of understand, is that a good approximation for what we should see for the rest of the year? Or do we think that particular customer will continue to be the exception in the industry and be a bit more volatile?

Morten Wierod: Thank you. Thanks, Max. As you said, with that exception, we had a mid-teens growth in the data center segments. And long term, we are confident also with the growth rate in data centers due to the AI trend that we see these days. So what we look at, and I don't want to speculate, I think there on the outlook from on single or individual customer performance, I think you will see that in the news as well. So I rather refer, let's say directly to the source and or the current news flow, more than that we come out with any firm statements on what our other companies plan.

Max: Thanks, Max as you said, we had a win with that exception, we had a mid teens growth in the data center segments and long term. We are confident also the growth rate in data centers due to the AI trend that we see these days so what.

Max: What we look at and I don't want to speculate I think they're all on the outlook from on single or individual customer performance. I think you will see that in the news as well so I'd rather refer lets say directly to the source and the or the current news flow more than that we come out with any firm statements.

Max: On what are other companies' plants.

Max Yates: Okay, thank you. Thanks, Max.

Max: Okay. Thank you.

Andre Kukhnin: And then we move to the next question, comes from Andre at UBS, your line should be open. Yes, good morning. Thank you very much for taking my question. I'll go with the obvious one on tariffs. I just wanted to ask whether you've taken any pricing action so far to respond to what's been announced in the US and also just quite keen to kind of double click on the US for US piece, which you very helpfully laid out. But within that US for US, have you looked into your suppliers and their sourcing and kind of geographical arrangements?

Andre: Thanks, Max and then we move to the next question comes from Andre with UBS. Your line is open.

Andre: Yes. Good morning. Thank you very much for taking my question I'll go with the obvious one on tariffs.

Andre: Wanted to ask whether you've taken any pricing action so far to respond towards been announced in the U S. And also just quoting to kind of double click on the U S for U S piece, which you gotta hopefully.

Andre: Laid out but within that U S for U S have you looked into.

Andre: Your suppliers in the sourcing and kind of geographical engineering and have you seen any evidence of them coming to you with price increases if they happen to source from.

Morten Wierod: And have you seen any evidence of them coming to you with price increases if they happen to source from? China or other high tariff countries and how you're responding to that, please. No, we have, of course, looked at all of these elements. As you say, first of all, the main part is what we produce the 75 to 80%. We have as ABB more or less no import from China coming into those numbers. So that is not an impact for us. The other part is we already also a lot of the Mexico and Canada import, a lot of that is with exemption from tariffs based on the USMCA trade agreement.

Andre: China will either high tariff countries and how you're responding to that please.

Andre: So we have Oh of course looked at all of these elements are as you say first of all the main parties, what we produce the 75% to 80% we have as a b be more or less no import from China coming into those numbers. So that is not an impact for us.

Andre: The other part is we already are.

Andre: So a lot of the Mexico, and Canada import a lot of that is with the exception where problems tariffs based on their U S. M. C. A trade agreement so that helps as well and then it's the what comes from where that will be exposed later on for tariffs and there.

Morten Wierod: So that helps as well. And then it's the what comes from where that will be exposed later on for tariffs. And there we will take price actions. As you mentioned, there has been already taken price actions this year. But that is more of the steel and aluminum tariffs that has been implemented. And because that has been as a general price increase in the goes through on to the other side. So that's how we work with when we talk about, you know, the suppliers and the suppliers of our suppliers. We have an overview on where it comes from.

Andre: We will take price actions as you mentioned there has been already taken price actions this year.

Andre: But that is more of the steel and aluminum.

Andre: Tariffs that has been implemented and because that has been as a general price increase in the market on raw materials and of course that is something that goes through on to the other side. So that's how we work with when we talk about the you know the suppliers and the suppliers all of our suppliers.

Andre: We have an overview on where it comes from we have been working on that for quite some time to minimize especially the China exposure Ah I don't have details.

Morten Wierod: We have been working on that for quite some time to minimize especially the China exposure. I don't have details to give you on more. I can say I can confirm that it's worked on, it's understood, and it's mitigated to have all the effect. That is why we can all come also out with the guidance that we're doing that we don't believe I don't see this with the current knowledge. I mean, as of today, or as of now, we don't have see any significant impact on our overall performance.

Andre: To give you on a more I can say I can confirm that it's worked on its understood and it's mitigated to a Ulster effect that is why we can noncommercial out with the guidance that we're doing that we don't really I don't see this with the current knowledge are made as of today or as of now we don't have a C N N a significant <unk>.

Andre: Packed on our overall performance.

Timo Ihamuotila: Yeah, maybe if I can just add super quickly on this one. So we have done, as Morten said, a thorough analysis with and without tariffs. And the tariffs itself, they don't have a big impact. It really is the economic uncertainty which we are now dealing with, which we have to then see how it plays out. But as I said, all of this has been taken up in our thinking on the guidance for the year.

Speaker Change: Yeah, maybe if I can just add.

Speaker Change: So super quickly on on this one so we have done as Morten said, a thorough analysis of with and without tariffs and the tariffs itself. They don't have a big impact. It really is the economic uncertainty, which we are now dealing with which we have to then see how it plays out but as I said all of this has been taken up in our thinking on the guidance for the year.

Unknown Executive: And we have a question coming through online here, sort of linked to tariffs, I would assume. Somebody asked, could you please tell us if there was any pull forward in orders in Q1? No, we did not see that in the first quarter, that people were pre-buying. I think that is just due to the uncertainty of what kind of would you buy to be able to mitigate. So no, we have not seen that. Very good.

Speaker Change: And can I have a question coming through online here sort of linked it to terrorists I went to him.

Speaker Change: If somebody else could you. Please tell us if there was any pull forward in orders in Q1.

Speaker Change: No we did not see that in the first quarter.

Speaker Change: People were pre buying I think that is just due to the uncertainty of what kind of would you buy to be able to mitigate so no we have not seen that.

Martin Wilkie: Then we go back to the conference call and we open up the line for Martin at City. Martin. Yeah, thank you. Good morning, it's Martin. Yeah, thank you. Morning, it's Martin.

