Please welcome to the stage Ann-Sofie Nordh. I wish it was like that every morning when I get to work. Welcome, everybody, to this ABB Capital Markets Day. We have a big crowd joining us virtually, and we have a full house here in New Berlin in Wisconsin, wherever you are. Thank you for choosing to spend the day with us. You should know that it's appreciated. At this motion site, we actually host three divisions in motion, the biggest one being drive products, but then we also have system drives and service. It's a little bit of a nice proof point of ABB leaders actually collaborating where it makes business sense. It's brand new. I realize I'm biased, but I think it's beautiful. You will see it later on. You will meet the people, those of you who are in the room when you go on the tour. I hope you agree about the beauty. You will also get to see a little bit of the value creation that motion generates here on its own, but also together with some of the other businesses within ABB. I know the local team is really excited about showing off their new home. I want to take this opportunity to extend a big thank you to the team. Couldn't have done it without you. Really, really thank you. We want you to be safe when you're with us today. Those of you who are joining us virtually, I hope you're all safely buckled up in your seats. In the room, if for any reason you don't feel well or 100% today, please reach out to any of the ABB people or reach out to the reception desk, and we'll make sure you get the help you need. You saw before on the screen there was a little notice saying photos not allowed. We actually mean it, and we kindly ask you to respect that today whilst on the premises. A small but important point about restrooms. You find them as you leave this room, both right and left. You'll find them there. Some of you joined us for dinner last night. Thank you very much. You got the chance to meet with the whole executive team of ABB. Today, you will meet with the three BA leaders. We have Jean-Pierre, Brandon, and Peter. You will also meet with Tuomo, who this is his home turf. He will proudly present the site later on because he heads the Drive Products division. First of all, we will kick off with our CEO, Morten, and CFO, Timo. They will talk about the full power of ABB. They will talk about why lean and clean make sense. They will talk about why we think that ABB can deliver even stronger performance in the future. First of all, we will kick off with a little bit of a video. I should also mention that we have a little special feature during the day. Every now and again, the lights may go off at full blow. Do not worry. We are just making sure you are awake. They will go back to this little cool, mellow lighting within short. Do not worry. Now we kick off with a little bit of action from ABB. Look at that. Isn't it beautiful? Running like a dream. Everything that runs well can be engineered to run better. From data centers to shipping and ports, from railways to buildings, and from manufacturing to electric racing. Our technologies in electrification and automation help industries run leaner and cleaner because in a world where simply running isn't enough, ABB helps industries outrun. A warm welcome also from my side. I think it's great to be here in New Berlin in Wisconsin. This was one of the times when I was in Motion back in 2022 before I moved over to Electrification. One of the last things I did was to approve the investment here, which was north of $100 million. We were a bit kind of even uncertain at the time because that was a lot of money on one site. Looking back, I think it was absolutely the right decision. We are very proud to show you also where, when you talk about CapEx and capital allocation, what you will see here today is how money is being deployed into the United States and around in many of our sites. Two years ago, many of you were with us in Frosinone in Italy. Today, we're here in one of the motion diamonds here in the US, and I think it's another great example on how really we help customers outrun, as you saw in the video, coming up with great technology. It's good to be back again two years later. For me, the first time here, looking at in this role, looking at the performance we've had over the years. Being in the Executive Committee since 2019, both in Motion and Electrification, we've been all kind of part of this journey that we've been on as ABB. I think one of the key elements and what we should be proud of when you're looking at the financial performance is the high say-do ratio. For me, this comes very much from the ABB Way operating model, the ownership to performance, the ownership and accountability to taking the business forward to the next level. We have been on a good journey, and we have added some of the charts here. You see some of these elements. I could have added also gross margin or order backlog or strong balance sheet, but we selected on these six. What is important for me is about record-breaking, doing better than ever before every year, year after year, and having an ambitious team that own the performance at each division. Today, we have 16 operating divisions who own their own performance, and they work together where it makes sense for customers or where it makes sense, like on this site where you work together under the same roof. That is what drives performance over time, having that ambition always to do better than you did last year, always looking at what's the next step we can make. That kind of record-breaking attitude, I think, is one of the key elements to say about the ABB Way and the culture of what we also want to foster in the company. That's what I do also when I look at selecting leaders. I know also my team, when they select the right division presidents and the right leaders down in the organization, it's the ones with ambition who want to achieve and don't take just the short-term view of doing a quarter or a year, but driving performance year over year. This is the financial performance we've had, but it's not the only way how we measure success. We also made ambitious targets back in 2019 on how we drive our sustainability agenda. I think this site is a great example of how technology can help reduce emissions in manufacturing. This is one of the net Mission to Zero and net zero sites that is by using our own technology. We have here, you will see later on we do a tour. You see that room up there with a lot of the orange and blue equipment. That is our own technology from electrification, motion, and automation that is being kind of enabling that low carbon emission site that we have here. A great example. Already now, this year, we will be able to be close to already over 2030 ambition of 80% reduction of our own scope one and two. The journey continues, of course, when you're looking at how we continue to help our customers reduce their emissions. That is really how we drive our business, and that is our ABB business today. Another area that I think we've done really well is also around the employee engagement because I believe that success comes from people who have ambitions and have teams with high engagements. Therefore, we also measure this every year. We did that also since 2019, both the engagement score, but also the number of respondents goes up year by year. We are now here at the 85% of our 110,000 people answer the 37 questions about how they feel about ABB, how they feel valued, and if they are motivated to get up in the morning and contribute to ABB's success. We are now at the 80% mark, which is above the high in the industry. You can always argue a bit of the chicken and egg discussion. Does it come, does engaged people create success, or is the success also creating engagement? I think this is just a positive spiral that you're working together. Highly engaged teams and people is creating the success today of ABB. We've done really well. It's something I always say we should be super proud at ABB of what we have done over the last year. It's a great journey, but we should never be arrogant. Always proud and never arrogant is somebody who will internally, they will know that phrase very well because I believe we can do much better than what we're doing today. We have identified six areas that I would like to talk about where I believe we can use these six elements or areas to continue to drive the performance of ABB to the next level. Doing well, but more to come. Let me go straight into the first area. Many of you who have worked with me or talked with me over the last year have often heard me talking about the beauty of mix. That is because I believe this is a driver for performance. It is how we use the ABB Way thinking of stability, profitability, and growth about driving performance of the company. Today, out of the 16 operating divisions, which then we put robotics and e-mobility on the side, with our 16 operating divisions, we have only one in stability. That is our machine automation business. Peter will be up on stage later on. We We give more clarity or more color to how we're also improving that business. If you look at profitability and growth, that is about the 20-80 mix. The beauty of mix is that everybody focuses on their own mandate, and they got targets, and they got incentivized according to those, which means that the profitability teams are looking at how do I reduce cost, how do I improve the performance of my division. The target is then also less on growth and more on profitability improvement. While on the growth team, it's all about how do we continue to drive that performance at the same or a bit higher level on profitability, but focus both investment and on the growth side. That is also reflected, of course, I say in targets, but also in the incentive plans. This is what we have taken also to the next level in an even more systematic way. It does not stop here. We want to take this one level further down in the organization because under these 16 operating divisions, we have around 75 business lines, which are these subgroups inside the divisions. Even taking in electrification, which has five divisions in growth mode, they also have business lines with profitability or even stability mandate. This shows a kind of, but using that methodology, using the thinking that the business line managers and the team know what is our strategic mandate, that targets are set accordingly, and also their incentive plan is following this way, is what drives performance. We know that this is working very well in ABB, and it's important just to use the same methodology also on the next level because I believe, and I will, that this will drive the performance of the company also for the coming years. Right now, all the 75 business lines know their mandate. They have targets for next year set up, but this will be the first year that you will see also this come through in the next level of the organization. This is a bit how we kind of use the beauty of mix and using the whole ABB Way thinking. Another area where I believe we can do even better is in the field of M&A. You know that we had an ambition of 1-2% of bolt-on acquisitions to the company. We have so far not been able to deliver fully on that commitment. This is an area where we also agreed that between the division presidents and in the leadership teams, we have to step up and put in more focus around pipeline building, looking at what are the targets and the technologies or channels that would kind of help us accelerate growth in our business. We have a scoring system with about 20 KPIs that it goes through so we can do a real valuation. Along this, it is down to the divisions now to come up with these bolt-on acquisitions because they are the ones who know the business and know what can help. Larger deals will also, of course, be considered, but that is more with the business area presidents and Timo and myself in overalls when we are looking at the bigger targets. Here, we believe that we can really make this also part of the performance culture of the company because the say-do ratio, what I say in many of the other fields, kind of shows that ABB can deliver on our commitment. This is another way. We work the same way. We build this into business reviews. We have more of the board discussions, and there is a firepower, you know that already, where they have a balance sheet that can clearly justify more investment into M&A. Especially with the robotics divestment happening next year, I get sometimes the question, "Will you have a $5 billion check in your pocket burning a hole in it?" I say, "Absolutely no." Therefore, I also want to underline for us, the value creation is key to any M&A decision we do. It has always to beat the alternative of share buyback to do an acquisition. That is kind of, let's say, just the fundamental. Let me come back to also how we want to use M&A as a real value creation opportunity in the time to come. This is one way to create value for the company. Another very important part is what we call the power of ABB. We are today three business areas, and you may see also I've described one change from what we had earlier. The business area of process automation is renamed to automation. We will do that from the beginning of next year. It just shows also the whole now when we take machine automation together with process automation, we believe automation is a good name. Automation has a special role in ABB because the automation business is very often the ABB ambassador, the one carrying the ABB flag at end users as large end users. It also pulls more than $700 million of business from electrification and motion as a package deal when they go out. That is why we will also see later on the expectation to margin is different to our automation business than it is to electrification and motion. It is a bit how we have set up the business model internally at ABB in this business. Therefore, world-class performance is a bit different when it comes to numbers, but our automation business plays an extremely important role being that ABB ambassador out there. I think now we have a very balanced company which looking at with electrification, motion, and automation, they share often technologies. They share about products that are being used in each other's systems. Take large motors from Motion that are used as part of the propulsion system of ossipods in the marine business, but there comes also medium voltage and low voltage switchgear from Electrification. These are examples of how you pull technologies together and come to customers with one offering because at ABB, we want to serve customers as they how they want to be served. It's not an inside out that we define how customers need to work with us. We adopt how customers want to be served from their side. That is the guiding star for how we organize ourselves, how we work internally with account management, with contracts, and how we are able to serve customers in the way they want to be served. That for me is a super important part. That also goes into what Ann-Sofie already talked about, that smart leaders collaborate in ABB. This is how you set it up. As long as you make customers in charge of this decision, we line up at ABB and serve them in that way that they want to be served. We also have good opportunities between this business area when it comes to technology. There is a lot of common technologies. There is a lot of common procurement activities as well. This is covered in what we call today our communities of practice where experts are connected throughout our organization, not in a matrix model because that is something we discontinued, but we let the business take the lead. Normally, it is the one with the broadest shoulders who bear the heaviest backpack. That means that those with having highest revenue would take the lead towards the customer and bring the other colleagues with them on project as an example. This is how we are able to work well together inside the company, supporting customer better or reducing our own cost, that be in procurement, that be in quality, being in any aspect of the business. I think to show this with an example on how we work together, it's a project I know really well because it's in Sweden where SSAB is putting in their new mill on the new steel mill in the north of Sweden. This is that complete upgrade on their old facilities where they're able to put in not just kind of the new facilities where they're able to reduce the emission for the whole country of Sweden by 7%. It's massive when they're talking about making things cleaner, this is a fantastic example how one plant can reduce a country's emission by 7%. As importantly, they're able to reduce their operating cost and drive productivity in the new facility. That is where we come with ABB with their all control system from our automation business, but also all the electrification from medium voltage to low voltage and all the equipment there. You have to work also with the OEMs in the steel industry for a hot and a cold rolling mill. This is where our motors and drives go in there and the electrification so that you have everything on site is ABB, which means we have a service opportunity. That's what SSAB want as an end user. They want ABB to be there and service all the equipment on site, even some comes direct and some comes indirect through OEM. This is the true power of ABB. Here we are one of the very few or maybe the only one in our industry who have this one-stop shop and one complete offering of this space. I have another example we also like to show, which comes from Shell and how we work with them. We can listen to the customer and how they are seeing us as a partner for some of their large projects. Ulrich Spiesshofer, historically has supplied up to 20% of the U.K.'s energy needs in the form of gas. They allowed the U.K. to switch from coal to a mixture of renewables and gas. Ulrich Spiesshofer, gas is now supplied through Europe. Technically, it's all about the development of the compressors, and it's all about developing the power system. It's really showing that we can apply these technologies and we can manage the risk associated with a technology-based project and that we have predictable execution. The long-step-out power supply, the deep water power distribution system can be applied to other types of projects such as wind developments or power storage developments. It's about our requirements as a customer. Letting the contractor take the lead in that was really important. Other ones was actually our ways of working. It's about a kind of strategic contracting. By going through larger contracts with less interfaces where we again rely on the contractor to deliver systems rather than components or modules, relying on that. Coupled with that, fostering and building a trust between the contractor and company. You become a true technology partner rather than a contractor. Interestingly for ABB, we had ABB supplying scope in different areas here. We had one contract on the control side and then we had the power side. You saw the real strength of them being one company. We saw the cooperation and you have to do that journey to get to the goal together. A company like ABB has many, many different areas and we use a lot of them. I think that kind of internal alignment is very important as well. I think it's a great example and a testament from Shell and how we can partner with them to help many of their offshore installations become both more productive and better, but safer, but also helping them also reduce emissions in what they do offshore, this one coming from the North Sea. I think this kind of lines up a bit. What does customer like about us? This is one of the things where I get really proud when I meet customers, tell kind of, and I ask the simple question, kind of why do you buy from us? Normally these are the two things that come back. It's how you're able to use technology by great product systems, services, solutions, and it's about your people, the know-how, the skill sets. Because we have been in this industry for 140 years and we plan to be that also for a long, long time in the future. We know that the technology is what is the partnerships that customers need. Always using the new technologies that's available. We talked 10 years ago, it was all about IoT, the Internet of Things. Then we talked about digitalization. Today it's all about AI. I think today it's all about using the best technologies that are available always and being the first company to deploy that new technology at the customer's site. That's what customers are looking for. Are you able to help me becoming more productive, being leaner, helping reduce my emissions, being cleaner? That is the objective. The technologies we use is a bit kind of, it's a second, it's not that important for the customers. What's the outcome? How do you help me? That is the ambition for us. We want to be perceived as the technology leader by our customers in the industries, always being the first movers. You will see also here today many good examples of how AI is applied within ABB, but more importantly at our customer's side, making the skill set and the know-how of ABB available at the fingertips at our customer's side so we make their life easier and better. That is our main goal. I think this is one good example of how, again, Shell, you heard it, but we could have many other examples and the feedback were very much. That is also why you see our investments in technology and being that technology leader together with also continued investment in our people and making that domain expertise available is key for our future success. You heard me talk now a lot about how we make sustainability part of our business, but it's again back to what I say