ABB Ltd (ABB:CA) Shareholder/Analyst Call Prepared Remarks Transcript

2026-03-20 06:32:18 ET

ABB Ltd (ABB:CA) Shareholder/Analyst Call March 19, 2026 5:00 AM EDT

Company Participants

Peter Voser
Morten Wierod - Chief Executive Officer

Presentation

Peter Voser ...

[Presentation]

[Interpreted] Dear shareholders, ladies and gentlemen. Welcome to our Annual General Meeting. I'm pleased to see that you have found the way to Oerlikon. Like in earlier years, this venue means a lot to us. Maschinenfabrik Oerlikon, one of ABB's predecessor companies used to manufacture locomotives and generators in this very hall. And as you may have read, we are investing CHF 80 million in the new corporate headquarters in our historic building right next door by 2031.

As you can see, even though we are constantly reviewing our portfolio and adjusting it where necessary, ABB is committed to Switzerland. Welcome, everybody now in Swiss dialect as well. We're very much looking forward to this meeting. May I also extend a welcome to those of you who are following our meeting via the Internet.

Likewise, I'm pleased to welcome my colleagues from the Board of Directors. Further, I would like to welcome [ Sebastien Tam ] here at the front. He is the representative of ABB's biggest shareholder investor.

We also have a school class with us today, namely students of the fourth grade of the [indiscernible] Grammar School, and their focus subject is economics and law. They are accompanied by their teacher, [indiscernible]. You can see them. A warm welcome to all of you from our side. I'm particularly pleased to see you here because I grew up in Baden, [indiscernible] Wettingen and I know the school that you go to every day very well. So it's fantastic to have you here today.

I'm pleased to see that you are interested in the most important form of Swiss company law, the corporation limited by shares. In addition to the theory you're starting at school, you will experience an important day in the life of such a company in practice with us today. Soon, you will have your final exams. And I wish you every success.

And finally, I would like to welcome the members of our Executive Committee. I address already now my thanks to the entire Executive Committee for their commitment and congratulate them on the success they have achieved for ABB in 2025. It has again become a record year.

Allow me to say a few words about safety. In the event of an alarm, please follow precisely the instructions of the personnel identified with either yellow or orange vests. The emergency exits are indicated and located on the right side of the hall and in the entrance area behind you.

Shareholders, guests, I shall now open our Annual General Meeting with some formal statements. In accordance with Article 14 of our Articles of Incorporation, I, as Chairman of the Board of Directors, shall take the chair of the AGM.

With me on the podium is Morten Wierod, our Chief Executive Officer. For the first time, I welcome Christian Nilsson, he has been our new Chief Financial Officer since the 1st of February this year. Also with us on the podium is Mathias Gaertner, our General Counsel and Secretary of the Board of Directors. Mr. Gaertner will also keep the minutes of today's meeting. Further, I would like to welcome the law firm, Zehnder Bolliger & Partner as the independent proxy. They are represented here at this meeting through Dr. Hans Zehnder.

May I ask all shareholders who wish to speak during the meeting to now come forward and report to the registration desk at the front, to your right. Please give your surname, first name and place of residence, and have yourself entered into the list of speakers on a particular agenda item. I'd like to ask you to speak only about the agenda item you have chosen to speak about and to limit your speech to be fair to everyone else.

Shareholders, we shall conduct all ballots and elections at today's AGM in electronic fashion. This is in accordance with Article 17 of our Articles of Incorporation. Voting procedures will be supervised by Daniel Burkhard, who is a member of the Group Legal Department of ABB and whom I hereby appoint as vote counter. KPMG, our auditors, are represented by Achim Wolper and Mohamad Midani. They are here upfront to the left from my perspective.

The invitation to the Annual General Meeting was published on the 19th of February in 2026 in the Swiss Official Gazette of Commerce and on our website, complying with the statutory notice period of 20 days. Shareholders entered in the share register were also separately notified of the Annual General Meeting on the 19th of February 2026.

I declare that no shareholders' requests in accordance with Article 13 of our Articles of Incorporation have been submitted for items to be included on the agenda nor have any deviating motions been submitted relating to the items on today's agenda.

