Q2 2025 ABB Ltd Earnings Call

and as you can see we're in our we're shooting from our new ABB studio and as per usual we have our CEO Morten Wierod and our CFO Timo Ihamotila and without further ado I will ask Morten to kick off the presentation. Thank you, Amsi. And a warm welcome also from my side. In the second quarter we delivered on plan with mid single digit revenue growth and increased operational earnings in three out of four business areas. I'm pleased with the overall results. That said, acknowledge that not all is perfect. We still have work to do to improve for example, the machine automation and e mobility business.

Greetings and welcome to this presentation of ab second quarter results. And if you can see, we're in our, we're shooting from our new Ab studio, uh, and as per usual, we have our CEO mutton Virat and our CFO T-Mobile. And without further Ado, I will ask Martin to kick off the presentation

Martin Virat: Thank you, Ani.

When it comes to the market, I would say that the business environment was more or less unchanged compared with the first quarter. Our broader markets remain fundamentally strong as the world turns to electric power and automation. And just like in Q1, we, just like everybody else, live with the added layer of uncertainty in terms of potential tariffs. I have said to our teams to continue to focus on what we can control. Our legacy of a local for local footprint serves us well. We do what we have done before. Take balanced actions to defend our market position and profitability.

Martin Virat: And uh, a warm welcome also from my side in the second quarter. We delivered on plan, with mid single digit Revenue, growth and increased operational earnings in 3 out of 4 business areas, I'm pleased with the overall results that said, acknowledge that not all is perfect. We still have work to do to improve. For example, the machine Automation and e-mobility business,

When it comes to the market, I would say that the business environment was more or less unchanged compared with the first quarter.

Martin Virat: Our broader markets remain fundamentally strong As the World Turns to electric power and automation.

And just like in q1, we just like everybody else live with the added layer of uncertainty in terms of potential tariffs.

Martin Virat: I have said to our teams to continue to focus on what we can control.

One key highlight in the quarter was the record high order intake of $9.8 billion. We booked a very large order in process automation, which helped us to get to this new all-time high. But momentum was also good when looking through this impact. We had positive order growth in all four business areas, supported by all regions and the majority of customer segments. Another happening was that we got recognized by Time magazine. They listed ABB as one of the top 15 most sustainable companies in the world across all industries. I view it as a testament to the success of the ABB way operating model.

Martin Virat: Our Legacy of a local for local footprint serves as well. We do what we have done before, take balanced actions to defend our Market position and profitability.

Martin Virat: 1 key highlight in the quarter was the record, high order intake of 9.8 billion. We booked a very large ordering process automation which helped us to get to this new all-time high.

Martin Virat: But momentum was also good. When looking through these impact, we had positive order growth in all 4, business, areas supported by all regions, and the majority of customer segments.

Martin Virat: Another happening was that we got recognized by Time Magazine, they listed ABB as 1 of the top 15 most sustainable companies in the world across all Industries.

We have embedded and made sustainability part of all of our operation based on accountability and transparency. Another highlight was the launch of three new robot families. These new offerings broadens the market scope for our robotics business as we expand to mid-market value propositions. Entering into this market segment with a fully local-for-local offering will support long-term growth and profitability for ABB Robotics. and it will strengthen our already leading position in China, as we have helped lowering the bar for automation also for smaller operators. So we move towards the spinoff of robotics from a position of strength.

Have view it as a testament to the success of the ABB way operating model.

Martin Virat: We have embedded and made sustainability part of all our operation based on accountability and transparency.

Martin Virat: Another highlight was the launch of 3. New robot families, these new offerings broadens, the market scope for our robotics business as we expand to mid-market Value propositions.

Martin Virat: Entering into this Market segment with a fully local for local offering will support long-term growth and profitability for ABB robotics.

Martin Virat: And it will strengthen our already leading position in China. As we have helped lowering the bar for automation, also for smaller operators.

And the process towards Q2 next year is progressing according to our plan. A really exciting event was electrification launching the upgrade of its already technology-leading air-circuit breaker, the EMAX 3. The previous version has been out since 2013 and now we have an even sharper offering clearly ahead of the competition. It has a world leading cyber security technology. It includes sensing, intelligence and advanced algorithms to improve energy security and resilience of power systems in critical infrastructure. You'll find it in data centers, factories, hospitals, and so on. We have had great success with the earlier version, and we have gained market share and have already installed more than five million EMAX 2 breakers.

Martin Virat: So, we move towards the spin-off of Robotics from a position of strength.

And the process towards Q2 next year is progressing according to our plan.

I really exciting event was electrification. Launching the upgrade of its already technology leading air circuit breaker. The e-max 3.

Martin Virat: The previous version has been out since 2013.

Martin Virat: And now we have an even sharper offering clearly ahead of the competition.

Martin Virat: It has a world-leading, cyber security technology it includes sensing intelligence and advanced, algorithms to improve energy security, and resilience, or Power Systems in critical infrastructure.

You find it in data, centers, factories hospitals, and so on.

This upgraded version is purposely designed with the same proportions, meaning customers can upgrade their retrofits for the switchgear to become even safer. The EMAX is one good example of how our business areas benefit from each other. Motion can leverage on electrification technology developments as they include the EMAX in their power drives. And in my view, this is one clear proof point on how we create customer value by embedding software in all of our products.

Martin Virat: We have a had great success with the earlier version and we have gained market share and have already installed more than 5 million emac 2 Breakers. This upgraded version is purposely designed with the same proportions. Meaning customers can upgrade their retrofits for the switch gear to become even safer.

The emacs is 1 good example of how our business areas benefit from each other.

Martin Virat: Motion can leverage on electrification technology developments, as they include the emacs in their power drives.

Let's take a quick look at this video. Thanks for watching!

And in my view, this is 1. Clear Proof point on how we create customer value by embedding software in all of our products.

Martin Virat: Let's take a quick look at this video.

This was a first flavor and I leave it as a cliffhanger for Giampiero to talk more about the EMAX 3 at the Capital Markets Day in November. I already mentioned the record high order intake of 9.8 billion, which is up 14% on a comparable basis. This includes the very large booking of about 600 million in process automation. Congratulations to the PA team on that. But you should note that our orders increased by 7%, also excluding this large impact. And it's encouraging to see that it was not one single driver. All four business areas improved orders in the 3% to 9% range.

this was the first flavor and I leave it as a cliffhanger for John PTO to talk more about the emac 3 at the capital markets day in November

Martin Virat: I already mentioned the record, high order, intake of 9.8 billion, which is up 14% on a comparable basis.

Martin Virat: This includes the very large booking of about 600 million in process automation. Congratulations to the PA team on that.

Martin Virat: But you should note that our orders increase by 7% also excluding these large impact, and is incurring to see that it was not 1 single driver.

We had positive development in all three regions, in the majority of customer segments, and in our service short- and long-cycle businesses. In my view, a really solid performance. Looking at the different segments, demand was strong in utilities, the same for data centers. And these are strong medium voltage exposure that also drive demand for our service base. The building segment was overall positive, and marine is an area which continues to be very good for us. The same goes for ports, where we help customers automate and electrify system for container and bulk handling. I also want to mention rail, where we see a continued solid pipeline as train fleets convert to electric power.

Martin Virat: All 4 business areas improved orders in the 3 to 9% range, we had positive development in all 3 regions in the majority of customer segments. And in our service short and low sight long, cycle, businesses, in my view, a really solid performance

Martin Virat: Looking at the different segments, demand was strong in utilities the same for data centers and these are strong medium voltage exposure that also Drive demand for our service business.

Martin Virat: The building segment was overall positive and Marine is an area which continues to be very good for us. The same goes for porch where we help customers automate and Electrify system for container and bulk handling.

So what is weaker? The automotive segment is challenging and put it put pressure on robotics orders. And similar to what we have seen in previous quarters, customer activity is subdued in pulp and paper and chemical.

Martin Virat: Also want to mention rail, where we see a continued solid pipeline as train fleets convert to Electric Power.

If you look at the right hand chart, you see that we actually hit an all time high also for revenues, which we reached $8.9 billion. It was up 6% with positive contribution from three out of four business areas. And it was supported by both the short and the long cycle businesses as well as service. In total, revenues were strong, but orders even stronger. So we continue to build order backlog, and book the bill was 1.1 in total, and positive at 1.03, also when excluding the large order in PA. Turning to look at the different geographies, we were actually up in all three regions.

Martin Virat: So what is weaker? The automotive segment is challenging and put it put pressure on robotics orders and similar to what we have seen in previous quarters. Customer activity is subdued in Pulp and Paper and chemical.

Martin Virat: If you look at the right hand chart, you see that we actually hit an all-time high also for revenues which re re reached 8.9 billion dollars. It was up 6% with positive contribution from 3 out of 4 business areas.

And it was supported by both the short and the long cycle businesses, as well as service.

Martin Virat: In total revenues were strong but orders even stronger. So we continue to build the Border, backlog and book, the bill was 1.1 in total and positive at 1.03. Also, when excluding the large order in PA

The Americas was again the main growth engine and increased by 28% like for like. The high number is helped by the large order booking, but the region is up by high single digit, also excluding this driven by the US. Asia, Middle East and Africa improved by 6% with China being virtually stable to positive in all business areas. Europe was up by 6% on a comparable basis with a positive development in our largest market, Germany. It was good to see that we convert positive top line growth into improved business performance. Operational EBITDA was up by 9%.

Martin Virat: Turning to look at the different geographies we were actually up in all 3 regions. The Americas was again the main growth engine and increased by 28% like for like

Martin Virat: the high number is helped by the large order booking, but the reason is up by high single digit, also excluding this driven by the US

Martin Virat: ACR Middle East and Africa improved by 6%, which China being virtually stable to positive in all business areas,

Martin Virat: Europe was up by 6% on a comparable basis with a positive development in our larger market, Germany.

It was good to see that we convert positive Topline growth into improved business performance.