here. It's about how we make our customers, helping them to become leaner and cleaner. This is an and equation. It's not an or. You don't have to choose. That's the nice thing about it. The whole part of decarbonization, which often comes up with electrification, is the better way to operate. It's lower CapEx and it's lower OpEx. That's why electrification business will be a long-term solution for industries. We see about the power of the future is all about electricity. Here just to show it, it's kind of three takeaways. It's that the electricity demand will outpace the energy consumption. Electricity will be the number one source that is growing. That goes across segments, talking about buildings, industries, or transportation. It is all over the world. It is not the U.S., Europe, or Asia, or China, India phenomenon. It is everywhere. That is kind of the whole backdrop of the energy equation. We need more energy and we talked today so much about energy expansion, making more energy and more electricity available now. Therefore we have to use all the tools in the toolbox to make that happen. That is what we can do as ABB, helping both on power generation, but also on the demand side, driving energy efficiency. You will see many examples here today about also not just using motors and drives for things to work well, but it also can work even better with better energy efficiency. Because being able to reduce driving energy efficiency will drive kind of reduce some of the energy expansion that we will face. On top of that, we have the energy transition, which when you look at the curve here on the lower part, you see that today the electricity coming from fossil-based power generation is the same as in 2019. The big kind of takeaway is that the energy transition has not even happened. All the additional energy we need comes from renewable sources. The underlying equation still, the energy transition globally has not even started. That is a further upside for the future. If you look at the one example, and we all talk about this today, the size of data centers. Jean-Pierre will share more about data centers in his electrification presentation. It's kind of from 2023 and up to 2023, we are looking at in seven years a quadrupling of the electricity used in data centers. In the past, we're talking about like a 200, that was a large data center. Now we're talking in the one to one and a half gigawatt data center, which means that you need a nuclear power plant in your backyard firing and giving electricity to this. That's kind of the enormous use of new power that is coming. Of course, also other industries are benefiting just from that ramp-up. If talking about in the mining sector, on the whole utility build-up, but also on the semiconductor side. If you look at this kind of from an overall perspective and looking at all markets, we're looking at from a 3% on the lower side and up to the 12 or double-digit growth on data centers, many of the faster growing markets. We are looking at this for over the cycle here, we're talking about from around 4-6.5% of growth in the market that we address as ABB. Kind of the whole takeaway of this, we are in really good markets. I believe we have the right setup as ABB today. With the ABB Way, we can do even better this way. I think we really have a right starting point to continue the journey of improvement, breaking new records and doing better than ever before. That momentum will continue in ABB. Therefore, what better than today we are here also looking at it, what should be the future ambition for us ABB. We have looked at both our growth and margin side because the 16-19% margin range that we had up to now, we are at the end of that journey. As ABB, we always say, what's the next step? How do we want to go forward? Starting with the growth side, we have kept over 5-7%. What I want to say there, that this is what we always said is over the cycle. This is not a midterm target. When we meet 10 years from now, you can hold me and the team accountable. We are committing to the 5-7% over a long cycle, not about what's about a few quarters or a couple of years. This is why I believe that the 5-7% is a good range for us at ABB. Then we're adding another 1-2% of acquired growth on top of that from bolt-ons and larger deals would come in addition. When looking at the profitability, there we have also now made a change on that when it comes to the business areas. Because I said earlier, what is world-class in our automation business is a different business model and a different setup than, for instance, in electrification. Therefore, when you see here also the electrification where we define the range from 22-26%, where I believe the world-class of 26% would be a comparable number when I look at the automation business on the 14-18%. Because of the business mix and the business model that we have, because automation is purchasing at market pricing from Motion and Electrification. I believe that is the right way to do it because then they need to create value by themselves in how they are pricing and how kind of the value they create for the customers on their side. I believe that's the right setup for us at ABB to do it, but it will also be a bit of different margin. Therefore, we need to recognize that when we do targets so that we also, for the people who work in these different businesses, will be again targets and an incentive plan we follow in the same direction. Motion, we have at 18-22 as what we define there, the upper end, which is what I believe is kind of the ambition over time is where we need to work to. On return on capital employed, we want to continue to be also here on a very high level as ABB. We have now increased that from 18% to about 20%. That also taking into account the acquisitions that we are planning to do in the time to come. That should also be taken into that picture. I believe ambitious targets and we have a strong commitment from myself, from the three business area presidents and the executive committee and the division leadership team that sits below here that these are ambitious, but a strong commitment targets from all the leadership team that this can be fully achieved in the time to come. I think with that, Timo, I'd like to invite you up to give a bit more color to some of the targets that I haven't talked about. Please. Thank you. Thank you, Morten. Good morning, good afternoon for everybody in the audience from my side as well. Now, Morten introduced the overall targets and we really think this is an ambitious and balanced set of targets. We have strong targets for growth and profitability and we aim to grow EPS faster than revenue. If we would operate at the higher end of these targets, that should also lead to a double-digit EPS growth. Let's see how it goes. On top of that, we have also best-in-class targets for return on capital employed and also for, let's call it, cash drop-through. I said ambitions, balanced set of targets, driving value creation. Now let's talk a little bit more about how we are looking to achieve these because we really think they are well achievable in the ABB Way operating model. Let's start with this higher target margin range. It's first good to remind that all our target setting happens through our bottom-up long-range planning process. Our leaders are really committed to these targets on group level, on business area level, on division level, and so forth. Now, if we kind of look at where we are at the moment and we take the last 12 months' margins and we take out robotics, we put corporate cost to 300 and also let's put, for this example, e-mobility to break even so we can compare. With that, you come to current margin level of about 19.3, 19.4, that kind of number. If you would take the business area midpoints and do weighted average on revenue, you come to a margin of about 20.3, 20.4. There is kind of like from where we are now, about 100 basis points upside to the midpoint and further maybe 160 or so to the high end. That's kind of like how we look at this overall situation. Equally important is that even on a down cycle, as Morten said, this is through cycle targets, we have no intention whatsoever to drop below 18. How are we making this happen? The strategic mandates play a really important role here. As Morten said, we are taking this to the business line level. There are about 75 business lines. Let's look at some examples on what has happened here in the past. When we look at the divisions which had growth mandates in 2023 and then we compare against the last 12 months, these divisions have grown about 2.6% faster than the other divisions. They have higher margin, so good for mix. When you look at the profitability mandates, it is a little bit more difficult because some of the divisions have moved around here. If you take 2023 and you look at the profitability improvement of the divisions which had profitability mandate at that time, they're up about 370 basis points comparing to the current last 12 months. Clearly the system for us is working. There are two things to further improve. It's actually quite interesting when we introduced the strategic mandates, it was kind of like everybody in the growth, good in growth, bad, not in growth. That we are really changing now because if you look at ABB's overall performance and supporting ABB's overall performance, it is actually equally good to be in profitability or growth supporting the total. That we have changed now, let's call it in an educational way, of course, led by Morten and the business area leaders. This is yielding results. I also think taking mandates to the 75 or so business lines will drive further optimization on this area. To one of my favorite topics, which we have been talking about some, whatever, six, seven years now, is this quality of revenue topic. We really have a balanced situation between short cycle and service and long cycle business, as you can see. We also now, after COVID, are in a situation where we have growth on both short cycle as well as long cycle orders. On the balance, I would say most importantly, even if the gross margin of the short cycle business orders has improved, the gross margin of the long cycle system and project business has improved even more. We expect it to continue to have lower earnings volatility coming from mix. Equally, you see that our backlog has actually normalized after COVID. We have kind of like same type of backlog on short cycle, long cycle service. When you look at the backlog gross margin, we actually have a really, really good development. It really shows that ABB's project and solutions business is really driving real value to our customers, which was also clear from Morten's examples from the customer side. I mean, improving backlog gross margin 12% in five to six years is not kind of like a small feat. It's quite an achievement in my book. It really is testament to driving a better quality of revenue. This really is coming from better pricing, better content, ABB content in our project business, and also really better focus on project management. I think this is really a fantastic job done by ABB teams on this area. On productivity, this is another one which we are sort of quite proud of. First of all, since we introduced ABB Way, we also had productivity on all our business leaders' targets. We do not believe this stuff actually kind of like happens automatically. In 2020, we introduced revenue productivity. Maybe even more importantly, in 2023, we introduced gross profit productivity. If we look at this since 2020, our revenue per head count has increased about 25%. Maybe even more importantly, since 2022, when we look at gross profit per head count, it has moved from about $90,000 to about $120,000. That is about 30% improvement in gross profit productivity in a bit over three years. I think that really is a testament to the efficiency of our operating model. This can, I think, come even better when we have better support from our systems landscape. You all see from our disclosures that we have been investing into these ABB Way transformation programs. This is basically wiring ABB HR systems and finance systems to the ABB Way operating model. We have done a lot of work, and our business areas have done a lot of work on making stuff better, for example, looking at this SKU by SKU gross margin development, that kind of stuff. That has required quite a bit of manual effort. Now, going forward from about early mid next year onwards, we will be having a system where basically every month at the press of a button, we will get the P&Ls of group, of business areas, of divisions, of business lines. That will make this work a lot easier. We will have a drill-down capability, as you can see on this analytics cloud, even to a transaction level data. We can really sort of automatically then slice and dice, for example, these gross margin components we have been talking about. We can also with this easily compare performance of businesses which have similar business models. Say somebody is performing really well, somebody is a little bit lacking behind. We can then check in the spirit of good leaders collaborate, what could be done better in the other place. I think this is going to be a really, really powerful set of tools for business performance management. As we are now coming kind of like to the end of these programs and we move from development mode to run mode, we are expecting that the difference, the delta between OP EBITA and EBITA will going forward be on this around sort of 100 basis points area because of course it has taken money to invest in this. On gross margin, I mean, Morten has spoken about this. I have spoken about this quite a bit. Our aspiration is really to be an over 40% gross margin company. This I think is a good level for an industrial tech company because it really shows that you are driving value to your customers. We have achieved this by mixed optimization through strategic mandates, quality of revenue in many ways, driving that concept, higher backlog, gross margin, focusing on gross profit productivity as we discussed, and also building these systematic data analytics tools, making sure we are really wired to drive ABB Way operating model in the best possible way. We firmly continue to think that we are going to stay above the 40% level going forward as well, which will then always allow us to invest where it matters, which basically is mainly R&D and CapEx. When we look at our R&D to revenue ratio, excluding robotics, at the moment about 4.1%. We are a little short of our 4.5-5% target level. We have sort of more investment to go. We also take into account on this figure the venture investment. This is kind of like externalized research for us because we all know that driving any kind of disruptive innovation inside a big company is really, really hard because you have these big labs and then these become kind of like pet projects and what have you, and they are difficult to sort of redirect. I've seen this in my history as well. It is kind of like difficult to see the business benefit. Somebody starts from scratch and kind of like runs past you. That is why we really think this is an integral part of this. We have actually two examples where we have sort of first invested and then bought the whole company. One is this Sevensense in robotics, another one actually where we invested in 2023 and bought the company this year is a company called Lumin in electrification smart buildings. We think that's important. We also really think about this investing where it matters. Just an example of that, this here is a little sort of pluggable MCB, miniature circuit breaker. Now our solution is such that you can just stick this in there and take it out and take Jean-Pierre's word for that. You do not need any adaptation layer. Basically, when you run the process, you do not have to do anything. Just a small example of investing where it matters. We are here at the Motion site now. We continue to be, to my understanding, the only company which really only with software platform can change a use case of a drive in the same power sort of voltage level. That of course gives us a huge scale advantage on our drive business. Just a couple of examples on this investing where it matters. We continue to believe that driving our embedded software strategy to drive customer value is really the right way to go for ABB. On CapEx, I mean, this is a fantastic new site. Of course, CapEx is also making our current stuff better. I think Jean-Pierre has some examples on that as well. Overall CapEx for us, maybe sort of after robotics, I think we can continue to drive this kind of growth well on sort of framework of about $800 million of CapEx also. A couple of words on the BA specific margins. I mean, Morten spoke quite a bit about this. We have been driving ABB Way operating model now for about five years. We think this is a good time to introduce these. Yeah, we spoke about this 22-26% for EL, 18-22% for Motion, and 14-18% for automation. I think the important point here is that all the business areas have upside on their margin ranges. I said already earlier for the group, there is also clear upside going towards the 22% margin. You will of course hear from the business area presidents later how they look to drive both growth and profitability to be operating at those higher margin levels. A couple of other favorite subjects here, cash and return on capital employed. I think we can be really proud of our consistent cash delivery. Now clearly this is driven a lot by improved operating performance. Also, we have changed our networking capital measure to trade networking capital so that these are really the components which our businesses can control. That was an important change. Another change we have done to drive better cash performance is that we changed our KPI, especially for the divisions, to 13-month rolling average improvement. That means that you cannot meet this figure if you do some kind of last quarter wonder, like ABB was quite famous for in 2018, 2019, all the cash came Q4, boom. Now you cannot do that. You have to work on this systematically throughout the year. This is really an important change. I think there actually is still more upside here because when we now take this to the business line level, we can even more focus kind of like to those areas where the networking capital improvement can be the biggest. Also with these new tools, we have, for example, defined something we call harmonized sales orders and purchase orders by data elements. We have better data quality. Already this year, actually, our days of sales outstanding has improved. It is a driver for this year's quite good cash performance. Knock on wood, let's see where we end up. I think we are on a good track here. We continue to drive good drop-through. That is why our new 95% conversion target is higher than, for example, one minus growth. We, of course, want to become more and more efficient on this all the time. Yep. On ROCE, we want to drive best in class return on capital employed. That is why this new 20% target is important. As Morten said, we are looking to meet this target also including inorganic growth, i.e., we have some room to stick Goodwill and PPA into this equation. We also measure return on operating assets, i.e., without Goodwill and PPA. Here we are at the moment at over 50% level. Really, really strong number. Of course, we continue to invest behind the organic growth as much as we can because the payback is really, really strong. Now I have gone through all the targets we put out today. I think it is a good time to hear from the new CFO what he thinks about the targets. Let's run a little message from Christian. Hi everybody. This is Christian joining from Zurich. I hope things are good in New Berlin. Regarding the new financial targets for ABB, I think they are a good reflection of how we challenge ourselves towards continuous improvements. They're realistic, they're bottoms-up driven, and they're supported by strong market fundamentals. I support these higher ambitions, and I look forward to working with our teams to deliver on them. With that, I turn it back to you, Morten, and to you, Timo. Okay. Looks like both the outgoing and incoming CFO are pretty well aligned on this stuff. We feel good about it. Just a couple of words about our capital allocation principles. I mean, you guys are familiar with this, but I think it's still worth repeating because these are really cornerstones of systematic long-term value creation for ABB. Of course, first we want to invest in organic growth because that gives the best risk return. With this 50% return on operating asset, that's kind of like a no-brainer to have there on top. Second, we want to continue to pay sustained growing dividend per share. As you can see after the power grids transaction, we had a fairly high payout ratio, which was actually planned by the model. I think since 2021, we have been systematically increasing dividend, and the payout ratio is now around the 50% of net income. Let's say that there is good room there as well. Third, we want to drive value-adding acquisitions. We continue to think that small to mid-size deals are really best value for the buyer. Of course, as Morten discussed, we do not rule out other kind of stuff as well if it's really driving good value for our shareholders. Finally, we do share buybacks. We think that our business performance will allow also going forward us to operate on all of these components in this capital allocation framework. Finally, to wrap this up, a couple of words on sort of forward-looking stuff. We really think that ABB Way operating model supports systematic business execution short, medium, and long term. This is a really important