Speaker Change: Then we go back to the conference call and we open up the line for Martin that city.

Speaker Change: Okay.

Martin: Marty Yeah. Thank you good morning, it's Martin.

Speaker Change: Thank you morning, Maarten Koning.

Martin Wilkie: Can I ask on the order pipeline, it seems no immediate impact on tariffs on orders so far, but when you are talking to customers about the pipeline for the remainder of the year, are customers worried about the environment and seeing the potential for significant pauses on decisions for the year ahead? And perhaps, you know, which industries are more worried around that? And linked to it, you've already talked about some capacity expansion in the US. Is that primarily demand driven? Or is it more to give you further hedging against tariffs as well? Thanks, Martin. The order pipeline, when we're looking at the, it's still strong when it comes to the overall and the long term need for electrification and automation, that is clearly there.

Speaker Change: It's gonna be older pipeline. It seems no immediate impact from tariffs in orders so far but when you are talking to customers about the pipeline for the remainder of the year.

Speaker Change: Customers worried about the environment.

Speaker Change: Which of course, it gets could postpone decisions with for the year.

Speaker Change: And perhaps you know, which industries are more worried around that and linked to it even if he talks about some capacity expansion in the U S is that primarily demand driven or is it more to give you further hedging against tariffs as well. Thank you yep. Thanks, Marc Henri.

Speaker Change: The order pipeline when we're looking at.

Speaker Change: It's still still strong when it comes to the overall in the long term need for electrification and automation that is clearly there you'll see some of the decision making as you'll remember as we mentioned may take and we saw that already in the first quarter that it takes a big may take a bit longer time to get that final decision, we win and we get the order, but sometimes you would take.

Morten Wierod: You see some of the decision making, as you remember, as we mentioned, may take, and we saw that already in the first quarter, that it may take a bit longer time to get that final decision. We win and we get the order, but sometimes you take another round, maybe with the board, you know, for major investments, what we see is that the no regret moves, they are being taken. That's the same on our side and others, where there is much bigger uncertainty, they saw where you take another extra round and may discuss. So that's the how, I mean, uncertainty is not good for decision making.

Speaker Change: Another round.

Speaker Change: Round, maybe with the board you know if a major investments what we see is that the no regret moves they are being taken and that's the same on oversight and others, where there is much bigger uncertainty they saw where you'll take another extra round.

Speaker Change: In may discuss so that's the how I mean uncertainty is not good for decision, making that's that's clear. So that's the but we are taking these uncertainty into account when we also make our forecast for the second quarter and year end. So it's something we believe we have under control and not kind of a.

Morten Wierod: That's clear. So that's the, but we are taking this uncertainty into account when we also make our forecast for the second quarter and year end. So it's something we believe we have under control and not kind of worried about it, but it will take a bit more of our sales work also to get the papers signed.

Speaker Change: Worried about it but it will take a bit more of where same store. It also to get get the paper get the papers are assigned and the I think the second point, maybe help me here I don't see that capacity and cloud capacity.

Timo Ihamuotila: And I think the second point, if you help me here, Anssi. Capacity increase, demand driven or tariff driven? Yeah, thank you. It is driven very much by a demand driven because we don't have many of these investments is driven by its kind of products that has special US or what we call NEMA, North America standards. And therefore, we need more capacity because the demand has over time been bigger, been larger than supply. So we are expanding because we see also a long term that goes with the two announcements we had in the education business in San Antonio, Mississippi, and Selmer in Tennessee is about $120 million.

Speaker Change: Terrorists driven yep. Thank you it is driven very much by a demand driven.

Speaker Change: Because we don't have that many of these investments is driven by a its kind of products that has special you guys sort of political Nemo North American standards.

Speaker Change: And therefore, we need more more capacity because the demand has over time being bigger there being larger than supply. So we are expanding it because we feel so our long term that goes with the two announcements we had in electrification business in southern Tobey, Mississippi and sell them or in Tennessee is about $120 million later.

Timo Ihamuotila: We're expanding those two facilities for low voltage bus bars and for low voltage circuit breakers that is used by utilities, it's used in industry and in data centers. So that goes into that general capacity build up. And of course, there will not be US tariffs on it when it's produced in the US, but that's not the primarily driver of it. Very good.

Speaker Change: Expanding those two facilities for low voltage bus bars and for low voltage circuit breakers that as you stated by utilities, that's used in industry and in data centers. So that goes into that general capacity buildup and of course, there will not be.

Speaker Change: U S tariffs on it when it's produced in the U S. But that's not the primarily driver of it.

Speaker Change: And a good hockey thanks, Marty, but we've had a couple of questions come through here online regarding the portfolio change announcement.

Martin Wilkie: Thanks, Martin.

Morten Wierod: We've had a couple of questions come through here online regarding the portfolio change announcement. So basically, the question is, why now? Yeah, we believe the robotics business is now ready to stand on its own two feet. The synergies with the rest of ABB is limited when you look at technology and customers. Their electrification, motion and process automation very much have much more common technology, common go-to-market, common customer base and even common competitors. So we believe this is a good value creation opportunity both for ABB and also for the ABB robotics division being a separately listed company.

Speaker Change: So basically the question is why now.

Speaker Change: We believe the robotics business is now ready to stand on its own two feet. The synergies with the rest of ABB is limited when you look at technology and customers are their electrification most of that motion and process automation very much have common more much more common technology common go to market come or cover our customer base and even.

Speaker Change: Common competitors. So we believe this is a good value creation opportunity both for ABB and also for the ABV Robotics Division.

Speaker Change: Being a separately listed company. So therefore, it will take a bit of time, we'd always said that in Q2. So a year. Good year from now is when we can do the listing as there are some internal work on the carve out into the preparation to be done.

Morten Wierod: So therefore, it will take a bit of time.