And at risk of repeating myself, also here we have delivered a new all time high of $1.7 billion. I'm pleased to see that we kept the gross margin at the 40% level and the outcome for operational EBITDA margin was even a bit better than what we expected at 19.2%. This was driven by electrification and process automation, while motion was almost stable. This offset margin pressure in the machine automation division, as well as headwind of 30 basis points from last year's positive, non-repeats in corporate and other. meaning our underlying margin improved by 50 basis points from last year.

Martin Virat: Operational inhibit a was up by 9% and at risk of repeating myself. Also, here we have delivered, a new all-time high of 1.7 billion dollars.

Martin Virat: I'm pleased to see that we kept the gross margin at the 40% level.

Martin Virat: And the outcome for operational, ebit a margin was even a bit better than what we expected at 19.2%.

Martin Virat: This was driven by electrification and process automation while motion was almost stable.

Martin Virat: Offset margin pressure in the machine automation division as well as head Vin 030 basis points from last year's positive non-representative.

If we continue down the P&L and look at our net delivery, EPS was up by 6% to $0.63. I'm pleased with our delivery.

Martin Virat: Meaning over underlying margin improved by 50 basis points from last year.

Martin Virat: If he continued down the pnl and look at our net delivery EPS was up by 6% to 63 cents.

Now, I'll hand it over to you, Timo. Thanks, Morten. And let's now take a look at what happened in the different business areas, starting with electrification. They delivered new all-time highs for both orders of $4.5 billion and revenues of $4.3 billion. And I have to say that delivering a positive book-to-bill of 1.04 when the base is record high revenues is a job well done. A testament to strong underlying markets and a very good execution by the team. The strong order intake was supported by improvements across the portfolio, meaning services, short cycle and systems-related businesses. And also, when looking at the different segments, there was a broad positive development with most areas improving from last year.

Timo: I'm pleased with our delivery know. I hand it over to you. Timo. Thanks Morton.

And let's now take a look at what happened in the different business areas, starting with electrification. They delivered new all-time highs for both orders or 4.5 billion dollars and revenues of 4.3 billion. And I have to say that delivering a positive book to Bill of 1.04. When the base is record, high revenues is a job. Well done a testament to strong underlying markets and a very good execution by the team.

The strong order intake was supported by improvements across the portfolio. Meaning Services, short cycle, and systems related businesses,

Utility stands out on the positive side together with data centers where orders improved at double digit rate. The building segment was also supportive to growth driven by the commercial market outside of China. The residential area, however, continues to be challenging as China is persistently weak. We also noted some softness in the US market, while Europe is more or less stable. And just as a reminder, that building segment is about 30 percent of electrification with residential about 10 percent. Now, turning to revenues, which increased by 11% like for like. This was primarily driven by higher volumes as we convert the backlog related to medium voltage and power protection.

Timo: Most areas improving from last year.

Timo: Utility stands out on the positive side together with data centers where orders improved at double-digit rate?

Timo: The building segment was also supportive to growth driven by the commercial Market outside of China.

Timo: The residential area however continues to be challenging as China is persistently weak. We also noted some softness in the US market while Europe is more or less stable.

and just as a reminder that building segment is about 30% of electrification with residential about 10%,

Timo: now, turning to revenues which increase by 11% like for like,

but also by improved activity in the short cycle business. We also had some additional support from positive pricing. And in total, it resulted in revenues of 4.3 billion for the quarter. Earnings exceeding the $1 billion mark was another milestone for electrification. They continued their margin journey and improved by 70 basis points from last year, now reaching 23.9%. Even better than what we originally expected, supported primarily by volume leverage and operational efficiency measures. Looking into the third quarter, we currently expect mid- to high-single-digit growth in comparable revenues and the operational EBITDA margin to remain broadly stable from last year's record high level.

This was primarily driven by higher volumes as we convert the backlog related to medium voltage and Power Protection.

Timo: But also by improved activity in the short cycle business.

We also had some additional support from positive pricing.

And in total, it resulted in revenues of 4.3 billion for the quarter.

Timo: Earnings exceeding. The 1 billion dollar Mark, was another milestone for electrification. They continue their margin journey and improved by 70 basis points from last year now. Reaching 23.9% even better than what. We originally expected supported primarily by volume leverage and operational efficiency measures

Timo: Looking into the third quarter, we currently expect mid to high single-digit growth in comparable revenues and the operational, eita margin to remain broadly stable from last year's record, high level.

Let's then flip the motion, which delivered another quarter with order intake above $2 billion. The comparable order increase was 3%, and it was due to an improvement in the short cycle businesses, which more than offset the impact from lower large order booking. In motion, we continue to see favorable order development in HVAC for commercial buildings and data centers. Power generation is another segment which contributes to growth, as well as food and beverage driven by our project business. Oil and gas was stable year on year while the softer areas included the process related segments of chemicals, pulp and paper and metal.

Let's then flip the motion, which delivered another quarter with other intake above 2 billion dollars. The comparable order increase was 3% and it was due to an improvement in the short cycle businesses, which more than offset, the impact from lower large order, bookings

Timo: In motion, we continue to see favorable order development in HVAC for commercial buildings and data centers.

Timo: Power generation is another segment with which contributed to growth as well as food and beverage driven by our project businesses.

Rail actually declined in the quarter, but this was linked to the timing of orders as this market is something where we see continued strength. Shifting now to revenues, the motion team executed well at just above $2 billion, improving 4% on a comparable basis. This was supported mainly by higher volumes in the short cycle businesses combined with backlog execution and some positive prices. In the earnings chart, you see that profit was up by 5% to $407 million on higher revenues. The margin, however, remained more or less stable, softening by 10 basis points, as the positive impact from operational leverage on higher volumes and some pricing was offset by higher SG&A expenses.

Timo: Oil and gas was stable year on year. While the software areas, included the process related segments of chemicals Pulp and Paper and metals

Timo: Rail actually declined in the quarter but this was linked to the timing of orders as this Market is something where we see continued strength.

Timo: Shifting now to revenues the motion team executed well at just above 2 billion dollars improving 4% on a comparable basis.

Timo: These were supported mainly by higher volumes in the short cycle businesses combined with backlog execution, and some positive pricing.

And before commenting on the outlook, I want to mention that effective as of July, we simplify our divisional structure in motion. We combine the former systems drives and large motor and generator division into the newly formed high power division. We believe this consolidation will be a more efficient and customer-focused setup, deploying go-to-market synergies in the medium voltage space. In this space, customers often buy both drives and motors from the same vendor simultaneously as they want to optimize the performance of large applications. For the third quarter, we anticipate comparable revenue growth in the mid-single-digit range and the operational EBITDA margin to remain broadly stable compared with the second quarter of 2025.

In the earnings chart you see that profit was up by 5% to 407 million on higher revenues, the margin however, remained more or less stable softening by 10 basis points as the positive impact, from operational leverage on, higher volumes, and some pricing was offset by higher sgna expenses.

Timo: And before commenting on the Outlook, I want to mention that effective. As of July, we simplify our divisional structure in motion.

Timo: We combine, the former former systems drives and large motor and generate their division into the newly formed, how high power power division.

Timo: We believe this consolidation will be more efficient and customer focused setup.

Timo: Deploying go to market synergies in the medium voltage space.

Timo: In this space, customers often buy both drives and motors from the same vendor simultaneously as they want to optimize the performance of large applications.

For the third quarter, we anticipate comparable Revenue growth in the mid single digit range and the operational. EIT our margin to to remain broadly stable compared with the second quarter of 25.

And speaking of records, in process automation, orders reached $2.6 billion, which is an increase of 40% on a comparable basis. This includes the large order, which Morten also mentioned, contributing about $600 million. This was booked late in the quarter and has a multi-year delivery period. However, it is also worth mentioning that when you look at the impact of this large order, the underlying demand remained robust, with orders increasing about 8%. The market profile was similar to recent quarters, with the strongest customer activity linked to the segments of marine and port automation and electrification. It was also good to see growth in the short cycle product business, even if it was from a relatively easy base.

Timo: And speaking of Records in process automation orders reached 2.6 billion dollars which is an increase of 40% on a comparable basis. This includes the large order with more than also mentioned, contributing about 600 million.

Timo: These was booked late in the quarter and has a multi-year delivery period.

Timo: However, it is also worth mentioning that when you look at impact of this, large order, the underlying demand remained robust with orders. Increasing about 8%.

Timo: The market profile was similar to recent quarters with the strongest customer activity, linked to the segments of marine and Port Automation and electrification.

even if it was from a relatively easy base,

We increased our orders in the mining segment due to a few specific projects. However, the general business environment remains relatively cautious. Orders in oil and gas segment improved, while the more muted process industry-related areas were pulp and paper and chemicals. The team executed on their steadily increasing order backlog. However, revenues came in slightly below our expectations at one point eight billion dollars, improving two percent on a comparable basis. There is no drama here, but relates to the short term timing of delivery. It was good to see that process automation now had all divisions operating at around the 15% or higher margin area.

We increased our orders in the mining segment due to a few specific projects. However the general business environment remains relatively cautious

Timo: Orders in oil and gas segment. Improved while the more muted process industry related areas where part and paper and chemicals.

Timo: The team executed on their steadily increasing order backlog. However, revenues came in slightly below our expectations at 1.8 billion, improving 2%, on a comparable basis. There is no drama here but relates to the short-term timing of deliveries

This resulted in earnings of $290 million, up 10% year-on-year, and a record margin of 15.9%, well done by the team. Looking at our expectations for the third quarter, we foresee comparable revenues to improve in the mid-single-digit range and the operational EBITDA margin to be broadly stable year-on-year.

Timo: It was good to see that process automation. Now had all divisions operating at around 15% or higher margin area, this resulted in earnings of 290 million up, 10% year on year, and a record margin of 15.9% well done by the team.