balance because of course it is all about long-term value creation. Kind of like if there is no good short term, there is kind of like no good long term either. You really have to drive all. Based on our financial framework and our capital allocation principles, we should be in a really good place to support double-digit TSR growth through cycle. Our EPS growth has been 17%, 22, 25 excluding divisional exits. Let's see if we get quite to those levels. Our organic revenue growth and also continued margin expansion in line with our new target framework should drive strong earnings performance and also good cash drop-through. It should really be, or we should be in a good place to drive further value creation for our shareholders. Maybe to finalize this, as this is kind of like most likely my last ever capital markets presentation, I want to thank everybody in the audience for your interest and support towards ABB. It's really been for me a fun and energizing ride. I'm sure it's going to be like that for my colleagues in the executive team, for my successor Christian, and also for other folks at ABB as well. Thank you. Okay. Now Q&A. I like it. Many hands in the air already. Love it. I hope I don't promise too much now, but microphone is on. No need to tap, no need to blow into it. You can just talk. Okay. Lucas and Beat will help with questions. We start over here with the number one, and then we have here as number two. Where's the camera? Don't worry about the camera. We're fine. Lucky positioning. Thank you. I wanted to ask firstly about large M&A, I think one of the key topics. Is there a pipeline for that? Will such deals be subject to those 20 KPIs that you mentioned? I have another one after. Yeah. No, thanks. First of all, we're building a pipeline of M&A both from small, mid, and larger targets. That's kind of the, so there is everything included. Yes, we are using also the framework when we're looking at, because it has to be value creative for ABB, as Tim also underlined in his presentation. That's kind of how we look at it. We are not desperate to make any big deals. That's kind of, we are looking at if these are good opportunities and we really believe that we could get the right synergies and the right setup, yes, we are able to do it. I just maybe also to highlight when we talk about big deals, the largest deal ABB ever made was Baldor Alliance Motor Business for $4.3 billion. Thomas and Betts was $3.9 billion, GIS $2.6 billion. Just to give you, that's the three biggest deals we have made as ABB. I see a lot of kind of big numbers flying around, but I think we should also put that in perspective. We are confident to making those or bigger deals than that, but that kind of sets more the framework. If I may ask a second one, probably more to Timo, to both of you, that change in attitude or approach towards profitability versus growth mandate and saying that it's not necessarily growth good, everything else bad. Could you just explain that a little bit more, what you talked about, that both can be creative to the final outcome and how does that translate into actually change to day-to-day operations and how those businesses prioritize what they do? Yeah, maybe if I kind of like throw a couple of words here. I think this is really, really important because we have margins, divisional margins, which can be sort of, I don't know, low double digit to clearly over 20%, like way, way up there. Of course, you can't necessarily expect that somebody who is on those kind of, let's say, lower double digit levels will suddenly get to group average. That is why we have created this framework where we take into account both the capital intensity of the business. If it is very low, then you can drive a little bit lower margin. If it is very high, then of course you should be on higher margin as well. In that way, it is totally okay to continue to improve profitability as part of the overall mix setup for ABB. That is why we really want to give message also to our business leaders that having a profitability mandate for a longer time is totally okay to support ABB's overall performance. That is really the thing. Maybe that gives you a bit of insight in the house, so to say, of how we do this. Every year we have a president seminar where we have our operating division presidents in the same room. There is a small, it's one of the elements we're looking at. We do a scoring from last year. That means if you had a growth mandate, did you grow? We gave a little green, yellow, and red marking on performance. The whole point is that if you are in profitability and you are improving profitability, you can still be green because you're adding value to the company. It's not like the growth people are the heroes in the corner and everybody else should be ashamed. You're all adding value to the company if you're delivering on your mandate. That's kind of how we use it in practice. Thank you. Daniela, thank you. Two questions as well. First, on the free cash flow target on moving to 95, and I think you say because of stronger growth, but you did not upgrade the growth and you are not doing more CapEx as a percentage of sales. I guess you are doing better on the working capital. Can you elaborate, like, what else are we there? Yeah, that's why it is not the range, it is higher than. I said already, I think two years ago in my presentation that the toughest target for us of those five would have been cash conversion at about 100 if we kind of improve our growth performance, and that we have done. Let's say, of course, our aspiration is to get closer to the higher end of these ranges. In that situation, kind of having that approximately 100 is just like not through cycle a target, which is sort of overall maybe achievable. We always try to do better than let's call this one minus growth. We really want to drive really, really good cash drop through all the time. Thank you. I guess you had a very interesting chart on revenue per employee and then the gross profits, and you mentioned a 25% increase versus pandemic. Can you help us understand within that how much was the cumulative net pricing you got that helped on that equation versus the really underlying changes in the business? Do you want me to? I can start and maybe. Yeah, I think this is like a really important point because that is exactly why we changed the gross profit productivity because we were kind of like saying, wow, you know there is so much revenue coming from inflation, maybe somebody will get a free ride. We don't like that. We looked at different options on how to measure productivity. We came into, okay, the inflation is both sides of gross profit. It's also kind of like on the input cost and it's of course on our pricing. We think that this new measure where we actually have improved even more is really a better measure for ABB because it drives focus on really invest where it matters, drives better gross margin. On that measure, we actually, as I said, we have improved like from $90,000 to $120,000 and about sort of 30% improvement. Of course, it can't continue forever like that. I mean, but it's really, really, I think a good measure. That's exactly why we changed it. In the new measure, there is like no special component, which is just coming from inflation. Thank you. We have one, we go to Martin here first. There was someone else. Yes, Joe down there, please, Lucas. Thank you. It's Martin from Citi. The question is on the 5-7% growth target. Since last time we had the investor day, you've got more business units in the growth mandate than you had before, but you've kept that target unchanged. You did mention that's a long-term target, but just in terms of how we think about the next few years, arguably the end markets are stronger than they were last time around, particularly in electrification, more business units in their growth mode. When we think about the time scale, how do we think about that five to seven over the next sort of two or three years? No, what we said is that the five to seven, I said that already, it is more 10 years from now. That's what you should hold us accountable for. It's the five to seven range over a longer period. We do not give like a two to three or three to five or all these different. That's a long-term ambition with the market exposure we have today. There I think you will see that there are business areas that will be above also the five to seven. There might be some years and there might be some below. That is why we say that this is over the cycle on a longer horizon. I think that is the, if you look at the numbers back from 2019, that is what we have been able to do at six. Of course, there is still then some room up to the seven that we argued, but that is kind of where we are. Thanks. As a follow-up, when the business units are in a growth mandate or in a fast-growing market, they could also get almost like a free ride from being in a very good market at that particular point in time. How do you make sure that they gain their fair share or more of a growing market to make sure that ABB is at least in line with the peers or gaining market share? Yeah, I mean, we measure not only the financial performance of the BAs and the divisions, but also the market share gain or loss. That may also happen because I think that those you need to look at both. In the end, we measure success in dollars and not in market share. You have to, you should gain market share. You have to strengthen your market position, but in the end, it needs to come out as money and dollars in the end because that's kind of what when we create value for the company. That in the end will be the ultimate test to it. Maybe to complement this here, so clearly we can have divisions which have higher growth target than seven. Absolutely. Of course, they have to be best in class. That is the whole idea of our portfolio matrix on the other axis. We measure if you are best in class in growth, profitability, and return on capital. That is how we sort of evaluate. Kind of like that we have this range for the group does not mean that we cannot have businesses inside ABB which have clearly higher targets. There is no ceiling. I think, I mean, and also there are areas here, like we talk about this stability mode. There is, we say you are not allowed to grow. You need to get your act together and fix your kind of clean your own house. That means, of course, that the other team members of the other divisions need to grow more to compensate because five to seven is for the whole company. There are clearly others who need to be at times to double digit in the market what we have now. Thank you. Joe, please. Thanks. I just wanted to talk about the interplay of some of these targets related to M&A. You are narrowing the focus of the company a little bit into areas, at least for now, are high multiple, expensive acquisitions. Like, are you willing to acquire something that might hurt your ability to hit some of these profitability targets, but might be a higher return based on what you pay? How do you think about the interplay of those two things? I think, again, they are back to the value creation opportunity we have in front of us. Would I do another GIS? Yes. I think it is one of the best acquisitions ABB ever made. It was highly dilutive at the time, but we've been able to bring it up to a level today that has shown kind of the value of the whole electrification business. Similar targets, yes, we would do again, which would hurt us, you could say, short-term where there will be dilutive to margin, but there will be in maybe three, four years getting back to the, in three years we'll get it back to the level that we have today. Yes, I would be ready to do that. As long as we have kind of strong confidence that we can bring it up to the same level and that you get it, of course, at a price that you see that we, because we are the one who have to do all the work and therefore we should also keep most of the value creation and not give that away t o the seller. Okay. It's a little bit hard to see. We have George here as number one, and then there was someone else here. Brandon. You try, Brandon. Lucas. Thank you. It's Brandon, George Featherstone from Barclays. Just coming back on M&A a little bit and just to talk a bit about data centers. A few of your peers have made a lot of progress on acquisitions into areas like liquid cooling and more in the white space. Is this a focus area for you to capitalize on the opportunity of their market? Yeah, we're looking at the whole, I mean, data center is a fast-growing area. You saw that already. Jean-Pierre will talk more about it. It is clearly a great interest. It's where we allocate a lot of our organic investment. You can see that, for instance, with the medium voltage UPS system, which I think is a fantastic story, how we bring completely new and innovative technology to the market. We're looking at that, for instance, with the technology collaboration we do with NVIDIA when it comes to the 800-volt DC infrastructure. We're not excluding also to do M&A. I mean, we're happy to look at M&A in this field, but we're back to the same thing that we need to be a strong value creation opportunity for ABB. We do not want to kind of pay out completely, let's say, outrageous prices to be there. I think that's a bit of, it's the approach we have taken or more kind of we need to be convinced about also the long-term value creation of this and not just jump on a bandwagon. That's just a bit kind of my feeling on it. Okay, thanks. One more question just on e-mobility. It's obviously quite a bit of a drag to you guys today. Can we have a bit of an update on the plan there in terms of is it an asset that will stay with you and when should we get break even? We are looking now at the, we're targeting getting kind of the losses out, which will be a focus again for 2026. I think our original plan remains, which, but there we would be more into, it will not happen in 2026 and doing the IPO. That is still the end result, the end target for our e-mobility business. First is about getting, running the business well and getting it at least to a break even level. That is ongoing. Then it's about also the markets, the e-mobility, the charging market need to be ready. I think here in the United States and North America, it's better at the moment. Europe has kind of been very slow. When the market is ready, we will also proceed with the original plan. Thank you. Okay. Yes, fire away. Morning, it's Ben from OxCap. My question is just about the divisional growth. I'm sure we'll get onto it in the divisional sessions, but qualitatively, how do you think about the 5-7% between those different divisions? The reason why I ask is obviously some of your peers are seeing outsized growth in electrification, energy management, whatever we want to call it, and then basically subpar growth, for want of a better word, in the other areas. In terms of your targets and how you're thinking about it, how should the three divisions compare? Yeah, I mean, there will be different growth rates between electrification, motion, and automation. That's clear because as we see, they are exposed to a lot of the electrification trends, but I mean, there is some market volatility which also reflects, I mean, just looking at our Q3 numbers where we had very strong growth rate in electrification and not as strong in some of the others. This is why we say this is over the cycle. Therefore, to get to that average of 5-7, they all need to perform in the markets where they operate. I will have here more about the growth rates or from Jean-Pierre, Peter, and Brandon in their sessions about how they kind of see the market from their side. Understood. Thank you. One more, which was for Timo. In your presentation, you made an interesting comment about, I don't know how it was uncool at one point to be profitability and then it's cool to be growth. What do you kind of mean by that? Is there any difference in the actual incentivization between profitability and growth? I.e., do I get paid more to be growthy? You don't get paid more, but you get paid on different KPIs. That's how it works. It was kind of like what Morten said. If you are stability, you will not have a growth no matter what. If you are profitability, you could have a little bit of growth, but your main targets will be improving margin, driving good cash, and productivity. You might have zero growth. You could have a little bit. If you are in growth, of course, your targets will be like, I do not know, 40% growth. The rest is like the other KPIs. There is a big difference on this. In our system, just a reminder, we do not have like that much common targets. We have 20% one level up target. Already, if you take a division president, for example, in Motion business, that person will have 20% common target from Motion level, nothing from Group, and 80% is the division own targets. We really believe on this kind of accountability model. That, of course, means that divisional results can vary quite a bit come year, and that is fine. Thank you. Okay. We have two here, I think. We go Magnus one, and then we have Jonathan behind. Thank you. Magnus here from Nordea. First of all, could I ask you, when the prior margin target was set 16-19, there was not a kind of underlying expectation that we will track towards the upper end of that range within a few years. How should we think about this new margin target within that context? I would, I mean, we are setting target because we want to reach them. That is the, but we would need some time. I think we needed a few years to get to the 16-19, and we need a few years also to get to the upper end of, but that, of course, is the ambition now. As I said in my presentation, this is not dreams. These are bottom-up commitment in our own planning with each division. We add this together. This is what we are very confident about telling also here today because we set targets and then we deliver on them. We will need a few years. Got it. Thank you. A second one. I think you moved from about 55% growth mandates four years ago or so to, was it 80% now or close to? What would the steady state be there between growth and profitability like over time? Obviously, it will vary from year to year, but what's realistic to reach? Did you get? Yeah, if I just start on this one. We do not kind of like look at it that we have a target. That is exactly the point on this. Profitability is good, growth is good kind of thing. It can vary, sort of, but I think maybe if we would be sort of on this sort of 70-80 type of area, that would be a good area. Yeah. I don't think we will ever be in the 100% on stability, profitability, and 100% on growth. There will, because you also have to remember we have raised the target to be on, because being in a 2020, you could be in a growth where if you stand still, you would now be in profitability or even a stability. Because we raised the bar all the time. That is also too, because I always say nobody should be below average. That's a bit the, of course, the challenging part, but that's what happened when you move the average, everybody has to move up. Yeah. Okay. Thank you. We finish off this Q&A session with Jonathan. Thank you. Yes, it's Jonathan Mounsey from BNP Paribas. Just going back to when you were answering George's question about e-mobility, we've got new targets today for margins. I remember the almost IPO of 2022 for e-mobility. I think the targets it had then, I know at the moment the job is to get it to break even, but back then its targets were quite a long way below what the group's are today. You said the plan is to IPO it, not next year, maybe 2027, who knows. Back then, I think you were going to IPO it and continue to consolidate. With probably the potential for profitability in that business, are we saying that the plan now is to IPO it and say goodbye to it? I think the plan was always to IPO and reduce over time the ABB holdings with stake in it. That was always the plan, and that plan hasn't changed. That's still what we're planning to do. Let's just say when the business and the market is ready for it. Okay. As a follow-up, today, obviously you've mentioned a commitment to consider buybacks. You said the money won't be burning a hole in your pocket, but you will get quite a bit of cash in from robotics and the pipeline is building for M&A. If we get to that disposal and the cash comes in and you haven't bought anything, is there a kind of commitment to start buying back more stock? Are we going to build a kind of war chest here in anticipation of potential M&A? I think we need to deal with that topic when we get there. I mean, there is still quite a bit of time before the money comes in. As we said, we will continue to systematically operate within the capital allocation principles and that framework. Let's see how it goes. Maybe the final one, we're not going to waste the money. That's our commitment here from states. We make good use of it and the best use of it. That's kind of what we have to do and we'll want to do. Okay. With that said, we take a little of a breather. Coffee and refreshments are available in the where you had breakfast, and we'll meet back here at quarter to 11. Welcome back. Feeling fresh? Ready for the next business area, automation, formerly known as process automation. I'd like you to welcome up on stage Peter. Thank you, Anzi, and good morning. Let me start our session on automation with a quick reflection of where we're coming from as process automation. We're a $7 billion business, and for those of you who've been in 2022 Helsinki, 2023 Frosinone in the capital markets days, you recognize, we've also reached and passed our strategic ambitions that we phrased last time. That's one of