Business Wire

ABB Capital Markets Day 2020

Share

ABB will be hosting its Capital Markets Day today, November 19, starting 11.30 am CET, at which CEO, Björn Rosengren, and CFO, Timo Ihamuotila, as well as the four business area Presidents, will give an update on the recent strategic and operational developments, including:

  • Improving performance under ABB Way
  • Review of business portfolio
  • ABB’s digital strategy
  • Updated financial framework and long-term sustainability targets

“ABB is a leading technology company, now and in the future. We have the global R&D capabilities, digital solutions and innovation focus to support our customers. The COVID-19 pandemic still weighs on the near-term outlook, but the long-term market trends of electrification, automation, digitalization and energy efficiency remain intact. At the same time, we are taking additional steps to improve performance in order to drive value creation for all stakeholders going forward,” said CEO Björn Rosengren.

Improved performance in the making

Since the start of this year, ABB has further decentralized its organization to bring operating decisions closer to the customer and successfully rolled out its new operating model called ABB Way, including the introduction of a scorecard-based performance management system reinforced through incentivization. This creates a clear focus on stability and profitability before growth in order to strengthen underperforming divisions.

Furthermore, ABB has carried out a portfolio review of its divisions to ascertain whether it is ultimately the best owner. As a result, ABB has decided to explore all options to exit three divisions:

  • Turbocharging (Industrial Automation)
  • Mechanical Power Transmission (Motion)
  • Power Conversion (Electrification)

These divisions represent roughly $1.75 billion of combined annual revenues or approximately six percent of ABB’s total revenues.

“All three divisions are high-quality businesses, with Operational EBITA margins above the group’s target margin corridor. In this process, we will seek the best value-accretive solution for ABB and those businesses and not put ourselves under time pressure,” said Rosengren. “Furthermore, portfolio reviews will continue to be a key element of the ABB Way.”

ABB will increase the number of divisions to 20 as of January 1, 2021, due to a split in the Motion business area portfolio, while Industrial Automation will be renamed Process Automation to better reflect its customer base.

CFO Timo Ihamuotila will highlight in his presentation that ABB has delivered on sustainable cost reductions: “Due to the reorganization of the Group, the ABB-OS target of $500 million net savings has been reached one year ahead of plan.”

ABB’s digital strategy

ABB has recently carried out a review of its digital strategy under the ABB Ability™ brand, which is comprised of software-enabled products and systems, as well as software and digital services. The company intends to accelerate the expansion of its digital offering that is tailored to specific sectors or applications based on ABB’s domain expertise. This will be done through increasing R&D and investments to about 5 percent of revenues per year and will be led by the business. This approach creates superior value for customers and drives a higher quality of revenues for the company. ABB will also continue to pursue select strategic partnerships in the digital sphere, as well as synergetic bolt-on acquisitions.

Updated financial framework

ABB is retaining its financial framework with modifications to certain targets in order to align with the ABB Way.

Guidance

Medium term ambitions

Revenue growth

3-5% annual average through economic cycle1

~2/3 comparable, ~1/3 inorganic

Operational EBITA margin corridor

Group 13-16%

Upper half of range as from 2023

Electrification 15-19%

Industrial Automation 12-16%

Motion 15-19% (previously 14-18%)

Robotics & Discrete Automation 13-17%

ROCE

15-20%

Steady improvement

FCF conversion to net income

~100%

Maintain solid track record

Basic EPS growth

EPS growth > revenue growth

Effective tax rate ~25% as from 2023
EPS rising strongly due to capital structure optimization program

ABB’s capital allocation priorities remain unchanged, including funding organic growth, a rising sustainable dividend per share and value-creating acquisitions. As previously announced, ABB intends to return to shareholders net cash proceeds from the Power Grids divestment of $7.6-7.8 billion.

“ABB aims to deliver attractive returns to shareholders and retain a ‘single A’ credit rating,” said CFO Timo Ihamuotila. “We also aim to complete most of our capital structure optimization program by the end of the year in order to further de-risk our balance sheet and further improve performance.”