Timo: Looking at our expectations for the third quarter, we foresee comparable revenues to improve in the mid single-digit range and the operational. EIT are margin to be broadly, stable year and year.

Now we turn to robotics and discrete automation, where comparable orders improved by 4% to $729 million. All be it from last year's low base. And, as usual for the second quarter, there was a sequential drop in the order level. There were, however, variances between the two divisions. In robotics, there were softer order intake across customer segments, with the exception of consumer electronics. Customers appear to be a bit in a wait-and-see mode on the back of continued tariff-related uncertainties, and some projects are pushed to the right. Despite this, we do expect orders to improve sequentially. In machine automation, orders increased sharply from last year's low level.

Timo: Now, we turn to Robotics and discrete automation, we are comparable orders improved by 4% to 729 million.

Timo: Albeit from last year's low Bass.

And as usual, for the second quarter, there was a sequential drop in the order level.

Timo: The war. However, variances between the 2 divisions in robotics they were softer order intake across customer segments, with the exception of consumer electronics,

Customers appear to be a bit in a wait and see mode on the back of continued tariff related, uncertainties and some projects are pushed to the right.

Timo: Despite this, we do expect orders to improve sequentially.

That said, the absolute order level remains subdued as customers cautiously balance new ordering with inventory level. Nevertheless, we anticipate absolute orders to increase sequentially in machine automation as well. Moving now to revenues, 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 5% year-on-year. Operational EBITDA margin of 9.1%, down 200 basis points year-on-year, and 80 basis points sequentially. As in recent quarters, the robotics division's margin was well into the double-digit territory and actually improved slightly from last year.

Timo: In machine automation orders, increased sharply from last year's low level.

Timo: That said, the absolute order level remains subdued as customers cautiously balance new ordering with inventory levels.

Nevertheless, we anticipate absolute orders to increase sequentially in machine automation as well.

Timo: Moving now to revenues the robotics division report did 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 result did incomparable revenues being down 5% year on year.

Timo: Operational Abit. Our margin of 9.1% down 200 basis points here on year and 80 basis point sequentially.

The business area margin decline stemmed from weaker results in machine automation. The distribution recorded a small loss as the volumes in production have not yet recovered enough to cover the cost under absorption. For RA in the third quarter, we expect order intake to increase sequentially. For comparable revenues, we anticipate to be in low to mid-single-digit range of growth and operational EBITDA margin to improve both year-on-year and sequentially.

Timo: As in recent quarters, the robotics divisions margin was well into the double digit territory and actually improved slightly from last year.

Timo: The business area marching decline stemmed from weaker results. In machine automation, the distribution recorded a small loss as the volumes in production. Have not yet recovered enough to cover the cost under absorption.

Timo: For RA, in the third quarter, we expect order intake to increase sequentially.

Timo: For comparable revenues. We anticipate to be in low to mid single digit range of growth and operational a bit margin to improve both year on year and sequentially.

Now, let's move on to cash flow. The pre-cash flow of 845 million is slightly down from last year. Although we increased earnings, this was more than offset by some growth-related build-up of networking capital, as well as the planned increase in capex. That said, looking at the total for the first six months, we are at 1.5 billion and a few million up on last year's level. Our usual pattern suggests a stronger cash delivery in the second half of the year. and we continue to be confident to improve from last year's annual level.

Timo: Now, let's move on to cash flow. The free cash flow of 845. Million is slightly down from last year.

Timo: Although we increased earnings this was more than offset by some growth related buildup of networking Capital as well as the planned increase in capex spend.

That said, looking at the total for the first 6 months we are at 1.5 billion and a few million up on last year's level.

Timo: Our usual patterns would suggest a stronger cash delivery in the second half of the year.

And with that, let me hand back to you, Morten.

Timo: And we continue to be confident to improve from last year's, annual level.

Thanks, Timo. Now let's finish off with the outlook. We leave our 2025 guidance unchanged. For the third quarter, we expect comparable growth to be at least in the mid single digit range and the operational EBITDA margin to remain broadly stable with a 19% loss.

Martin Virat: And with that, let me hand back to you Martin.

Martin Virat: Thanks Tim.

So now, let's see, let's open up for some questions. Yes, let's do so. And just a quick reminder for those who have dialed in on the phone, please press star 14 to register to ask a question. And also please remember to mute the webcast as your line is opened and limit the question to one. The way that way we allow for as many as possible to be heard. You can also put your questions through the online tool in the webcast, and I will voice them over.

Martin Virat: Now let's finish off with the Outlook. We leave our 2025 guidance unchanged, for the third quarter, we expect comparable growth to be at least in the mid single digit range and the operational eidl margin to remain broadly stable with the 19% last year.

Martin Virat: So now on see, let's open up for some questions.

Martin Virat: Yes, let's do. So.

Martin Virat: Uh and just a quick reminder, for those who have dialed in on the phone, please press star 14 to register to ask a question.

Martin Virat: To 1, please.

Martin Virat: The way that way we allow for as many as possible to be heard, you can also put your question through the online tool in the webcast, and I will voice them over from here.

And with that said, I suggest we go for the first question and we open the line for Martin at City. Is your line open, Martin? Thank you. Good morning, it's Martin at Citi. The question I had was on electrification and how we think about pricing and volume. It sounds like you had good orders there again in both utilities and data centre. Are we now in a market where that's when you talk about double digit there, that it's really volume? So if essentially pricing is now sort of normalised or flattish and that double digit comment is effectively a volume comment for order intake?

Martin Virat: And and with that said, I suggest we go for the first question and we open the line for Martin at city is your line open? Marty

Thank you. Yeah, we can make that very short really and say yes. That's a very short answer. We see a bit positive pricing. Of course, this is an average. I always say on the global business, there are the average of maybe half a point of price increase, but that is the average between some geographies where you have stronger pricing and others where we even see deflation. And, you know, taking US and China's two examples there. So the pricing is not the big factor for this quarter. It is really driven by units and growth in the number of units.

Martin Virat: Thank you. Yes. Good morning. It's Martin at City. The, the question I had was on electrification and how I think about pricing and and volume so that you had good orders, you know, gaining bulk, utilities, and data center. Are we known as in a market where that's when you talk about double digit there but it's a really volume. So if it says the pricing is now sort of normalized or flat-ish and and that double digit comment is effectively a volume comment for ordering. Take thank you.

Speaker Change: yeah, we can make that very short really and say yes,

Speaker Change: That's the, uh, the short, very short answer the, we see a bit positive pricing. And of course, this is an average. I always say on a global business, there are the average of maybe half a point uh, of price increase, but that is the average between some geographies where you have stronger pricing and others where we even see deflation and, um, you know, taking us and China to examples there. So, um, the um, but the pricing is not the big factor for this quarter. It is really driven by units and, uh, and growth in the the

Speaker Change: Number of units.

Thank you.

And there's one question, just to clarify that, because obviously, there was some debate last year about normalizing supply, particularly in medium voltage and lead times normalizing and so forth. There's been no adverse effect of that on pricing. It looks like we've kind of gone to a normalized level of price as opposed to giving up any of the price that we saw and benefited from over the last 12 months or so. Correct. That is what we see in the marketplace. It's the capacity, I mean, kind of demand supply, probably a bit better balance, but still strong demand, as we see on the order numbers.

And that has also been reflecting that the pricing is staying very stable. Great, thank you very much.

Speaker Change: Thank you. And and there's 1 question just to clarify in that because obviously there was some uh debate last year about normalizing Supply in a particularly in medium voltage and Lead times, normalizing and so forth. There's there's been no adverse effect of that on pricing. It looks like we've kind of gone to a normalized level of price as opposed to giving up any of the price that we have that we saw and benefited from over the last 12 months or so correct. That is what we see in the in the marketplace. It's uh if the capacity uh I mean kind of demand Supply probably a bit better balanced but still strong demand. As we see on the other numbers and and that has also been reflecting that the pricing is stay staying uh very stable.

Speaker Change: Great, thank you very much.

And we'll take one question here from the online setup. And here's one from Gael at Deutsche Bank. He's asking about that large order, which client vertical is behind that order? And do we see more of these larger orders coming?

Speaker Change: Okay, uh we'll take 1 question here from the online uh setup.

Speaker Change: And here's 1 from Gail, uh, at Deutsche Bank. He's asking about that large order, which client vertical is behind that order.

Yeah, we're not allowed to give you the name of the order of the client. What we can say, as you see in the numbers, it's a multi-year order that sits in the service business, it's in process automation. It's a good quality orders. And that's kind of where we leave it. We are happy to see this kind of long term order that goes into our order backlog when they come at good margins.

And uh, do we see more of these larger orders coming through?

And, but we don't, we're not, if the question is leading to if you're going to kind of move back to EPC business or large projects, that is not the case. This is a multi-year service order that we will take quite many years to execute, but it's always good to get it into the backlog.

Speaker Change: Yeah, we're not, uh, uh, allowed to give you the name of the order, uh, of the client what we can say, as you see, in the numbers, it's, uh, it's a multi-year order that sits in, uh, the service business. It's in process automation. Uh, it's a good quality orders, uh, and, um, that's kind of where where we leave it. Uh, we are happy to see this kind of long-term order that goes into our order backlog, uh, when they come at at, uh, good margins. And, uh, but we don't, uh, we're not if the question is leading to, if you're going to kind of move back to EPC business or large projects, that is not the case. This is, uh, as I say a multi multi-year service order that we will take, uh, uh, quite many years to, to execute, uh, but it's always good to get it into the backlog.

Very good.

And then we open the line for Max at Morgan Stanley. Max, are you with us? Hi, thank you. Thank you and good morning. Just, I guess the question I had was just around data centers. So, obviously, improved kind of data center order performance. We know you were affected kind of last quarter because of the single hyperscaler, so changing their ordering plans.

Speaker Change: Very good.

