ABB is constantly monitoring the pandemic situation around
COVID-19 (novel coronavirus). The health and safety of its
employees, customers and partners remains the company's number one
priority and we are working hard to assess and mitigate any
risks.
Guidance issued on February 5, 2020, did not include impacts due
to the coronavirus, the effects of which were mainly limited to
China at that time. We have subsequently experienced a decline in
trading conditions due to the outbreak, further impacted by a
weakening oil price.
The situation in China has stabilized following extensive
government-led efforts in February and operations at ABB's three
main production hubs of Shanghai, Beijing and Xiamen have largely
returned to normal. While weakened customer demand in China, our
second largest market, will also impact the first quarter results,
our China business has been improving recently. At the same time,
COVID-19 has spread rapidly to the western hemisphere in March,
resulting in governments and customers adopting containment
measures that have material economic consequences across the
globe.
Q1 2020 impact
Although it is not yet possible to determine the exact impact of
COVID-19 on ABB's first quarter results, ABB expects revenues to
decline in all its businesses relative to a year ago, while orders
are somewhat less impacted. The Robotics & Discrete Automation
business, which was already facing significant end-market headwinds
from the automotive sector, remains challenged, with first quarter
orders and revenues both expected to decline by more than 20
percent year-on-year.
Operational EBITA margins are also expected to decline in all
ABB's businesses, burdened by lower volumes, partly offset by
self-help efforts. Self-help initiatives are aided by the framework
ABB already has in place to implement ABB's Operating System
(ABB-OS). At the same time, the company is significantly
intensifying mitigation measures and actively reducing all
non-essential costs, and all of ABB's businesses are rigorously
focused on serving their customers while sustaining cash flow.
2020 outlook
Each of our businesses are closely monitoring current and
potential effects of the outbreak. Currently, the majority of ABB's
production facilities remain fully or partly operational and supply
chain impacts have been minimal. However, the outbreak is expected
to continue to have an impact globally, potentially creating
disruption across production sites and further curtailing product
demand, project and service activity.
In addition to short-cycle headwinds impacting all our
businesses, we expect project business to be dampened by the weaker
outlook for oil and gas capital expenditures and a fall-off in
cruise ship activity. By contrast, transport projects look more
resilient and the outlook for select high growth areas, such as
data centers, remains robust. Systems and service activity is
curtailed by restrictions to cross-border travel for specialized
sales and service engineers.
ABB is accelerating and extending its mitigation measures ahead
of what looks set to be a difficult second quarter, with a focus on
adjusting capacity to meet reduced demand.
Given continued uncertainty, including the recent oil price
decline, ABB is no longer providing financial guidance for full
year 2020.
ABB continues to work toward the delivery of transformation
milestones, including the divestment of Power Grids which is
targeted for completion at the end of the second quarter.
Despite short-term disruptions, ABB is confident in the
underlying resilience of its businesses and operating model, and
that its short-term liquidity needs are well covered by the
financial framework it has in place.
"I would like to take this opportunity during these
extraordinary times to thank the whole ABB team for sticking
together and handling this global pandemic with the highest level
of professionalism," said ABB CEO Björn Rosengren. "The health and
safety of all stakeholders, above all our employees, remains our
number one priority at this moment in time, while we also try our
utmost to secure business continuity. We remain prepared for any
scenario and will take strong action to mitigate the impact for our
customers, shareholders and employees."
"Furthermore, the Board of Directors and the Executive Committee
of ABB have decided to voluntarily take an immediate 10 percent
reduction in board compensation and salary for the duration of the
crisis, with the view to extend this strong sign of solidarity to
other senior management levels within the company. We must stay
strong together for the whole of ABB and for our society. The money
saved through the compensation and salary reductions will be
donated by ABB towards efforts aimed at fighting the impacts of the
Coronavirus crisis," said the CEO.
"After many of my first meetings since joining ABB earlier this
year, my impressions of the company and its people are very
positive. ABB is a strong company, with a tremendous spirit and the
right products and technology to drive the positive and sustainable
development of the world in the future," Rosengren added.
ABB plans for virtual communication
In light of the current situation around COVID-19, ABB plans to
make more use of virtual media to facilitate continued
communication with the financial community.
The following webcasts are currently scheduled:
Date Topic Host
April 28, 2020 Q1 Results: webcast CEO, CFO
June 10, 2020 CEO first perspectives: webcast CEO, CFO
Full details and additional events will be updated on
www.abb.com/investorrelations when available.
ABB (ABBN: SIX Swiss Ex) is a technology leader that is driving
the digital transformation of industries. With a history of
innovation spanning more than 130 years, ABB has four,
customer-focused, globally leading businesses: Electrification,
Industrial Automation, Motion, and Robotics & Discrete
Automation, supported by the ABB Ability(TM) digital platform.
ABB's Power Grids business will be divested to Hitachi in 2020. ABB
operates in more than 100 countries with about 144,000
employees.
This information is information that ABB is obliged to make
public pursuant to the EU Market Abuse Regulation. The information
was submitted for publication, through the agency of the contact
person set out below, at 6.45 a.m. CEST on March 30, 2020.
Important notice about forward-looking information
This press release includes forward-looking information and
statements concerning the outlook for our business. These
statements are based on current expectations, estimates and
projections about the factors that may affect our future
performance, including the future impact of the coronavirus, global
economic conditions, and 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" or similar expressions. However,
there are numerous 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. Many of the factors that could
cause such differences are identified and 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.
View source version on businesswire.com:
https://www.businesswire.com/news/home/20200329005041/en/
CONTACT: ABB Ltd
Affolternstrasse 44
8050 Zurich
Switzerland
Media Relations
Phone: +41 43 317 71 11
Email: media.relations@ch.abb.com
Investor Relations
Phone: +41 43 317 71 11
Email: investor.relations@ch.abb.com
SOURCE: ABB
Copyright Business Wire 2020
(END) Dow Jones Newswires
March 30, 2020 01:03 ET (05:03 GMT)
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