Summary of ABB Capital Markets Day Company Overview - **Company**: ABB - **Event**: Capital Markets Day - **Location**: New Berlin, Wisconsin Key Points and Arguments Company Performance and Strategy - ABB has made significant investments, exceeding $100 million, in its new site in New Berlin, which is a testament to its commitment to capital allocation and operational excellence [7] - The company emphasizes a high "say-do" ratio, reflecting its commitment to performance and accountability across its 16 operating divisions [9][10] - ABB aims for record-breaking performance year after year, fostering a culture of ambition and continuous improvement [11] - The company has set ambitious sustainability targets, aiming for an 80% reduction in scope one and two emissions by 2030, with current efforts already showing significant progress [12] Employee Engagement and Culture - Employee engagement is a priority, with an engagement score of 85% among its 110,000 employees, which is above industry standards [13][14] - ABB believes that high employee engagement contributes to overall success, creating a positive feedback loop between engagement and performance [14] Business Segments and Growth Areas - ABB operates in three main business areas: Electrification, Motion, and Automation, with a focus on leveraging synergies between these segments [22][23] - The company is committed to a balanced approach to growth, with a focus on both profitability and expansion, particularly in the automation sector [15][39] - ABB has identified six key areas for performance improvement, emphasizing the importance of a balanced mix of stability, profitability, and growth across its divisions [15][19] Market Trends and Future Outlook - The demand for electricity is expected to outpace overall energy consumption, with ABB positioned to capitalize on this trend through its electrification and automation technologies [34][35] - The company anticipates a quadrupling of electricity usage in data centers over the next seven years, indicating significant growth potential in this sector [37] - ABB projects a long-term organic revenue growth target of 5-7%, with additional growth from acquisitions [39][40] Financial Targets and Capital Allocation - ABB has set a target for a gross margin of over 40%, with specific margin targets for its business areas: Electrification (22-26%), Motion (18-22%), and Automation (14-18%) [41][60] - The company aims for a return on capital employed (ROCE) of 20%, reflecting its commitment to efficient capital management [42][63] - ABB's capital allocation strategy prioritizes organic growth, dividend sustainability, and value-adding acquisitions, with a focus on maintaining a balanced approach to shareholder returns [66][67] Technology and Innovation - ABB is committed to being a technology leader, continuously investing in R&D and leveraging new technologies such as AI to enhance customer productivity and sustainability [33][57] - The company emphasizes the importance of internal collaboration and technology sharing across its business areas to deliver comprehensive solutions to customers [24][26] Conclusion - ABB is well-positioned for future growth, with a strong focus on sustainability, employee engagement, and leveraging its technological capabilities to meet market demands [68] - The company is committed to delivering value to shareholders through disciplined capital allocation and ambitious performance targets [65][66]