ABB Ltd (ABBN) Earnings Call Transcript & Summary

Do you want to take that Mika.

We believe that the building markets and the penetration of drives in these applications continue to grow. So that is...

And the question if you believe, it grows, could grow even faster, that was...

And there is, I think, also the stimulus packages by different governments, probably will be by getting these energy efficiencies and so on. So it could even further push it, but it is to be seen.

Yes. And a market and what we show you here in the deck today is based on the -- again, most available industrial standards and market service -- public market services that we use. So we'll see -- we believe, as you say, the need for fresh air, clean air in buildings, it's increasing. So we also believe it could be more, but this is the official statistics and data that we have been showing to.

Thank you very much. Martin and Mika, very good. We appreciate that. And with that, we end this Q&A session. And we're going to move on to our next business area, which is Robotics & Discrete Automation, where we have the Business Area Head, Sami Atiya, presenting. Please go ahead. In just 1 short second, Sami is ready, very good.

Thank you very much, Ann-Sofie, and welcome, everybody, to the exciting world of Robotics & Discrete Automation. 80,000 -- 80,000 is the number of corona tests that are possible in Singapore today because of ABB technology. We use 40 cells and equipped into a 2 robots per cell able to do these tests, using our most advanced RobotStudio that Björn has shown you before, we're able to simulate and provide that support to the Singapore authorities. Together with the Institute of Science and Technology, we collaborate to do that. And we do 100% test of the incoming and outgoing patients into Singapore. Three things I would like you to remember today. First, this is a great business with growth potential and profitability coming. The underlying megatrends are here to say. Some of them have been even accelerated through the COVID prices. Second, we built on a strong strategy that I have presented to you just in February this year with strong momentum, and we have used this crisis. We did not waste it to reposition ourselves to even do more on the competitiveness, and we increased our R&D spend to reach the mid of our target range of 13% to 17% by 2023. We have a great range of product portfolio in ABB robotics and machinery automation from small robots to large robots. 4-kilogram and 1,000-kilogram are able to carry a whole chassis of car in this case. These are the articulated robots. But we also have a broad portfolio of SCARA robots that basically are used in the high-growth electronics business and pickers, delta robots are used in the also growth area of food and beverage and also logistics. Last but not least, our collaborative robot suite of 2-arm YuMi and 1-arm YuMi and expect more as we go in the near future on the cobots side. Due to the acquisition of B&R, we have enhanced our automation portfolio with a great product portfolio from server motion to controls, HMIs, but also, we have developed now over the last 2 years a great set of new devices, like the transport system. I'm going to show you later, really exciting and adding vision. And at the core of both is a simulation and digital software tool, the RobotStudio and the Automation Studio, to make our customers easier to install these products and to use them. At the core of who we are as ABB, Robotics & Discrete automation, we have a great portfolio that we use to support our customers and our domain expertise. We bring these 2 together with our software and digital and engineering tools, which, in this case, the RobotStudio and Automation Studio. And we are able through that to serve multiple industries which is really important because we want to put the foot of our business on different grounds. So we reduce the dependency, for example, of the pure automotive business where we started. We don't want to get out of that business, but we want to grow in other businesses that are really great. So these markets are automotive, the suppliers of automotive Tier 1; electronics, really growth and nice business; general industry is the of all; service robotics includes logistics, health care and retail; and then last but not least, the machine building business. We serve these markets with 2 distinct divisions, the robotics business and the machinery automation, but we have synergies between these 2. And I'm very excited to show you the latest progress we're making on these synergies between the 2. The robotics business targets mostly end customers, but we're also 1/4 of our business go through partners. And the machinery automation business is purely targeted to the machine builder business. And these 2 have distinct also competitors, as you can see. I would like to go through in my presentation through the attractiveness of this market, how we win and last but not least, how we're going to drive the profitability as we go. There are key megatrends driving the demand for robotization and automation. Most of you know them. Individualization of consumers, 1/4 of Americans already have bought product that individualized, and the trend is increasing across the world. And this is putting pressure on the whole logistics and manufacturing change. That's why you see in the right side, flexibility is going to be key in the future. Digitalization is key for our customers. And during this prices, the digitalization efforts of our customers and also our own have really skyrocketed. We were able to sell a complete solution for our customers, the robotics side, commission it and even get it up and running all virtually. So the trend you will see there more and more, and that means more productivity for our customers and ourselves. Shortage of labor is there to stay. And last but not least, we all know that uncertainty will not go away. We will face a more volatile world ahead of us. And our customers are asking more for flexibility and simplicity. When I go out to customers, they say, "Yes, productivity and quality is key when you automate, but give me flexibility and simple solutions, and then you'll be my friend." And we are driving with R&D, all of these 4 pockets. We served a market of EUR 70 billion in 2019 with a healthy growth over the last decade with some dips as we go. 2020, no surprise for all of us. COVID hit us. And we have been also hit by the automotive business already in 2019. About the market, we see that the market will continue to grow from now on to -- in the next 3 years by 10%. This is according also to what IFR, the Institute of Federal Robotics. So we anticipate this level of growth. As you can see, our businesses are either #1 or #2, depending on the market we're in. The machine automation business is the #5. But in the specific segment of high-performance machines, they are #2. What we will do is we will grow our high-growth segments, electronics, consumer goods, logistics and health care. We will innovate our portfolio and expand it with multiple new products. We will derisk the system business, and I'll show you what we're going to do there. And we will enhance our portfolio with more softer solutions and service as both are really key as a stand-alone, but to enhance the product value for our customers. And our goal is to increase our profitability by 500 basis points. Now how you -- will we win? I've shown you in March -- in February that we have set our strategy built on these 5 market segments like the machinery automation. And I can tell you, we are already seeing big successes there, by focusing on these industries because they didn't need different solutions. At the core of who we are, we are a technology company, where we seek the leadership of the applications that we provide to our customers. And last but not least, high-performance operations. We have set many initiatives in this year to improve the quality to improve our professionalism in pricing with the Chief Pricing Officer and tools and processes in place and our goal is to also improve the mix of our products towards more products, services and less turnkey business. And that all on the foundation of people and performance. Now how are the both of the divisions working. And here, I wanted to show you a little bit more detail. So we show also the business lines. As you can see, the need to get up on the profitability side to the level that we reach the 15%. Auto in itself, we will derisk the business, reduce the turnkey, but sharpen the portfolio. And we will improve even more innovations into that industry, but we will do less of large turnkey businesses. Tier 1 has less of an automation level than the auto OEM. So this is really an exciting business for us. And electronics, general industry and consumer segments are all growth areas that we will drive to push even further. And last but least, machinery automation. With new technologies and productivity improvement, we will bring it up to the right level of profitability and continue then the path of growth. Now this is at the core of our robotics product and application strategy. This is the value stack, as we call it for our customers. The fundamentals are our wonderful products, robots, the peripherals and the software. But the robot in itself without adjacencies like a vision system or a gripper cannot do much. So the next level will be functional packs where we add components to the robots, including AI and software that create more value for our customers. The next level value creation for our customers are the application cells. And this is really great business for us because this is at the center of who we are. It embeds the domain expertise and the software in an application cell, for example, a polishing cell for smartphones. We sell hundreds of them to our customers. Highly profitable, the customer gets repetitive business, proven quality and for us, it's a scalable business. We provide cells to the largest e-commerce companies out there more than 50 cells that we just sold this year, we do the fulfillment and the shipment preparation of parcels, for example. Last but not least, we call it smart systems. So the smart systems are built only on our core technology. And that is the pyramid we want to bring out more and more to the market. Service business has always been the key pillar of robotics. We are the leader in this industry with more than 1,600 service colleagues out there supporting our customers every day, 50,000 robots under contract and 9,500 robots are connected, and this number has been growing by 30% over the last 2 years. So here, we see great potential, not only for service, but also on the softer side. Now we are very proud to be the first on the robot studio to bring that out to the market, and it enhances our product portfolio, but we are seeing interest from our customers to buy the robot studio on its own. And then last one of these, you see the stack of common platform that we built. We use the ABB Ability platform. And on top of that, we provide our customers with applications that are able to improve the quality, control the quality and then improve the operations on the highest level of that. We give these applications and the platform to our customers, but also to our partners who are wanting to partner with us and provide solutions to our customers. To improve our quality of revenue, it is important for us to derisk the business. So we looked at the system business, and we said we want to get out of all the business that is purely turnkey with no or low-value add from ABB. Why we're going to do that? Because we want to improve our profitability and reduce the risk and lower the volatility of the business and focus on what we are good at, at it best, products plus software plus service. And you can see that -- you'll see that the automotive business, although we will see an uptick as we go lower than the others, but our intention is to stay flat. And in that, we the mix for more product and services and less system business and free up resources to grow in the other segments and to boost that area of profitable growth. When we do our innovation strategy, we look at it holistically. At the core of this, we innovate internally. That what we -- what you see in the slide, that's what we call the R&D. AI, we have a center in San Francisco. That's pure AI research for us. Digital twin, I talked about the application cells. But what we also do over the years, what we have learned is if you want to be fast, we have this concept of incubators. An example here is the logistics. We started by 0 revenue 3 years ago. We are now more than $100 million business. The same we kicked off last year, a healthcare incubator at the largest medical center on this planet, it's a Texas medical center. And you see already innovations coming out there, for example, the Singapore COVID testing that I just mentioned at the beginning. And then on the products, we invest in track systems, in hygienic designs and so on. But we also have a good track record in our M&A. And as you heard from Timo and Björn, we will look -- going forward also to accelerate that. We invested in a company called NUB3D. That's the vision system that really helps us enhance the product quality and value, machine tendering. And we bought a company in Brussels, logistics company that helps us to support our customers in the e-commerce area, Intrion. And I can tell you that, that company is already oversold. And we need even more capacity there. Last but not least, we announced 2 weeks ago, a great enhancement to our product portfolio, which is Codian Robotics. It has the best portfolio out there for hygiene, delta robots that will enable us to even -- get even further into the food and beverage market and we partner with the best universities on this planet. On the machinery automation side, at the core, we are a motion control and the PSC business. But we were able to bring out really cutting-edge innovations. At the center of it, is the ACOPOStrak. This is really a great example where when I talk with customers, they are so excited about it. It shuttles that are able to move in high speed and are magnetically detach so you can really singulate. Singulate means that you can really build the ultimate adaptive machine, which creates batch size 1. So at the end of the day, you can really have every single product, single eye and that is the trend in the industry. But we enhanced that with a solid vision portfolio, and what is really great is the machine centric robotics. This is where both divisions work together to bring a robot on a machine to make the machine ultimately adaptive and flexible for the needs of our customers. And the company that we bought Codian, you see in the right that the delta robots, are used both by the robotics team and the B&R team to bring in these innovations into the market. Now you heard at the beginning that we innovate for a purpose. We innovate not only to make our customers and society more productive but for a sustainable future. And this is important for us as ABB, and it's motivating for me. It is motivating for our teams. We have high-performance bottling automation in B&R, for example, where we can reduce 50% of use of plastics. And this is really tremendous by this automation that we provide. Microfulfillment centers in logistics have really reduce transport and less waste. And what is really great is that we have announced a couple of weeks ago, our newest technology to show how advanced paint solutions can reduce 33rd -- 33% in energy consumption and 30% paint loss and you'll see it's really also a very cool application. [Presentation]