the factors here, and Morten mentioned it already. We're an important conduit, and I'll talk more about it in this presentation. Also for electrification and motion, we benefit from them, they benefit from us. That is also one of the factors that allows us to actually have the trade networking capital that you see here, so lean, which helps us excel on the return on capital employed KPI that stands strong. In terms of content, that's of course all based on what we're doing for customers. We have a leading position in process control and in a number of industry specialties, largest of them being marine electrical propulsion, where we're really strong, but also, for instance, process analytical. If you saw the drone in the image video earlier, it's actually a real thing. This drone is sniffing methane, and that's both from a sustainability perspective quite important because it's a potent greenhouse gas, but also from a safety perspective. If you have methane concentrations, those could lead to explosions. People producing oil, producing gas, but also in city gas networks actually use our analyzers, sometimes deployed on drones, sometimes on cars, sometimes stationary, together with our digital solutions to pinpoint leakages. Just wanted to highlight that not all our analyzers are flying around, but also this is not just pure fiction, but it's actually what we do for a living. There is a lot of further industry-specific anchors, and we call them anchors because they anchor ABB first in mind when you're thinking about, for instance, doing a new mine, a new paper mill, an offshore rig, a marine vessel. We've got the equipment that you really want to think about first because it's performance critical, it's differentiating, and that helps us start the conversation of what else we can do for you in terms of the electrical, in terms of the motion content of the solutions we provide. We do that with 87% direct sales, so we have a great degree of customer intimacy that is very important for us. We do that in a sales after service, service after sales kind of way. We are convincing with customers at the capital projects phase when it comes to cost, schedule, and risk being the main criteria. Then also, as these assets that we help build get used over decades of life cycle, we basically help them manage those for safety, productivity, and sustainability. Still, as process automation, I've had a pretty decent run in recent years. We're looking back at 20 straight quarters of positive book to bill, of more orders than revenues in each of the last 20 quarters. That's provided us to quite a level of order backlog and definitely without compromising margin because the margin is also up by more than 500 basis points since 2020. We look at that as a good starting point. Also, when you have volatilities, when you have different cycles in the different industries that we serve, that provides us with resilience. Short of being able to make really accurate forecasts, which, I think in volatile and uncertain times, not so easy, actually having a backlog provides resilience and gives confidence in where you're going. Now, we have called this session automation, and Morten already talked about that bringing process automation and machine automation together, we call the whole thing automation. I'm excited about it. Machine automation is really a high technology, strong in customer and industry and domain knowledge, just like process automation actually. They are really very well differentiated through their competence, through their engineering. It's a niche business, but it's a niche business that brings opportunities to process automation where we will be able to tap into certain technology synergies. At the same time, some of the things we are strong in in process automation will, and I'm convinced of that, also help the machine automation business. Beyond that, and I think that's further out on the horizon in the hybrid industries, if you really think the strengths that we have on the process side in industries like, for instance, the pharmaceutical industries or parts of the food and bev, together with the secondary that they bring more on the machine level, I think if you look at long-term trends like personalized medicine, personalized nutrition, I really think there's opportunities there, but they're not for this strategic period. They're rather for us to lay the foundations now. If we do the translation from process automation to automation as the combination of process automation and machine automation, you have the numbers here. We're looking at a $7.8 billion business in terms of revenues. The margin was where machine automation right now is a little diluted, but we're still looking at $1.1 billion annual profit here. On the networking capital side, we clearly have room to apply some of the recipes we've successfully applied in process automation also more strongly in machine automation, so that the 22% return on capital employed that you see there right now can basically make their way back towards the 30%. I mean, we've been performing at more than 30% ROCE. I think that will not happen so quickly. This will take time, but clearly we also don't just want to sit where we are right now. Now, as automation, what are we actually doing for customers? This is independent of what we've been calling process automation, which also, in fairness, if you think of container ports in the marine and ports, call that process, call that discrete. I mean, we do automation across a broad range of industries that we serve, but basically automation is always about closing feedback control loops. Like, you're sensing a condition, you're taking algorithmic decisions in controllers, you're then acting, through, for instance, the motors and the drives that, when we're talking here in a motion facility, through switching electrical equipment so that you're taking action on this process or machine that you want to control. Where we are really feeling unrivaled is the integration of process and power from an automation point of view, that you control process and power under a single pane of glass and really, really quickly. That's of growing importance to the industries that we serve. Why is that so? If you think of a growing share of renewables in the grid, then basically that comes with a certain amount of intermittency. At the same time, when I studied electrical engineering, admittedly a few years ago, you wanted stable base load power for reliable industrial production, but that's not the reality of the electricity supply today. Our quite differentiated competence is to combine the control of process and the control of power so that basically within milliseconds, so very, very quickly, you can decide, let's focus the electricity on keeping that compressor running while, for instance, shutting down this heater really, really fast because it doesn't actually matter to the process. If it goes down for five, ten minutes, there's enough thermal capacity here that the process can continue to run. That's one of the areas in which we differentiate really well. Another that we look at as a strength is really from the process unit and in the future the machine through basically the plant all the way up to the cloud. We're also having a strong integration between our automation and our digital offering. All of that serving the interests of our customers to drive safety, productivity, and sustainability or to help our customers be leaner and cleaner, as we say these days in ABB. For those of you who've not been so exposed to automation, it's really the backbone, the nervous system, and the brain of industrial operations, and reliability is super important. We're talking about 99.9999% availability here, so you're way beyond what you would normally get out of normal computers or service level agreements out of the cloud. This is really high criticality equipment. If you think of the consequences of a shutdown, be that on an offshore rig, in a refinery, or in many of the other processes that we're serving, basically immediately you have to deal with a complicated situation where your revenue stops, you're not producing, and you have to take care of, for instance, material that's building up. If you're in a petrochemical plant and it goes down, you have to actually put a lot of your product to the flares. It takes you often a day until you're back to full production. The reliability, the dependability of these technologies is really essential and our customers value that both from a safety and a sustainability and a productivity perspective. Now, how we're organized is we're organized in five divisions, each of them fully accountable for their profit and loss at the same time, of course, working together with each other and working together with our sister divisions in Motion and Electrification, like we heard from Morten already. What we do there is in three of them, we're basically organized by industry verticals. In Energy Industries, we have both the conventional hydrocarbon kind of industries, we have renewables, we also have power and water there, and Process Industries, mining, metals, minerals, paper, those kind of industries. Marine and Ports is quite self-descriptive, whereas Measurement and Analytics is basically a technology offering across. Also, if you look where those machine automation solutions are deployed, it's actually across a range of industries. That's how you can picture that. We've also indicated the strategic mandates here for you. You can see we have profitability mandates in energy and in process industries. If you look at them, they've both actually grown quite a bit also over the years. We've always said before we take projects that basically dilute our margin, and we compromise on the risk-reward curve, we rather want to stay selective. Either we're really adding value and customers are willing to pay for that also, or we're not actually able to add sufficient value. We will also say no to a bid. That selectivity remains in place. We've upped both the margin and the volumes in both. We've kind of straddled near the edge of that. Underneath energy, underneath process, there's different business lines that then have, some of them gross mandates, others, more profitability mandates. Marine and ports have really been on a super strong growth journey as of lately. We've really had a lot of orders in this field. It's a cyclical business. It's a very long cycle business also. Some of the orders we've been booking lately, they will only be delivered three, four, even five years out. It's good to have the resilience of an order backlog here also. And the measurement and analytics, a growth mandate. I mentioned the process analyzer, leading position that we have, for instance. Clearly we have great technology there and we're certainly aiming higher with that. Machine automation as the newest addition to automation now, that one is clearly on a stability mandate. It's seen quite some shocks from the markets it's serving, from the supply chain. I think we want to put that back together and really bring it to its full potential. For the time being, we're on a stability mandate there. If you look at them, we share certain capabilities across them, not in a way to dilute the full P&L responsibility of each division, but more in the sense of competence pools. We're commonly using R&D and engineering capabilities, operations centers in just pooled location where everybody still has control over their part, but we have the same processes. We have some of the same locations, and the same is true for digitalization at a megatrend level, and not all synchronous in terms of their cycles. You see the big trends for us. Energy growth and transformation is clearly big for us. Security of supply, both on the energy side, but also the critical raw materials, is essential. Process electrification, as a way of bringing to those material and energy intensive industries that we serve, more renewables, as process electrification is a conduit there for renewables, for decarbonization. And then, of course, digitalization and AI is a big driver for us. Across all of that, how do we win? You have the wheel here, and we heard it from Morten also earlier. Technology leadership and domain competence, for us, really two main drivers for that. Then we are basically able to integrate automation, electrical, and digital elements into solutions for our customers, with an ability to execute anywhere in the world. We have a local presence, we have a global reach, and we are able to serve that over a long life cycle. Sales after service, service after sales, to help our customers outrun, leaner and cleaner. That's our recipe for success. We've been at this for quite some time. If we want to look at specific examples, and we saw the left-hand side of this chart also already, then very often I mentioned automation often gets decided early and at senior levels. Industry anchor products that we have for the different industries that we serve, like the Mine Hoist or the Gillis Mill Drive, the pulp and paper quality scanners, the ARTZIPALT propulsion in marine. Those are the things that really get you in the conversation early and that allow us to then say, in order to really do the best solution, let's bring in these drives, these motors and generators. Let's bring in this differentiated switchgear, for instance, maybe on a marine vessel. What are the advantages of going to direct current, to DC, where the colleagues in Electrification have great technology? We often win together. We're sometimes first through the door, especially with industrial customers. Then we check, is this a solution that the customer is looking to procure in an integrated way and have service in an integrated way? Or is it more we make an introduction and people actually want to buy separate lots? You have to be selling the way customers want to buy. That's clearly our mantra here, but it's a great collaboration and it helps us in Process Automation. The credibility that comes with the ABB name and the strengths of our electrification, the strengths of our motion businesses also helps us with credibility because customers also know we have a competence to integrate these things, will be interoperable, and will be coming together for solutions that will then also be supported over long life cycles. I think it's a strength that plays both ways for ABB. Specific examples here in the US ongoing, Rio Grande, LNG. We really have the automation, the electrical, the digital scope. We have the motors that drive, we've got the switchgear, we've got 800XA on the process automation side and digital solutions on top of that. It's really quite comprehensive. If you look, on the second example shown here, Northern Lights, first commercial location where you can actually bring your CO2 in order to have that sequestered. We're basically here again, with the motion, the electrification and the automation content as part of an integrated solution, and then providing the services along. Quite proud of that. Also, actually the first commercial CO2 tanker for that purpose is actually also equipped with our technology. There's real opportunity in this integration. Not everywhere, but there is. We're very happy to take this business. If you look from a strategy point of view, our strategy is fairly simple. It's about strengthening the core. It's digital and AI and it's energy and sustainability plus some inorganic across. That's a strategy we've had at process automation. It's served us really well also in not only meeting but beating the ambitious targets we had set at previous capital market days. We'll stay with the structure of this strategy. Obviously, some of the individual items will keep evolving. You can see on the left-hand side in gray and then black where we were able to get to with executing just the strategy. The restatement, with the addition of machine automation, what you see in red here, that's where we now start from as automation. We see more potential to unlock further value. If you look in terms of strengthening the core, what do we mean by that? We, of course, mean being systematic with the mandates at the level of each business line, so that we strengthen it from a numerical perspective, if you want to look at it this way. Also, in terms of content, we continue to invest in our leading technologies. We continue to drive our service value proposition, our market penetration of our own installed base, and then also beyond our own installed base in digital and AI. Clearly, automation has like a blurry top if you want to look at it this way. Above automation, there is clearly a growing space for digital solutions. As presented in previous capital market days, we have decided to go about that largely organically, but with some bolt-ons. In the energy and sustainability space, there is always movement between the three corners of the so-called energy trilemma, because between the security of supply, the sustainability, the affordability, there is constant movement. There is movement as a function of where you are in the world of industry, but clearly, a lot of things for us to do. Let's have a quick look one by one. In terms of leading with technology, one of my challenges is always how do I depict software, because 80% of our R&D teams are actually working on software, both embedded as well as automation software and then digital solutions. So that's kind of, in some sense, pictured on the left-hand side with automation extended, easier to picture and always quite impressive for those of you who were in Helsinki 2022 Capital Markets Day, in the ARTZIPALT factory. I mean, these are electro, electric hybrid solutions. And for those of you who haven't seen them, they're quite large. Basically what they do is they help a marine vessel, especially those that have dynamic load and maneuvering schedules, save something like 15% of the fuel bill simply by taking the big diesel engines to generate electricity and decoupling the RPMs of that diesel engine from the RPMs at the propeller. That is an example and a prominent one of an industry anchor product. We have many more. We have launched Dynafine as an innovative propulsion concept. We continue to invest on the analyzer side. This gas chromatograph, that is pictured here, for instance, is able to pick up a single molecule in a million. It is doing PPM, parts per million, level accuracy while at the same time coming with built-in cybersecurity, coming with Wi-Fi also. It's pushing the boundaries here and on the machine automation side, some really fascinating things, with mechatronics in the development and productization pipeline. On strengthening the core, I mentioned service as the other one. Here you have some numbers how we've actually not only grown on the project and new business side, but also grown on supporting our customers' installed base. Once you've made this initial investment and you're operating those assets over decades of life cycle, then basically keeping them up to date, modernizing, extending, future-proofing them, including from a cybersecurity perspective. All of these are important, and that's why this sales after service, service after sales model is so crucial for us. If we support your installation really well, you will also consider us for your next project, and if we win that next project, there's an installed base to be supported. It's really a virtuous cycle that we're benefiting from. We see significant further potential as this large installed base continues to both grow, but also the older parts age and need modernization. On digital and AI, on a high level, this is basically about the journey towards autonomous operations. When you look on the left-hand side there, it's a real picture from our archives, one of our customers in Sweden in 1890. You can see probably a dozen, two dozen signals that this operator is handling. In the 1980s, they started having color screens, pretty small screens, quite a lot of people still. In the collaborative operations, which is roughly where we are today with technologies on average, that's where you actually collaborate between different functions in the customer's enterprise. For instance, between driving operational performance and looking at maintenance, looking at managing the asset, working across different locations potentially also. We're talking about this trend towards autonomous operations, which doesn't necessarily mean total lights out, factory sort of production as the Japanese were envisioning in the 1980s. It does mean a lot fewer people in difficult, dangerous, hard-to-access areas. If we look at specific examples, we find them on the right-hand side here, the upper one, for instance. When you have mines that are above 4,000 meters in the Andes, it's some pretty harsh environmental conditions there. You won't find a lot of people who want to work there. If you have technology that will allow you to actually put some of your key operations people quite far away from the action, but relying on technology and far fewer colleagues who are locally on the ground, that gives you safety, it gives you productivity, it also gives you better sustainability. On a smaller level, not here on the slide, that's also if you would go into a container port today, basically there's not the crane driver cabins anymore where every crane has a crane driver who's sitting up there in scorching heat or cold, and with the vibration, 50 meters above ground with all the challenges that brings if you need a break. It's basically jobs that have been concentrated to control rooms where technology and people work together to move those containers around the yard, where more than one crane can be operated by an operator while at the same time actually making these jobs