— ABB LTD, ZURICH, SWITZERLAND, OCTOBER 25, 2018 Sustained growth Q3 2018 results Ulrich Spiesshofer, CEO; Timo Ihamuotila, CFO
— Important notices This presentation includes forward-looking information and statements including statements concerning the outlook for our businesses. These statements are based on current expectations, estimates and projections about the factors that may affect our future performance, including global economic conditions, and the economic conditions of the regions and industries that are major markets for ABB Ltd. These expectations, estimates and projections are generally identifiable by statements containing words such as “expects,” “believes,” “estimates,” “targets,” “plans,” “outlook”, “on track”, “2018 framework” or similar expressions. There are numerous risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking information and statements made in this presentation and which could affect our ability to achieve any or all of our stated targets. The important factors that could cause such differences include, among others: – business risks associated with the volatile global economic environment and political conditions – costs associated with compliance activities – market acceptance of new products and services – changes in governmental regulations and currency exchange rates, and – such other factors as may be discussed from time to time in ABB Ltd’s filings with the U.S. Securities and Exchange Commission, including its Annual Reports on Form 20-F. Although ABB Ltd believes that its expectations reflected in any such forward-looking statement are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved. This presentation contains non-GAAP measures of performance. Definitions of these measures and reconciliations between these measures and their US GAAP counterparts can be found in the ‘Supplemental reconciliations and definitions’ section of “Financial Information” under “Quarterly results and annual reports” on our website at www.abb.com/investorrelations October 25, 2018 Slide 2
— Agenda Q3 2018 financial performance 2018 update October 25, 2018 Slide 3
— Q3 2018 sustained growth Total orders +9%, up in all divisions and regions Base orders +7%, up in all divisions and regions Profitable Growth Revenues +3%; service revenues +11% ABB Ability™ recognized as Global #1 in Distributed Control Systems, Global #1 in Enterprise Asset Management 1 Group Operational EBITA margin 12.1%, impacted by GEIS dilution Relentless Strong operating result in RM, IA; EP robust; PG at target margin corridor Execution Net cost savings >$100 mn EPC business transferred to new JV established with SNC Lavalin Business-led Thomas & Betts brand migration completed Collaboration Recognized as #1 employer of choice in the technology sector 2 Note: Q3 results figures presented on a comparable basis, yoy 1 ARC Advisory Group reports, “Distributed Control Systems Global Market Analysis 2017-22” , September 18 and “Enterprise Asset Management October 25, 2018 Slide 4 Global Market Analysis 2017-2022” , June 18; 2 Universum Student Research, August 2018, Switzerland’s most attractive employer in the field of engineering
— Q3 2018 financial summary Orders Base orders Revenues $8.9 bn $8.3 bn $9.3 bn +9% 1 +7% 1 +3% 1 Operational EBITA margin Operational EPS Cash flow from operating activities 12.1% $0.34 $565 mn -80 bps 2 +4% 3 1 On a comparable basis, yoy; 2 Impacted 120 basis points by GEIS and charge related to legacy train retrofit business in non-core; 3 Operational October 25, 2018 Slide 5 EPS growth is in constant currency (2014 foreign exchange rates)
— Q3 2018 orders Order growth in all regions Total orders +9% yoy 1 Base orders +7% yoy 1 Growth by region and top 3 country markets in $ terms 1 9.5 8.9 9.8 USA +5% +17% China 8.2 8.3 8.5 +7% +4% Canada India 8.8 8.8 +35% -28% 8.3 Brazil S. Korea 7.9 7.7 7.4 AMERICAS +9% AMEA 3 +5% EUROPE +6% Germany +9% Italy +1% Sweden +7% Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Base orders ($ bn) Large orders ($ bn) 2 October 25, 2018 Slide 6 1 On a comparable basis; 2 Defined as orders above $15 mn; 3 AMEA: Asia, Middle East and Africa