The complete ABB annual reporting suite has been available on our website since February 19, 2026. This includes our integrated report 2025 with the management report, financial statements, consolidated financial statements, proposal by the Board of Directors relating to the appropriation of available earnings and related reports of the auditors. Attendance recording will be carried out electronically by means of a QR code on the admission card.

If you choose to leave the hall during the meeting, I'd like to ask you to take your admission card and your voting keypad with you. The attendance announcement and information about the voting modalities will be made at a later point in this meeting.

Ladies and gentlemen, I now declare that this Annual General Meeting has been convened and constituted in accordance with the statutory and legal requirements as to form. Other than that, I would like to point out that for the purposes of keeping the minutes, all statements and the meeting are recorded. In addition, today's meeting is being webcast live on the Internet in German and English via ABB's website. After the meeting, the recording as well as the minutes will be available on our website.

This brings me to the reporting for the financial year 2025. I'll start us off by making a few remarks from the Board of Directors' point of view. After my comments, Morten Wierod, our Chief Executive Officer, will report on the business developments of ABB Group.

Ladies and gentlemen, the events of the past weeks have once again reminded us that we are living in challenging and often unpredictable times. I'm pleased to report that our employees in the Middle East remain safe and that ABB is doing everything in its power to ensure their security. Indeed, the world today faces many challenges, war, whether in Ukraine or the Middle East, geopolitical tensions across many regions and of course, the technological upheaval driven by innovations such as artificial intelligence. These are profound transformations that are understandable and give rise to serious concerns for many people. This is precisely why it is so important to build trust and remain reliable, 2 things that apply equally to ABB and Switzerland.

For decades, our country has been regarded as innovative and forward-looking as well as stable and open to the world. And that must remain the case. Implementing proposals to cap the resident population at 10 million would cause significant harm to our country. Isolating our country won't help us. In fact, the opposite is true. We're located at the very heart of Europe, and we have close ties with our neighbors. This is why we also need what is known as the bilateral agreements III and wherever possible, free trade agreements, even if achieving them hasn't become any easier in today's world. The goal is to ensure that we remain competitive and continue to have access to the world's best talent.

Switzerland has one great strength in this regard. This country has always managed to seamlessly combine tradition and openness to the world. This is also reflected in ABB's investments, not least in the construction of our new headquarters here in Oerlikon, where we will fully renovate the landmark ABB Historic Building and construct a new modern office building alongside it.

There is no question in my mind, ladies and gentlemen, in times like these, your company's flexibility, agility and focus truly pay off. Our well-known local-for-local strategy means proximity to our customers, short supply chains and the ability to make quick decisions. That proximity to our customers is more than an advantage just in terms of efficiency. It is also an advantage in terms of resilience. And precisely because the world is becoming more predictable, it is essential for your company to remain predictable in its purpose, in its values and in its strategy. ABB remains firmly on course.

Obviously, we're making tactical adjustments. And of course, we're remaining flexible. But from a strategic perspective, we're focused on consistency and long-term objectives. This naturally also includes the forward-looking management of ABB's portfolio. With the announced divestment of our robotics business last year, we took an important decision, one that not only creates value for ABB, but one that will also allow the business itself to benefit under its new owner, SoftBank.

Our approach is working. Morten will provide you with a more detailed overview shortly. ABB's performance over the past year clearly shows that we are on the right path. For that, ladies and gentlemen, I would like to thank all our employees, our CEO, Morten, and the entire Executive Committee.

During our Capital Markets Day last November, we were able to raise several of our ambitions. This was possible because your ABB is well positioned and because we provide critical solutions for the major economic and technological trends shaping the world today. The first of these trends is energy security. This has become one of the most important political issues worldwide. No matter what region, there is an urgent need to upgrade and expand energy systems to meet the growing demand for electricity.

At the same time, a rapidly diversifying range of energy sources must be integrated into infrastructure in a safe and reliable way. The slogan, electrification of everything, which means the electrification of all systems as the foundation for productivity, resilience and decarbonization. This slogan remains as relevant as ever.

The second major trend is automation, another pillar of ABB's business. Our automation solutions help ABB's customers improve efficiency, enhance quality, strengthen safety and use resources more productively. And here at ABB, our strength lies precisely in our ability to effectively combine electrification and automation. The reason for this is clear. Electrification without automation is often too expensive. The other way around, automation without electrification is often unsustainable. But together, they are our sweet spot.

