ABB recorded a 40% year-on-year increase in orders in the third quarter, reaching a record 12 billion USD, as strong demand from data centres and other customer segments supported revenue growth and improved profitability. The group also announced plans to acquire a controlling stake in a joint venture with Mitsubishi Electric, strengthening its position in Japan\u2019s low-voltage electrification market.<\/p>\n\n\n\n
\u201cABB delivered record order intake and improved operational performance with strong cash flow and return on capital. We advanced our leading position in direct current technology and today we progressed on M&A with a new electrification joint venture with Mitsubishi Electric,\u201d said Morten Wierod, ABB\u2019s CEO.<\/p>\n\n\n\n
ABB reported strong financial and operational performance in the third quarter, with order intake increasing 40% year-on-year on both a reported and comparable basis. Orders reached 12 billion USD, slightly exceeding the previous quarter\u2019s level despite the seasonal decline typically seen during this period.<\/p>\n\n\n\n
Growth was driven by two of the group\u2019s three business areas, with positive momentum across most customer segments. Demand from data centres was particularly strong, with orders in the segment increasing by more than 100%.<\/p>\n\n\n\n
Revenue rose 14% year-on-year to approximately 9.7 billion USD, while orders exceeded revenue, resulting in a book-to-bill ratio of 1.24.<\/p>\n\n\n\n
Operational EBITA increased 24% to $2 billion, with the corresponding margin expanding by 160 basis points to 20.8%. Income from operations rose 15%, with a margin of 19%.<\/p>\n\n\n\n
Earnings per share remained virtually unchanged, reflecting higher net finance expenses, mainly due to the non-cash revaluation of a deal-contingent foreign exchange hedge related to ABB\u2019s announced acquisition of Rotork. Return on capital employed improved to 29.9%.<\/p>\n\n\n\n
ABB also announced plans to acquire a controlling 51% stake in a joint venture to be established with Mitsubishi Electric\u2019s low-voltage power distribution business. The agreement includes an option for ABB to acquire full ownership in the medium term.<\/p>\n\n\n\n
The transaction is expected to make ABB a leader in Japan\u2019s low-voltage market, providing access to one of the world\u2019s largest electrification markets and opportunities linked to growing electricity demand, including data centre expansion. It is also expected to create a platform for further growth across the Asia-Pacific region.<\/p>\n\n\n\n
The Mitsubishi Electric business to be contributed to the joint venture generated approximately JPY 102 billion ($640 million) in revenue in fiscal year 2025, with a low double-digit EBITDA margin.<\/p>\n\n\n\n
ABB expects the joint venture\u2019s Operational EBITA margin to reach at least 20% within five years. Planned improvements include expanding sales through combined distribution channels, introducing ABB products and technologies to Mitsubishi Electric\u2019s customer base and optimising manufacturing operations.<\/p>\n\n\n\n
Under the agreement, ABB will acquire its 51% stake in the newly carved-out company, as well as full ownership of Mitsubishi Electric\u2019s related sales operations outside Japan, for a total consideration of approximately JPY 79 billion ($495 million). The international sales operations account for around 15% of revenue.<\/p>\n\n\n\n
The combined businesses have an estimated enterprise value of approximately $890 million, corresponding to enterprise value-to-sales and enterprise value-to-EBITDA multiples of around 1.4 and 11.1, respectively, based on fiscal year 2025 reported figures. The EBITDA multiple is expected to fall to the mid-to-high single digits once anticipated synergies are realised.<\/p>\n\n\n\n
ABB expects the transaction to generate long-term returns well above its cost of capital, building on the profitability improvement approach applied following its acquisition of GEIS.<\/p>\n","protected":false},"excerpt":{"rendered":"
ABB recorded a 40% year-on-year increase in orders in the third quarter, reaching a record 12 billion USD, as strong demand from data centres and other customer segments supported revenue growth and improved profitability. The group also announced plans to […]<\/p>\n","protected":false},"author":2,"featured_media":17620,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[54,1133,56],"tags":[],"_links":{"self":[{"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/posts\/17618"}],"collection":[{"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/comments?post=17618"}],"version-history":[{"count":1,"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/posts\/17618\/revisions"}],"predecessor-version":[{"id":17621,"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/posts\/17618\/revisions\/17621"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/media\/17620"}],"wp:attachment":[{"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/media?parent=17618"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/categories?post=17618"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.automotive-today.ro\/index.php\/wp-json\/wp\/v2\/tags?post=17618"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}