Slide 1: Q4 2020 and full-year results
— ZURICH, SWITZERLAND | FEBRUARY 4, 2021 Q4 2020 and full-year results Solid end to challenging year Björn Rosengren, CEO | Timo Ihamuotila, CFO
Slide 2: Important notices
— Important notices There are numerous risks and uncertainties, many no assurance that those expectations will be This presentation includes forward-looking of which are beyond our control, that could cause achieved. information and statements including our actual results to differ materially from t
Slide 3: Solid end to challenging year: 2020 highlights
— Solid end to challenging year 2020 highlights 01 Implemented ABB Way Decentralized model – mandate and accountability for operating decisions to business areas and divisions ~$500 mn p.a. net savings from simplification, 1 year ahead of plan 2030 Sustainability targets and updated financial framew
Slide 4: Q4 affirms upward momentum from Q2 lows
— Q4 affirms upward momentum from Q2 lows Q4 highlights Notable developments ORDERS REVENUES Op. EBITA margin $7.0 bn $7.2 bn 11.5% -1%1 0%1 +140 bps Sig. wins in Short-cycle New year-end marine, products high for after -80 bps Kusile settlement mainly LNG Up mid- automation and non-core charges sin
Slide 5: China buoyant, COVID-19 impacts evident in Americas and Europe
— China buoyant, COVID-19 impacts evident in Americas and Europe Q4 2020 orders Order development yoy Americas Decline correlated to COVID-19 Growth by region and largest country markets in $ terms USA difficult: – MO and RA broadly flat – Tough for EL, IA Europe AMEA 36% 36% Europe All BAs challeng
Slide 6: Stable top-line, margin higher
— Stable top-line, margin higher Q4 2020 results Orders -1%1 Revenues 0%1 Operational EBITA Operational EPS margin +140 bps continuing operations $0.26 (% or bps) Q4 19 Q4 20 +20% 7182 7613 7068 7401 7171 7346 6892 6847 7003 $7.61 bn $6.85 bn 6886 6582 Op. EBITA 6688 10.1 11.5 6216 6154 $7.35 bn mar
Slide 7: Q4 2020 Electrification
— Q4 2020 Electrification Strong operational momentum 1 3 5 5 3,500 -2 -2 1 0 16.3 -5 0 -2 15.6 -5 -7 14.2 -12 -10 2,500 -10 13.1 12.6 -15 11.4 -20 1,500 -25 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Orders ($ mn) Orders growth (compa
Slide 8: Q4 2020 Industrial Automation
— Q4 2020 Industrial Automation Significant wins in LNG vessels, Kusile settlement 8 9 15 5 -2 -1 -1 12.1 3 10 5 -9 -7 9.7 1,500 0 -11 9.0 8.4 -5 6.4 6.8 -17 -10 -20 -15 -20 1,000 -25 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Orders (
Slide 9: Q4 2020 Motion
— Q4 2020 Motion Steady delivery 5 8 17.8 17.7 2,000 10 17.4 1 5 3 16.8 0 -1 -2 0 -7 -5 -5 0 -4 -5 15.4 15.3 1,500 -10 -15 -20 1,000 -25 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Orders ($ mn) Orders growth (comparable % yoy) Revenue
Slide 10: Q4 2020 Robotics & Discrete Automation
— Q4 2020 Robotics & Discrete Automation Machine Automation prospers 0 12.9 -5 0 11.0 1,000 -3 -3 8.8 9.5 -14 -5 7.3 -16 -10 6.8 -18 -15 500 -25 -19 -23 0 -30 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Orders ($ mn) Orders growth (comp
Slide 11: Operational EBITA analysis
— Operational EBITA analysis Q4 2018 Q4 2019 Q4 2020 FY 2018 FY 2019 FY 2020 Group operational EBITA margin 7.9% 10.1% 11.5% 10.9% 11.1% 11.1% Negative basis points impact within period: 2021 onwards: <10 projects in execution Stranded costs -100 -60 -110 -80 -15 2 main operational exposures ongoing
Slide 12: Cash generation analysis
— Cash generation analysis Historic development in cash flow from operating activities 2020 cash drivers Cash flow from operating activities in continuing Transformation impacts operations (CO) (ABB-OS, other restructuring programs, PG carve-out) +$1,875 mn Cash flow from operating activities, conti
Slide 13: Capital structure optimization largely concluded
— Capital structure optimization largely concluded Improved financial flexibility Balance sheet and liquidity position, end Q4 2020 Share buyback Debt and credit facilities Pension structures Debts Cash & facilities ~5% of share capital, Significant repayments Certain plans transferred Net debt/EBIT
Slide 14: Robust financial performance despite COVID-induced challenges
— Robust financial performance despite COVID-induced challenges 2020 highlights Short-cycle order development, 2020, monthly2 ORDERS REVENUES Op. EBITA margin $26.5 bn $26.1 bn 11.1% 0% -6%1 -5%1 +0 bps Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec CASH FLOW Basic EPS Operational EPS from operatin
Slide 15: Forward visibility limited; base case for gradual recovery
— Forward visibility limited Long-term market Base case for gradual recovery as 2021 progresses fundamentals remain intact Estimated addressable market ($ bn) ABB’s end-market outlook, 3-6 months view End Q4 CAGR: ~2.1% ~5.1% Estimated growth, 377 (% yoy): 361 5% or higher 0% to 5% 0% to -5% -5% to
Slide 16: Improved performance in the making: key priorities in 2021
— Improved performance in the making Key priorities in 2021 Cement culture of accountability - transparency - speed Steady progress towards improved profitability 1 OPERATIONAL PERFORMANCE 2 PORTFOLIO MANAGEMENT 3 CAPITAL ALLOCATION Further efficiency measures, Portfolio consolidation with 3 divisio
Slide 17: Appendix
— Appendix
Slide 18: Cost mitigation efforts yield results: 2020 Business Area results
— Cost mitigation efforts yield results 2020 Business Area results Robotics & $ mn and change yoy, Industrial Corporate and Group Electrification Motion Discrete unless otherwise stated Automation Other Automation Orders 26,512 11,884 6,144 6,574 2,868 (958) Comparable -6% -6% -4% -2% -12% Revenues
Slide 19: Q4 2020 operational EBITA bridge
— Q4 2020 operational EBITA bridge 10.1% margin 11.5% margin ($ mn) 1 56 - 29 - 47 825 211 - 40 32 710 - 69 Op. EBITA Net Savings Commodities Net Volume Non-core Mix / Under- Kusile & Others Forex Op. EBITA Q4 19 Absorption* other projects Q4 20 Q2 2020 Slide 19 results Slide 19related mobility cons
Slide 20: 2021 framework
— 2021 framework 2021 Q1 21 2021 Q1 21 $ mn unless otherwise stated FY 2020 FY 2020 framework framework framework framework Corporate and Other operational (545) ~(425)1 ~(110) Net finance expenses (351) ~(130) ~(30) EBITA Non-operating items Non-operational pension (401) ~180 ~45 Restructuring and
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