ABBNSEFebruary 10, 2022

ABB India Limited

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Management on call

Sanjeev Sharma

MANAGING DIRECTOR, ABB

T K Sridhar

CHIEF FINANCIAL OFFICER, ABB

Sanjeev Arora

MOTION, ABB INDIA LIMITED

G. Balaji

PROCESS AUTOMATION, ABB INDIA

Kiran Dutt

ELECTRIFICATION, ABB INDIA

Subrata Karmakar

ROBOTICS & DISCRETE AUTOMATION, ABB INDIA LIMITED

Tk Sridhar

Chief Financial Officer of ABB India

Key numbers — 27 extracted

rs,

Karmakar for Robotics. This time, we have also invited in a listen-in mode all our division managers, we have 18 divisions in the country. So, all division managers are also present in the listen-in m

30%

amangala factory, we were able to use the same space, reduce the footprint of our manufacturing by 30%, but increase the manufacturing by 30%. So, there’s a huge gain of productivity. Recognizing that

25%

is building and every building that we do, and it is automated to its teeth, it is likely to have 25% to 30% energy efficiency related to similar size business which is operated without ABB technolog

98%

We collect hazards around our locations and plants, and we resolve it and our resolution rate was 98%. We increase the recycling of water by 25%; it will increase further in 2022. Green power we are

43%

e increase the recycling of water by 25%; it will increase further in 2022. Green power we are at 43% level and because of the investment we are making, it is going to go close to 70% to 85% by the e

70%

power we are at 43% level and because of the investment we are making, it is going to go close to 70% to 85% by the end of 2022. Waste recycling at the moment is 95%. We are committed to net zero dis

85%

e are at 43% level and because of the investment we are making, it is going to go close to 70% to 85% by the end of 2022. Waste recycling at the moment is 95%. We are committed to net zero discharge

95%

aking, it is going to go close to 70% to 85% by the end of 2022. Waste recycling at the moment is 95%. We are committed to net zero discharge from our plants and we hope to achieve this by 2025, 2026

2243 crore

s. TK Sridhar: Thank you Sanjeev. The performance overview for 2021, we have booked an order of 2243 crores, probably the highest after several quarters for ABB India. It’s also notable to understand, as

400 crore

entioning, this includes a large order from a reputed oil customer, which is roughly around about 400 crores included in this, and there are some steel customers as well. Even on the base orders, we have s

20%

arter, and we will also deal with it going forward in more detail in subsequent slides. we had an 20% growth on profitability on profit before tax compared to the previous quarter. But on a year-to-

160 crore

year-to-year basis. So, that’s why in the SEBI results, for the full year, other income is around 160 crores compared to 111 crores last year and 160 crores includes this 40 crores which is there as a net

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Guidance — 20 items

TK Sridhar

opening

“Without wasting much of time, I hand over to Sanjeev to take us through what happened in Q4, the full year and also how we see going forward in 2022.”

Sanjeev Sharma

opening

“This is one of its kind order and is something we have started into a new segment, wherein new technology is being brought with ABB India and ABB France coming together, to deliver this very complex, but at the same time, something which we are very versed with globally in technology and much of it will be executed in the country.”

Sanjeev Sharma

opening

“This is something we are proud of and we believe that this will have a multiplier effect going forward.”

Sanjeev Sharma

opening

“We also completed a melt shop digitalization project for one of India’s leading steel company and they are measuring the boost in their productivity and profitability because of this implementation.”

Sanjeev Sharma

opening

“Likewise, I mentioned earlier, services grew, and they continue to expand, and we see that trend going forward in 2022 as well.”

Sanjeev Sharma

opening

“We are committed to net zero discharge from our plants and we hope to achieve this by 2025, 2026.”

Sanjeev Sharma

opening

“On the sustainable business model, first we made investment in green factory buildings; for all our locations, we have committed that they will be either gold or platinum standard green factory certifications.”

Sanjeev Sharma

opening

“And we will reach these parameters there.”

TK Sridhar

opening

“So, we are having a strong order backlog, which will cover almost seven months of revenue on an overall basis, but it also has project revenues, which will have to spread over the project schedule.”

TK Sridhar

opening

“So, they will be certain book to bill orders which will come through in the next two quarters to come.”