— Q3 2018 Power Grids Strong order momentum, margin at target corridor % $ mn 11 5 10 2,500 1 10.6 5 10.4 1 1 10.1 10.0 0 -4 0% 9.7 9.7 0 2,000 -4 -9 -5 -5 -8 -10 1,500 -18 -15 1,000 -20 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 1 Large orders Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 3rd party base orders Comparable revenues (% yoy) Operational EBITA margin (%) Comparable total orders (% yoy) Target corridor from 2018 Orders $2207 mn Revenues $2336 mn Operational EBITA $232 mn Third-party base orders +13% yoy 2 Growth in services mitigates lower opening Margin at target corridor, yoy -60 bps backlog Broad based growth; grid digitalization Cost reduction efforts, strong project and services strong Order backlog end Q2 -4%, end Q3 -1% yoy execution Large HVDC order October 25, 2018 Slide 7 1 Large orders includes large orders (defined as orders above $15 mn) and internal Group orders; 2 On a comparable basis
— Q3 2018 Electrification Products Robust organic growth, GEIS integration on track % $ mn 15 10 5 3,200 4 16.1 16.0 3 7 10 6 6 2 2 3,000 15.2 15.0 14.7 3 0% -1 2,800 5 13.5 -1 2,600 0 2,400 -5 2,200 2,000 -10 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 1 Large orders Operational EBITA margin (%) 3rd party base orders Comparable revenues (% yoy) Target corridor in 2020 Comparable total orders (% yoy) GEIS impact on target corridor, H2 18 3 Orders $3215 mn Revenues $3199 mn Operational EBITA $431 mn Third-party base orders +3% yoy 2 Good building products growth Margin yoy -260 bps Construction robust, growth for data GEIS in line with expectations Volume growth, pricing actions, cost control center solutions Order backlog end Q2 +5%, end Q3 +8% yoy GEIS dilution -270 bps, as expected 1 Large orders includes large orders (defined as orders above $15 mn) and internal Group orders; 2 On a comparable basis; 3 Expected impact of October 25, 2018 Slide 8 GEIS integration in H2 2018 ~260 basis points dilutive, as per guidance issued at Q2 2018 results
— Q3 2018 Industrial Automation Solid delivery % $ mn 15 20 3 14.9 1 10 15 14.1 14.1 14.1 2,000 0 0 0 8 7 13.4 13.4 10 4 1,750 0% 5 -1 0 1,500 -7 -5 1,250 -10 1,000 -15 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Large orders 1 3rd party base orders Operational EBITA margin (%) Comparable revenues (% yoy) Comparable total orders (% yoy) Target corridor 2015-20 Orders $1643 mn Revenues $1758 mn Operational EBITA $246 mn Third-party base orders +4% yoy 2 Strong book-and-bill, execution of backlog Margin yoy +70 bps Continued recovery in process industries Order backlog end Q2 -4%, end Q3 -2% yoy Net savings, strong project execution, positive one-time effects Strong quarter for cruise ships October 25, 2018 Slide 9 1 Large orders includes large orders (defined as orders above $15 mn) and internal Group orders; 2 On a comparable basis
— Q3 2018 Robotics and Motion Strong execution % $ mn 3,000 20 17.0 15 15 16.4 8 8 8 16.1 7 2,500 15 6 11 11 5 15.3 15.1 2,000 10 6 13.8 4 0% 1,500 5 1,000 0 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 1 Large orders Operational EBITA margin (%) 3rd party base orders Comparable revenues (% yoy) Target Corridor 2015-20 Comparable total orders (% yoy) Orders $2276 mn Revenues $2281 mn Operational EBITA $386 mn Third-party base orders +12% yoy 2 Execution of backlog, good book-and-bill Margin yoy +60 bps Growth in automotive, F&B, process Order backlog end Q2 +6%, end Q3 +10% Positive volume and mix, ongoing industries, rail yoy restructuring, cost discipline October 25, 2018 Slide 10 1 Large orders includes large orders (defined as orders above $15 mn) and internal Group orders; 2 On a comparable basis
— Q3 2018 Operational EBITA Operational EBITA bridge Q3 2017 to Q3 2018 ($ mn) 12.9% op. 12.1% op. EBITA margin EBITA margin -120 bps GEIS and non-core 1 +102 -30 +94 -35 -25 -80 +16 -48 1,124 1,118 Commodities Mix FX Op. EBITA Net Net Growth Other 2 Acq./Div. Op. EBITA Q3 2017 savings volume investment Q3 2018 1 Impacted 120 basis points by GEIS and charge related to legacy train retrofit business in non-core; 2 Other refers to legacy activities in non- October 25, 2018 Slide 11 core including train retrofit business charge
— Other financial items $ mn unless otherwise stated 9M 18A FY 18 $ mn unless otherwise stated 9M 18A FY 18 framework framework Corporate & Other Operational EBITA (455) ~(600) Net finance expense (180) (250) Key non-operating items: Effective tax rate 27% 27% PPA-related amortization (225) ~(315) Cash flow from operating activities 1,057 Solid Normal restructuring (61) ~(150) Capex (674) ~(1,000) Acquisition-related expenses and integration (152) ~(182) costs October 25, 2018 Slide 12
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