Morten Wierod: We know we said that in Q2, so a year, a good year from now is when we can do the listing. As there are some internal work on the carve out and the preparation to be done. So therefore, we need that time. But I believe now it's good timing because the robotics business is among the very best in their class and being measured against peers. You will also see that. And I think then they don't need to fight for capital inside ABB, but have now an access also for investor in the market. You have now an opportunity to get 100 cents on the dollar on the robotics investment, as was not the case at ABB, where it's about 7% of revenue and 5% of earnings.

Speaker Change: So therefore, we need need that time, but I believe now is a good timing because the robotics business is among the very best in their class and being measured against peers. You will also see that and I think then they don't need to.

Speaker Change: Fight for capital inside ABB, but have now access also for investor in the market are you'll have another has now an opportunity to get the 100 cents on the dollar on the robotics investment as was not the case at the at ABB, where it's about 7% of revenue and 5% of over earnings.

Morten Wierod: So that's where we believe that the timing and the team is ready to stand on its own feet that it's a long term good business in automation and robotics.

Speaker Change: So that's why we really the the timing and the team is ready to stand on its own feet and it's a long term good business in automation and robotics.

Timo Ihamuotila: Yeah, I mean, maybe, maybe just add there, of course, it's important also what ABB will look like after the spin happens. And, and there we are seeing increased gross margin, maybe 40 basis points, increased operating margin, maybe 50 basis points, clearly higher return on capital. I think the growth rates probably will be about similar. If you look at history, we would also have a notch higher there. So it really kind of like shows that, that these are a little bit different kind of company.

Speaker Change: Yeah, I mean, maybe maybe just add to there of course, it's important also what ABB will look like after the spin happens and there. We are seeing increased core gross margin, maybe 40 basis points increased operating margin, maybe 50 basis points clearly higher return on capital I think the growth rates probably.

Speaker Change: They will be about similar if you look at history. We would also have a notch higher there. So it really kind of like shows that that these are a little bit different kind of companies.

Alex at Bank of America Merrill Lynch: And with that, we have a question coming through from Alex at Bank of America Merrill Lynch. Yeah, thanks, Nancy. Morning, Morten, Timo. I appreciate you taking the question.

Speaker Change: And with that we gave.

Alex: We have a question coming through from Alex at Bank of America Merrill Lynch.

Alex: Yeah, Thanks, and morning, Morten T. Mo I appreciate taking the question I wanted to talk about electrification if I could please.

Alex at Bank of America Merrill Lynch: I wanted to talk about electrification, if I could, please. And I appreciate it. It's one question with two parts. Question on the acceleration on the growth guide into Q2, low double digits, very strong. I just wondered if you could give us a sense of what's driving that and the visibility that you obviously got in Q2, but for the full year. And just linked to that, the margin expansion, you mentioned about a month or so ago in a conference, the differential on margins between the North American business and the rest of the world in electrification. I just wondered if we're starting to see that gap starting to close as we see the margins moving up here and whether that's something that can accelerate through the year.

Alex: And I appreciate it it's one question with two parts.

Alex: Question on the acceleration on the on the <unk> on the gross guide into Q2 low double digit very strong I. Just wanted if you could give us a sense of.

What's driving that and the visibility that you obviously got in Q2, but for the full year and just linked to that margin expansion.

Alex: You mentioned about a month or so ago.

Alex: The conference.

Alex: French law margins between the North American business and the rest of the world and electrification I just wondered if we're starting to see that gap starting to close as we see the margins moving up here and whether that's something that can accelerate through the year. Thank you.

Alex at Bank of America Merrill Lynch: Thank you.

Morten Wierod: Yeah, so let's start on the Q2 growth outlook. So we have some of the revenue where we were a bit short in Q1, we saw that some of those deliveries were slipping over to Q2. So that's why we are confident we have a strong order backlog and the order book now being on a record high level, even at, just to mention, like on electrification, it grew by another 11% in Q1. Even if the order grows just for the quarter with 2%, but the order book increased by another up 11%. So that's a good setup and a good outlook when it comes to the second quarter.

Alex: Yeah, So let's start on the Q2 growth outlook. So so we have some of the revenue where we were a bit short in Q1, we saw that some of those deliveries were slipping over to Q2. So that's why we are confident we have a strong order backlog and the order book now being on a record.

Alex: High level, even at like just to mention there are like on electrification. It grew by another 11% in Q1, even if the order growth just for the quarter were 2%, but the order book increased by another up 11%. So that's.

Alex: Good setup in a and a good outlook when it comes to the second quarter and they talk about margin expansion.

Morten Wierod: And we talk about margin expansion, as we say there, in especially for the, we mentioned that in the electrification businesses, North America is diluted to the electrification margin. It still was in Q1, it will still be in Q2, but that gap is getting smaller. And I think that's the focus for the team and has been for several years and how we can close the gap to the rest of the world level. So we have, you will see, not just in electrification, but we have all four business areas are expecting a margin improvement for the full year.

Dave: As we say there in especially for Dave you mentioned that in the electrification business is North America is dilutive to the electrification margin. It's still worse than Q1, it will still be in Q2, but that gap is getting smaller and I think that's the focus for the team and has been for for several years and how we can close the gap.

Dave: To the rest of the world level so.

Dave: We have you will see not just genetic vacation, but I've have all four business areas.

Dave: We are expecting a margin improvement.

Timo Ihamuotila: So I'm sure Timo can mention a bit about the one-off that's special, but the operational performance is expected to increase in all four of our business areas at year-end.

Dave: For the full year, so I'm, a short T Mo Ken mentioned a bit about the the one off that.

Dave: That special but for the operational performance is expected to increase in all four of our business areas at year end.

Timo Ihamuotila: Do you want me to throw it now? That was a cute cue. A bit of an opening there, yeah.

Dave: Do you want me to throw at you.

Dave: Yeah.

Dave: A bit of an opening there yeah. So when we look at this I mean, when you look at our corporate guidance last year, we had a very strong sort of corporate performance. We were about 150 million now we are saying 200, so that would be a bit of a negative on the full year, but when you combine that with E. Mobility, we are going to see it be some tens of basis points positive on that holdco.

