Shareholder returns and capital allocation

ABB’s sustained capital allocation priorities are unchanged:
  • funding organic growth at attractive cash returns;
  • paying a rising, sustainable dividend;
  • investing in value-creating acquisitions; and
  • returning additional cash to shareholders.
ABB’s solid cash generation continued in 2018. Cash flow from operating activities was $2.924 billion for the full year. Free cash flow(1) in 2018 amounted to $2.024 billion. The company’s cash return on invested capital(1) was 9.1 percent, impacted by the acquisitions of GEIS and B&R.
Following the expected completion of the sale of 80.1 percent of our Power Grids business to Hitachi in the first half of 2020, ABB intends to return 100 percent of the net cash proceeds to shareholders in an expeditious and efficient manner. ABB intends to maintain the level of dividend per share after the closing and aims to maintain its “single A” credit rating in the long term.
ABB’s disciplined capital allocation policies have delivered $12.1 billion to shareholders in the form of dividend distributions and share buybacks from 2014 to 2018.
The Board of Directors is proposing a 10th consecutive increase in the dividend to CHF 0.80 per share at the 2019 Annual General Meeting.
Dividends to Shareholders
Dividends to Shareholders (bar/line chart)

(1) For non-GAAP measures, see the “Supplemental information” section of this Annual Report.
(2) Proposed
(3) Dividend per share (converted to U.S. dollars at year-end exchange rates) divided by basic earnings per share.

Total Cash Returned to Shareholders

USD BN

Total Cash Returned to Shareholders (bar chart)
Cash Return on Invested Capital

%

Cash Return on Invested Capital (bar chart)

(1) Includes impact of B&R acquisition.
(2) Includes impact of GEIS acquisition.

Capital Allocation

2014–2018 USD BN

Capital Allocation (bar chart)

(1) 2018 capex in continuing and discontinued operations.

Adjusted free cash flow and conversion rate
Adjusted free cash flow and conversion rate (bar/line chart)

(1) Reflecting less favorable timing of tax payments and a lower contribution from discontinued operations.