Well, this is a great innovation, and I can tell you the customers that I talked to after they saw our newest innovation here are so excited. And the fantasies are big, what you can do with it, what you can paint on the car? So here, it's a great example of robots, software, RobotStudio, how we can bring value to our customers. So digitalization and software is core to our strategy. And we look at it at multiple angles. We start with the life cycle of the design. You heard many times now the example of RobertStudio, where we're really able to model not only small cell but the whole manufacturing line upfront and reduce the time of implementation by more than 50% because the software that is built in the simulation tool is already the run time software. So when you download it into robot, it already can work. So it's really a great enhancement to productivity and simplicity for our customers. And at the core, in the middle, you see an example of a welding cell that, in this case, we use for Tier 1 supplier. India is the domain expertise and the software. And on the right side, you see now more and more application that we are providing to our customers that you can actually have on your mobile device or the iPad, and you can monitor the progress of the controls. You can even improve the operation efficiency of that specific cell. And these applications that you will see more and more from us coming to our customers, really exciting supporting the core of the business, but it's also a business of its own. With our strategy, we are uniquely positioned in the market. We produce our robots, the products and the machinery automation. We service them with the software, and we build cells. What we are reducing, as I mentioned in the beginning, is the dependency on the system business and the turnkey business. And as you can see, we are really unique in that in compared to our competitors and our ability to provide value-based on the product itself. And I can tell you, our customers really appreciate this position and that we can support them in the way that they are driving. Two distinct divisions, but they collaborate when there is value to be created. On the one side, we have a team that works on a digital factory automation solutions, which is the layer above. We use B&R technology and robotic technology to improve the operational efficiency of cells and lines. And I have a great example for you how the machine centric robotics really is a game changer when you bring the automation technology of B&R and robotics together. Here, you see an example from a customer in the food and beverage industry who asked us to create a pilot. And the pilot was about, can you help us? In the COVID times, now we have customers who want to actually click on a button, customize their specific chips and drinks in a box and ship it directly to me at home. So the food and beverage company ships directly to you at home. So in this case, we modeled it with our software. And you can see here the incoming chips, in this case, with our newest technology, the PickMaster using AI vision system to basically sort them in a way that at the end, you can put them on the trail and then ship them out. This is a combination of ACOPOStrak and the Picker. And then at the end, you see the ACOPOStra, which the part in the back and the robot working hand-in-hand to make sure that we can accommodate any type of size of that chip, which is important because, obviously, the requirement was not to break the chips when we ship them. They are put in sequence. And at the end, when you see on the left side, you see a box that is customized to your needs. So -- and it takes seconds from the moment you click on your special box until it gets into the production system. So this is really the most advanced out there in the industry by combining 2 technologies, many times you see an inflection going. Now you ask myself, is this really a machine, is this the robot, is it logistics, et cetera? It's actually a hybrid of all. And ultimately, we are making all the machines more adaptable and more flexible. And this is real value for our customers. And you know what, most of it is run through software, software and intelligence that we bring. Now let me close on the important topic of driving profitability. You remember maybe some of you who visited us in Germany at our robotics center when we presented in February, our strategy. I already talked about the most severe crisis in the automotive industry. And at that time, we had a dependency of almost 50% on that business. And you know what, COVID came afterwards. So we had a double hit in this year. But I must tell you, I'm so proud of our team, how they managed to fast react first to keep our employees safe, keep production up and running, but also to make sure that we may take as much cost out as possible to show the resilience during this time. So despite a significant decline of -- in 1 quarter, more than 25% decline, we hold the lines on keeping our profitability at the right level. This is not the level that we want. But I can tell you, it was important for me and my team not to waste this crisis. And we managed to improve and to do multiple things that when the market comes back, that we will be in a wonderful place. Our goal is to be well in the margin corridor, 13% to 17%. We -- I've used the term that Timo used, self support with 200 basis points, things that we can do on our own. I talked about the quality improvement, the pricing efficiencies and the change in mix and less of system business, more product and more service business, all of that will help improve by 200 basis points. But yes, the markets will come back. Yes, we will see a COVID recovery coming. But also with our newest technology, we will see an increase that supports also our profitability. And last but not least, we will invest in growth. And we increase the intensity of R&D this year. We will continue to increase the intensity because we want to be the winners of this market as it comes. So let me close with the 3 key points I mentioned at the beginning. First, this is a highly attractive and exciting business to be in. Second, we know how to win, is built on a solid strategy that we enhanced in this crisis with the addition of derisking the business and improving many of our operations. And last but not least, I'm confident that we will gain more than 500 basis points by 2023. Thank you, for listening, and we'll open up for questions.

