— ZURICH, SWITZERLAND | JULY 22, 2020 Q2 2020 results Strong COVID-19 headwinds; Power Grids divestment completed Björn Rosengren, CEO | Timo Ihamuotila, CFO
— Important notices This presentation includes forward-looking There are numerous risks and uncertainties, many no assurance that those expectations will be of which are beyond our control, that could cause achieved. information and statements including our actual results to differ materially from the Some of the planned changes might be subject statements concerning the outlook for our forward-looking information and statements made to any relevant I&C processes with the Employee in this presentation and which could affect our businesses. Council Europe and/or local employee ability to achieve any or all of our stated targets. representatives/employees. The important factors that could cause such On December 17, 2018, ABB announced an agreed differences include, among others: These statements are based on current sale of its Power Grids (“PG”) business. – business risks associated with the volatile global expectations, estimates and projections Consequently, the results of the Power Grids economic environment and political conditions business are presented as discontinued operations. about the factors that may affect our future – costs associated with compliance activities The company’s results for all periods have been performance, including global economic adjusted accordingly. Net income, EPS and Cash – market acceptance of new products and services flow from operating activities include results from conditions, and the economic conditions – changes in governmental regulations and continuing and discontinued operations. of the regions and industries that are major currency exchange rates, and This presentation contains non-GAAP measures markets for ABB Ltd. These expectations, – such other factors as may be discussed from time of performance. Definitions of these measures estimates and projections are generally to time in ABB Ltd’s filings with the U.S. Securities and reconciliations between these measures and Exchange Commission, including its Annual and their US GAAP counterparts can be found identifiable by statements containing words Reports on Form 20-F in the “Supplemental reconciliations and definitions” such as “expects,” “believes,” “estimates,” section of “Financial Information” under “Quarterly Although ABB Ltd believes that its expectations “targets,” “plans,” “outlook,” “on track,” results and annual reports” on our website reflected in any such forward-looking statement at www.abb.com/investorrelations “framework” or similar expressions. are based upon reasonable assumptions, it can give July 21, 2020 Slide 2 Slide 2
— Q2 2020 key take-aways 1 Health & Safety remains #1 priority Majority of sites operational 2 Q2 results impacted by COVID-19, as expected Intensified cost mitigation efforts increase resilience Motion performance a highlight 3 Transition to fully decentralized business model making strong progress 4 Power Grids divestment completed July 1 Share buyback program starts imminently Q2 2020 results Slide 3 Slide 3
— Cost mitigation efforts continue Re-sizing for current and anticipated trading environment Savings measures include: Revenue and cost development (% yoy) Q1 20 Q2 20 Elimination of discretionary spend, e.g. travel, tradeshows 0% Modifications in staffing and pay Cut in external resources, e.g. consultants -9% -10% Postponement of non-critical investments SG&A -14% R&D, group R&D, business areas -20% x% Revenues All data based on USD nominal change. SG&A = Sales, General and Administrative expenses. R&D = Research and Development expenses, non-order related. Group R&D includes corporate-led expenses Well prepared for continued challenges July 21, 2020 Slide 4 Slide 4
— — Power Grids strategic divestment Crystallized value for shareholders Agreed $11 bn Enterprise Value (100%), 11.2x EV/op. EBITA 1 – 80.1% equity share sale completed, as planned – Vast majority of ~$300 mn stranded costs eliminated Hitachi ABB Power Grids JV operational – 2 ABB nominees on Board – Long-term supply agreement established – Predefined exit option on 19.9% JV holding 1. As announced December 17, 2018, EV/operational EBITA, calculated using results from Simplifies ABB to focus on industrial customers twelve-month period to end Q3 2018, before share of corporate cost 1. As announced December 17, 2018, EV/operational EBITA, calculated using results from TSA = Transitional Service Agreement supplying IS services twelve-month period to end Q3 2018, before share of corporate cost Slide 5
