Slide 1: Full-year and Q4 2019 results
— ZURICH, SWITZERLAND, FEBRUARY 5, 2020 Full-year and Q4 2019 results Transformation on track Peter Voser, Chairman and CEO; Timo Ihamuotila, CFO
Slide 2: Important notices
— 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
Slide 3: CEO highlights
— CEO highlights Full-year 2019
Slide 4: Full-year 2019 results
— Full-year 2019 results Resilient performance in more challenging market Delivering on clear priorities ORDERS REVENUES Op. EBITA margin Sustained running of the business while undertaking transformation $28.6 bn $28.0 bn 11.1% Ongoing systematic portfolio management +1%1 +1%1 +20 bps Disciplined i
Slide 5: Transformation on track
— Transformation on track Transformation progress to date Future milestones Power Grids carve-out Transaction close expected end-Q2 2020; PG-JV operational Stand-alone business legally established Resource transfer to PG substantially complete Vast majority of stranded costs eliminated by deal clo
Slide 6: CFO perspectives
— CFO perspectives Full-year 2019 highlights & Q4 2019 results review
Slide 7: Full-year 2019 results summary
— Full-year 2019 results summary Robotics & $ mn and change yoy, Industrial Corporate unless otherwise stated Group Electrification Motion Discrete Automation and Other Automation Orders 28,588 13,050 6,432 6,782 3,260 (936) Comparable +1% +4% +0% +4% -11% Revenues 27,978 12,728 6,273 6,533 3,314 (8
Slide 8: Q4 2019 results
— 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
Slide 9: Q4 2019 orders
— Q4 2019 orders Europe strong, Americas and AMEA weaker Order development yoy Growth by region and largest 3 country markets in $ terms AMERICAS Weak across all businesses USA: slowing short-cycle industrial, buildings demand USA -7% China +1% Canada +2% India -19% Mexico -22% Japan -23% EUROPE AME
Slide 10: Q4 2019 Electrification
— Q4 2019 Electrification Margin development aided by continued good execution 3,750 8 6 6 5 5 6 4 3 3 3 14.2 2 4 13.5 13.5 13.1 2,750 1 1 12.4 2 0 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% m
Slide 11: Q4 2019 Industrial Automation
— Q4 2019 Industrial Automation Solid order development, adverse business mix 7 8 2 3 14.2 2,000 5 10 13.6 13.5 3 0 5 -1 -1 12.1 12.1 -2 -5 -4 0 1,500 -5 9.0 -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
Slide 12: Q4 2019 Motion
— Q4 2019 Motion Sustained steady execution 17.8 2,000 20 12 17.3 15 16.7 15 9 9 16.4 7 6 10 5 15.4 1,500 4 5 3 14.9 1 5 0 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 Orders ($ mn) Orders g
Slide 13: Q4 2019 Robotics & Discrete Automation
— Q4 2019 Robotics & Discrete Automation Continued market headwinds 16 20 8 15.2 12 3 1,000 10 0 13.1 12.9 -1 -3 -3 12.3 0 11.2 11.0 500 -9 -10 -16 -18 -10 0 -20 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 13-17% mid
Slide 14: Operational EBITA analysis
— Operational EBITA analysis Q4 2019 Q4 2018 FY 2019 FY 2018 Group operational EBITA margin 10.1% 7.9% 11.1% 10.9% Negative basis points impact within period: PG related stranded costs -60 -100 -80 -110 Non-core -110 -260 -50 -100 GEIS (12 vs 6 months consolidation) -40 Project revaluation in IA (Q3
Slide 15: Value creation with ABB-OS
— Value creation with ABB-OS Guidance (Feb 2019 CMD) To date Progress markers Regional organization dismantled $150-200 mn run-rate savings by end 2019 All countries integrated into businesses ~$500 mn run-rate benefit Integrated into business All corporate business functions integrated into expec
Slide 16: Leaner corporate
— Leaner corporate Corporate and Other op. EBITA 2018 2019 Delta Guidance (Feb 2019 CMD) 2020 est. Delta to 2018 Vast majority eliminated by Stranded costs 297 225 (72) ~50 ~(250) deal close Non-core wound down by end- Non-core business1 291 145 (146) 2021 ~$200 mn ABB-OS savings Ongoing corporate 4
Slide 17: 2020 financial expectations