Thank you, Sami. Painting the car in all sorts of fashions, I think could be the Christmas gift of the year. We'll open up for questions. And I think we have Ben from Morgan Stanley on the line.

My -- 2 questions. I want to make sure I understood a couple of things. Did you say that you were going to reduce your systems exposure within auto? And if so, how are you going to go about that? What is the thinking there? And then secondly, in your introduction, you sort of hinted, and I know we've talked about this before, about collaborative robots. And I guess what I wanted to know was based on the YuMi experience, are you proposing to go down a similar route? Or if we see more collaborative robots from ABB, are they going to be sort of fundamentally different in nature?

Thank you very much, Ben, for the questions. So first on the reducing the system exposure, yes, we will reduce the exposure on the system business. We have certain criterias. One of them is pure turnkey where we don't have value-add of ABB. And second is, it needs to be more, but obviously, more than 60% of content that is coming from us. And yes, we will reduce the exposure there, which will mean that in the automotive business, we will have a reduction of that business going forward. There is some slight system business that we were taking out in the general industry, but the majority of that business actually is going to be reduced in the automotive. Does that mean we are going to get out of automotive? No, not at all. I can tell you I have meetings even last week with large automotive, and they love our technology. But it's based on the core technology that we have. For example, the Flex production system that we have, the paint system that you saw, quality inspection using AI and our robots. All of these are cool technologies that our customers really value and our higher margin and makes fun to do business. The other business is volatile, higher risk, obviously, and we don't want to do that going forward. On the YuMi side, I can tell you that, first of all, I'm very happy with the development of YuMi, we brought a single-arm YuMi. And interestingly now in this crisis, we see a lot of demand coming from the health care area and the laboratories because YuMi is the most safest product out there for lab technicians together with. And yes, we are coming out with a suite of portfolio. On the one side, on the YuMi side, that is a great portfolio, but we also have our technology, what we call SafeMove2, which is basically when you come closer to a robot, the robot starts slowing down. When you go away, it moves faster. Why is that important? Because the customers want to keep the high life -- the cycle. So if you reduce the cycle and you reduce the weight, ultimately, there is no value for the customer. And with that technology, we can make all of our robots safe. And we have some also other cool things coming most likely at the beginning of Q1.

Thank you. Shane McKenna from Barclays.

I guess you've laid out quite a number of exciting new product offerings and trends within, obviously, your machine automation business. But maybe you can explain a bit more what was driving the decision to take the $290 million goodwill write-down with the Q3 results for that segment?

Maybe I didn't -- is not really working. What is the question there?

The goodwill write-down in Q3.

Thanks, Shane, for the question. No, we decided that the goodwill allocation in Q3, we will take away from the business area level down to the division level. And then based on the market situation and all the evaluation that we need to do, that we need to write-off the amount that we have done in Q3. So there is no change in the strategy. We will continue to grow the business. This is a technical evaluation that had to be done.

