— ZURICH, SWITZERLAND, FEBRUARY 5, 2020 Full-year and Q4 2019 results Transformation on track Peter Voser, Chairman and 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”, “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. Some of the planned changes might be subject to any relevant I&C processes with the Employee Council Europe and / or local employee representatives / employees. On December 17, 2018, ABB announced an agreed sale of its Power Grids (“PG”) business. Consequently, the results of the Power Grids business are presented as discontinued operations. The company’s results for all periods have been adjusted accordingly. Net income, EPS and Cash flow from operating activities include results from continuing and discontinued operations. 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 Q4 2019 results Slide 2
— CEO highlights Full-year 2019
— Full-year 2019 results Resilient performance in more challenging market Delivering on clear priorities ORDERS REVENUES Sustained running of the business while undertaking Op. EBITA margin transformation $28.6 bn $28.0 bn 11.1% Ongoing systematic portfolio management +1% 1 +1% 1 +20 bps Disciplined investment in organic growth Operational EPS Basic EPS CASH FLOW from operating activities $2.3 bn 0.67 1.24 -34% -20% -7% 2 Q4 2019 results Slide 4 1 On a comparable basis, yoy; 2 Operational EPS % yoy in constant currency terms (2014 foreign exchange rates)
— Transformation on track Transformation progress to date Future milestones Transaction close expected end-Q2 2020; PG-JV Power Grids carve-out operational Stand-alone business legally established Resource transfer to PG substantially complete Vast majority of stranded costs eliminated by deal close ABB-OS simplification program Full run-rate ABB-OS savings expected during 2021 Regional structures dismantled Country activities now within businesses Corporate transfers to businesses complete Future operating model effective New Performance Management Process in place Q4 2019 results Slide 5 1 On a comparable basis, yoy; 2 Operational EPS % yoy in constant currency terms (2014 foreign exchange rates)
— CFO perspectives Full-year 2019 highlights & Q4 2019 results review
— Full-year 2019 results summary Robotics & Industrial Corporate $ mn and change yoy, Group Electrification Motion Discrete Automation and Other unless otherwise stated Automation 28,588 13,050 6,432 6,782 3,260 (936) Orders +1% +4% +0% +4% -11% Comparable 27,978 12,728 6,273 6,533 3,314 (870) Revenues +1% +2% 0% +4% -4% Comparable 3,107 1,688 732 1,082 393 (788) Operational EBITA +7% +8% -18% +9% -22% 11.1% 13.3% 11.7% 16.6% 11.9% Operational EBITA margin +20 bps (60) bps (240) bps +70 bps (270) bps February 4, 2020 Q4 2019 results Slide 7
— Q4 2019 results Lower Corporate and Other costs support operating margin development Key below-the-line impacts ORDERS REVENUES Op. EBITA margin Non-operational items: $6.9 bn $7.1 bn 10.1% – Restructuring and related costs ($99) mn, includes ($64) mn ABB-OS simplification +1% 1 -2% 1 +220 bps – PG related transaction and separation costs ($39) mn – Combined gain from sales of businesses and adjustment to Operational EPS Basic EPS CASH FLOW GEIS purchase price +$178 mn from operating activities Discontinued operations (Power Grids) net income +$50 mn, reflects restructuring, carve-out related tax and transaction $1.9 bn 0.15 0.27 costs +2% +2% -11% 2 Q4 2019 results Slide 8 1 On a comparable basis, yoy; 2 Operational EPS % yoy in constant currency terms (2014 foreign exchange rates)
— Q4 2019 orders Europe strong, Americas and AMEA weaker Order development yoy AMERICAS Growth by region and largest 3 country markets in $ terms Weak across all businesses USA: slowing short-cycle industrial, buildings demand -7% China +1% USA India +2% -19% Canada EUROPE -22% Japan -23% Mexico IA, MO strong, supported by large orders; EL solid, RA weak AMERICAS AMEA -8% -5% Germany: good large orders in wind, rail EUROPE +16% Germany +37% Italy -5% AMEA UK +24% Strong in EL; weak in IA, MO, very weak RA China: strong broad-based growth, very weak in robotics All data presented on a third party, yoy comparable basis; all growth comments refer to comparable growth trends. Q4 2019 results Slide 9 AMEA = Asia, Middle East and Africa, EL = Electrification, IA = Industrial Automation, MO = Motion, RA = Robotics & Discrete Automation
— Q4 2019 Electrification Margin development aided by continued good execution 3,750 8 6 6 5 5 4 6 3 3 14.2 3 13.5 13.5 4 2 13.1 1 2,750 1 12.4 0 2 11.7 0 1,750 -2 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 EBITA margin Target 15-19% mid-term Revenue growth (comparable % yoy) Orders ($ mn) Orders growth (comparable % yoy) LTM EBITA margin, end Q4 Orders $3,160 mn Revenues $3,238 mn Operational EBITA $421 mn Strong growth in solutions: utilities, data Flattening short-cycle Margin yoy +140 bps centers, electric transport Order backlog end Q3 +4%, end Q4 +9% yoy Progress in GEIS integration, Installation Buildings mixed, slowing in US Products turnaround Slowing general industry Ongoing pricing and cost management Q4 2019 results Slide 10 LTM = Last twelve months
— Q4 2019 Industrial Automation Solid order development, adverse business mix 8 14.2 7 2 3 13.6 2,000 10 13.5 5 3 0 12.1 12.1 5 -1 -1 -2 -4 0 -5 1,500 9.0 -5 -10 1,000 -15 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 EBITA margin Target 12-16% mid-term Revenue growth (comparable % yoy) Orders ($ mn) Orders growth (comparable % yoy) LTM EBITA margin, end Q4 Orders $1,706 mn Revenues $1,683 mn Operational EBITA $202 mn Specialty vessels strong Lower book-and-bill Margin yoy -150 bps Weak conventional power generation Order backlog end Q3 +0%, end Q4 +2% yoy Lower volume, adverse business mix Operational execution Investments in growth Q4 2019 results Slide 11 LTM = Last twelve months
— Q4 2019 Motion Sustained steady execution 17.8 17.3 12 2,000 20 15 16.7 9 9 16.4 15 5 15.4 7 6 10 5 3 14.9 4 1,500 1 0 5 0 1,000 -5 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 EBITA margin Target 14-18% mid-term Revenue growth (comparable % yoy) Orders ($ mn) Orders growth (comparable % yoy) LTM EBITA margin, end Q4 Orders $1,602 mn Revenues $1,657 mn Operational EBITA $254 mn Drives solutions strong for wind, rail Tough comparison Margin yoy +50 bps Steady motors and generators Order backlog end Q3 +4%, end Q4 +9% yoy Positive mix, operational performance Q4 2019 results Slide 12 LTM = Last twelve months
Recommend
More recommend