Our 3 business areas, automation, electrification and motion are closely interconnected. Our customers know that this combination makes us the right partner to help operate their facilities and systems more reliably, more energy efficiently and more productively. Ultimately, our performance reflects the solutions we deliver to our customers every day across a myriad of industries from distribution grids and infrastructure to industry and mobility to ports and buildings.

And as shareholders, ladies and gentlemen, you benefit from these achievements as well because we want you to continue sharing in our success. As you might have read, we are proposing an increase in the dividend to CHF 0.94 per share, in line with our long-term policy of paying a rising sustainable dividend per share over time. As usual, you will have the opportunity to vote on this later in the meeting. This year, we'll also intend to continue our share buyback program and plan to spend up to USD 2 billion on it.

Our strong order backlog is also clear evidence that innovation remains at the center of what we do with our customers and for our customers. Since 2022, we have increased our spending on research and development by around 30%. Today, 7,800 employees in our research centers are working to ensure that our technologies remain at the forefront of our industry.

Digital systems and services and especially new ways of applying artificial intelligence are playing an increasingly important role in our product portfolio. These capabilities help us address pressing challenges for our customers, whether that means improving maintenance, optimizing energy flows or taking out complexity. And we take a very pragmatic approach to this work. After all, AI is nothing new for ABB.

For more than a decade, we've been working with analytical AI and now increasingly with generative AI. Reliability, security and robustness always come first. For us, there is no such thing as move fast and break things. We're not racing ahead at top speed while knowingly accepting mistakes along the way. No. AI is not a magic wand anyway, but it is a very useful power -- a very powerful lever. And when the lever is applied, responsibility must always remain with people.

Things are no different when it comes to innovation, which brings me to another point, a misconception that innovation no longer takes place in Europe. Yes, the EU is sometimes too bureaucratic and not agile enough. I'll give you that. There's clearly a need for greater momentum. Neither I nor anyone else here at ABB has ever hesitated to voice an opinion on this subject. But there is also no doubt that this continent remains one of the world's major drivers of innovation, be it in Switzerland, Sweden or across the European Union as a whole. And it's up to us to ensure that this remains the case in the future as well.

Let me add a few thoughts on one of the most important issues for everyone here at ABB, sustainability. This has been one of the most highly discussed topics over the past years. And that's understandable, especially in times of major disruption like these. But there's one thing I want to make crystal clear. ABB remains fully committed to sustainability. For us, sustainability isn't simply nice to have. And it's not an ideological stance either. Sustainability creates real value, both for ABB and our customers by strengthening productiveness, improving efficiency and enhancing competitiveness.

We have continued to build on this progress towards our sustainability targets in most areas. And by combining electrification and automation, we help our customers reduce both emissions and costs. In a nutshell, for us, sustainability isn't a project. It is an integral part of our business model. None of this would be possible without the right team. And we have that team at every level of the organization from our apprentices to our leaders and our Board of Directors.

We invest in development, lifelong learning and personal responsibility to address the shortage of skilled talent and the impact of demographic change. Many of our new leaders have emerged from within the company, including our new Chief Financial Officer, Head of Finance, in other words, Christian Nilsson. I would also like to take this opportunity to offer my sincere thanks to his predecessor, Timo Ihamuotila, for his outstanding work as CFO.

And, incidentally, this strong talent pipeline is also an intentional result of the ABB Way. When employees are given responsibility, they learn and grow quickly. And soon, they're ready to take on the next challenge. This is not just one more of ABB's strength. Strategies can be copied, but culture and a strong talent pool cannot.

I'd also like to briefly recognize the excellent work of our Board of Directors. The colleagues that are here with us today. We have a diverse, broadly positioned Board of Directors that brings together the expertise and industry experience your company needs to face challenges that may arise. And I'd like to say it once again, ABB is poised for success today and in the future.

In conclusion, I'd also like to express my gratitude to you, the owners of ABB. Thank you for your trust in us and your support. ABB remains firmly on course, and we look forward to continuing this journey together. Thank you very much.

Following these remarks from the point of view of the Board of Directors, I call upon our CEO, Morten Wierod, to speak and to dig into the nitty-gritty of ABB's business. Over to you.

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