Joe Giordano from Cowen and Co.

Sami, you mentioned $100 million in robotics -- in logistics now, up from 0 not long ago. Can you kind of go into what specifically you're doing in logistics? And what are your ambitions there? That's a certainly a fast-growing market with a big private robotics environment. So how much are you looking at M&A there? Are you looking at mobile robots, you're looking at gripping, if you can just kind of expand on that a little bit?

Well, thanks, Joe. So this is a very exciting business for us. Logistics -- and when we talk logistics, we mean the end part of manufacturing, that is logistics, but also all the e-commerce is really changing the whole game. And the example that I gave you on the food and beverage side is basically also consumer products are also changing the way they think about logistics cutting away the intermediate. So there's a lot of change going out there. And we have probably one of the best teams in this industry who really looks at this -- at the challenges there. And with the domain expertise that we have gained over the years from automotive and others, we bring that into that market. But what we do is all based on the robots, on the software, on the simulation tool that we have. For example, building a fulfillment center is really at the core what we do. We have bought a company 2 years ago, the Intrion company in Belgium, as I mentioned. We already sold out there. We are seeing double-digit growth in this industry. We had some tempering in the first -- the second quarter due to COVID, but this industry is really growing massively, I mean you see what is going on in the e-commerce world. So we will continue to invest in our own capabilities, including robots and moving parts, but we also will continue to look outside for enhancement. Obviously, I cannot say more about that.

And we will take the next question from James Moore at Redburn.

I have a question on B&R. Both Siemens and [Rockwell] are making more than a 20% EBIT margin in IPC and advanced specs making 16%. I've really got sort of 3 parts to this question. Why is the B&R margin still low double-digit? When -- I think 3.5 years ago when you acquired it, you presented it would move from 12% to 20% with 800 bps of synergy. And I think it's still pretty close to the acquisition profitability. Secondly, is it PLC or IPC, HMI or Servo motion that's dragging the return? And thirdly, could you talk about the portability outlook for B&R, please?

So thanks, James, for the question. So when we compare Siemens or Rockwell -- we compare and B&R, we compare 2 different inner worlds. The portfolio does not really match completely because also we don't have any drives business in the B&R portfolio in that percent, for example, as Siemens has or others. And we will drive to improve the profitability of B&R as we go. We have a great product portfolio that will add a gross profit to the business that will enable us to bring it up to a much higher level. In the aggregate, as I said, and I'm committed to is to bring the business area to the 15% level. And in that mix, we will bring also B&R up to that level that in the summer between robotics and B&R we will get after that. And I think we will bring it up to the level that it really deserves to B&R, and I'm quite confident that we have the things in place to bring it up.

Are you able to say which part of the B&R is dragging on the profitability?

No. No, no. It is no specific part that is dragging and that we don't have any areas where we have restructuring needs or anything. But as a whole, we can bring it up. And, for example, take the ACOPOStrak where we will -- as this is more of an end market business, we see higher profitability than, for example, others. Adding the vision system, the robotics that is now added to it, all of that will bring the margin up of B&R constantly over the next 3 years. I'm confident that we will get it up.

Thank you. And we'll take the last question for this Q&A session from Wasi with RBC.

I just want to delve a bit more into the selectivity of auto OEMs and the margin impact. I mean, looking at the bridge, is that most of the pricing and mix portion of the bridge? Or are you expecting meaningful pricing? And then in terms of understanding a bit more what you're doing on that. Do you think there will still be an opportunity to sell in some of those projects to partners within the turnkey that you're selling specific products? Will you end up losing most of that project -- most of those projects to competitors who are willing to take on the turnkey and the lower content? And then also you are then giving up the kind of future service and maintenance revenues from those projects?

We had a little bit of a technical issue here. So Sami couldn't actually here at the beginning of your question. Would you don't mind if you please repeat it again to see if we can get it to work.

Did you hear it? Maybe let's try again Wasi.

Sure. So the first part of the question was understanding what level of margin impact are you expecting from that selectivity on auto OEM? So if I look at the bridge, is that most of the pricing and mix element? Or are you expecting other mix or pricing components, too? And then the second element was just understanding in practical terms what that means walking away from those turnkey projects. Will you still have an opportunity to sell into those projects through your partners who are doing the wider project? Or will you end up losing out on those projects to competitors who are willing to take on those projects and then, therefore, you don't get the future service and maintenance opportunities either?

Good. Now I heard it. So first, on the bridge, the bridge in the middle part, as we -- you have seen, the 200 basis point is a mix between pricing, quality improvement and change our mix. And in the aggregate, it will be the 200 basis points. And in the total, if you add the growth coming back from COVID, new products coming into the market, the 200 and the investment in R&D in the aggregate will get more than 500 basis points out. And then to the second question, where we are very, very careful is when we -- when I say turnkey business, that doesn't have value add, value-add also includes service. For example -- and also if there is a business that comes along with the robots, then it's a healthy business. But if it's really a stand-alone system business that we bring in robots from a competitor and build it as if we were a stand-alone system integrator, this is not the business that we want. So we are not losing out. We are actually strengthening our business presence there. So if there's an opportunity for service or product, we do the business. If there is not, others can happily do that business because it's anyhow a lower margin, a really volatile and higher-risk business.

Thank you very much. And with that, we close this session. We're now going to take a little bit of a break. We'll see you back here at 3:30. When we listen to the next 2 business areas and which will finish off the session for today also with our CEO, Björn Klas Rosengren. I'll see you back here in a minute. Thank you. Bye. [Break]

Hello, and welcome back to the last session of our Capital Markets Day. You're going to hear from another 2 business areas. And we're starting off with Industrial Automation, where we have Peter Voser, and we also will have Brandon Spencer with us online from the U.S. And without further ado, I will hand over to Peter. Please go ahead.