Maybe if you could just comment, is the improvement in data center just down to that customer kind of normalizing their behavior and going back to ordering, or are you actually seeing a sequential acceleration in data center demand? And maybe also, if you could give us some color around what are your sales doing? What kind of growth are your sales doing in the second quarter and what should we expect for the full year? Thank you. Now on the on the data center, we had a very positive and a good, strong development in the second quarter, double digit growth.

Max. Are you with us? Hi, thank you, thank you. Um, and and good morning, um, just I, I guess the question, uh, I had was just around data centers, so obviously improved kind of data center order performance. We know you were affected kind of last quarter because of the, the high of a single hyperscaler, so changing their ordering plans. Um, maybe if you could just comment, is the Improvement in data center, just down to that customer kind of normalizing their behavior and going back to ordering, or are you actually seeing a sequential acceleration?

Speaker Change: In data center demand, and maybe also if you could give us some color around. Um what what are your sales doing? What, what kind of growth are your sales doing in the second quarter and and what should we expect for the full year? Thank you.

And that is across the board from all clients. In, of course, there are others where we have much higher growth than others. But that's the this is the average of the whole segment. And it's also positive to see this is, of course, a lot in North America, but it's really a globe that is the global number. And we see a good data center growth also in in China, in Asia, and also in Europe. So that is really across the board. And it has also given us the confidence for also for the rest of the year that the statement of double digit growth for the segment will remain.

Speaker Change: Good data center growth. Also in

And also for the years to come, as when we talk with either the hyperscalers and the kind of large clients in this industry, they're, they're not going backwards, there is a significant investment plan, new investment plan for the coming years, you've seen some of the announcement on the news, like Stargate and others. So therefore, our confidence is, is really high.

And maybe Timo, if you comment anything, we don't do the revenue breakdown. No, I don't know. I'm not gonna go there. And you can say it's solid growth, of course, there as well. Very good.

Speaker Change: In China in Asia and also in Europe. Uh so that is is really a cross the board and it has also given us the confidence for also for the rest of the year that the statement of double digit growth for the segment will remain. Uh and also for the years to come, as when we talk with either the hyperscalers and the kind of large clients in this industry there, uh, they're not uh, going backwards. There is uh, significant investment plan, new investment plan for the coming years. You've seen some of the announcement on the news like Stargate and others. Uh so therefore overconfidence is uh is really high and maybe Timo you covered anything with. We don't do the revenue breakdown know, I don't know. I don't, I'm not going to go there. No yeah. So then you can say it's a solid growth of course there as well. Yeah.

And then we take the next question from Daniela at Goldman. Hi, good morning is actually sort of a follow up on this, on these topics on the very strong growth, you've mentioned double digit growth in the But also interested on how do you assess internally, both on data centers or on the low voltage part in electrification products?

Speaker Change: Very good and then okay. Understood thanks. Thank you very much. Thanks. Mike. And then we take the next question from Daniela.

Speaker Change: At Goldman.

Transcription by Trans-Expert at Fiverr.com Oh. Yeah, I mean, we have a very good transparency on what is the kind of end-user point, but also because we know that from our client base on where it sits. So we can, with, I would say, very high accuracy, know both by region and down to customer and client levels. And some of it is because you have different SKUs even, that is, we have special features that is required in the data center industry that we have agreed with some of our larger clients. And so that's how we also are able to track this very well.

Speaker Change: Hi. Uh, good morning. Good morning. It's actually sort of. I follow up on this uh on these topics on the very strong Road. You've mentioned double digit growth in data centers, uh, but also interested on how how do you assess internally both on data centers or on the low voltage Parts? It's in in in electrification products, what is potential providers? What is underlying growth? How I'm more of a conceptual company of of how like a company like yourselves internally in terms of systems can have the vision?

Speaker Change: Visibility to distinguish the these 2 things so that we can be confident is really underlying demand.

Speaker Change: oh, uh

It's not the Timo coming up with some crazy numbers here. It is coming from our system with a good tracking of, and sometimes even down to SKU levels that are being used in this industry. And we of course follow...

But I have... Go ahead. Yeah, the way we don't see a pattern of pre buying, but of course, these are orders will be placed now we have pretty long lead times. And therefore there are clear terms and conditions around contracts, including as you say, cancellation fees and others that will take place if that come but we haven't in general seen that in these segments is more about how can we book capacity, but it's not just a book capacity, you need to have that into a dedicated project because as the data centers develop, you also and you know, in size and the technical solutions will be different than you need.

Speaker Change: Yeah, I mean, we have a very good transparency on what is the, uh, uh, kind of end user point. But also, what where because we know that from our client base on on, where it sits. So we can with a, I would say very high accuracy know, both by region and down to customer and client levels. And some of it is because yeah, you have different skues. Even that is for have special features that is required in the data center industry that we have agreed with some of our larger clients. So we that's how we also are able to track this very well. It's uh um, it's not a team or coming up with some uh, crazy numbers. Here it is, uh, coming from our system with a with a good exactly tracking of. Um, and sometimes even down to, uh, SKU level that are being used in the, in this industry. Yeah. And we, of course, follow let's go ahead, go ahead.

Speaker Change: Just wondering have clients ever in the past in any cycle told you when they were pre buying stuff and and is there a possibility that they go back and cancel this or these are all from orders.

So it's not that easy to pre buy, you need to know what you want to buy, what's the technical design, and then you can place an order. So orders we have today do often have lead times from 12-24 months. That is kind of more the cycle, because it goes also into you know, the civil works and other things on the site that needs to be aligned. Yeah, I was just gonna say that, that more often you see that kind of where it's more difficult to follow in the channel business, where of course, you don't exactly always know how the inventories on that side develop.

Speaker Change: Yeah, the um we I we don't see a pattern of pre- buying, but of course, these are orders will be placed. Now, we have pretty long lead times and therefore there are clear terms and conditions around contracts, including as you say, cancellation fees and others that will take place if that come but we haven't uh in general seen that uh in this segments is more about, how can we book capacity? But it's not just the book capacity. You need to have that into a dedicated project because as the data centers develop uh you also and you know in size and the Technical Solutions will be different uh then you need. So uh it's not that easy to pre buy. You need to know what you want to buy, what's the technical design, and then you can place an order. So orders we have today, do often have a lead times, uh, from 12:24 months, uh, that is kind of more the, uh, the cycle uh, because it goes also into, you know, the Civil Works and other things on the site that

But I think in this area, very unlikely that there would be any pre buying. And we of course also have the kind of like order pipeline, which we follow probability weighted. So we also see kind of like what is coming longer.

Okay.

Speaker Change: That needs to to, um, be aligned. Yeah, I was just going to say that that more often. You see that kind of where it's more difficult to follow in the channel business, where? Of course, you don't, exactly always know how the inventor is on that side developed but I think in this area very unlikely that there would be any pre- buying and we of course also have the kind of like order pipeline, which we follow probability, where it did. So we also see kind of like, what is coming longer term. Yeah.

No. Pre-buy is done and dusted.

Okay.

No.

Okay.

Maybe it's a question for you, Timo. How confident are you to reach your full year guidance of mid-single-digit revenue growth, given the ongoing uncertainties in the business environment? Yeah, OK. Thanks for the question. So basically, when we look at our performance now, we have been at 5% growth first half, so kind of like rounding in there. And then when we look at our backlog, we actually expect about 5% conversion from the backlog. So backlog is clearly higher at record level, 25 billion. So our conversion is a little slower, but still, actually, we have approximately 5 points coming from that.

Speaker Change: Got it. Thank you very much. That's helpful for you guys. Done and dusted. Okay. Um, maybe it's a question for you Teemo. How confident are you to reach our full your full year? Guidance of mid single digit Revenue growth. Given the ongoing uncertainties in the business environment,

And then also, I mean, we guided sort of a little higher revenue, at least mid-single-digit, and also had strong order growth in our short cycle orders on high single digits. So with all that in, even with the economic uncertainty, we actually feel quite good about where we are at the moment.

Speaker Change: Record level, 25 billion. So, our conversion is a little slower, but still actually, we have approximately 5, uh, 5 Points coming from that. And then also, I mean, we guided sort of little higher Revenue at least mid single digit and also had, uh, strong order growth in our short cycle, orders on high single digits. So, with all that in, even with the economic uncertainty, we actually feel quite a good good about where we are at the moment.

Very good, and then we take a question from the conference call, and that's Andre from UBS, your line should be open. I wanted to touch on the formation of the High-Powered Motion. I thought before we were moving kind of more towards HHS Online Business Examining and Review. More granular look.

Speaker Change: Very good. And then we take a question from the conference call and that's, uh, Andre from UBS the line should be open.

smaller individual businesses with ABB and maybe while at that, is there anything else that we should be looking forward to at that Capital Market Day?

Speaker Change: Hi, good morning, thank you very much for taking my question. I just wanted to touch on the information of the, um, new high power division. Uh, within motion. I thought before we were moving, kind of more towards I could say, higher fragmentation, um, uh, or looking at smaller and smaller pieces within each, uh, sub segment of each business area. Uh, is that not kind of the move the other way, uh, and is this something that you expect to cover that the capital markets day, that kind of more granular? Look at

Speaker Change: Um, smaller individual businesses with nbb and maybe a while at that, is there anything else that we should be looking forward to at that Capital markets day?

Thanks Andre, I won't give any spoilers of the Capital Market Day today. But let me comment on the new high-power division as part of motion it's you know they have today seven divisions they will now have six going forward the reason of looking at these two it's not a trend or that ABB will kind of merge a lot of divisions but it is for higher we have now with the business line transparency as we have better now in the divisions we looked at what are more of standalone and where is very tightly connected and that's why kind of the basis of this there is a lot of large motors and large drives which is designed together as one package if it sits for instance on board a ship or if it's in a cement plant or in a or in a pulp and paper plant these kind of solutions need to be designed together so from a completely different technologies between motors and drives but it's the combination of the two because the drive is controlling the motor and therefore it also need to be need to be have a have a common design so that is this system and solution thinking that it's that it holds the two together and the customer will buy it as one package they will not buy a motor from all from this is not that from the shelf motor and from the shelf drive this is really designed as a system together and that's why we said that going to market there is advantages and therefore we believe that we can take out some cost on one side when it comes to administration but we believe also when it comes to a serving the customer will be even better in this setup where you kind of because you win the package or you lose the package together so sometimes you need to take a bit of a cross the division or now it will be inside one division to make that decision to take the whole package or to lose the package that's a one decision to make and not two so that's a majority of the other reason behind it very good And then there's a question here from Ben Healan.