much more broadly accessible to people because suddenly you have them in much more human-friendly environments. That's just a few of these examples. Also, we're quite pleased to see that our ABB, Janix Industrial IT and AI suite is receiving also good external distinction and recognition from Gartner, from Redantics, and others lately. Finally, energy and sustainability. It's really the energy expansion and the energy transformation that are happening at the same time. The world clearly has a hunger for energy. It is interesting to see that even in our conversations, for instance, with producers of hydrocarbons, of oil and gas, people are increasingly concerned about how do we produce that barrel or that cubic foot of output from the oil or gas field with actually lower emissions. There is that side. At the same time, in many of the processes that we serve, there is electricity brought in as a conduit for renewables, as a conduit for carbon, for decarbonization. You see that symbolized in the pictures here. Some of the very material and energy-intensive industries use electricity. That is also why electricity is growing faster as part of the solution than the overall energy demand is expected to grow. Finally, the inorganic side, we are actively building pipeline, but we are also executing on some of it. There's the industrial software and AI piece I talked about earlier in this one. Actually, middle of last year, we closed the acquisition of the weather-based routing business from DTN, that today is part of our marine business, on the digital solutions for the Voyage solution suite that we have there. We got Voyage and vessel kind of services. One is more process performance, the other is asset performance in generic terms. That's going ahead really well. That's in this category. We are generally looking at decarbonization of hard-to-abate industries, that goes well with our themes of anchor products. We're always scouting the market for what's next in this area, be it through more venture participation, but also outright acquisition if we see the right target. Advanced sensing, we did two actually last year. We acquired Dr. Group as a continuous emissions monitoring technology on the process analyzer side, but also water analyzers. Dr. Födisch in Germany and Realtek Water, actually a Canadian company, mainly a technology that we're adding to our portfolio to be sold through our existing sales force. Of course, we continue to develop that pipeline, be it on marine, be it for segment leadership in general. Let me wrap it up here. In terms of where we start from as automation, I think we've come a long way as process automation. We now have this opportunity to bring machine automation to its full potential. We stand on a stronger basis than we did maybe at the 2022 Capital Markets Day we did specifically for PA. Quite proud of the team that achieved that. With our 26,000 people, we have an easy-to-remember strategy. I talked about it a moment ago, strengthening our core, including the technology, including the digital aspects of it, the digital and AI basically as part of our journey towards autonomous operations and the energy expansion and energy transformation topics in energy and sustainability. On the growth and margin improvement side, we're basically at a point as automation, we're a point of growth and a point of margin, if you do evaluation, sort of contribute similarly to value. We're taking a balanced approach. You saw different divisions and underneath them, different business lines are, some on this mandate, some are on the other. Really pleased to see automation at the heart of ABB's purpose and contributing to it. The pictures that you see there, all those photos are actually the real thing. This is, things we're doing for a living. Over the cycle, we're looking at a 5% growth ambition. Over the cycle, we'll have years that will be above, some that will be below depending on the cycle goals. Again, here, resilience from a strong order backlog will for sure help us. We have the margin corridor of 14-18%. You saw that with machine automation initially. We're actually starting just below our corridor. We'll clearly have an ambition to work our way back into the corridor. Again, also driving capital efficiency and margin, an ambition to work our way towards the 30% ROSI again. That's all I have from my side. Thank you. Thank you, Peter. We're going to open up for Q&A for Peter. Here's your opportunity. We do the same procedure as last time. Hands up in the air. We start with Max. Yeah, we have two there actually next to each other. Thank you. I have Max from Morgan Stanley. I think we, when this was just a standalone division X machine automation, you know, I think we used to talk about this being quite a good margin at 15%. That was a good level. Yet you're kind of showing us two quite big pieces, which are still in kind of profitability improvement. Maybe if we were thinking in kind of old terms of where could that division go to, maybe just sort of what would we think about for process automation? And, you know, for those two big pieces, what are you really doing in them? Is it about selectivity of projects that you're taking? Is it about cost efficiency? Is it pushing price? Maybe help us understand those big two pieces where they're in profitability mode and what you're doing. Yeah, so we're talking about energy industries and process industries. Those are the two that are in profitability mode. Underneath that, there's clearly parts that are margin accretive, and that we will drive, with a strong focus more on the growth side. I mentioned service as an example. It's clearly important for our customers that we service them over a long life cycle, and we have further headroom in this area that we will continue to drive with a lot of focus. At the same time, when you look at greenfield projects around the world, you always have to ask yourself, okay, how is this something that still makes sense for us, also considering as ABB overall? Is this something where we do an integrated automation and electrical solution, including managing the cost, schedule, and risk consequences for the customer? Or is this something where the customer is really saying, look, if I buy this and that and that from ABB, all I want is a discount. That is another way of saying you do not see a value in integration. Please manage that risk yourself. It is not a project for us in automation. It can still be a great opportunity for electrification or motion colleagues as an example. This is the sort of selectivity I was talking about. You want the right content. You want the customer to see a value in integration. We do provide that value. If that is not your focus, of course, you can also buy the pieces individually. That's what is under the profitability mandates here. Okay, maybe just a very quick follow-up. I've always thought your division is one of the ones where you could also do larger M&A, you know, maybe in the sort of valves or actuator space. Do you see those as white spots? And would that be something you would be kind of interested in proposing, maybe sort of similar to what Emerson have done? I mean, you would always have to look at what position you could acquire for yourself. Would you be a small fish in a big pond, or would it rather be a big fish in a small pond? It's the second we'd rather be. I don't think we would want to copy the model of one of our competitors where they've established themselves very strongly, and, sort of come late to that party. We'd rather find our own party. Okay, please go ahead. Thank you very much. I have two, maybe three questions on the machine automation part of the business. Sorry, I'm here. Yeah, sorry. Yeah, it's very hard to see. The lights are quite blinding on the stage. Based on the numbers you provided, it seems that machine automation had EUR 600 million of orders last year, $800 million of revenues. It doesn't look like you're, you know, building up the backlog again. I guess my question is, when would you expect the business to grow again? That's question number one. Question number two is more on the M&A side, maybe a follow-up to Max's questions. I guess your business today is obviously skewed towards process. From a strategic perspective, on the M&A side, would it make more sense to double down on process, you know, invest more in your core or actually make acquisitions potentially on the discrete side, expanding your positions into, you know, machine builders, 3Cs, semis, you know, whatever. Yeah, okay. If I start with the machine automation question, and you mentioned the 600, roughly speaking, on orders and 800 million on revenues, there's been, in parts, order cancellations in that also. If you think of the bullwhip effect that traveled through the machinery OEMs, the component producers, supply chain, so both from the customers as well as the supplier side, that led to some sort of transient effects. My sense right now is we're probably at a point where this is starting to stabilize more, but then I've only taken this business on from October 1. That's an early and preliminary assessment. My sense is we're probably seeing stability in line with the mandate also from the market side, but perhaps not yet growth in specifically the machinery OEMs market, in the way we're serving them there. I think in the coming weeks, in close dialogue with our customers, we'll figure that out much more. On M&A, I showed you our five such fields that are authentically what we're looking for. I showed you the three deals we've been doing so far. I think more of that bolt-on type of deals would fit our logic here. Thank you very much. I'm going to stop you there. You have the opportunity to come back with questions to Peter at the end of the day. We're going to instead switch to a bit of electrification business area language. I'm going to say we break this Q&A and we switch to business area electrification. Before we welcome Jean-Pierre up on stage, we're going to get to see a little bit of action from what electrification can do as a business. To electrify the world, the challenge is clear. Industries need more power with less emissions. We are delivering solutions, supporting clean generation and resilient grids, powering the movement of people and goods, driving energy efficiency and productivity with precision, redefining how sustainability meets comfort where we live and work, scaling power to support more data, more density, more demand, because electrification makes it all possible. Good morning. Good morning to all of you. For sure, electrification makes it all possible, in particular, makes everything possible. You know, I started my career 30 years ago in ABB just after the graduation as an electrical engineer. I knew that it was an important industry, but I could not believe or imagine at all that electrification was becoming one of the most important and critical sectors in our era. Today, we are in the middle of a big revolution. We are in the revolution where hundreds of billion dollars are flowing inside of our business, inside the electrification business, because electricity is going to be the energy of the future. In particular, it's going to create the possibility to sort it out, one of the biggest challenges that our planet has, to create more power with lower emissions. Today, I would like to guide you through three major topics. The first one, how our market will grow, how our segment will grow in the future and for the next cycle. The second is related to how we were successful versus the last capital market day that we did, the capital that we did in Frosinone a couple of years ago. The third one, we will show you how we will continue to grow in sales and in profit margin. Let's start with the market. This is the segments that we are doing business in electrification. This picture is related to the revenues of 2024. Today, we will go through the three major sectors that represent about 70% of the total business of electrification. That is the building sector, the utility, and the data center. That is, of course, the most growing sector. Let's start with the building. Building for sure is the biggest sector where we do business. We are very strong in the building sector. We are doing more than one third of our sales. We do believe that in the next four or five years, the growth of this segment is going to be in the low single to low mid single digit, creating an additional $20 billion of additional market in 2030. You know, one of the big things that sometimes we underestimate is how the building sector is in transformation. Within 2050, the additional consumption of the building sector is going to be like 13,000 terawatt hours. What does it mean, 13,000 terawatt hours? It means twice time the entire consumption of the United States today. Just because there is going to be a conversion from the fossil fuel to the fuel electricity. Just because there will be more cooling in order to adapt to the climate change. Just because electricity is going to be the primary source for all the HVAC system inside of our building. We are very well positioned in this market, also because this market you win in this market if you have a great network of channel partners and distributors on a global scale. We have more than 12,000 of those. Ninety percent of the business through this segment is passing through distributors. On top of that, more consumption, more electricity consumption is going to happen in the building. Large building, large hotel chain that will focus more and more on automatize the electrical system to reduce the energy consumption. That is one of the clear examples that is reported there. For example, Sokos Hotel is a chain in the Nordic part of Europe where we enabled them to reduce by 50% their HVAC energy consumption connecting our ABB automation KNX system with their reservation system. The data has changed among their reservation system and the energy and the electrical system. Based as Todd was saying, it is like the space race. This is exactly what is going on. This is what is going on for the AI data center. We love technology. That's why also we're developing technologies that help our customers to succeed and to make it better. This is our focus for today and for the future. That's why developing new solutions and technology was enabling us to grow during the last 20 quarters in a row. We were growing the last 20 quarters in a row with an average CAGR of 8% since 2019. In the meantime, we were able to grow substantially our profit margin, reaching more than 23%. That is higher than the target that we were setting during the capital market day two years ago. How we did it? I think that the most important part for any kind of business is always the people. We do not talk so much about the people. I think we have a great team of people. We have a great team of professionals that know what they are talking about and they know the technology. That's all that's important. If you combine a great team with one of the best operating systems, that is the ABB Way, where you try to embed the culture of empowerment, accountability, ownership at the divisional level, at the business line level, and we aim to do it at any level inside the organization closer to the market, you have great results. There are always the recipes to do great business. On top of that, of course, this thing was creating one important fact. Four out of five divisions that were growing profit margin during the last couple of years. On top of that, we were able to make and manage between divestments, investments inorganically, and in investing more than $2.5 billion in research and development during the last five years, we managed in a very, very good way our business portfolio. That has enabled us to grow in a great way, also in terms of profit margin. Another big thing is that we were able to do it. It was that two of the divisions, like Distribution Solutions and the Installation Product that we were talking during the last Capital Market Day, they were growing in a tremendous way during the last two, three years. U.S. turnaround. You remember we were talking about in Frosinone about that U.S. need to improve. This is what was done. We walked the talk. We improved substantially. There's still significant room for improvements, but a lot of improvements were done in US in profit margin, but also in market position. We grew substantially also in many product lines here in the United States from the market standpoint. Local for local strategy. That was our long-term strategy and is there, was always there, and we will continue to aim to invest in order to reach 90% of what we sell in every region need to produce inside this region. There was a strategy that we have since many years, and in particular this year, it was helping us also to get out or to guide us among the tariff and the trade risks. This is what we did. Now looking forward, let's see, because the best is yet to come, we do believe. The best yet to come, and we will work now for the next cycle on the four areas that are reported on the screen. The first one is related to the continuous improvement with the U.S. focus again. The second one is related to continue to invest and keeping our leadership position in the market that we serve. The third one is related to the big investment in innovation for the future technology. Remember what I said at the beginning? We are in the middle of a revolution. We need to invest much, much more than in the past on the innovation to create the future technology. The fourth one, we will have much more focus also in the M&A and the inorganic grow. Let's go one by one. U.S., U.S. is our largest market. It's where we're growing the most and where we, in particular, during the last two, three years, we were growing with an average of 20% every single year. We invested during the last five years $500,000,000, and just this year, we announced $230,000,000 of additional investment. Why we did it? Local for local strategy. It's always our strategy. We aim always to reach 90% of what we sell, we need to produce inside the region. Of course, one other important thing is this one. We improved substantially our profit margin in the United States, but we are still below the average of the Electrification operational ABB. What we aim during the next strategic period is that we would like to reach at least the Electrification average and go beyond that because there is big room for improvement. How we could improve it, how we could improve here, I think many of you that were in Frosinone, in the capital market in Italy two years ago when there was the last capital market day, I think that you saw a beautiful factory, also because I grew up there, so there is also my heart there a little bit. There is a beautiful factory, very lean, not vertically integrated, great productivity. That's a number. Every year, 20% of productivity improvements. This is what we need to learn, and we are bringing here in the United States, where today we have just the robot density in our factory here in the U.S. is roughly one-third of the robot density that we have in other places in the world. Why we didn't, we have not done before? Because you cannot do everything in one step. That's simple like that. We did big capacity improvements, and now what we are working is fine-tuning and go step by step in order to improve continuously the profit margin. These are one of the biggest areas that we will need to do it, and we will have a plan to do it during this strategic period. The second one is keep the leadership position and make it better. This is one clear example. This is a beautiful product. It's one of the most successful, or better I can say, the most successful product line that we ever done in the electrification business, in the history of the electrification business. We launched in 2013 the Emax 2. And this one has become the market leader worldwide basis. We have more than 5 million of product installed base. This is the most profitable product line inside of our company. We launched in July in Malaysia. We did a new launch and we created the Emax 3. Why we did it? Because we were market leader and we want to make another, we want to make another leap forward versus our competitor. Now we introduce more digitalization, more control algorithm, sorry, more automation and more control of the power needed. There is a full backward compatibility. If the customer wants to make an upgrade, you can rack out the product, rack in the new one, and you have upgraded. That's one clear example of the big investment that we are doing in order to keep our leadership position. You can find those products, a huge amount of those products you can find in data centers, you can find in hospitals, in airports, in all the critical applications in the big industry. We were talking about how we invest in to keep our leadership position, but as I said, we need to invest also for the future technology because we are in the middle of a big revolution. DC, and so the direct current DC distribution is here, and this time is here to remain. We talk about DC since many, many years. We are in this industry since many, many years. Why is it important? Let me talk about one thing also because why the direct current is important. You saw in the benefits, it enables higher power density. It can reduce the cost because it can use less raw material. For example, very simple, in AC distribution, you use three or four cables. If you are in DC, you use one or two cables. After that, here, we are more than 100 people in this room. Everybody of us here has a laptop, has a mobile phone. We are having LED, so lighting, TV screen, projectors, air conditioning. All of those are working in DC. Due to the choice