Thank you, Ann-Sofie, and welcome to Industrial Automation, where we serve the process and hybrid industries forever safer, smarter and more sustainable operations with automation, digitalization and electrification. I'll walk you through our portfolio and plans. And then we'll take a closer look at Energy Industries, which isn't only our largest division, but which is also an industry that, in particular, is going through a transformation globally, and then we'll find time for your questions. As a leader in Process Automation and in process electrification was growing over the life cycle of their investment, that value for customers translates into value for shareholders. We target 14% as the middle of our profitability corridor by 2023, while continuing to deliver robust returns on capital in the upper 20s by focusing on quality of revenues and business that makes sense for both our customers and ABB. Let's take a look at the industries that we serve: safety, productivity and sustainability are common goals across these industries. And integrated automation solutions often combining process and power management together with a growing share of digitalization are essential to realize these goals. This is the business context for our 5 divisions and all 5 hold leading positions. Three of them, energy industries, process industries and marine and ports combine an integrated automation and electrical system offering that is differentiated by industry-specific products and complemented by services over the long life of these assets, which is typically measured in decades. In turbocharging and in measurement and analytics, we deliver products, again, supported by services over a long life cycle, but enhance and extend the value of these investments for customers. Björn already mentioned that turbocharging business is earmarked for exiting at the right time and in the right way for ABB for our customers, our employees, so we will have work to do there going forward. But take a look at the markets that we serve. Several sectors that we serve are quite cyclical. So on this chart, when we look at growth rates, we look at through-cycle growth rates. The sectors in the lower part are likely to grow slightly below GDP over the cycle. And at the same time, offering fits well with their focus on safety, productivity and sustainability. So still, there is an opportunity to capture an increasing part of their spend. Sectors in the other part, in the upper part, are likely to grow more. Across all the industries we serve, we meet fairly consistent expectations. There is a capital investment phase where customers for their capital investment for their project look for reducing cost, schedule and risk. And once then the asset goes into operation, customers look for continuously improving, and -- that is basically the safety, the productivity, the asset life and the environmental impact that are then key. There's a recipe for success in serving these industries and customers. We continue to invest in our leading technology positions. We use our strong domain knowledge we hold in many of these industry verticals that we serve. And we combine that into integrated solutions for customers where we take physical and digital building blocks, our domain expertise and the engineering and service competence that we have around the world, in person and digitally, remotely in a virtuous cycle where sales comes after service and service comes after sales. At the heart of process automation is the process control system, the distributor control system in serving the process and hybrid industries. It's really the heart and brain of our customers' operations. Our customers have helped us to not only remain the global #1 in distributed control systems for now over 20 years but to even increase our share over the past decade. Honoring our concept,of evolution without obsolescence that protects their investment that they make in ABB technology, we have the largest scale in DCS, and we match that with strong industry-specific offerings. Plus, we're excited about DCS as the nucleus for our growing digital offering. Let's look at a typical integrated systems offering as we would deliver it in energy industries, process industries or marine and ports. We internally source for more than 500 million electrification and motion equipment. We then use our control system as an integration platform. We add industry-specific anchor products like our Azipod propulsion that Björn already mentioned in his introduction. Gearless mill drive or paper quality control systems, generator excitation. Whatever the industry specifically is that we are serving, and then we add our domain expertise and engineering competence to deliver successful projects. Executing these projects professionally translates into an asset-light, high return on capital business for industrial automation with significant value generated also for ABB's Motion and Electrification businesses who have the margin on the product. By 2023, we aim to increase our margin to 14%, the middle of our corridor, and even further increase our already strong return on capital employed to around 29%. We are confident to get there by prioritizing quality of revenues before growth, which means focusing on high own value-added business and being able to say no to projects that have too low an ABB content to make sense for us. To calibrate where we are going to, let's look at where we have come from. And let's look first at 2013 to 2015, where, interestingly, in 2014, the oil price collapsed from $110 down to $40 a barrel. And you can see, we held our margin. 2016 to 2018 then, we started to really intensify the focus on execution, on the quality of revenues, the same levers I mentioned now, and we exited the EPC business that we had. We increased service, and we professionally executed our projects, all contributing to higher-margin realization. Then unfortunately, came the setback in 2019 around conventional power generation, and the market in conventional power generation went down faster than most people, and I include myself in that we're seeing it coming. So we felt that twice. We felt that in turbocharging, where stationary power generation is actually our second largest market sector. And we felt that strongly in power plant automation, which we had internally take over in 2016. And that all was worsened by the Kusile power plant project in South Africa, a project that ABB took an order for in 2015, on which ABB then self-reported a suspicious payments to the authorities in 2017. We haven't previously published it, but here's the number that we are quite proud on because through all these years, through all those ups and downs of the markets we are serving, we have produced a consistent return on capital employed in the upper 20s. Now this year, 2020, unfortunately, puts us into a perfect storm. We're still working on overcoming some of the 2019 challenges, while the coronavirus disease is the first crisis in my lifetime that disproportionately affects service, which normally is the most resilient in this portfolio. But because of mobility constraints related to lockdowns, we've also suffered disproportionately on service. And in addition, the combination of the coronavirus disease and its consequences for our customers, together with the lower oil price, have really also cut into our customers' operations to different degrees. I won't go into all the details. But if you look at this conceptual slide, where you see on the horizontal axis, the impact that the coronavirus disease had, you see most pronounced that, for instance, cruise vessel operators in our marine and ports business. They, of course, hardly operate any parts of their fleet in this period of time. Hence, also, their service need has declined significantly. While at the same time, if you take the oil and gas price impact, of course, our energy industries business but also other parts would strongly feel that. We are navigating this storm. We are keeping our people safe. We're staying close to customers, now a lot more through digital meetings than physical meetings in this period. We're trimming our organization with a combination of permanent and temporary adjustments. And we're increasingly interacting digitally with customers. And I'm confident that we will not only weather the storm but we will ultimately come out stronger as the crisis is also a catalyst for increasing the speed of digitalization in industry. Here's in quite some more detail how we work our way back into and then towards the middle of our margin corridor. The first part is overcoming the Kusile and COVID headwinds. If you just take out Kusile of the last 12 months data, that already puts us back above 10 percentage points margin. But the bigger part here then follows to get us towards the middle, which is really a focus on quality of revenues and further strengthening our execution, including our productivity, and continuing to grow our services, including digital, while continuing to invest in technology. And again, their digitalization is a key part of it. In going this path, not everybody is going exactly at the same pace and with the same priorities. In line with the framework of stability, profitability and growth, our different divisions have different mandates, and 3 of them are to improve performance, which means margin is the first priority before volume and 2 of them are on the growth trajectory, i.e., start from a margin basis that is already reasonably strong but are growing their volume as the first priority. But that's a simplified picture, of course, because even below the division level, we clearly manage our offering portfolio as a continuous process. So our portfolio is not cast in stone. This is something we work and rework on with differentiated priorities as a function of the attractiveness of the business and our ability to perform. Now there's one area across all our divisions, that is really a priority. So let me talk a moment about our digital portfolio. We're within the category of purely digital. So the software and software-as-a-service, we look at 3 different categories. The first one is digital services around equipment that we have delivered, where often, we basically differentiate the hardware that we've delivered through a software offering that comes on top. And second is the digital system solutions, where we take a more holistic approach, very often on the basis of install base of distributor control systems based on operations data and know-how that we have about the domain and 5 value driver families. And this summer, we started into a third category, a push beyond the operational technologies, combining contextualizing and analyzing data across operations technologies, engineering technologies and information technologies, and of course, across all that, we support our customers with cybersecurity services, and we help them with remote expertise in what we call collaborative operations. Let's look at examples and financial numbers behind digitalization. Here, the underlying challenge is that natural gas leakages are both a safety hazard because of the risk of explosion and an environmental hazard because methane is a potent greenhouse gas. That translates to a need for customers to localize leakages for oil and gas companies and gas utilities. And we have a hardware product that is a gas analyzer. But rather than installing it in a fixed way, we now mounted on cars or even drones. And we add location information, capture wind speed, take digital maps, and through all that, localize leakages exactly. And we call that ABB Ability MobileGuard and offer the customers the choice of either sourcing the information as a service or buying our equipment and licensing our software. When I talked about collaborative operations as a means of digitally providing expertise to people who are out on a marine vessel, a rig, in a remote mine or mill through a combination of people and algorithms, let's have a quick look at this video. [Presentation] I mentioned the third category in the pure digital area. And this is exemplified by the recent launches this summer of our ABB Ability at Genius and Genix offerings. Analysts estimate that in our industries, at best, 20% of the data are being used, and that there's up to 40% productivity potential through industrial analytics and artificial intelligence in this area. So this summer, we launched this offering. And our Genius is really our operations data manager that makes the data from the real-time control system available for such analytics and then Genix, our industrial analytics and AI suite, integrates our domain, digital and automation expertise with analytics and AI. So it combines, contextualizes and analyzes data from operations, engineering and commercial IT systems for actionable insights and faster decisions. We zoom back out, here's the overview of what we do in digitalization. Our digital strategy starts with customers and their needs. We manage the 3 categories that I mentioned. Based on the inner workings of our offering on the cloud and edge level, including the ABB Ability platform. We manage on behalf of the other business areas also. So we do this collectively. And the new launches, I mentioned, all ingesting and contextualizing data from products and systems installed in the field. I realize digitalization to many of you at times risks to sound a bit virtual but the business is real. So I'm proud to share some numbers here. On top of the several billion dollars that we have in digitally enabled business, which quite naturally comes if you're in the automation business. We have built a $400 million business in selling software and software-based services organically, which means we've doubled this in just the last 3 years and simply because we saw a better payback in taking that organic investment relative to spending that money externally. We won't rest on this, obviously, but we have a double-digit growth ambition also going forward, again, mainly organic, but potentially including some bolt-on acquisitions for competence or acceleration. Finally, together with safety, sustainability is an important part not only of ABB's purpose but also of the license to operate of our customers. Our automation, electrification and digital technology solutions help our customers successfully manage the energy transition, increase energy efficiency and reduce the environmental impact by more sustainably using resources, including by low carbon mobility. Björn mentioned our electric and hybrid propulsion in marine. I already mentioned the gas leakage detection. You have several other examples here on this slide. And we could do a whole presentation just on that. So to conclude, we're committed to create value to deliver a consistent, upper 20 percentage return on capital deployed -- employed despite the cyclical industries that we serve target a 14% profit margin by 2023. Let me now hand over to Brandon Spencer, President of Energy Industries Division, to share both his excitement and his plan regarding how we can help our customers to make their operations safer, smarter and more sustainable in an industry that is transforming while creating value for ABB. Over to you, Brandon.