Timo Ihamuotila: So when we look at this, I mean, when you look at our corporate guidance, last year we had a very strong sort of corporate performance. We were about 150 million, now we're saying 200, so that would be a bit of a negative on the full year. But when you combine that with e-mobility, we are going to see some tens of basis points positive on that whole corporate e-mobility combined. And then, as Morten said also, the businesses, we are expecting them to improve.

Dave: Operating mobility combined and then as Morten said also the businesses, we are expecting them to improve.

Sean McLoughlin: Okay, and then we'll take the next question from Sean at HSBC. Your line should be open. Yes, good morning. Thank you. Question around process automation. You make a very interesting point on your competitive advantage of being the only supplier with direct access to electrification and motion. The how much are you seeing that already as part of the existing strength in process automation orders? Is this something that will be, let's say, something that you push much harder on going forward? And you've also highlighted the marine side of things. Just wondering if there's any regional focus of where you see particular order stroke there.

Sean: Okay and then we'll take the next question from Sean at HSBC.

Speaker Change: Your lines will be open.

Sean: Yes. Good morning. Thank you a question around process automation you make it very interesting point on your competitive advantage being the only supplier with direct access to electrification and motion.

Sean: The Oh, how much are you seeing that already is part of the existing strength.

Sean: In process automation orders is this something that will be lets say something push much harder on going forward and you've also highlighted the marine side of things just wondering if there's any regional focus of where you've seen particular order stroke right. Thank you.

Morten Wierod: Thank you. Yeah, I think that is very much a play. The strength between our process automation, electrification and motion business is very clear in areas, for instance, in LNG, you know, where you do drilling, you do the whole pipeline with compression, and you do the terminals, and later on, you even do the LNG ships. So if you look at these four applications, that's a nice ABB combination of automation systems of motors and drives that is, you know, to get like the right compression for compressors. And it's also with electrification, because no motor or no drive or any automation system is working without electricity and all the switchgear that is needed.

Sean: Yes, I think that is very much at play that the strengths between our process automation electrification and motion business is very clear in areas for instance, in LNG and where you do thrilling.

Sean: You do the whole pipeline with compression and you do the terminals and later on you even do the LNG ships. So if you look at these poor applications. That's an nice ABB combination of automation systems of motors and drives studies.

Sean: Like the rewrite compression.

Sean: A poor compressors and it's also with electrification because no motor or no drive or any of automation system is working without electricity and oldest switch gear that is needed. So this if you look at LNG to be as one we have some very successful, especially in North America project, we are working the three businesses.

Morten Wierod: So these, if you look at LNG to be as one, we have some very successful, especially North America project, we are working the three business areas or the divisions that is relevant here, they work together as a team as a common task force. And that's how we go to market and how we support project OEMs and end users on the ground and later on also with service and taking care of that equipment over the lifetime of 25-30 years plus, which is the expected lifetime. And it's the same, if you're talking about our marine business, a propulsion of a cruise ship, you will see there from the room, you will have the electric generator, the switchgear, the drives that is driving the speed of the motor and the torque, and then the propeller system known as Ocipod leading in the cruise industry.

Sean: Areas or the divisions that is relevant here. They work together as a team is a common task force and that's how we go to market and how we support project the Oems and end users on the ground and later on also with service and taking care of that equipment over the lifetime over 25, 30 years, plus which is the expected lifetime and it's the same.

Sean: If you're talking about over our marine business, our propulsion or the cruise ship.

Sean: You will see there from a from the general from them.

Sean: Room, you will have the electric generator the switchgear that drives that is driving the speed of the motor and the toric and then the propeller system known us all support leading into in the cruise industry. So these are just a couple of examples where you see that this electrification motion and process automation really working together in tandem.

Timo Ihamuotila: So these are just a couple of examples where you see that this electrification, motion and process automation really working together in tandem. We're often process automation takes the lead versus the end customer. They are the one carrying the ABB flag there, but then with strong support from their brothers and sisters from coming from the other divisions. So that's how we work together. And I think that's what I know. It's a unique combination, which is highly appreciated by customers. Latest confirmed that was in Houston at the Sarah Week this year. And this is one of the winning arguments why we are performing really well in these segments compared to many of our competitors.

We're often process automation takes the lead versus the cost of debt.

Sean: And customer they are the one carrying the ABB flag there, but then with strong support with the problems with their brothers and sisters from coming from the other divisions. So that's how we we worked together and I think that's what I know, it's a unique combination which is highly appreciated by customers latest confirmed I will say in Houston at the Cera week.

Sean: This year.

Sean: And this is one of the winning arguments why we are performing really well in these segments compared to many of our competitors.

Timo Ihamuotila: I think there was this regional comment, I can just confirm that PA orders were very strong, broad-based, so actually also in China grew, but also Europe grew, and the US grew, or America, so very broad-based.

Sean: I think there was this regional comment I can just confirm that P. E orders were very strong broad based so actually also in China grew but also Europe grew and U S crew or America, so very broad based.

Unknown Executive: Very good.

Unknown Executive: And then we have a question from Simon at Jefferies here via the online tool. Can you please elaborate a bit on what you saw in the US during the quarter? Did the market hold up and perhaps particularly so in the short cycle business? Yeah. No, it did. We had growth in all four business areas. In the United States, it was And we had also a strong March. So there was not really a big change throughout the quarter. It was a healthy business generated in all three months. So that was overall a good start to the year in the United States.

Sean: Okay. Thank you and then we take we have a question from Simon at Jefferies here via via their online tool.

Simon Jefferies: Can you please elaborate a bit on what you saw in the U S. During the quarter did the market hold up and perhaps particularly so in the short cycle.

Simon Jefferies: We had growth in all four business areas in the United States. It was 9% on order intake overall in all business areas.

Simon Jefferies: Contribute to that growth rate and we had also a strong march so they will snap.

Simon Jefferies: Really a big change throughout the quarter was a healthy.

Simon Jefferies: Business generated in all three months or so that was overall a good a good start to the year in the United States.