Long-term sustainability targets

ABB is announcing the launch of its new sustainability strategy and targets for 2030, which is rooted in ABB’s Purpose and centered on an intensive stakeholder listening phase comprised of interviews and analyzed feedback. Based on this, the company has created a comprehensive sustainability strategy that combines ABB’s higher ambition, impact, measurability and accountability across its value chain of operations, customers, suppliers and society at large.

We enable a low carbon society

We preserve resources

We promote social progress

Carbon neutrality in own operations

80% of ABB products and solutions covered by circularity approach

Zero harm to our people and contractors

Support our customers in reducing annual CO2 emissions by >100 Mt2

Zero waste to landfill3

Comprehensive D&I framework4; 25% women among ABB leaders

Supply chain emissions reduction

Supplier sustainability framework

Top-tier employee engagement score in our industry

Impactful support for community-building initiatives

Integrity and transparency across our value chain

Further details available at go.abb/sustainability

“ABB is embedding sustainability in everything we do in order to create long-term value. Foremost, we are enabling customers to reduce their emissions and preserve resources because this is where ABB’s technology can have the greatest impact. Furthermore, our new targets will be tied to employee incentive plans thus driving performance and culture within our group, while we are proud to be contributing to the United Nations’ Sustainable Development Goals,” said Rosengren.

Note to editors: The Capital Markets Day, CEO/CFO presentation, as well as presentations from Business Areas and Divisions, can be followed under: https://global.abb/group/en/investors/strategy-events/capital-markets-day-2020 from 11.30 am to 5.15 pm CET.

ABB (ABBN: SIX Swiss Ex) is a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB’s success is driven by about 110,000 talented employees in over 100 countries. www.abb.com

Important notice about forward-looking information

This press release includes forward-looking information and statements which are based on current expectations, estimates and projections about the factors that may affect our future performance, including the economic conditions of the regions and industries that are major markets for ABB. These expectations, estimates and projections are generally identifiable by statements containing words such as “anticipates”, “expects,” “believes,” “estimates,” “plans”, “targets”, “aims” or similar expressions. However, there are many 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 press release 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 COVID-19 pandemic, 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.

_____________________
1
Calculated to exclude FX impacts and transformational acquisitions and divestments, includes bolt-on acquisitions and divestments within divisions.
2 Annual savings in the year 2030 from all solutions provided to customers 2021-30
3 Wherever local conditions allow
4 Diversity & Inclusion framework

To view this piece of content from cts.businesswire.com, please give your consent at the top of this page.

Contact information

ABB Ltd
Affolternstrasse 44
8050 Zurich
Switzerland

Media Relations
+41 43 317 71 11
media.relations@ch.abb.com

Investor Relations
+41 43 317 71 11
investor.relations@ch.abb.com

About Business Wire

Business Wire
Business Wire
24 Martin Lane
EC4R 0DR London

+44 20 7626 1982http://www.businesswire.co.uk

(c) 2018 Business Wire, Inc., All rights reserved.

Business Wire, a Berkshire Hathaway company, is the global leader in multiplatform press release distribution.

Subscribe to releases from Business Wire

Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Business Wire

H.I.G. Capital Announces the Sale of DGS S.p.A.11.6.2024 12:00:00 CEST | Press release

H.I.G. Capital (“H.I.G.”), a leading global alternative investment firm with $62 billion of capital under management, is pleased to announce that an affiliate has signed a definitive agreement to sell its portfolio company, DGS S.p.A. (“DGS” or the “Group”), a leading firm in the Italian Information Technology market, to DGS Co-Founders and management team in partnership with ICG, a global alternative asset manager. Since its inception in 1997, DGShas supported blue-chip customers in the design, integration, and maintenance of complex IT systems, with a specialization in digital transformation and cybersecurity services. The Group currently has over 1,900 employees, revenues of approximately €300 million, and maintains a group of highly loyal clientele. During H.I.G.’s ownership, DGS has tripled in size and consolidated its position as a leading Italian firm in cybersecurity services and digital transformation. DGS offers its clients sophisticated and proprietary digital transformation