Thank you, Peter. I'm really pleased to be here today to talk on behalf of energy industries, to share a little bit about where we're going as a division and how we drive value internally and also for our customers. What you see on the right-hand side of the screen here is where we're going as a division. We're going to drive our profitability up between now and 2023. We're going to continue to drive our impressive return on capital between now and 2023. And you've heard Peter talk about it, you've heard Björn and Timo talk about it, some of the other leaders, profitable and stable before growth. We're not going to give up on growth in energy industries because there's absolutely opportunity for us, but we are going to focus on making sure that we're profitable and stable. So how do we do that? If you look at the left-hand side of the screen, it's about being a leader in automation. It's about driving innovation forward. We're a technology company. What can we do in order to continue to drive a carbon-free society? Even in our traditional businesses, where can we help with that along with other parts of our technology? It's around innovation in digital. So digitalization, you heard Peter talk about the $400-plus million as part of industrial automation, $200-plus million of that comes from energy industries. And those are pure digital plays. Not our DCS offerings and other things, but pure digital business. And lastly, we're going to live to the ABB way. We're fully empowered to deliver the results. We're fully accountable to deliver those results. And I'm going to step you through a little bit in this -- the next few minutes about how we intend to do that. Really excited to talk about this slide. This is not yesterday's news. This is today's news. These are wins that we've had since COVID, since the perfect storm that Peter talked about. We talked about oil price volatility, we talked about demand shock, we talked about COVID, kind of the perfect storm in our business. These are wins that our teams around the world have done where we're driving value for our customers. And as you work around the chart, you see pure automation business, where we're providing the intelligence and brains to run these kind of facilities. You see electrification projects, where we're working together with our brothers and sisters from EL and from Motion in order to deliver a superior value to the customers. You see our digital solutions, again, pure digital solutions, where we're taking data, driving connectivity and driving value together with our customers. And last but certainly not least, the environmentally friendly offerings. So yes, we have the conventional parts of our business in power gen and in oil and gas, but we also have other avenues and other markets that are opening up and are growing in a way that certainly offsets what we see in the downside of our conventional businesses. Really proud of the team, really excited to show the highlights of what we're doing around the world. As I said a little bit, we've got diversity in our markets. And so on the right-hand side, you see, we've combined power generation, water, oil and gas, chem and refining, the midstream portions of our business. All of those together, which allows us to have pushes and takes against what's happening in the market. You see where there's some growth rates that are happening that are higher than others, and we certainly are confident that the growth rates in some of the emerging segments outweighs the downside that we see in some of our conventional businesses. When we talk with customers, when I talk with trade media, I'm constantly talking about oil price cyclicality, about the demand for sustainable energy, what does it mean for the customer as they transform and transition their businesses as part of the energy evolution that we're going through, and certainly, around digitalization? Our customers are going through it internally, which is really important. ABB is doing it internally, which is really important. But how do we work together, bring in other parties from the ecosystem that play in this space in order to truly drive value for both organizations? And we'll touch on that a little bit as we continue forward. We've talked a little bit about the industries. And really, my takeaway for this slide is what Peter talked about in his presentation. We serve all these industries, the conventional power; the oil and gas; what we see in alternative energy and where those markets are going; water, a really important market for us, where we're seeing double-digit growth in 2020, and we expect to continue to see that as we go forward. And what are we doing for those industries, we're all about making them safer, smarter and more sustainable. So whether that's the way we deploy our technology, whether it's the solutions that we bring, the services that we wrap around it or the digital connectivity that bolts it all together, it's about making our customers' operations safer, smarter and more sustainable. What you see here is our portfolio. It's a little bit of a complicated slide, but we want to be transparent with everybody that's watching today. So I'll step through a little bit of detail in terms of hoping to explain it better. What you see at the top is the markets that we serve and important to note is that we go-to-market with a multichannel approach. We believe in EPCs, the engineering companies, end users, OEMs, channels, all of these ways to get to market because we want to sell the customers the way they want to buy from ABB. What are we selling? We're selling automation. We're selling electrification. We're selling digital connectivity, and we're wrapping service around all of those. Service is over 50% of our revenue. So it's a critically important part of our business, and certainly, a growth engine for us as we go forward. Automation is our core business in the middle of the chart. That's our anchor product. All of our platforms are current platforms as well as our legacy platforms. And then we have the specialty portfolios at the bottom of the chart. These are areas where we're market leaders, and these businesses sit within energy industries. So we have responsibility for the product development, the road maps, the marketing, the go-to-market. All of these elements we have responsibility for. The bottom right-hand side of the chart, also important. We do a lot of pull-through volume with our brothers and sisters in EL and in Motion. It's critically important for us because we're delivering solutions to the customer. And so we want to make sure that we provide best-in-class technology, domain expertise, project execution, all these things. And where it's not part of ABB, we work with third parties in order to make sure that we can deliver that turnkey solution that drives value for our customers. So let's talk a little bit specifically about automation, winning in greenfield and in brownfield, very important for us. And there's 3 pillars that I want to focus on. The first is technology. We're -- we want to be innovative and continue to lead in technology. So whether that's new product offerings, whether that's Edge Genius and Genix and the digital connectivity elements that we talked about, all of those things complement our strategy and the strategic pillar for being a leader in technology. Technology feeds into execution. Execution in our markets is critically important, whether it relates to safety, the environmental impact, cost, schedule, risk. I'm very excited to share with you all that we launched a few weeks ago, ABB Adaptive Execution. We're going to play a short video for you here in a second. And in that video, it shows what are some of the elements that wrap into Adaptive Execution. Peter? [Presentation]

