ABB downgrades 2021 sales forecast on supply shortages

[ZURICH] Swiss engineering group ABB on Thursday (Oct 21) downgraded its sales expectations for 2021 as global shortages in semiconductors weighed on its business.

The group, a leader in robotics, had initially forecast sales to grow by just under 10 per cent as the economy recovered from the shock of the pandemic.

But it now expects revenue growth of 6-8 per cent, adjusting for currency effects and any acquisitions or mergers, ABB said as it posted third-quarter results.

The group said this was due to "supply constraints towards the end of the year". "Q3 painted a mixed picture, containing on one hand a high level of demand driving strong order growth, while on the other hand the tight supply chain impacted our revenues more than anticipated," chief executive Bjorn Rosengren said in a statement.

In the three months to September, orders jumped by 29 per cent compared to the same period last year, to close to US$7.9 billion, far higher than analyst expectations.

But sales increased by 7 per cent to US$7 billion, below expectations.

"Revenues were hampered by supply chain constraints delaying customer deliveries," Rosengren said. "This was primarily related to semiconductors and imbalances in the overall supply chain."

The coronavirus pandemic has disrupted global supply chains, leading to bottlenecks in the components, wood, plastics and steel markets, crippling many industries.

As expected, ABB's new profit slumped by 86 per cent to US$652 million as the previous year's figures were inflated by windfall gains from the sale of its power grid business to Japan's Hitachi.

AFP