James Moore: Very good, and we take the next question from James at Redburn. Yeah, good morning, everyone. Thanks for the time. Timo, you mentioned that economic uncertainty is the biggest risk. And I totally agree. That makes sense. I got the impression from other comments that your orders at the start of April are kind of largely unchanged, a comment we're hearing from a number of companies. But I guess in reality, the tariffs didn't start in the first two weeks of April. This is the first week.

Speaker Change: Very good and would take the next question from James that Red Bank.

Speaker Change: Yeah, Hi, good morning, everyone and thanks for the time Tina.

Speaker Change: You mentioned that economic uncertainty is the biggest risk and I totally agree that makes sense I got the impression from other comments that you were or does it start tonight glut kind of largely unchanged comment.

Speaker Change: Comment we're hearing from a number of companies, but I guess in reality the tariffs didn't start in the first few weeks in April. This is the first week and I wouldn't normally ask about life trading but are you seeing anything in the order run rates and the daily rates at this week that is materially different particularly in the U S that would suggest that we are going to see any economic impact.

Morten Wierod: And I wouldn't normally ask about live trading. But are you in the order running rate and the daily rate of this week that is materially different, particularly in the US, that would suggest that we are going to see any economic impact? And tagging to that, where you've got that import, that the 20-25% import, some of it comes from Europe, where you've got a product coming from Europe to US customers? Oh, and you're raising price. Are you seeing customers accept that? Or do you think that they will switch to a local producing competitor?

Speaker Change: Tagging to that.

Speaker Change: When you've got that imports the 20% to 25% import some of it comes from Europe.

Speaker Change: You've got a product coming from Europe to U S customers.

Speaker Change: And you're raising price are you seeing customers, except that or do you think that they will switch to a low cost producing competitor.

Speaker Change: Yeah.

Morten Wierod: I can start on the on the last part of that question. In Again, giving you an example from the electrification business, where the portfolio is so wide, it is very difficult to have a full production everywhere in the world. And some of the, you know, there are different standards between the US, what we call the NEMA standards, and in Europe and the rest of the world, there's IEC. And there is to use some of these IEC products that is produced in Europe by all companies, which goes into, for instance, into a machine built in or a project built in the US, that is re-exported or exported outside the United States.

Speaker Change: I can start on the on the last part of that question.

Speaker Change: In.

Speaker Change: Again us, giving you an example from the electrification business, where the portfolio is so wide it is very difficult, especially.

Speaker Change: So having two very difficult to have a full production in everywhere in the world and some of the ones. You know there are different standards between the U S political the NEMA standards and in the Europe and the rest of the world with IAC and there is to use some of these IAC products that is produced in Europe by all companies, which goes into.

Speaker Change: For instance, two and machine building or a project built in the U S.

Speaker Change: Re exported or exported outside the United States. So this is accounts for some of those products that is not produced in the United States and we don't see I also don't think or I know that any one nobody's really producing those components in a in the United States and therefore, it will come as a as a price.

Timo Ihamuotila: So this is accounts for some of those products that is not produced in the United States. And we don't see, I also don't think, or I know that anyone, nobody is really producing those components in the United States. And therefore, it will come as a price change in the market. Because for most of these cases, there is no local alternative available. Yeah, and on the trading, I think we can only say there that we have not seen anything kind of like in the trading sort of these months, which would sort of fundamentally change any view, any customer behavior or anything like that.

Speaker Change: The change in the market.

Speaker Change: Because for most of these cases there is no local.

Speaker Change: Or alternative available.

Speaker Change: Yeah and on the trading I think we can only say there that we have not seen anything kind of like in the trading sort of these months, which would sort of fundamentally change any do any customer behavior or anything like that but I think we need to leave it at that.

Unknown Executive: But I think we need to leave it at that.

Unknown Executive: Thank you very much. Thanks, James.

Speaker Change: Thank you very much thanks, James and then we'll open up the line for Daniela at Goldman Sachs.

Daniela Costa: And then we open up the line for Daniela at Goldman Sachs. Hi, good morning. Thank you so much for taking my question.

Speaker Change: Yes.

Daniela: Hi, good morning, Thanks, so much for taking my question.

Daniela Costa: I just wanted to ask regarding low voltage and supply and demand in the market, your adding capacity, we also see a lot of your peers adding capacity, just maybe if you could give some color on that, especially like where are lead times, what's the sort of visibility that is there, especially if we go into a slightly softer US macro, part of these products are short cycle, but just to give us a picture of how the supply demand is. As you said, the increased, the expansion of our facilities is to meet that extended or the expanded demand that we see in the market.

Daniela: Just wanted to ask regarding low voltage and supply and demand in the market, you're adding capacity. We also see a lot of your peers, adding capacity just maybe if you could give some color on that especially like where our lead times whats the sort of visibility that is there, especially if we if we go into a slightly softer.

Daniela: U S a.

Daniela: Macro the part of these products are short cycle, but just to give us a picture of how the supply demand.

Daniela: Yes.

Daniela: As you said the.

They increased the expansion of our facilities is to to meet that.

Daniela: Extended or expanded demand that we see in the market and again to also to limit the number of imports what comes from outside because that's why we also take some of some of the components or that comes from Europe. Today is because we don't have enough capacity in United States.

Morten Wierod: And again, to also to limit the number of imports, what comes from outside, because that's why we also take some of some of the components or that comes from Europe today is because we don't have enough capacity in the United States. So I see there is still there's still longer, much longer lead time than the industry was used to. So we still have work to do there to get it further down. I don't see any short term or midterm kind of overcapacity or issues in the market. So therefore, I don't have any short or midterm worries when it comes to capacity.

Daniela: So I say there is still there.

Daniela: There is still long long much longer lead time than than the industry was you were used to and so we still have work to do there to get it further down I don't see any short term or mid term kind of overcapacity or issues.

Daniela: Issues in the market it is the whole.

Daniela: The trend of electrification, even if there is the global economy goes a bit slower nobody's immune, but I see that the electrification and automation trend that we are facing especially.

Daniela: Especially as I mentioned, an infrastructure that is not going to change. So quickly because those are capex plans are made those are ongoing projects and we see that that is desperately needed, especially in the United States and some of the infrastructure investments. So therefore, I don't have any short.

