ZURICH – ABB announced its Q4 and full year 2019 results today, showing a decrease in orders and revenues for its robotics and discrete automation division. However, overall the company reported a 1% increase in orders and 1% increase in revenues compared to 2018, although net income was down 34%.
The company said it delivered a “resilient performance” for the year while undergoing an extensive transformation, among a backdrop of more challenging markets. An 11% decline in orders within the robotics and discrete automation group reflected “softening global economic growth and substantial headwinds in discrete markets,” specifically automotive and machine builders. Overall orders rose 2% in Europe, 1% in the Americas, and declined 1% in Asia, Middle East and Africa (AMEA).
On the revenue side, the company reported a 4% decrease in the robotics and discrete automation sector for 2019. Overall revenues increased 4% in Europe, 2% in the Americas, and a decline of 3% in AMEA.
Fourth quarter results were also down for the robotics and discrete automation division, with ABB saying that businesses faced “slowing short-cycle industrial demand,” mainly in the U.S., as well as “ongoing market headwinds in discrete industries, which dampened both top-line performance and operating margins.” Orders in Q4 in the robotics and discrete automation division fell 18%, and revenues were 10% lower. The company cited the impact of “a challenging environment in conventional power generation across discrete industries, particularly automotive and machine builders,” for the decline.
The company said it will continue to expand its digital ecosystem, including a partnership with Ericsson to jointly develop software solutions for robots and smart factories using 5G capabilities.
Weak growth in Europe, coronavirus impact in China
In its short-term outlook, ABB said macroeconomic indicators suggest weaker growth in Europe and the U.S., while a stabilizing trend in China might be impacted by the recent coronavirus outbreak. “The global economy remains affected by geopolitical uncertainties, and overall is anticipated to maintain a similar growth trend when compared to 2019.” It reported that it will face headwinds in some markets, particularly automotive, machine builders, and conventional power generation sectors, although other end markets are “showing resilience.”
“ABB gave a resilient performance in 2019 in the face of challenging market conditions and a significant transformation,” said Peter Voser, chairman and CEO of ABB. “Our revenues and operating margin both improved slightly. The divestment of Power Grids is on track, and we are clearly starting to see the positive effects of implementing our new operating model and new culture.”
As part of its policy to pay a rising, sustainable dividend over time, the ABB board has proposed an ordinary dividend of 0.80 Swiss francs per share for 2019, subject to shareholder approval at the company’s annual meeting on March 26, 2020. The company will also hold a robotics and discrete automation investor event on Feb. 27, 2020.
ABB has four business divisions – electrification, industrial automation, motion, and robotics and discrete automation, supported by its ABB Ability digital platform. The company’s Power Grids business will be divested to Hitachi in 2020. More details on its 2019 financial results are available here.