— Q2 2020 results summary Orders -14% 1 Revenues -10% 1 Operational EBITA Operational EPS margin -90 bps $0.22 -35% 7,171 $7.61 bn 7,401 $6.85 bn Q2 19 Q2 20 (% or bps) $7.35 bn 6,154 6,054 Op. EBITA $6.22 bn 11.5 10.6 Basic EPS margin $0.15 +398% Stranded -90 -30 costs Cash flow from operating activities 2 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 19 19 19 19 20 20 19 19 19 19 20 20 $680 mn mn 1. yoy comparable; 2. Cash flow from operating activities, continuing and discontinued operations Note: USD reported orders and revenues are impacted by foreign exchange and changes in the business portfolio 1 yoy comparable; 2 Cash flow from operating activities, continuing and discontinued operations Q2 2020 results Slide 6 Slide 6 Note: USD reported orders and revenues are impacted by foreign exchange and changes in the business portfolio
— Q2 2020 orders Americas strongly impacted by COVID-19 Order development yoy Growth by region and largest 3 country markets in $ terms Americas Euro Eu rope -14% Steep drop as pandemic escalated in all BAs Germany -2% USA: material decline in EL, severe decline in MO, IA, RA Italy -9% Sweden +11% Americ ricas -23% 3% Europe USA -23% AMEA -5% 5% Canada -23% Material decline China +3% Mexico -48% Germany: MO strong, EL subdued, steep drop in RA, IA India -33% Australia +64% AMEA As % of orders AMEA Strong result in MO outweighed by weak EL, IA and RA 34% Europe 37% China: moderate growth led by strong MO, EL robust, RA subdued, IA impacted more materially Americas 29% All data presented on a yoy comparable basis; all growth comments refer to comparable growth trends AMEA = Asia, Middle East and Africa, EL = Electrification, IA = Industrial Automation, MO = Motion, RA = Robotics & Discrete Automation. BA = Business Area Q2 2020 results Slide 7 Slide 7
— Q2 2020 Electrification Lower volumes weigh 6 5 5 4 10 3 1 1 3,500 0 5 -2 0 -7 14 14.2 -10 10 13 13.5 -5 -12 12 13 13.1 12 12.6 12.4 12 2,500 -10 11 11.4 -15 -20 1,500 -25 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Revenue growth (comparable % yoy) EBITA margin Orders ($ mn) Orders growth (comparable % yoy) Target 15-19% mid-term Orders $2,737 mn Revenues $2,764 mn Operational EBITA $348 mn Short-cycle demand fall incl. buildings Weaker short-cycle business Margin yoy -90 bps Steep drop in oil and gas, renewables Constrained project activities in distribution Lower volumes solutions Distribution utilities, data centers, Supportive cost savings, resilient pricing transport resilient Order backlog end Q1 +9%, end Q2 +6% yoy GEIS, Installation Products turnaround firmly on track Q2 2020 results Slide 8 Slide 8
— Q2 2020 Industrial Automation Downturn in all end-markets, negative mix, especially service 8 13 13.5 3 5 10 0 3 -1 -1 12.1 12 12 12.1 -2 5 -4 -5 9.7 0 -9 9.0 8.4 1,500 -5 -10 -17 17 -15 -20 1,000 -25 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Revenue growth (comparable % yoy) EBITA margin Target 12-16% mid-term Orders ($ mn) Orders growth (comparable % yoy) Orders $1,305 mn Revenues $1,382 mn Operational EBITA $115 mn Broad-based end-market decline, select Substantial drop in book-and-bill, particularly Margin yoy -370 bps large order wins mobility constrained services Lower volumes, negative mix Project pipeline deferrals, no order Order backlog end Q1 +6%, end Q2 +3% yoy cancellations Mobility constrained services Q2 2020 results Slide 9 Slide 9
— Q2 2020 Motion Strong performance 8 17 17.8 17.7 17 6 9 5 4 2,000 10 5 1 3 16.7 16 5 0 -1 16.4 16 -4 0 -7 15 15.4 15 15.3 -5 1,500 -10 -15 -20 1,000 -25 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Revenue growth (comparable % yoy) EBITA margin Target 14-18% mid-term Orders ($ mn) Orders growth (comparable % yoy) Orders $1,586 mn Revenues $1,583 mn Operational EBITA $279 mn Material downturn in many sectors e.g. Solid backlog execution Margin yoy +100 bps wind, cement, oil & gas, buildings Order backlog end Q1 +15%, end Q2 +13% yoy Strong cost mitigation, favorable mix Resilience in chemicals, rail Q2 2020 results Slide 10 Slide 10
Recommend
More recommend
