Slide 1: Q2 2020 results
— ZURICH, SWITZERLAND | JULY 22, 2020 Q2 2020 results Strong COVID-19 headwinds; Power Grids divestment completed Björn Rosengren, CEO | Timo Ihamuotila, CFO
Slide 2: Important notices
— 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 t
Slide 3: Q2 2020 key take-aways
— 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
Slide 4: Cost mitigation efforts continue
— 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. con
Slide 5: Power Grids strategic divestment
— Power Grids strategic divestment Crystallized value for shareholders Agreed $11 bn Enterprise Value (100%), 11.2x EV/op. EBITA1 – 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 – L
Slide 6: Q2 2020 results summary
— Q2 2020 results summary Orders -14%1 Revenues -10%1 Operational EBITA Operational EPS margin -90 bps $0.22 -35% 7,401 $7.61 bn 7,171bn $6.85 (% or bps) Q2 19 Q2 20 $7.35 bn 6,154 6,054 $6.22 bn Op. EBITA margin 11.5 10.6 Basic EPS $0.15 Stranded +398% costs -90 -30 Cash flow from operating activit
Slide 7: Q2 2020 orders: Americas strongly impacted by COVID-19
— Q2 2020 orders Americas strongly impacted by COVID-19 Order development yoy Growth by region and largest 3 country markets in $ terms Americas Europe -14% Germany -2% Steep drop as pandemic escalated in all BAs Italy -9% USA: material decline in EL, severe decline in MO, IA, RA Americas -23% Swede
Slide 8: Q2 2020 Electrification: Lower volumes weigh
— Q2 2020 Electrification Lower volumes weigh 6 5 5 3 10 4 3,500 1 5 1 0 -2 0 -7 14.2 -12 -5 -10 13.5 13.1 12.6 2,500 -10 12.4 -15 11.4 -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 Orders ($ mn) Orders growth (comparable %
Slide 9: Q2 2020 Industrial Automation: Downturn in all end-markets
— Q2 2020 Industrial Automation Downturn in all end-markets, negative mix, especially service 5 8 10 3 13.5 3 0 -2 -1 -1 12.1 12.1 5 -5 -4 0 9.7 1,500 -9 9.0 8.4 -5 -10 -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 O
Slide 10: Q2 2020 Motion: Strong performance
— Q2 2020 Motion Strong performance 6 5 8 9 17.8 17.7 2,000 4 10 5 1 5 3 16.7 0 -1 16.4 -7 0 -4 -5 15.4 15.3 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 Orders ($ mn) Orders growth (comparable % yoy) Revenue
Slide 11: Q2 2020 Robotics & Discrete Automation: Severe downturn continues
— Q2 2020 Robotics & Discrete Automation Severe downturn continues -1 0 12.9 12.3 1,000 -9 0 11.2 11.0 -3 -3 8.8 -14 6.8 -16 -10 -18 -15 500 -25 -19 -23 0 -30 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 Orders ($ mn) Orders growth (comp
Slide 12: Capital structure optimization
— Capital structure optimization $7.6-7.8 bn of net proceeds from PG sale to be returned to shareholders To be executed in efficient, responsible way Balancing sources and uses of cash – Initial buyback program of 10% of share capital to run until 2020–22 illustrative March 25, 2021 – ABB intends to
Slide 13: Outlook & priorities
1 — Secure path to recovery Outlook & priorities – #1 priority, Health & Safety – Close collaboration with customers Short-term outlook, by end-market – Cost mitigation continues End Q1 2 Accelerating transformation with ABB Way → End Q2 – Improving profitability in underperforming businesses Estima
Slide 14: Appendix
— Appendix
Slide 15: Q2 2020 operational EBITA bridge
— Q2 2020 operational EBITA bridge 11.5% margin, 10.6% margin, Q2 19 Q2 20 ($ mn) Op. EBITA Net Savings Commodities Net Volume Invest. Growth Mix / Under- Others Forex Op. EBITA Q2 19 Absorption* Q2 20 *Inclusive of COVID-19 related mobility constrained service activities Others includes stranded co
Slide 16: 2020 framework
— 2020 framework Key New or revised guidance FY 2020 Q3 2020 $ mn unless otherwise stated H1 2020 FY 2020 Q3 2020 framework framework H1 2020 framework framework Corporate and Other operational ~(550) (249) ~(150) EBITA Net finance expenses ~(190) (85) ~(70) (continuing) Non-operating items Normal r
Slide 17: Q2 2020 net income drivers
— Q2 2020 net income drivers Operational EBITA to net income walk ($ mn) Key non-operational items Q2 20 Op. EBITA 651 Restructuring and related costs includes $14 mn ABB-OS simplification PPA-related amorization 65 Power Grids related transaction and separation Restructuring related 67 costs $55 mn
Slide 18: P&L reporting for Hitachi ABB Power Grids Joint Venture
— P&L reporting for Hitachi ABB Power Grids Joint Venture (“H-A PG JV”) Until 30 June 2020, inclusive Electrification Industrial Automation Motion Robotics & Discrete Corporate and Other Power Grids Group Automation Income from continuing operations Incl. stranded costs, non-core Income from discont
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