Behind the Numbers: Schneider Electric, ABB & Rockwell Automation – Q1 Revenue Reports
By Alex Catana
Schneider Electric, ABB, and Rockwell Automation are leading players in the automation sector, each tackling unique challenges and serving diverse markets. Together, these companies embody innovation and adaptability, driving growth and sustainability across a large number of markets including energy management, data centres, robotics & discrete automation, transport & infrastructure and software & controls.
Schneider Electric
Schneider Electric’s performance in Q1 2024 demonstrated notable growth and strategic resilience despite challenges in certain segments. Financially, the company achieved group revenues of €8.6 billion, marking a significant +5.3% organic increase, setting a new Q1 record. While Energy Management saw a robust +8.9% organic growth driven by strong performances in North America and the Rest of the World, Industrial Automation faced a -6.6% organic decline primarily due to market weakness in discrete automation.
Key factors impacting Schneider’s results included strong demand dynamics across most sectors and geographies, particularly in Data Centres and Infrastructure. Geographically, key regions like China and India continued to exhibit strong growth, with the Middle East & Africa also contributing significantly. Systems & Services emerged as a growth leader, experiencing double-digit growth. Additionally, Schneider reaffirmed its commitment to sustainability and its 2024 financial targets.
Despite challenges in certain markets, CEO Peter Herweck highlighted the company’s confidence in a second-half pickup, particularly in Discrete automation. The transition to subscription-based models, particularly evident in AVEVA’s double-digit growth in Annualized Recurring Revenue (ARR), showcased the company’s adaptability and resilience.
Overall, Schneider Electric’s Q1 2024 performance reflected a blend of growth opportunities and challenges, with a strong focus on sustainability, geographic diversification and strategic execution positioning the company for continued success in the coming quarters.
ABB
In Q1 2024, ABB showcased a resilient performance despite challenges, reporting positive book-to-bill, record-high margins and strong cash flow. While orders slightly declined by 5% (4% comparable) from last year’s record-high, reaching €8,348 million, the company maintained stable revenues of €7,321 million, representing a 2% comparable growth.
The quarter’s performance reflected a mix of positive developments and challenges across business areas and regions. Electrification and Motion business areas achieved new record-high order intake, with Electrification showing a strong 6% growth (8% comparable) and Motion growing by 2% (1% comparable). However, Process Automation orders declined by 20% (20% comparable) due to challenging comparable and timing issues. Similarly, Robotics & Discrete Automation saw a sharp decline of 30% (30% comparable) due to ongoing normalization of order patterns.
Geographically, orders in the Americas dropped by 3% (3% comparable) despite positive developments in the United States, offset by declines elsewhere. Europe faced an 8% decline (9% comparable), particularly impacted by markets like Germany and Italy. Asia, the Middle East, and Africa declined by 4% (0% comparable), with strong performance in countries like India, Japan, and Australia offsetting a decline in China.
In terms of market segments, industrial areas such as utilities and data centres showed particularly strong development globally. Positive developments were also noted in transport & infrastructure, especially in marine, ports, and rail. However, robotics-related segments, including automotive, general industry, and consumer-related segments, experienced declines, while process-related segments like oil & gas, pulp & paper, and mining faced challenges despite robust underlying market sentiment.
Looking ahead, ABB’s strong cash flow at the start of the year positions the company for another good annual free cash flow delivery. Strategic acquisitions, such as the SEAM acquisition, aim to expand ABB’s footprint and know-how, contributing to long-term shareholder value. The company also announced a share buyback program to distribute excess cash to shareholders. CEO succession plans were announced during the quarter, ensuring a smooth transition in leadership. Overall, despite challenges, ABB remains confident in its ability to navigate the evolving market landscape and deliver value to its stakeholders.
Rockwell Automation
Rockwell Automation reported its second quarter fiscal 2024 (January – March 2024) results, showing a mix of challenges and strategic initiatives amid market dynamics. The company’s reported sales were down 6.6% year over year, with organic sales declining by 8.1%. Acquisitions contributed positively, adding 1.4% to growth. However, total annual recurring revenue (ARR) saw a significant increase of 20% year over year.
Blake Moret, Chairman and CEO, noted solid execution in the quarter, with sequential order improvement. However, challenges persisted due to excess inventory at customers, particularly affecting machine builders, leading to a reduction in full-year guidance. Despite the revised outlook, the company emphasized its commitment to gaining share across important product lines and markets, particularly in North America.
In terms of financial performance, fiscal Q2 2024 sales amounted to €1,978 million, down 6.6% year over year. Segment-wise, Intelligent Devices sales decreased by 4.9%, Software & Control sales by 23.1%, and Lifecycle Services sales increased by 14.0%. Segment operating margins varied across segments, reflecting the impact of lower sales volume, mix, and incentive compensation.
Looking ahead, Rockwell Automation remains focused on building a strong foundation for future growth and profitability. The company aims to leverage its portfolio strength and focus on margin expansion through cost discipline and operational excellence to achieve longer-range targets and create significant shareholder value. Additionally, the upcoming retirement of Nicholas Gangestad, Senior Vice President and Chief Financial Officer, was announced, signalling a leadership transition in the organization.
If you would like to discuss any of the thoughts and topics raised in this piece or would like to learn more about how Beaumont Bailey can support your executive hiring strategy, please reach out to Alex Catana: alex.catana@beaumontbailey.com
Sources:
https://www.rockwellautomation.com/en-gb/company/investor-relations/quarterly-reports.html
https://www.se.com/ww/en/assets/564/document/466554/presentation-Q1-revenues-2024.pdf