Evertas Names Nick Selby Head of European Underwriting11.6.2024 12:00:00 CEST | Press release

Evertas, the world’s first crypto insurance company, has named Nick Selby as its new Head of European Underwriting. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240611141887/en/ Nick Selby, Executive Vice President and Head of European Underwriting at Evertas (Photo: Business Wire) Selby, an accomplished information and physical security professional, brings two decades of expertise in public and private sector information security, physical security, and complex incident handling, as well as seven years of experience leading teams securing billions of dollars in cryptoassets. Previously, his roles included VP of the Software Assurance Practice at Trail of Bits, Chief Security Officer at Paxos Trust Company, and Director of Cyber Intelligence and Investigations at the NYPD Intelligence Bureau. “Nick is an extremely valuable addition to our European team,” said Evertas CEO and Co-Founder J. Gdanski. “His public and private

Owlet utvider globalt fotavtrykk med lanseringen av medisinsk-sertifisert Dream Sock™ i Storbritannia og over hele Europa11.6.2024 11:00:00 CEST | Pressemelding

Owlet, Inc. («Owlet» or the «Company») (NYSE:OWLT), pioneren innen smart spedbarnsovervåking, kunngjør i dag den britiske og europeiske lanseringen av Dream Sock. Dette er en smart babymonitor med levende helseavlesninger og varsler for friske spedbarn mellom 0-18 måneder og 2,5-13,6 kg. Dette innovative medisinske utstyret gir foreldre helse og viktig informasjon i sanntid, noe som gir uovertruffen trygghet. Denne pressemeldingen inneholder multimedia. Se hele pressemeldingen her: https://www.businesswire.com/news/home/20240611820341/no/ (Photo: Business Wire) «Vi er svært stolte over å lansere Dream Sock til omsorgspersoner over hele Storbritannia og Europa og gi millioner av foreldre mer trygghet mens babyen sover,» sa Kurt Workman, Owlets administrerende direktør og medgründer. «Dream Sock er nå et globalt produkt som er anerkjent som medisinsk nøyaktig og trygt, etter å ha gjennomgått regulatoriske autorisasjoner og sertifiseringer innenfor flere geografier. I dag er misjonen vår

V-Nova Surpasses 1000 Patent Milestone in Media Technology Innovation11.6.2024 10:00:00 CEST | Press release

V-Nova, a leading provider of data compression solutions, video compression technology, XR technology, AI acceleration and parallel processing for a multitude of industries including media and entertainment, today announced its milestone achievement of 1000 active technology patents. This accomplishment underscores V-Nova’s dedication to research and development and its commitment to protecting its intellectual property globally. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240611724561/en/ V-Nova’s patent portfolio spans more than 50 different jurisdictions. Including over 400 patents in Europe, over 200 in the Americas, over 100 in the United States specifically, and over 200 in Asia. V-Nova forged new directions in data processing to enhance digital experiences, maximize efficiency, reduce costs, and increase sustainability. The company leads the way with key international data compression standards for the video indust

Alipay+ Reveals Top Scorer Trophy Design for UEFA EURO 2024™11.6.2024 09:24:00 CEST | Press release

Alipay+, a suite of cross-border mobile payment and digitalization technology solutions operated by Ant International and an Official Partner of UEFA EURO 2024™, today revealed the trophy that will be awarded to the most prolific marksman at the UEFA EURO 2024™ finale on July 14 in Berlin, Germany. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240610328619/en/ The UEFA Top Scorer Trophy presented by Alipay+ is unveiled for UEFA EURO 2024™ (Photo: Business Wire) Sculpted in the shape of the Chinese character “支” (pronounced zhi, and meaning payment as well as support), the trophy reflects Alipay+’s dedication to supporting consumers to enjoy seamless payment and a broad choice of deals using their preferred payment methods while traveling abroad. The character also resembles the fleeting moment of a barefooted striker poised to shoot, evoking the original beauty and power of football – a game that united people across the wo

World GlobeA line styled icon from Orion Icon Library.HiddenA line styled icon from Orion Icon Library.Eye