Daniela: A short or mid term.

Daniela: Various when it comes to capacity, it's more as I say, we are still building capacity at this point of time.

Daniela Costa: It's more as I say, we are still building capacity at this point. Thanks, Daniela.

Speaker Change: Very good. Thank you. Thanks, Daniela and then would take we have a question here from all of that sounds goodbye piece.

Olof at Danske Bank: And then we have a question here from Olof at Danske Bank. He says, what impact do you expect from the stimulus package announced in Germany? And when do you expect that to impact, if so? I mean, overall, it's good that Germany starts also to investing again. It has been a bit of a tough situation in Germany for the last two years. And we do see some more optimism on the ground, also with large customers. But it's still too early. There was no impact in the first quarter, and we will not see that in the second quarter either.

Speaker Change: So what impact do you expect from the stimulus package to announce in Germany, and when can you when do you expect that to impact itself.

Speaker Change: Yeah, I mean overall, it's good that that Germany starts also to investing again has been a bit of a tough.

Speaker Change: Tough situations in Germany for the last two years and we do see some more optimism on the ground by also with large customers.

Speaker Change: But there is still too early there was no impact in the first quarter and we will not see that in the second quarter either it says here because you know from planning permitting into starting building until the electrification and automation is in the ground is more of a so from there have an impact point of view, we are more into the 2026.

Morten Wierod: It is because, you know, from planning permitting into starting building until the electrification automation is in the ground, it's more of a...

Morten Wierod: So from there, an impact point of view, we are more into the 2026 onwards. So, but I think it's kind of good to see that there is a more environment of investing again. And I think the mood starts to change. And that is maybe the I think is the first and important part that the customers and our partner starts to look at the opportunities and not kind of looking backwards. So everything that went wrong, but more of what can we do in the marketplace, and there is a bit more of optimism that will help. And for us, it's about all those investment in either in infrastructure, you know, getting more affordable, but more reliable energy supplies of Europe and Germany, especially will support the business of ADB.

Speaker Change: Onwards, so, but I think it's kind of it's good to see that the racer and more and the environment of investing again and I think the mood starts to change and that is maybe the I think it's the first an important part that the customers on our partner starts to look at the opportunities.

Speaker Change: And not kind of looking backwards, so everything that went wrong, but more of what what can we do in the marketplace and there is a bit more of optimism that will help.

Speaker Change: And for US it's about all those investment in either in infrastructure, you know getting more affordable, but more reliable energy supplies of Europe, and Germany, especially will support the business over ABB. So I think that we are well positioned to take part in that those investments that will come but a bit.

Morten Wierod: So I think that we are well positioned to take part in that those investments that will come, but a bit still a bit early.

Speaker Change: It's still a bit early.

Anders at ABG: Very good.

Speaker Change: Very good and we open up the line for this that's a biggie.

Anders at ABG: We open up the line for Anders at ABG. Are you with us? Yeah, thank you. Just, yeah, exciting news on the robotics spin.

Speaker Change: With us.

Speaker Change: Yeah. Thank you.

Speaker Change: Just so I can use the robotics being just wondering about the thought process behind going for a spin.

Morten Wierod: I just wonder about the thought process behind going for a spin rather than a trade sale. Is there anything to, I mean, if those discussions came up here, is there anything that would sort of prevent you from, or, you know, would you engage in such discussions if it came up here? Yeah, I can start and you continue. We have looked at, of course, the different options when we do make such a decision. And the options what we are launching now is the separate listing of the robotics company, because we believe that is also a good opportunity for the shareholders to participate in that value creation opportunity that we are confident about.

Speaker Change: Losses on a trade sale leased or anything to I mean, if those discussions came off period or anything that food.

Speaker Change: Sort of prevent you from or you know.

Speaker Change: Would you engage in such discussions if it came up here.

Speaker Change: Yeah, I mean I can start that.

Speaker Change: Contingency we have looked at of course are different options. When we do make such a decision and the options. What we are launching now is the astellas separate listing of the robotics company. Because we believe that is also a good opportunity for the airport the shareholders to participate.

Speaker Change: In that value creation opportunity that we are we are quite confident about so therefore, that's why we've chosen this road we are but portfolio management is an important part of the whole ABB way operating model and we are always looking at different options and that would also be the same here as we have over overall.

Morten Wierod: So therefore, that's why we've chosen this road we are. But portfolio management is an important part of the whole ABB way operating model. And we are always looking at different options. And that would also be the same here, as we have our obligation to our shareholders to consider any option that may occur. But right now, we are on the path of a listing, and that's the work that is ongoing.

Speaker Change: Jason to over shareholders too to consider any any option that may of course about the right. Now we are at the on the path of a listing and that's the work that is that is ongoing so that is our clear primary plan at the moment, but.

Timo Ihamuotila: So that is our clear primary plan at the moment. Yeah, maybe a little bit also on the thought process. So if you look at some of the previous transactions, what we have done, so I think the key point is that, is there a natural industrial consolidator in the business, hopefully, two or three of them, and then it's sort of easier to go for the trade sale, which was very much the case, for example, in the bearings business, whereas in Acceleron, that didn't exactly exist. And here, it's not necessarily the case either. So I think that's sort of a little bit just on the thought process.

Speaker Change: Yeah, maybe maybe a little bit also on the thought process. So if you look at some of the previous transactions. What we have done. So I think the key point is that is there a natural industrial consolidator in the business hopefully two or three of them and then it's sort of.

Speaker Change: Easier to go for the trade sale, which was very much. The case for example in the bearings business. There is an accelerant that didn't exactly exist and here, it's not necessarily the case, either so I think that's sort of a little bit just on the thought process.

Morten Wierod: And while we're on this topic, there's a question here from Ben, just to clarify, will machine automation be a separate division in process automation, or could there be other changes in process automation? No, they will be a separate division there. And I believe they are on a clear path of improving their performance. So we talked earlier about, you know, they had a record performance in Q1 last year, that has declined since when they had kind of used the backlog and customers were sitting on a large inventory. Now, they are graining back, we said that now in Q2, they And therefore, we are more back to a more normal order pattern and revenue situation.