I get absolutely charged up every time I see that video, and it's really exciting what we're doing there. It wraps around people, around process, around technology and around infrastructure in order to deliver cost, quality and schedule to our customers. There's a benefit inside ABB as we modularize things and streamline and standardize what we do in order to affect quality and drive profitability, there's a benefit for our customers around the CapEx side, into the operating side and certainly around the quality that they receive. Really excited about the launch of this program globally for us. Last but not least is services, being the life cycle partner. Peter talked about the duration of these projects. The capital side of the project can go 2, 3, 4, 5 years until the technology is deployed, then it runs for the next 20, 30, 40, 50 years. Service is our intimacy with the customer. That's how we connect. COVID has certainly been a catalyst for some of this connection and digital connectivity, as Peter touched on, with the collaborative operation centers. We will continue to drive value and find strategic offerings that we have, which really help ABB and our customers to be more productive as we go forward. We talked about environmentally friendly solutions. And I want to dive a little bit deeper on that. As Peter said, we could give a full presentation on this topic. But I want to show some real examples of where we're doing it. Again, when I'm talking to customers, we're talking about resource efficiency. We're talking about new energy models, renewables, hydrogen, carbon capture all these different types of potential energy sources. And we're talking about a responsible use of resources, like we talk in water all the time. So what's ABB doing about it? And specifically, what are we doing in IAEN in energy industries about it? On the right-hand side, you see a couple of examples, and they range from electrifying the seafloor. So you're taking off a gas turbine from the top side of a facility, emitting carbon and you're electrifying the seafloor driving up reliability, availability and reducing the environmental footprint. The first green hydrogen facility in Europe. ABB is providing the intelligence around this facility. In Bangladesh, a solar facility, where we're providing intelligence and digital solutions as they diversify their power generation sources. And last, but not least, and really important here is that we don't just talk about it externally, we are about it internally. This is a collaboration story between ourselves and EL where we make an ABB facility carbon neutral. And this is done together with products from our brothers and sisters. My division is providing some of the intelligence and digital applications. And so I think it's really important that we focus on that we're delivering these solutions to ourselves. And so there's clearly value in there that we can deliver to the customers. I touched on digital. I want to give a feel for where we are and where we're going. $200 million plus in terms of the revenue portion of energy industries, an impressive CAGR, so an impressive growth rate that we've had in this organically, along with some partnerships, that we continue to use to drive and serve value to the customer. Where are we going? We're going to double this business. So I mentioned profitable and stable before growth. This is an area of growth for us, and it's an area that helps also drive profitability for ABB and value for our customers. And so whether it's our own niche solutions, whether it's wider enterprise offerings where we're connecting different customer sites or whether we're just driving efficiency, all of our solutions with ABB ability, with Genix, with Edge Genius and with our homegrown solutions that are part of ability in IAEN, we are focused on delivering value through our digital growth. Quality of revenues is a theme that you've heard today and stable and profitable before growth is a theme that you've heard today. This is what it means in IAEN. We manage our portfolio annually, which you see on the left-hand side of the slide, and we'll continue to do that. Are we the best fit? Is this product? Is this market where we want to play and where we can add value. What are we doing about it? We'll target growth. Whether it's in service, whether it's in channels, whether it's in digital, some niche places where we play in specific markets, we'll target that growth. We're going to work on some of the hygiene elements of our business as well. So whether that's units that are underperforming, for example, we're going to fix them. Products where we aren't at exactly at the margin quarter that we want to be at. We're going to address it, and we're going to get it to where it needs to be. Our operational footprint, all of these kind of things go into that hygiene category that I just mentioned. And lastly, some bid selectivity. We want to make sure that we're focused on winning in markets where we can deliver value to the customers and we can get paid for that value back to ABB and thus to our shareholders. We'll do all of this by leaning into the ABB way. What you hear Björn, Timo, the rest of the Executive committee talk about externally is exactly the messaging that comes internally, and we fully support it. We're adopting it, we're implementing it, and we're going to help use it to drive results. The decentralization that you hear is real. The connectivity to performance, whether it's through the scorecards, whether it's through the annual incentive plan, all of these things to truly drive ownership. We have a motto in called team, which is transparent, empowered, accountable and made simple. All of these fit perfectly within the ABB way. So as I close here, what you see on the left, that's my commitment to you. It's the commitment of my leadership team to you, and it's the commitment of our 8,000 loyal employees that are serving our customers every day to go deliver those results as we lean forward. With that, I hand it back to Ann-Sofie to start the question-and-answer period.