— 2020 financial expectations Comparable Order backlog +5% yoy Steady or slightly up revenues Challenges continue in some end-markets short-term Operational Elimination of stranded costs, continued ABB-OS savings Margins to improve, stronger in H2 EBITA margin EL to reach 15-19% margin corridor duri
Slide 18: Looking ahead
— Looking ahead
Slide 19: 2020 outlook
— 2020 outlook End-markets largely resilient ABB end-market growth estimates, short-term Macroeconomic indicators (3%) 0%-3% >3% Manufacturing PMI (% yoy) <(3%) -0% Buildings Food & Beverage 60 Distribution Data centers Renewables EV charging Marine O&G (Offshore upstream, Mid- and 55 Downstream) Co
Slide 20: Technology and innovation driving growth
— Technology and innovation driving growth Recent business highlights Robotics & Discrete Electrification Industrial Automation Motion Automation AI-powered energy Disruptive technology for Accelerating decarbonization Unique machine-centric management solutions Oil & Gas of transport robotics techn
Slide 21: New leadership and culture to drive performance
— New leadership and culture to drive performance New leadership Embedding ABB-OS Energizing our people Björn Rosengren to start as CEO March 1, Leaner corporate; empowered businesses Enhanced employee engagement, building 2020 on recent employee survey New management processes to drive Smaller Exec
Slide 22: 2020 priorities
— 2020 priorities Focus on execution Attractive returns to shareholders Improving performance in the businesses CHF 0.80 DPS proposed, subject to shareholder approval1 – Driving profitable growth and enhanced efficiency Maintain DPS post closing of PG sale – Ongoing systematic portfolio management C
Slide 23: Appendix
— Appendix
Slide 24: 2020 framework
— 2020 framework Key New or revised guidance FY 2019 FY 2020 Q1 2020 FY 2019 FY 2020 Q1 2020 $ mn unless otherwise stated actual framework est. actual framework Est. Corporate and Other operational (788) ~(600) ~(175) Net finance expenses EBITA (148) ~(150) ~(40) (continuing) Of which, stranded cost
Slide 25: Full-year 2019 operational EBITA bridge
— Full-year 2019 operational EBITA bridge Operational EBITA bridge 2018 to 2019 ($ mn) 10.9% op. 11.1% op. EBITA margin EBITA margin +337 +8 +102 -104 -127 +145 -182 +42 -119 3005 814 3107 825 Op. EBITA Net Commodities Net Invest. Mix/Under- Non-core Other incl. Acq./Div. Forex Op. EBITA 2018 saving
Slide 26: Q4 2019 operational EBITA bridge
— Q4 2019 operational EBITA bridge Operational EBITA bridge Q4 2018 to Q4 2019 ($ mn) 7.9% op. 10.1% op. EBITA margin EBITA margin +119 -6 -14 +94 +1 -37 -21 -10 710 814 825 584 Op. EBITA Net Commodities Net Invest. Mix/Under- Non-core Other Forex Op. EBITA Q4 2018 savings volume Growth absorption Q
Slide 27: Q4 2019 net income drivers
— Q4 2019 net income drivers Operational EBITA to net income walk Q4 2019 ($ mn) Key non-operational items Q4 19 Op. EBITA 710 Restructuring and related costs includes $64 mn ABB-OS PPA-related amorization simplification Restructuring related 99 Power Grids related transaction and separation costs $
Slide 28: Operational EPS reconciliation
— Operational EPS reconciliation Q4 2019 Q4 2018 Change yoy1 $ mn, except per share data in $ EPS EPS Net income (attributable to ABB) 325 0.15 317 0.15 +2% Operational adjustments: Acquisition-related amortization 60 75 Restructuring, related and implementation costs2 99 129 Non-operational pension
Slide 29: Operational EBITA reconciliation, continuing operations
— Operational EBITA reconciliation, continuing operations 2019 2018 $ mn Q4 FY Q4 FY Income from operations / EBIT 648 1,938 275 2,226 Acquisition-related amortization 60 265 75 273 Restructuring, related and implementation costs1 99 300 129 172 Changes in obligations related to divested businesses
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