down at the end of the 19th century, the standard became the AC. Today, the power electronics enable the possibility to move part of the distribution network in the DC. Today, every one of us has a charger or has a converter. It's a small one. All of the things that are heating and when you plug it in, there is a lot of heat. There are conversions. There are a lot of losses in heat. Every one of us is wasting a lot of energy during the conversion. What if we can distribute with the direct current? That's why the importance, why the data center provider, why NVIDIA, why every single data center provider, they want to invest in DC. We need more power density. What's the easiest way? Arrive with the medium voltage, with the medium voltage power as close as possible to the rack, and afterwards, go direct with the DC. That's a strategy in order if you want to have that the data center are becoming bigger and bigger. That's the only way to do it. For those of you who were in Frosinone two years ago, I think that you saw the gray box that is called there Solid State Circuit Breaker. We launched it during the capital market day, and you were seeing these big gray boxes. We were the first one in the world to launch it. It was done for the DC application. Why we did it? For a great collaboration that we are having with process automation. Because in the DC vessel, the DC is already a reality. We tested it. We already use it together with the process automation colleagues in many electrical vessels around the world. Same type of grid is going to be implemented for the data center. Exactly the same Lego blocks will be implemented for the data center. The second big investment that we are doing, of course, in the DC is the research and development. We are in the DC since many, many years. We have more than 700 patents, and we will continue to invest. We're making a lot of partnerships. One month ago, we announced also a great collaboration that we are doing with NVIDIA in order to build up the future DC architecture that is not available yet. We are working with many other peers to build up this DC architecture. We did equity investment like DigiMatrix to build up another Lego block that is a solid state transformer. There are many Lego blocks that need to build up in order to arrive to the dream to have an 800 volt DC that is going to happen. We are making a lot of working with many of our peers also to build up the new standard with current to us and ODCA, one in the United States mainly for the Americas and the other one mainly for the rest of the world in order to build up the future standard. The last point is related to the M&A. We did $800 million investment in the last couple of years for between equity investments or acquisitions. I think that we did in a very disciplined way because our ROSI was improving from mid-teens to more than 30%. I think that when we do, when already Morten and Timo were talking about that, when we do acquisition, we try to do in a very disciplined way in order to see if we are creating value for our shareholders. This is what we did during the last few years. Now we are ready also for a larger deal. We have a pretty big pipeline, and the four areas where we're going to focus is related to improve the grids and to improve the reliability and the stability of the grid on the high-performance data center, on the smarter building, and of course, to expand from the geographical standpoint in higher grow geographies. In conclusion, as it was already mentioned before, we are thinking that we are well established. The market is growing. We are very well positioned to grow in terms of revenue towards the high-end part of the range that it was mentioned this morning by Morten and Timo. In the meantime, we are very confident and we have planned to reach a profit margin between 22-26% over the cycle. We will continue to invest in innovation and create the best experience for our customer. We have a clear path. I'm very confident, super confident that we will reach this plan. Thank you so much. Right, a few questions before we head out for lunch. We have one question here at the front. We start here and then we continue on the second row there with yes. Thank you. Fire away, Daniela. Just a question regarding sort of how you think about liquid cooling and if you would think that would be something complementary that could add something to the portfolio. Your thoughts on that, please? Yeah, liquid cooling, there is no doubt that if the AI is going to grow, there will be a growth of the liquid cooling. We are working already with many manufacturers of the liquid cooling to try to help them also from the electrification standpoint in order to optimize and to make a better efficiency also for their system. We are already working with many of them on such part. For sure, we are investing a lot, as I was saying. At the moment, we are 7% of the investment in data center, and we are mainly present on the gray space where it is our strength. If there is value creation, we could expand further also in the white space. Thank you. Please go ahead. Hi, Jean-Pierre. It's Sean from HSBC. On your margin range, I mean, the progression has been impressive over the last few years, and I'm particularly surprised at hearing about how important this US story is that it's been sub-margin and how, in theory, straightforward it is for you to catch up. I mean, looking also at the growth targets, I mean, why should the bottom end of that range, given also where you are today, be something you're even considering? You mean for the growth or the profit? For the margin. For the margin. I mean, over the cycle, we fix a range. It does not mean that we cannot go beyond that, for sure. It does not mean that we will be able to do beyond. Over the cycle, we do believe you can have ups and down, and that is why we will have also range. I think that is pretty fair also as a range. Maybe just to follow up on the U.S. I mean, are we at peak CapEx now for the U.S., or do you still foresee further acceleration? At the moment, no. I think that what we did, the $230 million that we announced this year, is going to be good enough in general. We will not foresee for the next future to make some other big investments. Thank you. Thank you. Do we have any? Yes, we have two Anders here on this side. If we start with Anders Idborg, and then we have Anders Roslund following after. Yeah, hi, Anders Idborg from ABG. Just an interesting comment you said about the potential growth in data centers in Europe and China and your higher market share there. Could you give us some numbers on that differential? Also, in terms of the profit pool, it has been very attractive here in the U.S. What do you see there in Europe and China? Let's say it this way. In China, we're already growing significantly data center because the data center market in China is growing very nicely. I can tell you that the profit margin for the data center in China is in accordance to the profit margin that we have normally for that market. We are not providing data for any single market, but we can say that if we are growing, the growing China data center is providing the same profit margin that normally we could have for the rest of the rest. The same for Europe. It's very similar to the profit margin that we have for the rest of the business in Europe. For sure, the growth perspective is very interesting because for many years, the growth was up in mainly here. Now we start to up in Asia, start to up substantially, and now it's going to make a boost also for Europe and in China. We are in a much better position there, for sure. Thank you. Thank you. If we could just pass the microphone to Anders further down there too. Thank you. Yes, hello. Anders Roslund from Pareto. I have a question regarding the data center and the smart building. I mean, those are focus areas for all your competitors as well. At least Schneider seems to have been growing the last five years a percentage point faster than you. How will you catch up? They have a growth target of 7-10%. What are the key reasons for you to catch up? Is it M&A or organic growth or both? I take that first. First of First of all, when we talk about our growth, we always talk about through the cycle. When we talk about 7-10% of our numbers, 6-9 of some of our period, we are talking about midterm. There is a significant difference of those numbers. I think that Morten and Timo were already explaining before. I think that we are very satisfied on our growth. I think that if we are looking at the growth that we are having, data center is comparable to our peer. By the way, remember always that data center is just 12% of our growth. There is much, much room for improvement in all the rest of the 88% of our business. Yeah, I mentioned smart building, for example. Yeah, the smart building and the building sector is an area where it's one-third of our market. For sure, the growth will not have most probably the same trajectory of the data center, but it's significant for us. As I was mentioning to you, if I look through the next 10 to 15 years, the area for improvements of this market is significant. We are investing on today, we are mainly focused on the KNX parts, but we cannot exclude also to try to expand our portfolio for the future. Okay, thanks. Okay. Beard, if you please hand to Martin here at the front, and then we'll have a second one from Andre at the end there. Thank you. Just coming back to the DC technology that you mentioned, obviously the penetration of that today is relatively small. What's your positioning there? I mean, obviously technologically you've got a lot of products, but if that was to develop, would your market share be similar in that market? How should we see you versus peers and your offering in DC? You know, the DC, as I was saying, we were the first in the world to develop the solid state circuit breaker. This is the basic Lego block for any kind of electrical architecture. I do believe that we were very well positioned. We started earlier on that just because we used to have in the Marine and Port Division on process automation. They were already working in DC vessels since 2013, if I'm not wrong. That is why we started to work there. After that, there are many other Lego blocks of the data center, sorry, of the DC distribution that are not available yet. Everybody, including us, we are working hard to develop those ones. I'm going to mention one, solid state transformer. We have in our laboratory, we have a prototype of that. We have an internal incubator where we invest a lot of our resources. We invested in an external company to build up this kind of, in a faster way, the solid state transformer, but nobody has it at the moment. It is still in the early stage, but it is going to be a super important future technology for the future. Now, of course, we are in a hurry because there is a data center. We have done, just to give you an idea, the solid state breaker that I mentioned before, you can find today in the vessels, in the DC vessel, you can find today, for example, even in the building. We were the first one that last year we did, we enabled a big industrial site with offices in Germany for a primary automotive industry where we helped them to build up the first hybrid distribution network where you can have the AC distribution and the DC distribution. Solid state breaker were there. Thank you. Okay. We have Andre here at the end. Great, thank you. Sorry, I'll keep going on data centers. Could you give us an idea of your dollar per megawatt in data centers? I think you mentioned some number of 7%. 7% of the total investments. If we talk about dollar per megawatt, it's close to $2 million, right? Roughly like that for the electrification part. Great. That $7 per million invested number that you mentioned. 7% of. Okay, so you get 7% of everything. 7%. The market potential for us is 7% of any dollar that is invested. Perfect. Thank you. One other question I wanted to ask is about that kind of DC microgrid infrastructure. Is there a point in rack density where it just becomes a must? A bit like with latest NVIDIA chips of 1.2 kilowatt, you have to liquid cool them. Is it 100, 200, 500? Yeah, we have talked about now at this stage with the new chips, the plan of NVIDIA is to reach 1 megawatt per rack. A rack is like a switchboard, right? Today, until last year, it was 30 kilowatts. It is 30 times, you need to bring 30 times the power of last year, 30 times the power that we were using last year inside the same box. It is going to become no alternative. Is that at one megawatt where it's no alternative? Because at 100, you can still. We can still do it. 450. I think that the strategy, and that's why we were developing the medium voltage UPS, is to try to arrive as much as possible with the medium voltage distribution, as much as possible closer to the server. After that, you need to go with the DC. Otherwise, it's going to become a block of copper. That's what's important. Thank you. Thank you. Do we have any more questions for Jean-Pierre or now? Yes, we have one at the back. Lucas, if you may, please. Sure. Bobby Ebank from Chevy Chase Trust. Pretty philosophical question here. The growth drivers are really obvious, but here in the West, we're seeing more pushback on power prices, electricity prices from consumers. How is ABB helping to lower electricity prices for consumers? Yeah, I think that, as we said, one of the examples that I was showing, for example, one of the buildings and the hotel that I was showing before. One of the things that we are trying to help is to try to reduce the energy bill of the hotel chain. The hotel chain that I was showing you before, it was able to reduce 25% their energy bill. That's significant, in particular if you're using all the HVAC system and the lighting for a hotel, it's about roughly 50%, half of the energy bill. This is something that we are doing to help them. We acquired, for example, a company that is called SensorFact. It's a Dutch company. We acquired this company in February of this year. It's a software as a service company that the major focus of them is trying to work on the middle size from the small, middle size enterprises and the mid-size building in order to help them to reduce the energy consumption. We have many solutions to help them to reduce the energy consumption because many times you are talking about more power, more things, but the best way to have more power is to reduce the energy consumption, as it was mentioned by Morten this morning. It's fine. Yeah. We have one final question here at the front. Hi, my name is here from Rodeo again. The profitability upside in the US market, the third of the business there, what is the timeline of that? Yeah, you know, we were able to grow, to improve the profit margin during the last two, three years from low single digit to teens. I think that we could have the same type of time in order to try to arrive to the electrification average. After that, more we grow here, of course, more we grow the electrification average, but to catch up is going to be a race. That's for sure something. That's why also the $230 million investment that we did this year, it was not just for capacity expansion. It was also to build up one of the biggest things. You can build up a factory. Great. You have a great building, but you need to fulfill with people. You need to train them. You need to have molding. You need to have a supply chain that in the U.S., unfortunately, it was not existing. So we are in some cases asking to our suppliers in India or in Europe if they open their own facility here in order to help us to grow. Because if you're doing that, we are much faster instead of trying to search others. It's something that you need to work every day on such things. Three times during the next strategic period, that is three to five years. With that, we're going to take a bit of a break. There will be lunch served in the same area as before. We'll meet back here at 12:45 P.M. Thank you. Thank you. Welcome back. All full, I hope. Both here in the room and at home, the virtual crew. Now we are moving on to Motion, the guys who actually invited us into their home today. We are going to start, we are going to start with Brandon, who is head of the Motion business area, and then we are going to hear from Tuomo, who is head of the Drive Products divisions, whose home we are actually in today. Without further ado, I am going to ask Brandon to come on stage. Thank you guys very much. It is a pleasure to be here. We will bring you home with Motion, and then we will put you in Motion, and we will walk around the facility, kick the tires, and see some of the toys that we have to show you guys. Hopefully you can continue to learn more about ABB, what differentiates us, and kind of why we think we're on the mission that we're on. I'm incredibly proud to stand here on behalf of my Motion colleagues, 23,000 strong around the world, market leader in what we do around having the most comprehensive portfolio in drives, generators, motors, power conversion, and then the services that complement that. We've been on a really great journey. I'm pleased to stand up here as the market leader. Certainly that differentiates by portfolio, by geography. We'll step you through a little bit of that, of where it's most relevant. Certainly here in the US, can stand here confidently with what our position is, the strength of our go-to-market, our customer intimacy, and really the results that we've been fortunate to deliver thanks to the teams across the US. How are we set up? We're set up with six divisions now. One of the changes that I made coming in that I'll touch on a little bit more is combining two of our largest long-cycle divisions. I'll touch on why we did that and what that means for our customers, because that's why we do everything that we do. We have three businesses that are short-cycle. If you think about our low-voltage drive products, our low-voltage motors here in the NEMA market, and then our low-voltage motors all the rest of the world. We then have two long-cycle businesses, which is high power. That's large motors and generators combined with our high power drives. Really bringing those things together because that's how we see customers buying across industries, marine industries, LNG industries, carbon capture example that was mentioned earlier. All those are great combinations of that portfolio. The traction business might be interesting for some that have a long history with ABB that we don't have a train there. Obviously, we're known for that in the rail industry of what we do in propulsion, but now we're taking that propulsion and as another growth vector, we're going towards off-road. We call it rail to wheels. What can we do in order to drive off-road growth for mining, for construction, buses, other types of transportation, and even into the marine industry where we're having some successes? That is why we've got a different picture up there for traction. We pull it all together with service. Our attachment rate to our high power division is where it's the strongest, but there's also upside and headroom for us to move across the short-cycle businesses. Whether that comes in actual service business or whether that comes in replacing the equipment, it's a great opportunity for us to continue to grow. The widest portfolio in terms of motors and drives from the lowest kilowatt to the megawatts and everything in between. You heard Peter talk about it, you heard Morten talk about it in terms of having software and the importance of software. Some of our differentiation comes through the software applications that we have across our drive solutions and how we exercise both control and efficiency. You have heard all of my peers talk about the importance of not just doing it the most efficient way, but also doing it with the most control. That is where ABB differentiates itself, especially in terms of our drive technology. The business is running at an all-time high from an absolute side and in some of the KPIs from a percentage side. You can see what our growth has been across the cycle from 2019 to now, a little bit of a lull there in 2023 and part of 2024, and now trying to return that to growth and deliver where we're going to be across the cycle. Certainly across profitability as well. My peers, you know, Morten was here, we had another gentleman running the business, and then I've been here since March of or since August, about a year and a half ago. Really running well in terms of productivity, in terms of what our manufacturing footprint is, making sure we can stay competitive, keeping gross margins where we think they should be, and pushing towards that 40% that Timo talked about earlier being an elite industrial company. Certainly we're trying to make sure that we contribute to that from the Motion standpoint as well. What are the industries that we play in? $57 billion or so industry. Industrial part, the heaviest side of that. You can see what's happening in transport, power generation, a huge topic with electric expansion, which you've heard about as a theme all day today. Certainly buildings being relevant for us. What are we doing in those spaces? We're protecting the operations, we're improving grid stability. Jean-Pierre talked about it, but let me give you a little bit more color, the VoltaGrid project in Texas. We're taking synchronous condensers, which is our technology, our large motor technology within my high power business. We're working together with process automation and the energy industry's business to package a solution around it that includes stuff from Jean-Pierre's business and core offerings from Peter's business. We're delivering a value to the