ABB Ltd

ABB reported Q2 group orders of about $12 billion, up 28% comparable, and revenues of $9.5 billion, up 12% comparable. Operational EBITA increased 20% to $1.9 billion, with margin up 90 basis points to 20.2%; gross margin was 40%, down 50 basis points year over year, mainly from unrealized derivatives on FX and commodities. Free cash flow was $881 million, slightly higher year over year, and backlog reached a record $30 billion, up 28% comparable. For 2025, ABB raised comparable revenue growth guidance to low double-digit to low teens and reiterated a margin outlook that improves from last year; for Q3, it expects low- to mid-teens comparable revenue growth and sequential Operational EBITA margin improvement. Electrification Q3 margin should improve from 24.9%, Motion Q3 revenue growth should be mid- to high-single-digit with margin similar to Q2, and Automation Q3 revenue growth should be mid-single-digit with margin improving year over year.

Morten Wierod framed the quarter as another record result with strong execution, broad demand, and no evidence of pre-buys or lead-time-driven distortion. He emphasized that ABB is adding capacity, especially in Electrification, and that the strong order intake reflects sustained customer investment in energy expansion, efficiency, resilience, and data centers. He was notably upbeat on the strategic logic of the Rotork deal, describing it as a strong fit for ABB’s Sense, Control, Act automation loop and a sign that ABB is in a position to take on larger assets.

Christian Nilsson highlighted that Electrification delivered 58% comparable order growth, $5.2 billion of revenue at 19% comparable growth, and a 24.9% Operational EBITA margin, while Motion had 20% comparable order growth, $2.2 billion of revenue, and an 18.5% margin. Automation generated $2.2 billion of revenue, 7% comparable growth, and a 15.4% margin, helped by stringent cost control and a one-time provision release of about 70 bps. He also said free cash flow of $881 million was supported by higher operational earnings, offset by higher CapEx and lower discontinued-operations cash flow, and that ABB remains on track to improve free cash flow versus last year’s $4.6 billion.

Analysts focused heavily on Electrification demand durability, backlog duration, pricing, capacity, and whether data-center demand was being pulled forward. Management said lead times had not changed materially, there were no pre-buys, pricing was about 2% overall, and capacity is being expanded so ABB can convert orders into revenue without overcommitting delivery dates. On Rotork, management said the timing is right because ABB is now a stronger, better-governed business, and they expect synergies mainly from revenue and service expansion, with some procurement and manufacturing benefits; on e-mobility, they said losses are narrowing and they still expect break-even by year-end, with a later decision to follow in 2027.