Speaker Change: Thanks, Andre. Uh, I'll have I'll give any spoilers of the Capital Market day today, uh, kind of like on the video. So we'll do it there. But I'll let me comment on the new high power division as part of motion. It's, you know, they have today. 7 divisions. They will know how 6, uh, going forward. There is no looking at these 2. It's not a trend of an ABB will kind of merge, a lot of Divisions, but it is for how we have now with the business line, transparency, as we have better. Now in the divisions, we looked at what are more of Standalone and where is a very tightly connected and that's why kind of the the basis of this. There is a lot of large Motors and large drives, which is designed together as 1 package. If it sits for instance, on board a ship, or it sits in a cement plant or in a uh, or in a pulp Pulp and Paper plant, these kind of solutions need to be designed together. So, from a, a completely different Technologies.

Speaker Change: Between Motors and drives but it's the combination of the 2 because the mo the drive is controlling the motor and therefore it also need to be need to be, have a, have a common, uh, design. So that is this system and solution thinking that is that it holds the 2 together and the customer will buy it as 1 package. They will not buy a motor from from the. This is not from the Shelf motor and from the Shelf drive, this is really designed as a system together. And that's why we say that going to Market there is advantages. And therefore, we believe that we can uh, take out some cost on 1 side when it comes to Administration, but we will leave. Also, when it comes to a serving, the customer will be, uh, even better in this setup where you kind of because you win the package or you lose the package together. So sometimes you need to take a bit of a cross the division or now it will be inside 1 division to make that decision to take the whole package or to lose the package. That's it. The 1 decision to make and not 2. So that's the majority of the of the reason behind it.

Speaker Change: Very good.

He would like to know about machine automation. And in Q1, you talked about moving into a more normal ordering pattern on machine automation. Do you still see Yeah, we are what we talked about earlier was that we had inventory sitting out at our customers, machine builder customers that they had over ordered in this semiconductor crisis time, we see that that those inventories and we have transparency on that, that is those inventories are now down to more of a normal level. That means that the order intake reflects more the real market demand, and not kind of taking down or ramping up inventory levels.

Speaker Change: To know about machine Automation and, uh, in q1, you talked about moving into a more normal ordering pattern on machine automation. Do you still see this?

So we still see a bit of slowness in the whole overall machine builder market. That's probably where we see where we do see some of the uncertainty in this market. But the kind of the so now the demand in the market is the same as over order intake. So that effect is now taken out of the equation.

Speaker Change: Yeah, we are what we talked about earlier was that we had, uh, inventory sitting out at our customers, the machine Builder customers that they had over ordered in this, uh, the semiconductor crisis time. We see that, that those inventories and we have transparency on that. That is those inventories are now down to more of a normal level. That means that the order intake, reflects more, the real market demand, and not kind of taking down or ramping up inventory levels. So, uh, we still see a bit of slowness in the whole overall machine Builder Market. The that's probably where we see where we do see some of the uncertainty, uh, in this market, uh, but um, the kind of the the. So now, the demand in the market is the same as our order intake, uh, so that effect is now taken out of the equation.

And then we take a question from James at Red Band. James, can you hear? Great to see your 9% electrification order goes. I hear all your message about grid and data center being very Compared to others, you've got quite a big exposure to industrial. And over the years, we've been seeing a greening of heavy industry, trying to become more decarbonized in the light. He's that. Momentum Slowing. Trump Web. Green Tech Agendas Could you talk about the pace of growth in industrial and that theme, please? No, I'm happy to do so. You're right that the best way to decarbonize your operation is to go electric.

Speaker Change: Uh, and then we take a question from James at Redban.

James, can you hear us?

Speaker Change: Uh, and see and great to see your 9% electrification order growth and I hear all your message about grid and, and data center being very strong compared to others. You've got quite a big exposure to Industrial

Speaker Change: Industry, trying to become more decarbonized and the likes.

Speaker Change: Is that?

That's kind of the ultimate solution. But there is another point to it. The best way also to reduce your cost in your operation is to go electric. I can use an example where a steel company in India to be competitive versus Chinese steel imports. They're looking at how do we become more productive in our steel production? And there we are helping them to go from a coal based furnace to electric furnace. And it's of course, it's a decarbonization topic, but that's not the motivation. It's a productivity game. So our technology and the whole application is not only about greenification.

It's also about productivity. So when we're talking about making industries leaner and cleaner, this normally goes together. It's not one or the other. It's both. And that is where the electrification trends play in. And many industries today that it's not just to decarbonize. That's kind of the icing of the cake. It's to become more productive because it has a lower operating cost and lower maintenance cost when you do it with electric solutions compared with others. And I see just also to mention on the electrification side in the United States, there we see that the there may be a shift or a trend from renewable power generation to more into the gas side LNG.

Speaker Change: Momentum slowing post-trump where perhaps Green Tech, agendas, uh, faded somewhat and could you talk about the pace of growth in industrial? And, and that theme, please know, I'm happy to do so you're right. That the best way to decarbonize your operation is to go electric. That's kind of the, uh, ultimate solution. But there is a another point to is the best way. Also, to reduce your cost in your operation, is to go electric. I can use an example where where, um, uh steel company in India, uh, to be competitive versus Chinese steel Imports. They're looking at, how do we become more productive in our steel production and they're we're helping them to go from a call based, uh, furnace to electric furnace. And it's of course it's a decarbonization topic but that's not the motivation. It's a productivity game. So our technology and the whole education is not only about greeny vacation. It's also about productivity so uh, when we talking about making Industries leader,

Speaker Change: And cleaner. These normally goes together, it's not 1 or the other it's both and that is where the electrification trends play in and many, uh, Industries today. That is not just to decarbonize. That's kind of the icing of the cake. It's to become more productive. Uh, because it has uh, a lower M, uh, operating cost and lower maintenance cost. When you do it with electric Solutions, uh,

But for us as ABB, what we see is that the electric consumption is going up and how you generate that electricity. We will be part of it either, say, on renewable or on the LNG side. So for us, it's it really doesn't matter what part, if you look at from a pure financial performance, we will have content and be part of that, both of the grid integration, but also a lot of those solutions that are being used. So that doesn't really affect. On a personal note, I think it we need every source of energy, also in the United States, but also here in Europe.

So I think it's not be taking one only one solution ahead of another. We are playing in every of these grounds. And I think we will see that also next year when we need more energy or more electricity will come from multiple sources. Thanks very much. Thanks, James. And we take the next question and open the line from John at BNP Paribas. Thank you, Yancy, for fitting me in. Yeah, maybe a question on trading, particularly in China. So we're plus two on the orders now, I guess the picture might be quite mixed across the various China and markets.

Speaker Change: Compared with others. And I see just also to mention on the electrification side in the United States. Uh, there we see that the there may be a shift or a trend from Renewable. Power Generation to more into the gas side LNG. But for us as ABB what we see is that the electric um, consumption is going up and how you generate that electricity? We will be part of it either say on renewable or on the LG side. So for us it's it it really doesn't matter. Uh what part if you look at from a pure financial performance, we will have content to be part of that both of the grid integration but also a lot of those solutions that are being used so that doesn't really affect um, on a personal note I think it's we need every source of energy um also in the United States but also here in Europe. So uh, I think it's not be taking 1, only 1 solution ahead of another, we're playing in.

Speaker Change: Every of these grounds, and I think we will see that. Also in next year, when we need more energy or more electricity, will come from multiple sources.

Thanks very much. Thanks James. And we take the next question and open the line from John at BMP. Um, pariban

And could you comment on that, particularly on recent trading as we headed into Q3? And just on that, that Q3 comment, I see in a significant event after Q2, I think the robotics business launched three robot families in China specifically to target the mid market. Is that purely just an opportunity to take more, share more revenue? Or is it also a reflection of competitive trends, perhaps in the higher end, sort of a need to compete more aggressively with local competitors? I think that I mean, as you said, we had 2% order growth in China in Q2, where, but they're also a bit of mix of the different between the business areas, but overall, the trend, what we talked about earlier, strong growth in data center, strong growth in renewables on the industrial side, but weakness in building and especially residential buildings are still on a weak side.

Speaker Change: Thank you and see, um, for fitting me in. Yeah, um, maybe a question, um, on trading, particularly in China. Um, so plus 2 on the orders. Now I guess the the picture might be quite mixed across the various China and markets and could you comment on that, particularly on recent trading as we headed into Q3 and just on that? That Q3 comment. I see in a significant event after Q2, I think the robotics business launched um, 3u robot families in China. Specifically, the target the midmarket, um, is that purely just an opportunity to take more, uh, share more revenue, or is it also a reflection of competitive Trends, perhaps in the in the higher end? Um, sort of a need to compete more aggressively with with local competitors.

Yeah, I think that, I mean, as you said, we had 2%, um, uh, order growth in China in Q2, uh, where, uh, but they're also a bit of a mix of, of the different, um, between the business areas. But overall,

And over projection is that they will remain for quite some time. So it's kind of a, it's a bit like the inventory of apartments that need to come down, it's too high, so no need for new capacity. So that it's gonna take some time. When you look about robotics, I think this is a great opportunity to all now coming with three new robotic families. They're addressing mostly the mid market and lighter applications. It's what we have talked about earlier, where we had some gaps that we needed to fill also to compete. A lot of customers asking for this kind of solution.

