Jefferies 11th Annual Industrials Conference in New York on August 12-13, 2015 ABB Next Level Shaping a global leader in power & automation Binit Sanghvi, Senior IR Officer ABB August 6, 2015 Slide 1
Agenda ABB overview Performance update Next level implementation Outlook and priorities ABB August 6, 2015 Slide 3
ABB today What (Offering) Power & Automation Power 40% of revenue Automation 60% of revenue For whom Transport & (Customers) Utilities Industry Infrastructure 35% of revenue 45% of revenue 20% of revenue Where…
Attractive markets Big shifts in power & automation: shaping joint opportunities Big shift in power Big shift in automation Generation mix Things Services Internet Power of transmission and distribution People Micro- /…
Attractive markets Power & automation demand in three customer segments Industry Productivity 250 bn Energy efficiency Automation penetration Utilities Power quality and reliability Emerging markets Renewables 200 bn US…
Well positioned A true global player team, culture, and presence Revenue Top 200 split 2014 Europe managers 13.7bn 34% 3/4 from outside Americas Switzerland and Sweden Mature 11.5 bn 29% 27 nationalities from AMEA markets…
ABB Next Level Shaping a global leader in power & automation Shifting the center of gravity Strengthening competitiveness Profitable Driving organic growth momentum growth Lowering risk Well Incremental acquisitions and…
Agenda ABB overview Performance update Next level implementation Outlook and priorities ABB August 6, 2015 Slide 9
2014 strong foundation, solid momentum Robust order growth, PS break-even, increased dividend Delivering along our three focus areas +10% orders growth1, up in all regions and divisions Profitable Base orders +5%1, large orders…
Q2 2015 Steady execution in challenging markets Delivering along our three focus areas Orders reflect challenging market dynamics (-4%) 1 Profitable Revenues continued to grow (+3%) growth Book-to-bill for first 6 months 1.09x, 1.0x…
Impact of low oil price Low oil price Oil & Gas Industries1 Governments Upstream Mid- / Downstream Short term opex Short term opex reductions reductions Several industries Reallocation of oil benefit, e.g., subsidies to…
Focused growth initiatives bear fruit in key markets Orders reflect market headwinds & challenging comparable 2015 Q2 base order 2015 Q2 total order growth by region growth2 Change on a like-for-like basis Change on a like-for-like…
Capital management Cash from operations reflects Q2 revenue pattern Late quarter revenue drives receivables Cash from operations build-up mn 888 598 Q2 14 Q2 15 Q2 14 Q2 15 Q2 2014 Q2 2015 Current rec Overdues Trade…
Agenda ABB overview Performance update Next level implementation Outlook and priorities ABB August 6, 2015 Slide 16
ABB Next Level Shaping a global leader in power & automation Shifting the center of gravity Strengthening competitiveness Profitable Driving organic growth momentum growth Lowering risk Well Incremental acquisitions and…
Profitable growth Driving organic growth momentum Examples Profitable OEMS: growth Tap European machinery Penetration Well channels, e.g., YTD orders positioned 10% in key sectors Marine: Relentless Azipod D propulsion…
Profitable growth Shifting the center of gravity Strengthening competitiveness Solution offering Software-led Services differentiation Future Customer value Technological proposition leadership Economic cycle High-growth…
Profitable growth Q2 actions shifting the center of gravity Example Strengthening competitiveness Profitable growth New service suite Expansion of Well for solar customers robot studio for positioned general industry Grid…
Shifting the center of gravity competitiveness YuMi : man machine collaboration Things Dual-arm small parts assembly robot Flexible hands Parts feeding systems Camera-based part location Services State-of-the-art robot control…
Shifting the center of gravity competitiveness Services: remote service of factories Things Speaking machines real time sensing data from product Intelligent and connected robots - sending data to cloud servers for reporting,…
Shifting the center of gravity driving organic growth Driving organic growth momentum through PIE Navigation check: heat maps Growth levers: PIE Penetration: Selling more of our existing offering to accessible customers e.g. Japan…
Profitable growth incremental partnerships Solid momentum strong complementary partners Smart home Grid energy storage technology and EV charging Cloud datacenter HVDC technology for technology Japan Global microgrids…
ABB Next Level Relentless execution Profitable growth Well positioned Leading operating model Driving change through 1000 day Delivering attractive Relentless shareholder returns programs execution Linked strategy,…
Relentless execution Power Systems delivering on step change What we said What we delivered Profitable growth Progress on profitability in 2015 Margin up 580 bps y-o-y Well positioned New team deeply rooted in Strengthen…
Relentless execution: 1000 day programs Focus, phased actions, clear ownership and accountability Wave 1... n Objective Approach: Implementation in waves Focus on high-impact strategic priorities Executive sponsor, dedicated…
Relentless execution Stronger focus on operational performance management Examples Relentless Execution Dashboard Profitable growth Care Customer Cost Cash Well OTD NPS Field Cost OPQ Product DPO Invent DSO Failur positioned…
ABB Next Level Business-led collaboration Profitable growth Well positioned Delivering attractive Relentless shareholder returns execution 2014-2016 share buy-back Attractive Simplifying how we work together…
Business-led collaboration Delivering greater customer value Examples Profitable Organization Processes & tools Go-to-market growth Well New Country Common channel positioned Manager role Salesforce.com strategy Focus on…
Business-led collaboration Profitable growth from combined power & automation offering Transportation & Utilities Industry Infrastructure Eskom, South Africa Statoil, Norway Stadler rail 170 mn 120 mn 60 mn combined Power plant…
Agenda ABB overview Performance update Next level implementation Outlook and priorities ABB August 6, 2015 Slide 32
Q2 summary and outlook Q2 results Outlook Orders reflect challenging market dynamics (-4%) Hard-weather sailing: Mixed short-term Continued revenue growth (+3%) picture, uncertainty remains Operational EBITA margin 11.7%, up 100…
Priorities for 2015 Summary Drive shift in center of gravity Profitable Maintain / accelerate organic growth momentum relative to market growth Deliver value from 6bn annual R&D & Sales investment, partnerships, past…
Shaping a global leader in power & automation Strong basis, solid progress, clear agenda Shifting center of gravity of portfolio Value from partnerships and past acquisitions Leading operating system Clear agenda Transformational…
Overview of 2015-2020 targets Group targets and divisional operational EBITA margin targets Group Divisions Revenue growth1 4-7% Discrete Automation and Motion 14-19% Low Voltage Products 15-19% Operational EBITA %2 11-16%…
ABB organic revenue growth target in context Targeting above-market growth Expected growth rates 7% Main drivers Shifting the center of 6% gravity Strengthening 5% competitiveness 4.5% Driving organic growth 4% momentum 3.5%…
Assumptions for 2015-2020 Group financial targets GDP and industrial capex to grow at 3-3.5% Global GDP growth in % Industrial production in % 3.3 3.3 3.7 2.8 3.5 3.6 1 2014 2 2016 3 2018 4 2020 2014 1 2016 2 2018 3…
More information available at ABB Investor Relations Name Telephone E-Mail Alanna Abrahamson +41 43 317 3804 alanna.abrahamsonch.abb.com Head of Investor Relations John Fox +41 43 317 3812 john.foxch.abb.com Binit Sanghvi +41…
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