customer at a speed, reliability, and execution and service package that our peer group can't match. That's why we've been selected to execute that project. It's a great opportunity for us not only here in the US to provide grid stability, we're doing it in Central Europe, we're doing it in the Middle East, we're doing it in Australia. This is a really nice growth vector that's come in, I would say, in the last year or so where we see the pipeline really growing around the synchronous condensers. Lastly, renewables. Morten talked about the energy transition hasn't begun yet. Renewables is expanding. We like that in the medium term and long term, which is how we think about these cycles. Certainly our power conversion technology to play a role in that. We like the renewable space and what we can add and offer value there. Local for local, you've heard about it from my peers. Let me show you what it looks like for Motion. In the US market where we're standing, that was part of the investment decision that Morten made when he was back in the role. Now, in fairness, we're a very selfless executive committee, so I got to cut the ribbon and be in the pictures and everything when we opened this facility. Morton was very gracious to allow me to do that, even though it was his decision to make the investment. It was a great investment and it supports our local for local strategy. You can see 80+% here in the US of what we sell here, we make here. India, 85%, China, 90%, Europe, 95%+. We'll continue to drive this investment. That doesn't only count for our brick and mortar or our factories within Motion. It also counts for our service footprint. That's critically important. You heard Peter talk about service in his presentation and the importance of that and what it offers. It's the same thing for Motion. We're running really critical assets for these LNG plants, the marine industry, data centers that we're doing for the cooling and the importance of that. Having service capabilities, whether that's replacement, spare parts that can come quickly from our footprint here, our channel network and distribution that we have with inventory that sits close to our customers and their needs, all that is part of the differentiation. When you think about competitors coming into certain markets, there are barriers to entry into coming into these markets because of the footprint that we have, the go-to-market that we have, and the relevance that we have, not only with our customers through Motion, but through my brothers in Electrification and in Automation. The macro trends are the same for us in Motion that you saw from Peter and Jean-Pierre. The amount of data that's moving around the world continues to grow, electricity demand continues to grow, and then energy transition. Whether it's energy expansion or energy transition, it's a growth driver for us in Motion. All of these businesses require motors, drives, generators. That's what we're world-class at. They require the services to support it, which is where we deliver extra value. All of these are really nice drivers for us fueling growth. Regionally, of course, it matters a little bit, but if you talk in India, we're seeing growth in India. China, in my heavy industries businesses, we've continued to see growth there while there was a little bit of a slowdown in some of the commercial and res where we see some positive signs there. I think it does move around a bit, I'd say, geographically, but we really see a tailwind and ability for us to grow across these sectors. One thing that's probably the most important in my presentation today is to talk about energy efficiency. This is not a brand new topic, but the relevance of it is gaining more and more importance. We talk in ABB all the time about the greenest unit of energy as the one you don't consume. This needs to become more meaningful in our industry. Jean-Pierre talked about the challenges that exist to add enough power to the grids, what you need in transmission lines, what you need in investment, all these sort of things. With energy efficiency, we can put 10% capacity back on the grid today with technology available right now. That means no new transmission lines, no new substations that you have to build. It's just doing more with the technology that's available now. I'm going to walk you through a couple of examples and also show you a customer so that you can hear from them and not just from us. When we talk energy efficiency, we talk high-efficiency motors. Let's use the most efficient products that are available. Right now, the majority of still what's being bought on the markets is kind of in this IE2 efficiency. We have IE5, moving to IE6 on the efficiency side, and then the use of drives. We're going to show you in the facility that we're standing in what the benefits of that is. When we take a drive or motor and attach it to a pump for our geothermal system, what does it save us in electricity? We did not build this facility just to bring customers in here to show them something that we do not believe in ourselves. We built it because there is a business justification for the return on investment of spending some more money on the CapEx side and benefiting from it in the OpEx side. We will show you that on the tour. What does it mean in terms of a specific example? This is an IE2 motor that you see on the left-hand side. You can see the size range of it, call it $15,000. Then we say, "Okay, Mr. Customer, spend three times that amount of money." The first response is three times, that is crazy. Why would we spend that much more money? The return on investment is nine months for that one motor and drive. It will use $1.3 million less electricity across the lifespan of that motor. That's assuming, by the way, 25 years. Our customers run these motors for 30, 35 years. Make the numbers even more in terms of what the savings is. This is, again, technology that's available today, proven, reliable, robust, service capabilities, all those things there. Don't just take my word from it. Let's listen to a customer and what they have to say about how they view energy efficiency for their business. As global demand for copper accelerates, efficiency, reliability, and sustainability are no longer optional. They're business-critical. At Aurubis's Pirdop plant in Bulgaria, copper concentrates are turned into high-quality cathodes and anodes used in wiring, power grids, EVs, and everyday electronics. The plant runs on hundreds of electric motors, but over half were more than 25 years old. We selected ABB because they offered more than components. We needed a long-term partner with high-efficiency motors, drives, digital tools, all aligned with our decarbonization targets and operational goals. By working with ABB, we were able to transition from 42 different suppliers to a single partner. By replacing 460 motors with ABB's high-efficiency IE4 and IE5 technology, along with drives, the plant will cut energy use by 28%, saving 25 gigawatt-hours each year. That is enough to power over 6,000 EU households annually and reduce CO2 emissions by 12,000 tons. ABB enables system upgrades with advanced digital monitoring, providing predictive insights and improving uptime by approximately 10%. It is not just about cost savings. It is about achieving operational stability at scale. This is not just a technical upgrade. It's a strategic shift from reactive maintenance to proactive performance. We help customers outrun, leaner, and cleaner. I think it's a real appreciation to them for doing the video, and I think it's a great example of making it real. 6,000 households, 25+% less energy consumption, associated electric bill with that, moving from 40+ vendors to one. At dinner last night, I talked with certain people and they asked questions about, will companies go retrofit their plants and these sort of things, all the motors, some of the motors? This is a great example of just moving the motor efficiency up, not adding drives and those sort of things, just moving the motor efficiency up. There's then an even another level of this that we can move to. Really proud to see what we're doing there and trying to make this real and relevant. R&D, investing organically in the business, really important to us. We're spending a little bit more money right now because we're updating some of our motor portfolios that have been around for several versions of those product families. We want to make sure that we can drive competitiveness, drive efficiency, and really compete around the world. Both in our NEMA business and our IEC business, we're also doing some things where we're spending for specific markets. Take here in the U.S. We've lagged in the U.S. on medium voltage air-cooled drives. That market was predominantly driven by others. Now we have a factory footprint here that you'll see. We've come out with some technology that's really, really impressing our customers. We're starting to take market share in the medium voltage air-cooled space. We will build it and deliver it, service it from here with those R&D innovations coming from here. That's, again, part of our local for local. Three examples here. Really cool, the first one. Whenever you're the world record holder and you break your own record, that's a great day. That's what you see is this first one. This is a customer in India for a steel mill application, a large motor. It will consume $6 million less electricity in cost across its lifespan and a three and a half month payback for the customer. This is the highest efficiency motor in the world. Great job by the team. AI, you've heard about it as a theme throughout. What's cool here is we've taken an internal example to show you of how we're driving it to use efficiency internally. We get stacks of specifications from customers this big about what they need from an application, what they need from a motor, these sort of things. We've now created a tool internally where we take this, use an AI tool that we've created and through the innovation and entrepreneurship that we have within one of our communities of practice around AI. They've condensed that into instead of days, they've condensed it into minutes, and it creates a proposal and a bill of material for that motor. That's a great way for us to be responsive to customers. Speed matters. We learn from all these specifications, and we continue and improve. A cool example there. Then something from Tuomo's business on the machinery drive side. This is an innovation where we did not have a product to serve this market. It opens up a machinery market to us, which is a very large market for us and allows us to go play in that space. Highest cybersecurity in the industry, most connectivity in terms of protocol in the industry. We are really excited about kind of a homegrown innovation that opens up a market for us to go play in and to grow. In addition to organic, we talk about inorganic. I would say we have probably lagged here a bit in Motion, and we want to be a strong contributor to the group in terms of the 1-2% and the role that Motion can play in that. We think there are some great opportunities. We do have a really nice acquisition that we just closed earlier and that we just officially integrated into ABB about four weeks ago, which is Bright Loop, a company out of France. They make DC-DC converters, which can be used in a lot of industries, a lot of applications from F1 to Formula E to the marine industry to the mining industry. When we did this acquisition, I got several personal emails from some of our largest customers that said, "This is a fantastic technology that we're happy to see come inside of ABB for you guys to help us scale." For me, that's the most rewarding kind of emails you can receive is validation from your customers that you're spending money in the right ways. We are happy to have these guys on board. We also do the equity investments. We invest into different companies, partial investments with the potential to take larger roles in those companies or completely acquire, like has happened in automation or electrification, as well as companies that are helping us with our manufacturing. One of the companies is here in the US that we're using to help with smart manufacturing for us to become even more efficient, more productive. We're trying to come at it from all angles of how we serve customers, but also how do we do things the best way. Inorganic is a big push for us. This is done at the division level. I had some discussion at the dinners last night as well. I want to be clear, the mandate for acquisition, for building the pipeline, identifying the targets, these sort of things is done at the division level in ABB. That then comes to the business area, and we look at overall capital allocation and how does it make sense and those sort of things, and then we make recommendations to the group. This is now reviewed quarterly with my businesses at the global level of what are they doing on their pipeline and what are we advancing through that funnel. It is really important for us as we look at how do we grow inorganically. Let's take two examples of why it matters being part of ABB. This is something that's near and dear to my heart. I've been here for 20 years. I started as a front-end salesperson down in Houston, which is where I'm still based out of. Serving the LNG business, I've had a pleasure of being a part of these things. I worked for Peter directly for eight years. I think I can speak pretty credibly about what happens in automation, electrification, and motion and how that comes together at the coal phase, which is the customer. The value here is tremendous for us to help them optimize from the beginning how they design these facilities, optimize them to operate with the highest efficiencies that we can and the highest reliability. On the electrification of LNG, we have customers that are telling us they're going to build an e-LNG, so electrify the trains. They're going to build that and assume that one day green electrons will flow to it. Instead of building it a conventional way, they're going to build it from an electrification path forward. We're helping them from the beginning of that. Also on data centers. Data centers play a key role in my business. In HVAC on the drive side, we're the leader here in the U.S. We're very strong around the world. It's a great opportunity for us to tap into some of the growth that's happening in that industry. Same with motors that we're providing to the OEMs that are going into these facilities. A lot of the companies that are doing the backup generation, you have to have 100% redundancy on these data centers. The companies that are doing the backup generation are using ABB generators that they're attaching to their turbines and generation. It's a great opportunity for us. We're looking at how do we continue to drive some of the questions around cooling, electrification, and the trends that are happening there. Where is it best for ABB to capitalize? Is it organic? Is it inorganic? What do those options look like? How do we best work together with EL to influence specifications and really help drive efficiency? Efficiency matters tremendously in a data center because of the amount of power they're consuming. Every bit that we can open up in percentages is value for ABB and value for the customer. Three things that myself and the leadership team have taken on in the last year have all gone live now. First is implementing business lines all the way down into each of the divisions. We have six divisions. We have 25 business lines. Some of those are in profitability. Some of them are in stability, and about 65-70% of them are in growth. We have a mix within those businesses. We incentivize based off that. We performance review based off that. We set annual targets based off that, and we govern based off that. We have implemented that as of July 1 across Motion. That has now got a couple of months of runtime in terms of how that is working. Creating customer value and being kind of customer-centric, this was combining large motors and generators with our medium voltage system drives business. That is purely a revenue play. That is about going after the markets and selling solutions, deeper penetration, a share of wallet and penetration into certain OEMs that are buying both or might be buying one and not the other, and really gives us a value proposition to focus on applications and how do we bring this technology together, how do we innovate this technology together with our customers in order to grow. Then the last one, for about 45% of the revenue base, we've changed the go-to-market towards the ABB Way. We previously had a matrix structure in how that was set up, and it was not clear accountability, not clear empowerment. Now we've changed that. We have that by division in the countries, people that represent Motion there and really are purely accountable for delivering on the business targets per the mandate that they have. These are three changes. That went live November 1. That's only got a couple of weeks underneath its belt. Certainly, myself and the leadership team, fully confident that this will have the impact we're looking for to make sure that we stay at those thresholds that we've committed to from the ABB group side. Full confidence there. When we talk about priorities, I talk with my team about something called big rocks. You might have heard of that analogy before, but it's really about driving focus. There are lots of things to distract us and lots of things to take away from what our pure mission is. Our big rocks are here in terms of the business lines and the mandates of how we want to drive and govern this business. M&A that we want to strongly contribute to the group, and we want Motion to play a role there because we think we've got value to add independently as Motion, but also to my brothers in Electrification and in Automation. We want to strengthen the service attachment. Our service attachment is probably in about the 40% range of our installed base. We've got upside, and we get to Peter's service attachment. We have upside for us to have penetration into the industries, take better care of our customers, and really add value to ABB. Work together across the industries and across our business areas. Critical for us. Lastly, we're not going to stop innovating. We can't be comfortable as the market leader. We have to continue to spend money. We have to continue to come out with new products, new offerings that push the limits, push our industries forward, and really help drive value for our customers and for ABB. With that, this is a perfect picture of what I just said. A lot of you might not have seen a motor before. If you haven't seen a motor before, I got bad news for you because that's the most beautiful motor you're ever going to see in your life. This is a product that we developed that we're the market leader on. That product has a different technology where we don't use rare earth minerals. It has the highest efficiency. It changes the game for us in ABB. We will continue to drive business towards that. 25% attachment, just so you know, on motors where it drives attached to them. As we can drive the efficiency message, as we can look at business models and profit pools, we think there's a way for us to push that forward. We like having motors in our portfolio. We like having the best drives in our portfolio. You bring those things together, and we think we can move the market. We like our structure in Motion. We like our strategy in Motion. I would expect some consistency in that in 2026 and for us to go have a high say-do ratio. What we commit to the EC and to the board is what we're going to go deliver. That's what the commitment is for myself and the management team. You've seen the ranges there of 5-7, of 18-22. We're somewhere in the 19.5 range. There's upside for us on margin. That can come from our footprints. That can come from productivity, product innovation. We do variances local for local in order to make sure that we're competitive while also maintaining margin. There is headroom for us to move further up in that quarter that you see there. We're going to invest organically, and we're going to push to make sure that we find those value-accretive things inorganically. Really proud to have you guys in this facility to do the tour that we're going to go on here in a few minutes and see the technology, and most importantly, meet the people. In Motion, we talk about people, customers, and results. We start with people because that's what we rely on. That's who drives this innovation. That's who delivers the results. I'm humbled and proud to stand up here and represent the 23,000 strong in Motion and also commit on their behalf that we're going to go do what we said we're going to do. With that, I hand it over to Tuomo. Thank you, Brandon. Yeah, very good afternoon, everyone, and warm welcome to our brand new ABB Drives US campus. This campus has been designed, built, and engineered to outrun. We are very proud to say that this is the first one-stop shop for all the customer needs in Drives, whatever customer needs. How this value proposition is made, Morten mentioned earlier that we want to serve the customers how they want to be served. We acquired a land, put customer in the middle, which is pretty much the area where we are now. We define the story of what the customer needs here. When customer comes to this building, first they see the portfolio, which is usually available here. Behind is the wall which shows our building automation system, how this building is controlled with all the ABB products. What is a very unique thing, we have here the HVAC mechanical room visible on this side. Usually, it's somewhere hidden in the