Speaker Change: Uh the trend what we talked about earlier, strong growth in data center uh strong growth in Renewables uh on the industrial side, but weakness in building and especially residential buildings are still on a weak side and over projection is that it will remain for quite some time. So it's kind of a it's a bit like the inventory of a partners that need to come down. It's it's too high. So no need for new capacity so that it's going to

I'm very, very pleased to see that this is now being available out in the marketplace. And that's, for me, a great opportunity for the robotics team to really fight with the same tools or guns in that marketplace. It's a great local for local initiatives. It's designed in China, manufactured in China, and it's sold with our Chinese system integrators and partners in China. So I think that's a really kind of the best example of what we when we talk about local for local. This is what we mean about it.

Can I add one thing there? So actually, in our motion business, we had a pretty good growth now in China and exactly following the strategy. So kind of like, for example, in drive products, they really made a lot of work to localize the product. And I think we are seeing now a little bit of benefits of that. So that's actually really nice to see. And, of course, would expect similar to happen in robotics as well. Very good.

Speaker Change: Place. It's a great local for local initiatives. It's designed in China, manufactured, China and is sold with our Chinese, uh, system integrators and partners in China. So, I think that's a really kind of the best example of what we when we talk about local for local, this is what we mean about it. Can I add 1 thing there? So, actually in our motion business, we had a pretty good growth now in China and exactly following the strategy. So, kind of like, for example, in Drive products, they've really made a lot of work to localize the product, and I think we are seeing now a little bit of benefits of that. So, that's actually really nice to see. And of course, would expect similar to happen in robotics as well.

And then we'll take the next question from you. Thanks, Jonathan. And then we'll take Will at Kepler. Hello, Will. Good morning, Anssi. Good morning, Morten, Timo. Yeah, my one question would go to the subject of capital allocation. I think if we go back to October, when you kicked off, Morten, you were confident about a positive pipeline of deals. There have been a few, but, you know, I wonder, how are you shaping up the team to accelerate the capital allocation process from a bolt-on perspective, bottom up? But more importantly, perhaps, what are the sort of range of transformational transactions that you're looking at at the moment?

Speaker Change: Very good. Uh, and then

Speaker Change: Take the next question from, thanks Jonathan. And then we'll take a will at Kepler.

Will: Hello will.

Will: Good morning. Uh, and see, uh, good. Good morning Morton. Uh, Timo. Uh yeah. My 1 question would go to the subject of capital allocation and I think if we go back to October when you kicked off more than you were uh confident about a positive pipeline of deals. Uh, there have been a few but um, you know, I I wonder how are you shaping up the team to accelerate the capital allocation process from the bolt-on perspective? Bottom up. But more importantly, perhaps, what are the sort of range of

And how should we see capital allocation developing over the next six or nine months? Thank you. Thanks, Phil. As you said, the skill set is here a bit of twofold. First is that what we do need to do on bolt-on. So that fits very much with our operating divisions. And there we are building pipeline and we are doing deals. And as you also referred to, we're asking the divisions to do a bit bolder and to make some bigger deals. We do quite many in the 30 to 50 or up to $100 million range. We are okay also that the division take a bit of a bigger leap, could even make two, three, up to $500 million.

Will: Transformational transactions that you're looking at at the moment. And uh, how should we see Capital allocation developing over the next 6 or 9 months? Thank you.

So that's the one side of how we when we talk about bolt-ons. Then we're looking at the more transformative deals and the bigger ones. That fits very much on the table of the business areas. And of course, also with Timo and myself, and our corporate team, and we're looking at larger deals. And that is something we are working on. We are also having a pipeline. It is developing. But as you always know, we're not going to announce any deals or what we should do on these calls. We do that when we have done them. But what we committed to and what I committed to almost a year ago, when we did Q3, still very much remains.

Will: Thanks, Phil. Uh, as you said, the skill set, uh, is here with a 2-fold first is that what we did do need to do on Bolton. So that's it. Very much with our operating divisions, and there we are building Pipeline and we are doing deals. And as you also refer to, uh, we are asking that divisions do do a bit be bolder and to make some bigger deals. We do quite many in the 30-50 or up to 100 million dollar uh, range. We are. Okay. Also that the division take a bit of a bigger leap. Could even make 2 3 up to 500 million there. So that's the 1 side of how we when we talk about boltons, then we're looking at the more transformative deals on the bigger ones that sits very much, uh, on the table of the business areas. Uh, and of course, also, with T-Mobile and myself, uh, and over over corporate team when you're looking at larger deals and, uh, that is something we we are, uh, work. We are working on. We are also uh, we're having a pipeline, it is developing and, uh,

Will: But as you always know, we're not going to announce any any deals or what we should do, uh on these call we do that when we have done them and a lot of. But um what we committed to and what I committed to uh almost a year ago when we did Q3 still very much remains

very good. Thank you.

Thanks, Will.

And then we have one question here from Ulle at Danske Bank. He's asking about Germany, switching geographies here, orders up 16% in Germany versus a decline earlier on. What's driving this? And are we seeing any impact from stimulus packages? Yeah, the growth in Germany comes in three out of four. It was the only EL electrification where we didn't see growth. We had there also some high comparables from last year. There are more, this is more a project business that we have booked in Germany. We don't see any kind of real effect on stimulus packages yet.

Speaker Change: Very good. Uh, thank you. Thanks.

Will: uh, and then we have

Speaker Change: Bank, who's asking about Germany?

Switching geography, here orders up 16% in Germany versus a decline earlier on. What's driving this? And are we seeing uh any impact from stimulus packages packages announced?

I think there is Still, I mean, this takes time to go through the process, through the different levels organizational-wise, especially on government spending. We're talking about that Germany have made decision-making on country level, but, you know, it needs to go down to the regions and the money and budgets really being made available. And that's not something we see when we talk about the market yet. So that is more a thing to come. And especially if you look at the building markets, which is important for us in Germany there, we don't see it yet, but we know that the demand and the need is clearly there and there is more about giving permits and getting the planning process going, which is, but we know kind of the decision on top level is made, it's now it's the execution down in the, let's say, more of local, state or province levels that it needs to happen.

Speaker Change: Yeah, the growth in Germany, comes in 3 out of 4. It was the only eel electric location where we didn't see growth. We had there also some high comparables, from last year. Uh, there were more, this is more of a project business that we have booked in Germany. Uh we don't see any kind of real effect on stimulus packages yet. Uh, I think there is

Still, I mean, this take time to go through the process, through the different, uh, levels organizational wide, especially on government spending. And we're talking about uh, that Germany have made decision-making on Country level. But, you know, it needs to go down to the regions and, and the money being and budgets, really being made available and that's not something we see.

And I know also our team is pushing there to really see that come through.

Yes, and I just, there's one question here regarding price and perhaps, so there's no confusion out there. When you talked about price, did you mean that there was price deflation in both China and the US, the total? We don't leave no confusion on this. OK, sorry if I was not clear. What I said is that the slight positive change was an average between some deflationary environment in China and more inflationary or more increase in the United States. So when you add those together, that's where you end up on a slight positive for the quarter. And maybe to add to that, the price on the positive, it's not like just the US, of course, it's also in other markets.

Speaker Change: When we talk about, um, the market yet, so that is more um, uh, I think to come. Uh, and especially if you look at the building markets, which is important for us in Germany there, we don't see it yet, but we know that there is a demand and the need is clearly there and there is more about giving permits and, and, and getting the planet, uh, the planning, uh, process going, uh, which is, um, but we know kind of the, the decision on top level is made. It's now it's the execution down in the uh let's say low more of local state or Province uh levels that it needs to happen. And I know also our team is pushing their to to really see that come through the system.

So China is, as Morten said, a little bit more deflationary at the moment. But in the other markets, we have about this average half a point or something coming from price. And that half a point, of course, includes already the China deflationary. So outside that high. I hope that leaves it without any confusion on pricing.

Speaker Change: There's 1 question here regarding price and perhaps, uh, so there's no confusion out there. Uh, when you talked about price, did you mean that there was price deflation in both China and the us? The total just so, there's no, we don't leave no confusion on this, okay? Okay. Well, then if sorry, if I was not clear. What I said is that the slight positive change was on average between some deflationary environment in China and more inflationary or more increase in the United States. So, when you add those together, that's where you end up on a slight, positive for the quarter, and maybe to add to that, the, the price, uh, on the positive. It's not like, just the US, of course, it's also in other markets. So, China is as more than said a little bit more deflationary at the moment, but but in the other markets we have about this average have point or something coming from price and that have a point of course includes already the China deflationary so outside that higher,

Then we move to the call and open up the line for Joel at Cowan. Hey guys, good morning. I'm just curious on the orders on electrification. Do you feel like just in dollars, are we at some sort of like near term kind of local peak, you know, very high levels of four and a half billion? And I'm just curious on the mix there too, because revenue margins very, very good. But in 3Q guidance, you kind of have stable margins at, you know, a fairly high revenue growth rate. So maybe if you could talk about mix there.

Speaker Change: I hope that leaves it without any confusion on pricing. Uh then we move to the call and take uh open up the line for Joe at Cowen, please.

Speaker Change: Hey guys, good morning. Good morning.

Thank you. Yeah, we have The strong order growth, we see that also. continuing, we have a strong pipeline on electrification, I mentioned already data center, but also utilities is a segment where we see a long term, it's really across the globe where we need to get higher investments in on the utility on the grid, stronger grid to justify or kind of to enable these electrification trends that we are seeing all around the world. So that is why we are, are pretty bullish on on what we say about the or guiding on on electrification. Margin wise, it's always a bit of mix, both when you look at a comparable from from last year, where Q3 was was very strong.

