Automation supplier revenues slipped by 3.5 percent in Q1 2020 due, in part, to the effects of the COVID-19 pandemic, which took root in many countries in February and March. In Q2, revenues dropped by over 12 percent, with process-centric suppliers seeing a 12.3 percent decline and discrete suppliers posting a 12.7 percent drop overall. Depressed oil prices also played a role in revenue declines. Many suppliers also re-ported a drop off in order activity during the first half of the year, auguring poorly for the rest of 2020.
With this latest automation supply side-market update, ARC has increased the number and breadth of automation suppliers covered, based on a combination of publicly reported data and ARC’s own extensive research database. We’ve also added selected business intelligence visualizations. Readers should contact their ARC client managers if they’d like to gain additional access to this market intelligence as it applies to both regional and sector-specific supply side automation market trends.
2020 Starts on a Down Note; Q2 Revenues Plunge
Compared to the first quarter of 2019, the total combined revenues of automation suppliers to both the process and discrete manufacturing industries slipped by 3.5 percent in Q1 2020. In Q2, revenues plummeted by over 12 percent overall. Process industry suppliers saw their combined revenues drop by 12.3 percent in Q2; while suppliers to the discrete industries saw a 12.7 percent drop in combined revenues. Among suppliers that report order intake, many saw declines in activity.
Currency Exchange Rates
In this Insight, ARC Advisory Group includes the most recent quarterly results for major automation suppliers that publicly report their results. To convert the revenues of non-US suppliers to US dollars, we average exchange rates for foreign currencies used for the entire second quarter of 2020. The euro declined 2 percent relative to the dollar from Q2 2019, while the yen appreciated by 2 percent over the same period.
Automation Supplier Revenues
- ABB’s overall automation revenues fell by 5.5 percent in Q1 and by 9 percent in Q2
- Industrial Automation segment saw revenues fall 13 percent in Q2, while orders dropped by 20 percent
- Robotics and Discrete Automation Segment revenues dropped by 26 percent, and orders slipped by 28 percent
- In Motion, revenues slid by only 4 percent due to order backlogs. Order activity dropped off by 10 percent
- Revenues slipped by 10 percent to $132 million in Q1, but grew by about 2 percent in Q2 to $199 million
- For the entire fiscal year, revenues were down by about 1 percent
- Annual spend grew by almost 10 percent to $593 million
- Aspen reported that it purchased about 1.3 million shares of its common stock for $150 million during the fiscal year
- azbil revenues increased by 3 percent in Q1, but fell by 4 percent in Q2
- The Advanced Automation business revenues fell by about 7 percent, and order activity flattened during the quarter
- Investment in the semiconductor sector was relatively strong due to buildout of 5G technology and infrastructure, but azbil expects COVID-19 to have a far-reaching impact on overall business in 2020
- Revenues slipped by 3 percent in Q1, and dropped by 21 percent in Q2
- Turbomachinery and Process Solutions revenues dropped by 17 percent versus 2019; orders fell by 34 percent year-over-year
- The Digital Solutions segment saw a 26 percent drop in revenue, while orders plummeted 32 percent
Emerson Automation Solutions
- Reported a 10 percent drop in revenues in Q1, and by more than 14 percent in Q2. North American sales fell by 20 percent, Europe by 8 percent; revenues in Asia, Africa and the Middle East slipped by 6 percent, offset by 9 percent growth in China
- Trailing three-month underlying orders were down by 19 percent as of March
- Emerson projects an 8 to 10 percent drop in revenues for FY 2020
- Automation revenues slipped by about 10 percent during Q1, and by nearly 19 percent in Q2
- Factory Automation group revenues grew by 3 percent, while Robot revenues dropped 19 percent versus Q2 2019
- Orders fell by over 14 percent; FA group saw a 9 percent drop, while Robot orders plummeted by 15 percent
- Revenues increased by half a percentage point in Q1, and by nearly 7 percent in Q2, while orders fell by over 26 percent versus Q2 2019
- Pump division sales were flat; orders fell by 30 percent
- Flow Control revenues slipped by 20 percent; orders fell by 12 percent
- Revenues increased by 7.6 percent in Q1, due to acquisitions; Q2 revenues dropped by 15.7 percent
- Professional Instrumentation revenues were down 11 percent in Q2
- Industrial Technologies revenues dropped by nearly 24 percent
- Industrial revenues fell by nearly 5 percent in Q1; Q2 revenues dropped by 9 percent
- Power segment saw 42 percent drop in orders; revenues fell by 11 percent
- Renewable Energy segment saw orders fall 19 percent; revenues slipped only by 3 percent, thanks to onshore wind projects
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Keywords: COVID-19, Automation Suppliers, Quarterly Results, Asia-Pacific, Europe, Middle East & Africa, Latin America, North America, Market Trends, ARC Advisory Group.