Zurich-based electrical engineering conglomerate ABB on Tuesday published third-quarter results that pointed clearly upwards. Order intake jumped 40%, to $12.06 billion, and revenues rose 14%, to $9.70 billion, according to the report carried by the AWP news agency. On the same day, the group announced the creation of a joint venture with Mitsubishi Electric's low-voltage power distribution division, intended to strengthen its presence in Japan and the Asia-Pacific region.

ABB results: orders beyond expectations

The most striking figure is orders. Analysts consulted by AWP expected them to reach barely more than $11.85 billion; they came in at $12.06 billion. Otherwise, the reported performance sits at the top end of, or even above, analysts' projections, with one exception: revenue, which was almost in line with expectations. The picture is therefore not uniform: order momentum is more surprising than sales momentum.

The group highlights strong demand in the data centre segment, which more than doubled year on year according to ABB. This is a statement by the company, which sheds light on where part of the growth in orders comes from.

A rising Ebita margin, a slight dip in net profit

Operating profitability is improving. The operating gross margin (Ebita) gained 1.6 percentage points, to 20.8%, and Ebita rose by nearly a quarter, to $2.03 billion.

Net profit tells a different story. It slipped 2%, to $1.18 billion, weighed down by revaluations linked to the price agreed for the acquisition of British company Rotork. Announced last July, the deal is set to cost ABB $5.5 billion. The gap between the rise in Ebita and the decline in net profit is therefore due, according to the explanations reported by AWP, to this acquisition rather than to ongoing business.

Guidance maintained, which remains a set of targets

Management has kept its roadmap for the full financial year unchanged. It still expects revenue growth of 10 to 15% and an improvement in the Ebita margin of at least 2.7 percentage points compared with the 19.0% reported in 2025. These are forecasts, not facts: the third-quarter figure (20.8%) indicates the current trend, but the annual result will only be known at the close of the financial year.

Electrification: a joint venture with Mitsubishi Electric in Asia-Pacific

In the second announcement of the day, ABB will invest around $495 million (408 million francs) to acquire a 51% majority stake in the new entity, as well as full ownership of the sales activities outside Japan. The transaction values the business as a whole at around $890 million. According to SWI swissinfo.ch, the new company will combine ABB's technology and sales network with Mitsubishi Electric's Japanese operations.

ABB has an option to acquire the entire share capital in the medium term. Completion is expected in the second half of 2027, "subject to regulatory approvals and other customary closing conditions". The group is targeting an Ebita margin of at least 20% for the joint venture within five years, again a target and not an achieved result.

The strategic reasoning is spelled out in the press release: to turn the limited presence of ABB's Electrification division in Japan "into a leadership position in one of the world's largest electrification markets, while strengthening ABB's ability to grow in the Asia-Pacific region". Swissinfo describes ABB's position on the Japanese market as weak until now.

What Mitsubishi Electric's division brings

The business concerned generated revenue of around $640 million in the 2025 financial year, with an Ebitda margin of just over 10%. It employs around 2,800 people and has production sites in Fukuyama, Japan, and Hanoi, Vietnam. Its portfolio includes low-voltage circuit breakers, switches, motor starters, contactors, control devices, measuring and monitoring equipment, and uninterruptible power supply systems.

Comparing the margins shows the scale of the task ABB has set itself: the division reports an Ebitda margin of just over 10%, while the group is targeting an Ebita margin of at least 20% for the joint venture. The two indicators are not calculated in the same way, but the gap suggests that ABB is counting on a significant gain in profitability from the acquired business.

A group stepping up on electrification

These announcements are part of a series of recent deals. After the Rotork acquisition announced in July, the agreement with Mitsubishi Electric broadens ABB's footprint in Asia. As early as July 2025, the group had won a major contract in Azerbaijan for the electrification and grid stability of Sangachal, one of the world's largest oil and gas terminals, swissinfo recalls. For a multinational based in Zurich, growth is thus increasingly taking place far from its home market, driven by data centres and power distribution needs.

Sources

  • Allnews: "ABB sur une pente ascendante au troisième trimestre"
  • SWI swissinfo.ch: "Swiss engineering firm ABB in joint venture with Mitsubishi Electric"