Speaker Change: And was very helpful. Thank you.

Speaker Change: And while we're on this topic and that's a question here from Ben and just to clarify will machine automation be a separate division in process automation or could there be other changes in process automation.

Speaker Change: No there will be a separate division there and I believe they are on a clear path of improving their performance. So we talked earlier about you know they had a record performance in Q1 last year that has declined since when they had kind of use the backlog and customers were sitting on a large inventory now.

They are grinding back we said that now in Q2, they will come and we will be ending that situation of a at the customer.

Speaker Change: And therefore, we are more back to a more normal order pattern in revenue.

Morten Wierod: And therefore, I'm also satisfied to see that we are able that plan that was made is followed. And that was good to see now. So but that will so that will remain in process automation. And they will, they will keep as a separate divisions, but working together on projects, even with the motion business or electrification, where this makes sense, or they will work with their colleagues and team members in process automation, when automation solutions or PLC solutions, for instance, in tunnel projects in energy industry, it's done, then they will be a contributor into those projects as one example.

Speaker Change: Situation and therefore I'm I'm also satisfied to see that we are able that plant that was made is followed and that was good to see now so that will so that will remain in process automation and they will they will keep as a separate divisions by working together on projects, even with emotional basis or electrification.

Speaker Change: Where this makes sense and where they will work with their colleagues.

Speaker Change: Colleagues and team members in process automation, when automation solutions or plc solutions for instance in tunnel projects in energy industry.

Speaker Change: It's done then they will be a contributor into those project as one example, so this is how we work across the company, where one division takes the lead to the towards the customer, but then working also whether there are other colleagues in other divisions. So of course that will continue also when they are in process automation.

Morten Wierod: So this is how we work across the company, where one division takes the lead to the towards the customer, but then working also with their, their other colleagues in other divisions. So of course, that will continue, also when they are in process automation.

Gael de: And we keep going on the portfolio spin topic here. Here's one question from Gael.

Gael: And we keep going on the portfolio spin topic here, Hey, just one question from Gael.

Morten Wierod: Could you also talk about the competitive environment for the robotics business? Yeah, I think the if you look at the how robotics are doing, and, again, when I say I think they will benefit from being measured, and compared with their peers in the robotics industry. And there, you will see that they are having a very strong performance, both from a top line, but also a bottom line performance. So being among the top and the very best in their class, and therefore, that's the also I see the benefit of having that focused company where we which, which we know will have.

Gael: Could you also talk about the competitive environment in the or for the robotics business.

Speaker Change: Yeah, I think the if you look at the how our robotics are doing it and again, it's when I say I think they will benefit from being measured and compared with their peers in the robotics industry and there you will see that they are having a very strong performance both from a top line.

But also our bottom line performance so being among the top in the very best in their class and therefore, that's the.

Speaker Change: And also I see the benefit of having that focused company, where we which are which we know will have and then on and I think they're also doing.

Morten Wierod: And then on, and I think they're also doing a good job when I look at what's happening in China, coming up now and launching this year, more of a China for China portfolio with for lighter application, which is quite kind of it's the robotics market in China is quite different from the rest of the world. And therefore, we have also adopted to that new reality, not just from a competition, but also from an that performance that is expected from customers, because that's, again, what drives it. So I think there is how you need to adopt this local for local strategy, when it's a new application and things with robots being used in China for other things, I mentioned, I think, on these calls earlier, the soup kitchen, ramen soup or noodle soup, being one, but many of these kind of a much higher robot density than what we see in Europe, and especially in the United States.

Speaker Change: Good job when I look at what's happening in China coming up now in launching this year are more of a China for China portfolio with for lighter application, which is quiet kind of at the robotics market in China is quite different from the rest of the world and therefore, we have also adopted to that new reality towards us from.

Speaker Change: Our competition, but also from an application and technology point of view and there I think is put on a really good job. Both so coming up with new products that is fit for purpose fit for some of these light applications, but at the same time also using local components and sub assemblies.

Speaker Change: Not using imports from let's say the west, but using those local Chinese components at and at the sea at the right cost level versus what we used in China, but.

Speaker Change: But also they're having with that performance, but that is expected from customers because that's again, what's driving it. So I think there is how you need to adopt this local for local strategy. When it's a new application of things, which is robust being used in China for others things I mentioned I think on these calls earlier, the the soup kitchen Robin Stewart.

Speaker Change: <unk> sup being born.

Speaker Change: But many of these.

Speaker Change: Kind of a much higher robot's density than what we see in Europe, and especially in the United States. So therefore, it's also a different portfolio and I'm happy to see that that portfolio is coming online and now they've got a big expansion now in 2025.

Morten Wierod: So therefore, it's also a different portfolio. And I'm happy to see that that portfolio is coming online.

Morten Wierod: And now we've got a big expansion now in 2025.

Speaker Change: Okay, we change topics for a little while and maybe towards U N T. Mo could you elaborate on why backlog execution was lower than planned in the first quarter and does it change your view on the full year outlook.

Timo Ihamuotila: And maybe towards you, Timo, could you elaborate on why backlog execution was lower than planned in the first quarter? And does it change your view on the full year out? Yeah, happy to. I think that really is only a timing issue. So there is nothing dramatic on that. A little bit more in motion and a little bit in EL. And then in motion also, we had a little lower service revenue, actually, than we expected. But looking forward, we actually saw very strong growth in base orders, actually higher than our normal order growth. We don't usually talk about it, but just wanted to mention that because it converts faster.

Speaker Change: Yes happy to I think that really is only a timing issue. So there is nothing dramatic dramatic on that little bit.

Speaker Change: More in emotion and little bit in in E. L. F and then emotional so we had a little lower.

Speaker Change: Service revenue actually than we expected, but looking for what we actually saw very strong growth in <unk>.

Speaker Change: <unk> orders actually higher than our normal order growth, we don't usually talk about it but just wanted to mention that because it converts faster. We also had over 6% we had 11% growth in service, which also service orders, which also supports revenue for the year and then when we look at the overall backlog we have.