Speaker Change: Um, just curious on the orders on electrification. Do you feel like just in dollars are we at some sort of like near-term? Kind of local Peak, uh, you know, very high levels of 4 and a half billion. And I'm just curious on the mix there too because Revenue uh, margins very, very good. But the 3Q guidance, you kind of have stable margins at, you know, a fairly High Revenue growth rate. So maybe if you could talk about mixed there, thank you.

Speaker Change: yeah, we have, um,

Speaker Change: the um, strong order to growth. Uh, we see that also

And then you have a in quarters also some some mix effect when it comes to if we do more system or more base product.

So that is kind of in line with Timo, maybe you have some, something else you would like? Yeah, I can I can throw in something on the on the dollar comment, because this 9% growth, what we have in the orders is on comparable basis. And then now, with weaker US dollar and us being a US dollar reporting company, actually, my guesstimate, I don't have it. But I think it's probably two percentage points higher, when you compare to this 4.5 billion number. So kind of like probably 11% growth, kind of like on reported basis. So again, the 9% is a comparable number.

Continuing, um, we have a strong Pipeline on the, on the electrification. I mentioned already data center but also utilities is an a segment where we see a long-term, it's really across the globe where we need to get higher investments in on the utility, on the grid, stronger grid to justify or kind of to enable these L expectation trends that, uh, we are seeing all around the world. So that is why we are are pretty bullish on on the or what we say about the or guiding on, on the electrician, uh, margin Wise. It's always a bit of a mix both. When you look at a comparable from from last year, where uh, Q3 was was very strong and then you have a in quarters. Also some some mix uh effect when it comes to if we do more system or more base products so that is kind of in line with demo. Maybe you have some, is it something else you would like? Yeah, I can I can throw in something on the, on the dollar comment because

And then exactly as Morten said, on the on the margin, we expect a little bit more from the systems business on the mix. So it really is a mixed topic in EL. And so let's see how it pans out then during the quarter. Thank you. And then we open up the line for Phil at J.P. Morgan. Yeah, hi, good morning. Thanks for the question. I guess the thing that surprised me is how solid the results were outside of data center. Obviously, you don't believe this is pre-buying. I know you referenced market share, but without wanting to lay the point, are customers overtly telling you in quite a broad-based fashion that they are now living with uncertainty and pressing ahead with projects?

Speaker Change: This 9% growth, what we have in the orders is on comparable basis and then now with weaker US dollar and us being a US dollar reporting company. Actually my estimate, I don't have it but I think it's probably 2% this point higher when you compare to this 4.5 billion number, so kind of like probably 11% growth kind of like on report databases. So, again, the 9% is is a comparable number and then exactly as more than said on the, on the margin, we expect a little bit more, uh, from the system's business on the mix. So it really is a mixed Topic in E. And so, let's see how it pans out, then during the quarter,

Speaker Change: Yes, thank you. Uh and then we open up the line for Phil at JP Morgan.

Yeah. Hi good morning. Thanks for the question.

Speaker Change: Surprised me is how solid the results were outside of data center. Obviously, you don't believe this is pre-b, buying. I know you referenced market share but

And on that big PA order, I know you can't comment too much about the customer, but is that one that has been in the funnel for a long time and is a tangible example of living with uncertainty and pushing ahead with a large order? Thanks. Yeah, thanks, Bill. It's the start at the end. Yes, this is a long, long term, there was not a surprise. This order, it is a, as I say, it's a multi year order in the service business that will take 10 plus years to execute. So that's the that's why you but you always like to get it on the books, even if it's a long, long term commitment from from the customer, it shows kind of the also the strength to have that.

Speaker Change: But that 1 delayed the point, our customers over be telling you in in quite a broad-based fashion that they are now living with uncertainty and pressing ahead with projects.

Speaker Change: And on that big PA order. I know you can't comment too much about the customer but is that 1 that has been in the funnel for a long time and is a tangible example of living with uncertainty and pushing ahead with a large order. Thanks.

Yeah, thanks, Bill Bill. It's uh, the, um, the start start at the end. Yes. This is a long, long term. There was not a surprise, this order. It is a. And it says, it's a multi-year order in the service business that will take

On our side that we can work together with the customer on such a such a such a big pro multi year program and project. When you talk about the the the base business or kind of the overall trend there, it there is we said already, there was no kind of pre buy, there is just a strong confidence of the whole trend of electrification. There is no point to wait for a month to see where it all pans out. So I think with the exception, what I've seen with what we saw in automotive, where which was, which is a small part of ABB, with the exception of that, I think broad based people just get more used to that this is a new environment.

And it's probably it's going to last for some time. So let's just get on with it and do what makes sense today. Because if it makes sense in also over the long term, it doesn't help to wait for another month. Yeah, yeah, maybe just to throw a number in there. So we actually had Q2 also double digit order growth in large orders outside this 600 million. So there are people who are also pulling the trigger on other stuff.

Speaker Change: Trend there it it there is we we said already, there was no kind of pre buy. There is just a strong confidence of the whole trend of electrification and maybe as you what you said, also here the, uh, the uncertainty in the market I felt was to be was higher coming into the quarter than leaving it. We are as an organization but I think every industry gets used to the uncertainty these days and it's more difficult to plan. So, in some way you just say, okay, let's just get on with it. And, and we, and we plan, if it's makes long-term sense, a strategic sense to do it, there is no point to wait for a month to see where it all pans out. So, uh, I think with the exception, what I've seen with, what we saw in automotive, uh, where which would, which is a small part of ABB. With the exception of that, I think broad base. People just get more used to that, this is a new environment and it's probably it's going to last for some time. So let's just get on with it. And do what makes sense today, because if it makes sense,

Speaker Change: In also, over the long term. It doesn't help to wait for another month or 2. Yeah, yeah. Maybe just to throw a number in there. So we actually had Q2, uh, also double digit. Order growth in large orders, outside this 600 million order,

Can I just follow up? Are you also taking that same approach when it comes to things like your own CapEx investment plans and M&A plans? Are you a bit more confident now to pursue opportunities than perhaps you were one quarter ago? Yeah, I would just say that if it makes long term sense, we will always go ahead. And there, as you say, some of these longer trends where we know there is capacity needed, we're making the investments and so we are not delaying or waiting, kind of this wait and see what happens. We're not in that position.

Speaker Change: So there are people who are also pulling the trigger on on other stuff. Yeah.

Speaker Change: Can I just follow up? Are you also taking that same approach when it comes to things like your own capex? Investment plans and MMA plans, are you a bit more confident now to to pursue opportunities and perhaps you were 1 quarter again?

Speaker Change: Yeah, I I would just say that if it makes long-term sense we will always go ahead. Uh,

We know if it makes long term sense, we're going ahead. And that's, that's kind of the strategy and the direction. of course slight difference in CAPEX and M&A because one you can totally decide yourself the other one of course requires a little bit more consideration from multiple parties. Okay. Thanks, Phil. Of course. Thank you very much.

Speaker Change: and there, as we say, some of these longer Trends, where we know there is capacity needed, we're making the the Investments. And, um, so we are not delaying or wait, the kind of this wait and see what happens. Uh, we're we're not in that position. We we know if it makes long-term sense, we're going ahead. And that's uh, that's kind of the, the, the strategy and the direction. Yeah, of course, slight difference in capex and m&a because 1K you can totally decide yourself. The other 1, of course, requires a little bit more consideration from multiple parties.

And then we open up the line for Seb at RBC. Yeah, thank you for taking my question. I was wondering, the short cycle business within electrification, and it relates to a question already asked, but you said that Resi is still soft, you don't see pre-buying, pricing is not a big issue. So when I do the numbers, you probably still see like seven, eight, 9% growth, just for commercial and any other electrification. So would then the conclusion be that you take market share in that, in that region? Or what is the reason why, why it's so, so strong when PMIs are still unchanged, and everyone's talking about a flat short cycle, and you speak of a strong short cycle.

Speaker Change: Okay, thanks, will thank you very much. Uh, and then

Speaker Change: The line for set.

Yeah, thank you for taking my question. Um, I was wondering, uh, the short cycle business within electrification and it relates to a question already asked. But, um, you said that, uh, Rey is still soft. You don't see preying. Um, pricing is not a big issue. So when I, uh, do the numbers, you probably still see like, 7 8 9

Maybe you can explain a bit. Yeah.

Oh, it's It's too early to say, I think we are the first in our industry that present our numbers. So it's a bit early to say, yes, we are taking market share. I'm confident in how our teams are working on the ground and supporting our customers. So I, and that with our exposure in the market. So I think we are rather gaining, but that's the, I'm more based on that on historical data where we have overview and we are taking share in many important segments for us. So that is part of the success of ABB over the last few years.

Speaker Change: Growth just for commercial and any other electrification. So would then the conclusion be that you take market share in that, uh, in that region or what is the reason, why, why it's so so strong when PMI is still unchanged. And everyone talks about a flat short cycle and you speak of a strong flat as well, maybe you can explain a bit. Yeah, no. It's

So that's the, that is how we are, but it's too early to say for this quarter, how that will run out. I guess we know that later on. Yeah. But, but I would say it's kind of like when you look at the electrification growth also on revenue, it was kind of like very broad based. So we had almost 20% growth, I think in the US and 16 in America. And then we had, I think, seven in Asia, Middle East and Africa and eight in Europe. So it is actually quite broad based to kind of like revenue performance there.

Speaker Change: Um, I it's too early to say, I think we are the first in our industry that percent over numbers. So it's a bit early to say, yes, we are taking market share. Uh, I'm confident in how our teams are working on the ground and supporting our customers. So I, and that with our exposure in the market. So I think we are rather gaining but you say, that's the I'm more based on that on historical data where we have overview, and we are taking share in many important segment for us. So that is part of the success of ABB over the last uh, last few years. So that's the um,

So it's not coming from just one.