Risks & concerns — 8 flagged

ABB India Limited’s Board also has approved divestment of our turbocharger business as a going concern on a slump sale basis to its wholly owned subsidiary.

— Sanjeev Sharma

The good part is that we could note how did we able to generate better capacity utilization this year is our integration with the global supply chain which helps us get the material on time and deliver it in despite the economy reeling under the pressure of material disruption, supply chain disruptions.

— TK Sridhar

Without any extraordinary income, we are talking of operating margins, clear margins from the business lines and also the risk which will be pertinent when we run any business.

— TK Sridhar

And so what is pertinent for us is the commodity and the FOREX volatility risk which will happen and to combat that particular risk, we will continue to focus on our supply chain actions, and of course, look at hedging data front so that we are not taken by surprise on the FOREX element.

— TK Sridhar

So, are there any pockets of concern or certain end markets, which are slowing after a very strong growth or recovery that we saw in the last 12 months.

— Renu Baid

It doesn’t hurt, especially when we were in the middle of 2020, and we were really scraping all the battles how to pass through the COVID period because that was something which was a concern during lockdowns, et cetera.

— Sanjeev Sharma

The last question was on the impact of the IPO EV charging on the Indian listed entity?

— Bhavin Vithlani

And last third question is on the other expenses in the quarter, they have seen a very sharp jump although you mentioned that raw material price pressure has been there to some extent which has impacted margin while some of the other travel cost and freight cost have not normalized.

— Sandeep Tulsiyan

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Q&A — 7 exchanges

Sir my first question is on your comment where you mentioned that few sectors have started to see a comeback in terms of demand environment and the outlook is improving. So, if you can give more color in terms of which are these end markets, where now demand is picking up. And this year, we also saw some system orders coming back in terms of inflows and driving growth in addition to the base orders. So, do we expect the system orders to continue growing in the next couple of years as investments in core sectors accelerate. That’s the first question.

Sanjeev Sharma

Sanjeev here. Thanks, Renu, for that question. On a broader basis, we do; just to give you a flavor of how we see the market segments tracking, in terms of the estimated growth rate we see, I’ll talk in the sequence. Renewables are on the top of the list based on water, then followed by water and wastewater, warehouse and logistics, electronics, food and beverage, pharma, data center, railway, power distribution, automotive, building and infra, marine and port. So, these are really tracking well. The ones which still have to come out to the double digit growth rates are in the cement, oil and

I have a couple of questions. The first one is if you could just help us understand any decision taken on the electric charging division globally that is going in IPO, what would be for the Indian listed company. The second part is you also probably mentioned in your opening remarks, in the previous calls, about building automation and warehouse automation, which is an area where ABB does not have a market leading position and even perhaps, if you could just give more color on where are we heading over the next three, five years on this segment, that will be useful. The last part is you did me

Sanjeev Sharma

Thanks for the question. With respect to building automation and warehouse automation, if you’re following ABB closely, we globally acquired a company in Spain for warehousing automation, and our core robotics automation also goes into that space. We are seeing a very good traction of it in America as well as in Europe. We have had a good dialogue with certain large scale warehouse manufacturing, because you see it’s not only the money being spent by the smaller warehouse operators, but now we have the global money coming into those assets and they demand good space and good productivity. We a

I have two quick questions. First is on the entire robotics industry market size. The way lot of sectors are undergoing expansion, especially in the auto chain. Do you think the market in RDA will move from current level of $150, $200 million to by 24-25, maybe around two to three times? Are we up for that kind of sizing in the RDA? And similarly, on the low voltage side where our product portfolio in 35 kW and below is pretty comprehensive where are we positioned to tap the market, that’s my first question.

Sanjeev Sharma

Okay. On the robotic side, couple of years three years back when we were talking, we had a consumption of about four robots per 10,000 workers in the country. Now it has gone to six robots per 10,000 workers in the country. And that’s 50% jump, but it’s a very, very low base right now. And if you look into similar economies of China, if you look into economy of South Korea, Japan, and many other countries which have manpower, but they want to do more automated work, it is 10 times or 15 times and 20 times size of the market. So, that’s a scale you have to keep in mind. Earlier, there was a les

The first question is pertaining to the e-mart sales for the current quarter or from full year perspective, if you can share what percentage of your EL segment is come from this, and what is the kind of growth specifically in this particular sub segment is what we are looking at?