Timo Ihamuotila: We also had, and that was 6%, we had 11% growth in service, which also service orders, which also supports revenue for the year. And then when we look at the overall backlog, we have maybe 3 to 4% coming from backlog. When you look at the backlog conversion of the 23 billion and 60% expected to convert this year. So we should be overall in a pretty good place regarding our revenue guidance for the year. Very good.

Speaker Change: Have it may be.

Speaker Change: 3% to 4% coming from backlog when you look at the backlog conversion of the 23 billion and 60% expected to convert this year. So we should be overall in a pretty good place regarding our revenue guidance for the year.

Speaker Change: Okay. Good and then we open up the line for Eric I'd CIC market solutions.

Eric at CAC Market Solutions: Then we open up the line for Eric at CAC Market Solutions. Yes. Hi. Good morning.

Speaker Change: Yes, hi, good morning, I go to pushing on the U S with touring I understand the objective of the Trump administration, the east to accelerate excellence reassuring, but to reduce immigration as well and I suspect you. All we are pleased with your automation business there.

Morten Wierod: I got a question on the US reshoring. I understand the objective of the Trump administration is to accelerate reshoring, but to reduce immigration as well. And I suspect you are well placed with your automation business there. And I was wondering what's your view on that? Do you currently observe any acceleration on that side? And do you observe any, I don't know, more optimism from your local teams on that particular issue?

Speaker Change: I was wondering what's your view on draft. You currently observe any acceleration on that side and do you observe any I don't know more optimism from your local teams on that particular issue. Thank you.

Morten Wierod: Thank you. Well, this is, I have to say, it's been a trend that has been ongoing for quite a few years now, because with the risk of tariffs being one, but also I think the importance of being closer to customers is just a trend that has become more and more important. So we have done it as ABB, but I know we're not the only company in the world that has moved production closer to customers. And I think that was a bit of a learning after the COVID shutdown in the beginning of 2021. So I think this is just the trend what we're seeing.

Speaker Change: Okay.

Speaker Change: Only the automation.

Speaker Change: Sure sure.

Speaker Change: Well. This is I have to say, it's been a trend that has been ongoing for for quite a few years now because.

Speaker Change: Because the way the risk of tariffs being one but also I think the importance of being closer to customers is just a trend that has been kind of more and more important. So we have done it as ABB, but I know we're not the only company in the world that is has a mood production closer to customers.

Speaker Change: I think that was a bit of a learning after the call Covid are.

Speaker Change: Shutdown in the beginning of the 'twenty to 'twenty. One. So I think this is just the trend what we're seeing in and we do let's say that's what we are helping also our customers when they are our or building up more of their local manufacturing I think that's the important but I can also use an example that we.

Morten Wierod: And we do say that's what we are helping also our customers when they are building up more of their local manufacturing. I think that's important. But I can also use an example that we had even from China, which just shows this where in the electric vehicle space when some of the leading electric vehicle companies go outside China and set up new manufacturing, that being Indonesia, that being in Thailand or here in Europe, then we are also following customers abroad. That's why it's important to have this global presence. But then you can also travel with the customers out when they establish new production so that what we have done in China or what we've done in Europe or in the US, when they go out to a new region, then we can bring that technology and the know-how from their original design and also do a kind of more of a copy-paste outside.

Speaker Change: Even from China, which just shows space, where in the electric vehicle space when some of the.

Speaker Change: Leading electric vehicle companies go outside China, and set up new manufacturing that'd be in Indonesia that being in Thailand over here and in Europe.

Speaker Change: Then we are also following our customers abroad. That's why they're important to have this global presence. But then you can also traveled with the customers out when they are established new production. So that would be what we have done in China or what we've done in Europe or in the U S. When they go out to a new region. Then we can bring that technology and knowhow.

Speaker Change: How from their original design and also to kind of more of a corporate paced outside so there is where some really good wins also in this quarter in that space not just in the U S, but even even coke going out of China, becoming more local in Asia or in Europe.

Morten Wierod: So there is where some really good wins also in this quarter in that space, not just in the US, but even going out of China, becoming more local in Asia or in Europe in the automotive industry as one example. And we don't see it only there, but also in other industries. So this importance of being truly global but acting local and having service, having people on the ground that can support it's one of the key elements why our customers choose to work with us on large-scale projects.

Speaker Change: In the automotive industry as one example, and we don't see it only there but also in in in other industries. So this importance of being truly global but acting local and having service having are.

Speaker Change: Having people on the ground that can support its one of the key elements why our customers choose to work with us on large projects.

Morten Wierod: Okay, thank you. But do you think the Trump administration policy could accelerate that trend in the U.N.? Yeah, I mean, there will be more investments in local manufacturing in the United States. That is clear. So I think the flip side here, as Timo mentioned, is kind of the question mark. How will it affect the global economy? But of course, it will drive some more investments in the United States in manufacturing. That's clear. But how effective it will have on the global economy is for me more the question mark, but that it will drive some more investments in the United States.

Speaker Change: Okay. Thank you, but do you think the Trump administration policy could accelerate that.

Speaker Change: Trends in U S.

Speaker Change: Yeah, I mean, there will be more investments in local manufacturing in United States.

Speaker Change: That is clear so I think the flip side here is T. Mo mention is kind of the question about how will it affect.

Speaker Change: The global economy, but of course, it will drive some more investments in the United States in manufacturing that's clear about the Wow effect. It will have on the global economies for me more of the question Mark but that it will drive.

Speaker Change: Some more and more investments in United States that's clear.

Morten Wierod: That's clear.

Unknown Executive: Understood, understood. Thank you.

Speaker Change: Understood understood. Thank you. Thank you and the time flies when you're having fun and what are you going to have to make that our last question. Thank.

Unknown Executive: And time flies when you're having fun.

Unknown Executive: We're going to have to make that our last question. Thank you very much for joining us today. And have a lovely spring break if you're getting one. I'll see you soon.

Speaker Change: Thank you very much for joining us today and have a lovely spring break if youre getting one.

Speaker Change: So you're saying.

Speaker Change: Thank you.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].