basement. We made it visible. It's full of ABB products, our drives, motors, but a lot of electrification products to run the pumps, fans, chillers. You also see here the green color pipes, our geothermal system. Now, even more unique is that customer can enter this area while the building is in operations. Also, all of you today, you will see this HVAC, the mechanical room with your own eyes while we run all operations. This is, by the way, the 100th of participants remotely, good showcase and reason to visit here in New Berlin, Wisconsin, to see all that. Now, the customer journey continues. We think about the value proposition. Our products are quite complex technical products. Our customers really want to pay the training. Now we continue the journey with our training area, our hands-on training classes, and our remote class, the places. We provide there multiple different locations to continue different types of training practices for our customers and our partners. What we need then, we need very strong presale support for our customers. What you're going to see after that is the application laboratories. Whatever customer needs, we test that in the real product here. We design the application, and before going to commissioning, we make sure together with our customers that everything works. Actually, this is a very unique value proposition because often the customer sites are in the complex locations. If we can save time for the commissioning, have low risk, make it much faster, that's a big value for our customers. You will see all this today after the break. We also have a factory here. By the way, this is becoming one of the largest drives factories in the world. It is brand new. You will see that we are just now in the commissioning phase. We will see a lot of opportunities to optimize that. At the same time, we need to remember that this is the industrial electronics factory. Many of you were two years ago in Italy, our capital markets day, and you saw the beautiful electrification factory, very high volume products for electrification. Now you see these larger industrial electronics products, which are often configured to order or even engineered to order. The common thing is both are best in class, state-of-the-art facilities. What else we see here, we combine the warehousing. All the warehouse supply activities are interconnected, same building and the flat floor, which enables unlimited automation opportunities. On top of that, we have a very large R&D center. More than 100 R&D and application engineers can develop the very complex new product. They help us to be local. We have a lot of different local needs in the US, and our team here helps to make the perfect fit for our customers. What we need to remember, the R&D is a lot more than development. Our customers have very demanding questions. While we have here the tech support available, if they need some help, we do not need to go back to Europe or other regions. We have the highest level expertise of R&D here, and we serve our customers in minutes and hours, not days or weeks. When we combine all this technology together with all the services, the service workshop, and lifecycle management, we can say that we have the one-stop shop for all customer needs in the same place here. It is a very unique value proposition. Customers are willing to really focus on that need here. If we still talk about a little bit this investment, this $100 million single investment, this facility, 20% out of that, so $20 million is ABB products, meaning that when we count all the electrification automation here, we have around 20% of ABB products. There are a lot of opportunities for facility investments. When you see any of this kind of facility investment, at least 20% is a great opportunity for ABB. We see here this large-scale R&D center, the office, also the office part. We have right now around 700 people, but we are hiring more while we grow very fast in the US for the US market. We have here all kinds of disciplines. We cover all the functions and create this highly skilled workplace. People really appreciate this modern office, which is really fit for purpose, also working here. If you think about the warehouse and the overall, we used to have six facilities here, four warehouse locations. We had two other facilities, factory and office. We combine all the six as one here. If you think about the example of the warehousing, instead of four, all the shuttle trucks, massive complex setup, everything is one, which is interconnected directly here. We already optimize a lot of inventories and still serve the factory much faster. At the end of the day, our customers. Yesterday, I heard the question about that, what is the output of this factory? Next year, we target to deliver 350,000 drives. What is even more exciting, 350,000 drives next year out here will save more than $2 billion of our customers' electricity bill. I really want to repeat the story because the output of this factory in one year US for US saves more than $2 billion of our customers' electricity bill. This is counted with the industrial standard as an average and a conservative way. In many cases, it is much more than that. Overall, summarizing that, this value proposition is such an incredible and amazing, the customer really appreciates this. Now, I want to share three examples about this case. Starting first, the global climate player and innovator wanted to make a step change for the product. Now, the outcome was that they want to have this high speed, which means that from typical 1,000-2,000 RPM, have like 10,000 RPM or even beyond, which means that the product is smaller and also higher efficiency. At the same time, it's very complex and demanding development. We took the challenge together here and realized what we need to do our product, develop that. We also realized that it's so demanding for the cooling that we need to use our technology development and have a new cooling system that we, by the way, patented and make the solution for our customer. At the end of the day, we see the picture here. Instead of any external cabinet, it's a highly integrated solution as a high-speed compressor, having drives and every ABB component built in. It's smaller than before. It's higher efficiency than before, but it's still better serviceability. We guarantee the lifecycle management over the years in future for that solution. Very close collaboration. At the end of the day, the customer is most happy with the fast support, with the speed and agility we can provide. This particular business is starting to grow very fast. We take another example, data center part. It requires a lot of know-how and expertise. We built a team here that we learn and have a high knowledge of data center cooling. Now, together with Trane Technologies, which is one of the leading companies for these cooling applications, we sit down here that there is a long list of requirements. What we do, we want to meet all those requirements, make highly advanced, highly optimized, and customized the chiller for data center cooling. A lot of innovation behind there, but it was really mandatory that both customers and our side, the experts, sit down together and understand each other. At the same time, the speed is so important that we need to count days, not months or quarters. Also, the train requires that this has to be brand labeled, meaning that it's ABB inside, but then we also have the brand label for that. We combine all the needs and make it on time. Also, we see that this business is really starting to catch up fast. Now, the third one is we deep dive undermine. We go to the underground mining with a long list of requirements and very, very special restrictions. This major automation player needed a bigger tribe. This is coming from our high-power division side. The key was the speed and engineered to order. We deliver this 10 times faster than typically before. We understand the needs. We work together, all the details. If you think about alone the logistics from two months to two days here locally. At the same time, we meet all the tax incentives for the customers and also minimize the tariff impact. It is well known, the BABA, the built-in and also the Buy in America requirements. We met all those. At the end of the day, the customer said that the most important thing was that they get the direct access for our local engineers because it is so demanding application that they want to get the engineers available right away with their needs. We were able to provide that because we have so high-level expertise for R&D and engineering here. Combining these three examples, these are very unique, the value propositions for our customers, what we built here with our people, the customers, and the new facility here. All those are very fast-growing, and customers are very, very happy for that. At the same time, we grow faster with the growth mandate and our growth with these nicely profitable businesses. I want to end the facility because it's important that we serve the customers. Now, this is the first large-scale motion, the Mission to Zero site. On top of that, everything is controlled with ABB building automation system. We made, because we are a cold area, very thick insulations around here. On top of that, we built this geothermal heating. We are not using gas at all anymore. We have 24 km, which is equal to 15 mi of geothermal pipes around here. In wintertime, we use the warm air from the soil and help to decrease a lot of electricity bill. In summertime, it's opposite. When we do the air conditioning, then we use a lot of the colder air from the ground. Amazing story how we can save a lot of energy and have this zero emission, which is combined with the solar panels on top. We also have a lot of EV charging stations. If something goes wrong, even our backup generators use biodiesel so that we are super clean here. Very unique value proposition for our customers. I want to summarize that this is the first real one-stop shop for all the drives need for customers and partners in the US. This complete campus is designed, built, and engineered to outrun. Thank you very much. Q&A? Put Brandon and Tom on the spot. Is there anything that did not come across? Here is your chance. We start, I think, ladies first, Daniela. Then we have Martin here on the front row, please. I thought it was interesting that you mentioned you did that motor without rare earth. I was wondering if you could give a little bit more color into that and how dependent the business is on rare earths. How is your supply chain given? That is a big topic at the moment. Yeah, and I probably can't answer the technical question on how we solve that riddle. I don't know if my colleagues know, but the rare earth metal is a low intensity for us. It's not a huge bottleneck or supply chain topic for us. It is an issue, obviously, in general. Also, now we've found a way to engineer our way out of it. That's a great development for us to not have to deal with that. It goes along with doing things the right way. We always say that the how matters as much as the what. It's an opportunity for us to do it the right way. If I can get somebody to answer the question for you, though. If I still add a little bit that there are a lot of high-efficiency motors called permanent magnet motors available in the market, but they need those rarely available materials and are much more expensive. This means that the availability is so much better, and then the cost is much more competitive, meaning the value proposition for our customers. Is this an ABB unique thing, or are there peers without motors without rare earth? There are available those in the market, but we are by far the forerunner on that. If you talk about the portfolio, also the efficiency, then we are by far the forerunner in this industry. Thank you. Thank you. Martin, please. Thank you. Just a question on the adoption of the technology. You mentioned about this fantastic payback in terms of the saved energy, but obviously not every customer is buying it overnight. What is the catalyst for the customer to make the investment? Is that changing either because of high electricity prices or maybe even electricity shortages? Can something really accelerate that adoption? Yeah, I think there's probably several things that are catalysts. I mean, sustainability is more in the front ground now than it was previously. People have footprints and KPIs that they're trying to reach as corporations. That's one topic that drives it. Electricity prices obviously make the return on investment shorter, and that helps drive it. The regulatory environment, as different countries, governments, different things push the regulatory environment higher, that obviously can also be a catalyst to it. Lastly, education. I mean, there's a lot of people in the value chain. There's an end user, but then there's an engineering company. There might be a system integrator, an OEM, the original equipment manufacturer. Getting that through the value chain because the savings ultimately are for the end customer. How do you get that through the value chain? What's the business model there? We certainly believe that the adoption will continue to pick up because the need for power is so great. The capacity can be online, and it's good for the wallet, good for the planet. We think that all these things come together as a catalyst for it to move faster. Thank you. Thank you. Any more? We have Max. We go first with Max, and then we have Joe as number two. Thank you, Max from Moon Sunny. I noticed when Morten was talking at the start in his opening speech, he talked about kind of Motion being the one area where he thought you could get to the upper end of the target range. I didn't hear him say that. I heard him say that. I was just wondering why, sort of, was there any reason he particularly mentioned your division? Is there anything that felt like maybe there's something kind of outstanding in terms of a single division or unit where there's a real opportunity? Is there anything in particular, like one underperforming business that's still to turn around or a really big opportunity that you'd highlight in your business? I mean, I do not want to put words in our CEO's mouth, so you can ask him on the tours, I would say. I think there is a belief in the capabilities of where we were, where we are, and where we can get to. I think we have proven that we can continue to drive profitability and growth. It is not an OR equation. It is an AND equation. I think if you look at our productivity, at our footprint that we are doing, our design variances that we do in different countries to be local for local, our strength in go-to-market and our channels that we have and these sort of things, and then growing our service business, growing Tuomo's business, some other ones that are creative in the upper end of that, I think it provides an opportunity for us to reach into that headroom. Hey, over here. ITT, I know, is making a big deal about selling pumps that they make that are fully integrated with their own motors and their own drives as a single solution. I know you guys mentioned integrated pumps and motors at a CMD a while ago, but I haven't really heard about it since then. Just curious what that has looked like and if that is a way pump manufacturers could kind of disintermediate a little bit by installing these products themselves rather than needing a separate motor and drive manufacturer? Yeah, I think it's more an opportunity for us, especially in the North American market, say, because it's certain size ranges, certain applications that can make a big difference to have an integrated motor drive. Tomo can maybe give a little color on it, but I think it's more of an opportunity and upside for us that if we have the right technology that fits those applications at the right price point, we can grow in that space. There's always organic activity going on to say what kind of white spaces do we want to close the gap on, and does it make sense for ABB? We certainly look at that. Maybe you want to add a little? Maybe adding a little flavor. Because of technical reasons, those are usually the very small power range, which is really the lower part of our offering. We see opportunities to go there, but that is kind of a little bit below our typical core. It is more like additional offering, not necessarily a big driver for the industry today. Thanks. OK, we have one question here on the front, please. Do we have any other hands in the air? Nope? Oh, there's one. Yep. Hello, thanks. It's Will from Kepler. Two questions. First one comes back to your motors business. I think it was 2022, 2023, there was a huge surge in electrical steel prices, which have then collapsed. How did you respond with your pricing, and how much did you give back? So how does the price dynamic relative to the input costs on some of the core bill of materials cost structure work? I'll come back to the second one. Yeah, so I mean, I think we've been able to do pretty well in terms of holding price, holding margin, and managing on the cost side. Our local for local plays a role in that. Some of the modularity that we do plays a role in that. Even in the tariff situation, because of our footprint and our supply chain, some hedges that we've done in different things, we've been able to remain pretty competitive in that without having to do big price drops. We have seen price compression, certainly competitive pressures in India and other markets where price compression has pushed things down 5%, 7%, maybe even 10% in some of the markets. We're able to combat that with working on our bill of material and some of the organic development that we're doing to take costs out. I think it's something we always have to manage. Material costs are the biggest costs, obviously, that go into building a motor. As you go towards more high efficiency, it's more metals, which is how you get to that efficiency. It plays a really important role in our supply chain management. The second question comes to the drives business. I mean, it's been an incredible growth story from a small beginning over the decade or so that you've started here. I mean, how much further have you got in the journey with regard to expanding penetration, gaining share, and further growing the business and the utilization in these facilities? Yeah, it's a very good question. To be honest, we are in different geographical areas strong with the different segments. We offer the full portfolio globally everywhere, but it's variating still quite much where we are very strong and where we are strong. That means that when we go through all the different segments, subsegments, and applications, we still see a lot of growth opportunities. What we've done in this year along the overall leadership, the development, and the overall motion development that Brandon mentioned, is that we go even more granular level of every segment, subsegment, and application. Now we have a great plan that how we will penetrate more on the different applications, but also geographically even broader. We are very confident that we continue to drive this also several years ahead, this nice growth. Timo set his business lines up from a geographical perspective versus a product perspective because there's differences in each market, what the offerings are, where we are relevant in the industries, and these sort of things. There are very specific mandates for those geographies of where they can excel. Maybe it's HVAC here, it's industrial there, it's water wastewater there, whatever it may be. That's how we've broken down the business in order to put the right growth targets onto Timo's business overall. Thank you. We will have the microphone, please, to Gael over here. Thank you. I think you said you wanted to contribute strongly to the group's 1-2% M&A growth. But you're already by far the number one player in both motors and drives with what I think are pretty high market shares. So can you grow inorganically in motors and drives, or shall we think about you moving into adjacent areas? I think all the above. Adjacent areas, if it makes sense, and kind of along with what my peers and what Morten has said, is that if we can see it being accretive, fits our purpose, and kind of aligns with what knowledge we have in-house or can expand in-house, then adjacency is certainly something that we're interested in. I also think the rules of the game are a little bit different now with some of the regulatory environments where we could have more favor to move up in terms of market share, even in our core offerings around motors and drives. I think there's opportunity right now for us to be specific and to try and play offense in this category. Thank you. Then we'll finish off with a question here at the front, please, with Magnus. Thank you, Magnus von Nordera. I think you mentioned that the price point of a very efficient motor could be up to three times a less efficient one. Is there any way you can sort of slice the revenue mix that you have in your motors sales at the moment? Is it a relevant way to look at potential growth opportunities? It's definitely a growth opportunity. The predominant amount of motors that we sell are still in the mid-level efficiency, so in the IE2, IE3 range, and that's common across the industry. It's an upside as we push efficiency standards up, as the prices of electricity and demand restrictions exist. It's an opportunity for us to push into the IE4, IE5 plus categories. The majority of the share is still in those kind of mid-level efficiency classes. OK, thank you very much. With that, we're going to close this Q&A. With that, we also close the virtual streaming of this CMD. Thank you very much for joining us today.