Sanjeev Sharma

So, as far as this particular way of selling in the industrial market is concerned, one has to acknowledge this is a new approach in Indian market, and we are doing it with our own platform. So, what it does for us is, there are two sides of selling our product, one is the physical side, another is the reachability to the farthest corner of the country. So, what e-mart is doing is, is able to make these products available to the Tier II, Tier III, Tier IV cities in a seamless way, wherein what we find is that people are able to evaluate the portfolio, and they are able to make selection, and t

Now that the Hitachi Energy has become completely independent and on its own feet. So, just wanted to get some clarity, is there anything that is stopping Hitachi from introducing this medium voltage, low voltage product of Hitachi in this Hitachi Energy subsidiary, is there any non-competing kind of an arrangement?

Sanjeev Sharma

Renjith, I’m sure you will get this opportunity to ask this question to Hitachi Energy. So, we can’t comment on a portfolio of independent company and that’s a good order. No, just wanted to clarify whether is there any anything that you have any agreement that or if they are completely independent and on their own? It’s a completely independent company under the umbrella of Hitachi Energy, and they should do what is suitable for their portfolio and what their market demand is. And of course, whatever has been written as an agreement in terms of portfolio globally, that will apply to them as w

Thank you, everyone for joining this call, it was always a pleasure to answer to the questions and provide clarifications wherever possible. In case there still are certain unanswered questions, please feel free to reach out to me or Sohini; we will do our best to ensure that you get the immediate clarification. Thank you very much for joining the call and look forward to meet you in the AGM in the next quarter. Thank you.

Management

ABB India Limited Plot No. 5 & 6, 2nd Stage, Peenya Industrial Area IV, Peenya Bangalore 560058 Karnataka CIN: L32202KA1949PLC032923 https://new.abb.com/indian-subcontinent

Management

Speaking time

Sanjeev Sharma

TK Sridhar

Moderator

Sandeep Tulsiyan

Renu Baid

Bhavin Vithlani

Renjith Sivaram

Amit Mahawar

Kiran Dutt

Registered Office

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Opening remarks

TK Sridhar

Thank you, Margaret, and very good morning to all of you. It’s a bright sunny day in Bangalore as I sit in my Disha Office in Peenya. So, welcome to the Q4 2021 and the Full Year Result Call with all of you. So, we have absolute pleasure in discussing these topics as every quarter. Along with me in the room, I have Mr. Sanjeev Sharma – MD of ABB India Limited, Sanjeev Arora, who leads the Motion business for India, Subrata Karmakar, the Head of Robotics business, Kiran Dutt who represents Electrification Products and also Balaji who represents Process Automation. Without wasting much of time, I hand over to Sanjeev to take us through what happened in Q4, the full year and also how we see going forward in 2022. Over to you Sanjeev.

Sanjeev Sharma

Thank you Sridhar. Good morning to all of you. Let me also acknowledge that apart from our divisional managers who are present that is Sanjeev Arora, Kiran Dutt, Balaji for Process Automation and Subrata Karmakar for Robotics. This time, we have also invited in a listen-in mode all our division managers, we have 18 divisions in the country. So, all division managers are also present in the listen-in mode for us because as you all know, ABB is a company in India which has 18 distinct divisions and sum total of all these divisions performance, is presented to you as a cumulative result of ABB India. Coming to business highlights. We have been investing in the smart factory and the manufacturing excellence over a period of time. And we have seen substantial productivity gains in our factories by employing robotic solution and also squeezing the space that is required to produce. For example, in our Nelamangala factory, we were able to use the same space, reduce the footprint of our manufa

TK Sridhar

Thank you Sanjeev. The performance overview for 2021, we have booked an order of 2243 crores, probably the highest after several quarters for ABB India. It’s also notable to understand, as Sanjeev was mentioning, this includes a large order from a reputed oil customer, which is roughly around about 400 crores included in this, and there are some steel customers as well. Even on the base orders, we have seen a good traction compared to the previous year, which was only the base orders. So, we are having a strong order backlog, which will cover almost seven months of revenue on an overall basis, but it also has project revenues, which will have to spread over the project schedule. So, they will be certain book to bill orders which will come through in the next two quarters to come. We did have a strong bottom line in this particular quarter, and we will also deal with it going forward in more detail in subsequent slides. we had an 20% growth on profitability on profit before tax compared

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