Speaker Change: That, that is how, you know, but it's too early to say, for the, for this quarter, how that will run out the I guess we we know that later on. Yeah, yeah, yeah. But, but I would say it's kind of like, when you look at the electrification, um, growth also on Revenue, it was kind of like very broad-based. So we had almost 20% growth, I think in the US and 16 in America and then we had, uh, I think 7 in Asia, Middle East and Africa and 8 in Europe. So it is actually quite broad-based to kind of like Revenue performance there. So it's not coming from just

1 place.

Thank you, Sam. We'll take that later on. Thank you, Sam.

Okay, we will open up the line for Alasdair at Bernstein. Hi, good morning, everyone. Thank you for squeezing me in. So you called out strong utility demand in electrification. It sounds like obviously, that's been a key driver again, in the in the quarter, I suppose, outside of data centers. I don't think you've expanded on that yet. So I was just wondering if you could talk about the trends there a little bit, perhaps unpack that, you know, are growth rates accelerating? Are you seeing sort of similar dynamics in the US and Europe? And are there kind of any limiting factors on growth there, either from the customer side, or, or perhaps on the supply side, just a comment on equipment times, maybe not your own, but maybe elsewhere in the industry.

Speaker Change: Thank you, s. Maybe we follow up. We'll take that later on. Thank you sir. Okay, we will open up the line for an Alistair at Bernstein, please.

Speaker Change: Yeah. Hi good morning everyone. Thank you for squeezing me in. Um so you called out strong utility demand in electrification. It sounds like obviously that's been a key driver again in the in the quarter I suppose outside of data centers I don't think you've

Thank you. Yeah, as I said, the overall trends in the data center is very positive. So there is a long term, good ramp up in that, in that business. We see that in North America, which is the biggest part in dollars, clearly, biggest part of the market, but also the percentage growth is strong also in Europe, but especially also in Asia. So we see the trend overall, it's not pure and North American or a US topic is really a global, global trend also in China, when we're looking at our business there. When you talk about what's the limiting factor, I don't think it's it, ABB will not be a kind of a limiting factor.

Speaker Change: Less in Europe. Um, another kind of any limiting factors on growth there, either from the customer side or, or perhaps on the supply side, just a common on equipment. Lead times, maybe not your own, but maybe elsewhere in the industry. Thank you.

But there are areas and we talked about before power transformers, and also gas turbines for use in kind of in critical power. Those are applications that has long, much longer lead times, which we see there also there are more capacity coming online in the later kind of stages of the, but a couple of years from now, we know for in the industry, which may help, you know, and not be the such a limiting factor. But there are a few years ahead, that could help that, that we, we are able to keep on in even even stronger growth than what we see.

Speaker Change: Yeah, as I said, the overall Trends in the data center is very positive. So there is a long-term, uh, good ramp up in that, uh, in that business. We see that in the, uh, North America, which is the biggest part in dollars. Clearly, uh, biggest part of the market, but also, the percentage growth is strong also in in Europe, but but especially also in Asia. So we see that Trend overall. It's not pure and North American over a US topic is really a global global Trend. Also, in China, when we're looking at our business there, uh, when you talk about what's the limiting factor, uh, I don't think, is it ABB will not be a kind of a limiting factor but there are areas and we talked about before power Transformers. Uh, and also, um, gas turbines were used in or kind of in critical power. Uh, those are applications that has long much longer lead times uh which we see there. Also there are more capacity coming online in the late.

So that's kind of the that's the limiting factor, what we what we see today. I think there was also a utility question. Yeah, there was a question as well on utilities. Thank you. Yeah, so I can comment on that also. So on the utility, I think we see very strong demand environment at the moment, particularly U.S. when they need to sort of strengthen the grid. And there, of course, we have a really good product portfolio, especially for the underground stuff which is happening. And we really expect that this to be a very long term friend in the U.S., of course, given by increased demand in electricity, as Morten was talking about.

Speaker Change: Sure kind of stages of the, but the couple of years from now, we know, for in the industry, uh, which may help, you know, and not be such a limiting factor, um, kind of. But there, there are a few years ahead, um, that could help that. That we, uh, we are able to keep on in, even even stronger growth than what we see. So, that's kind of the, um, that's the, the limiting factor. What we, what we see today.

That's the whole power generation topic again, that we need more electricity, more energy. And therefore, it will be new investments also, especially in the United States when you talk about the LNG side. Maybe throw in there also that in our medium voltage business, because there's been a lot of discussion on kind of like that, is the industry sort of investing at the right level? We think that we are absolutely investing in the right level. We have the strongest growth in medium voltage in data centers, but that is still kind of like 15 percent or something also from the medium voltage business.

I think that was also a utility. That's great. Thank you, question. Yes, was a question as well on utilities, thank you. Yeah. So I I can comment on that that's that. That also so, um, on the utility I think we see very strong demand environment at the moment, particularly you as when they need to sort of strengthen the grid and they are, of course, we have a really good product portfolio, especially for the underground stuff which is happening. And we really expect that this to be a very long-term great friend in the US, of course, given by increased demand in electricity, as more than was talking about

Speaker Change: And that's the whole power generation topic again that we need more electricity more energy and um, and therefore it will be new Investments also in especially in the United States on uh when you talk about the the uh, the other LG side. Yeah. And maybe the throw in in there. Also that in our medium voltage business because there's been a lot of discussion on kind of like that.

And actually, the utility part is 35. So strong growth in both of those two areas are, of course, extremely important. And as we discussed, we really think this is a strong long term trend.

Speaker Change: Is the industry sort of investing uh, at the right level. We think that we are absolutely investing in the right level. We have the strongest growth in medium voltage in data centers, but that is still kind of like 15% or something. Also from The Medium voltage business and actually the utility part is 35, so strong growth in both of those 2 areas are of course, extremely important. And as we discussed, we really think this is a strong long-term trend.

Great.

Appreciate the detail. Thank you.

Thanks Alasdair.

And then we'll take the next and potentially last question from George at Barclays. Good morning, everyone. Thank you very much for fitting me in at the end. Now, just maybe a bit of a follow up on some of the topics you've just been discussing there on medium voltage. You said at the start of the year you gave some quite helpful colour on lead times for your business. I think you said they're around 30 weeks in January. Can you help us with where they are today? And then lots of competitors clearly adding capacity. Are you concerned at all about losing any share in that sort of environment if you're not really doing that yourself?

Speaker Change: Okay, great. Appreciate the details. Thank you. Thanks Alistair.

Speaker Change: and then we take,

the next and

Speaker Change: From George Barkley's.

Good morning everyone. Thank you very much for fitting me in uh at the end now um just to maybe a bit of a follow up on some of the topics you've just been discussing their on on medium voltage. You said at the start here get get some quite a helpful color on lead times for your business.

And you said there are around 30 weeks in, in January, can you, can you help us with where they are today and then lots of competitors. Clearly adding capacity. Are you concerned at all about losing any share in that sort of environment if you're not really doing that yourself?

Yeah, let me start saying that the lead times what we talked about earlier is also where we are today, which means that we are able to deliver more under kind of the same time span with some of our capacity. That's what you see in the revenue, the revenue growth that that comes out of it. I, I don't think I'll comment on much of what is the lead time of competitors. I what I want to make sure is that we are in the forefront, and that this could be a competitive and use it as a competitive advantage for us.

And that's because there, I believe it's an opportunity for us to gain share, not just being shorter, but also to be reliable. And that's in the main part, especially on large projects, you know, reliability, the worst thing contractors want to hear is that the day before delivery that you are a month or two or three late. So this has been one of our part, we have been, we have not been super aggressive of taking orders, but we have been super aggressive when it comes to being reliable, and that you can really trust us. Because I believe that long term, this will be a winning factor in our industry, people will remember the ones who could kind of not let them down, or could help you to make a successful project and instead of doing failure.

Speaker Change: No. Yeah. Let me start saying that. The lead times what we talked about earlier is also where we are today, uh, which means that we are able to deliver more under a kind of the same time span which some of our capacity. That's what you see in the revenue, the revenue growth, that that comes out of it. Uh, I I don't think I'll comment how much of what is the lead time of competitors. I, what I want to make sure is that we are in the Forefront and that this could be a a competitive and use it as a competitive Advantage for us. And that's because there I I believe it's an opportunity for us to gain share. Uh, not just being shorter, but also to be reliable and that's in the main part, especially on large projects, you know, reliability. The worst thing contractors want to hear is that uh, the day before delivery that you are, um, a month or 2 or 3 late. So this is been 1 of over parts. We have been, uh, we have not been super aggressive of taking orders but we have been very super aggressive with when it comes to being a

So that we have identified as a very important part. And there, I also know what we got a very high trust level and then you from customer side, and then you can use that long term as well. If you're able to bring customers over, and then of course, you need to, to keep them. And that is where this kind of solid project execution on these on large deal with short delivery time, but also high reliability is a key winning factor.

And I've seen from customer meeting that that really builds customer loyalty as well, which is, again, turned, in my opinion, into long term And with that, we wrap up from our end here and say thank you very much. And we encourage you that before you go on your summer break, log on to the IR website and register for the Capital Markets Day in November. Wish you a happy summer. Thanks, bye. Thanks, likewise. Please Like and Subscribe. Thanks!

Long term. This will be a winning factor in our industry. People will remember the ones who could kind of not let them down. Who could help you to make a successful project and instead of doing failure, so that we have identified as a, a very important part on there and also know what we got a very high trust level and then you from customer side and then you can use that long term as well. Uh, if you're able to bring customers over and then of course you need to to keep them. And and that is where these kind of solid project execution on these on uh large deal with short delivery time. But also High reliability is a key winning factor and and I I've seen from customer meeting that that really builds Customer Loyalty as well that which is again third, in my opinion into long-term success.

Speaker Change: Thank you very much. Thanks George. And with that, we wrap up from from our end here and say thank you very much and we encourage you that, before you go on your summer, breaks and log on to the IR website and register for the capital markets day in November.

Uh, wish you a happy summer, thanks. Bye. Thanks likewise.