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.