Thank you, Peter and Brandon. We now go into the Q&A session. And as promised earlier on today, we'll tune in Guillermo for his question to Peter.

And question to -- again, to regards to process automation and I guess, portfolio management. And going back to the issues of low growth and low market positioning, I was wondering if apart from turbocharging -- turbocharges. You can actually -- you can actually do more portfolio optimization with, for example, instrumentation, or OGC? Or is it the case that the synergies from doing that portfolio utilization are greater than the potential uplift that the group will do by doing some actions over there?

Question, Guillermo. And I think it's important to emphasize how we understand and how we live portfolio management. There's always a question, and the framework was shared earlier by Björn and Timo. That's the framework we use consistently across ABB. There's always the strategic attractiveness of a business and our ability to win. And we then look at how can we make not only how can we deliver consistent margin and consistent volume, but what is the delta we can make and the delta we can make in 2 ways. Of course, we can make a delta by buying and selling businesses and in this case, the exit in turbocharging is a delta was a business that is performing at a very high level of performance very consistently over many years, but where we're basically not seeing under our ownership, the ability to make a major on top delta on top of that high-performance that we have already, whereas in some of the other areas, clearly, by focusing on the delta we can still make. By example, adaptive execution, as mentioned by Brandon, further strengthening our execution and serving some of the markets that we are serving by deploying technology innovation, by improving our operations and our factory footprint by a whole range of such measures tailored to the specific part of the business we're looking at, we see us making a delta. And then also, our portfolio evaluation isn't cast in stone. So we take that assumption. We make our plan. And then we see. Are we able to make it materialize? And of course, in case we wouldn't be able to make the delta ourselves, then we would get back to your question in a year's time. And see what -- if we can't do things organically, but with what we have, we see the opportunity to make a delta.

And we have the next question from Andreas at JPMorgan.

I have a question on the margin target, if you could clarify that. This morning, I think it was mentioned that the 14% would also need or include some M&A where you basically buy some higher-margin businesses. We've talked about adding more devices to that process automation business for maybe the last 20 years in terms of, I think, past management called it, having more products to hang on the kind of DCS Christmas Tree. What has happened here on M&A? And is that still a focus? And why have you not been able or willing or it didn't happen in terms of all these add-on acquisitions maybe that we talked about over time?

Thank you, Andreas. And indeed, there's always with portfolio management, not just the -- what will we stop doing, but what will we start doing question? So what can we create synergies with. For the time being, I think, a big delta that we are in the process of making and where I disclosed some numbers is in digitalization. And there, we basically looked at the odds of doing it organically. Investing a part of our margin in that organic growth that I was able to show you for this area rather than actually spend a lot of money outside and then having to find a payback for that acquisition. So for the time being, I don't think it would be the right thing to go further into what exactly would we be buying. But clearly, as we're talking about an exit from a high-margin business, we are wrapping our minds around what could come in, in its place and not only be a great addition, but in addition, that would help us make a further delta on.

Is the 14% margin target organic or including an acquisition that replaces the high-margin turbo business?

You already heard Timo's answer this morning, which was basically saying without turbocharging. The margin ambition clearly gets a lot steeper if we look at continuous improvement actions only. So that likely we would be looking at an acquisition to at least partly cover the gap that our most profitable division would be leaving. But I mean, we don't have the timing and the modalities on that. So at this point in time, we also don't know when this event will actually happen.

We'll take the next question from Martin at Citi.

So it's Martin from Citi. Just a couple of questions, if I can. The first one, just following on from the margin question. You do target a good increase in return on capital as well. I mean, again, would that include any goodwill and so for that you would need to spend on acquisitions? And the second question was, we've talked about this in past investor days, some of your peers have talked about ABB losing market share. And obviously, there's many, many parts to the division and some of those, like conventional power, as you see, have been weaker than expected. Has that growth differential simply been a mix effect? Or have you seen any sort of end market share changes over the last 2 or 3 years?

Thanks, Martin. These are 2 great questions. And yes, let me emphasize on the first one, that our return on capital employed is including goodwill. So we always look, including goodwill, and that's the result of a track record of project execution and basically running our project businesses around 0 net working capital. So the balance of what we're getting from customers, what we're spending, the discipline in our execution is what actually allows these ROCE values to be as strong as they are. And I'm so happy to be able to disclose them here for the first time also. On your second question, yes, we've heard 1 particular competitor very often stated that they would be gaining share from ABB. At the same time, they, of course, look at the same market share report as us. And I just included that in the presentation for the fun of it. In the last 10 years, there's no signs of us losing market share in distributed control systems. Several people have gained market share, including ourselves, basically 3 companies have 1 has been losing market share in a major way. So I'm not concerned about that. But of course, with the journey that I shared in a bit more detail, where we exited EPC where we did a few other moves where we focused on higher ABB content in the portfolio, which was part of what I was talking you through as part of our margin uplift trajectory in those measures, yes, our volumes reported in this business area have actually not developed in line with some of the others, but that's because we made a conscious choice to actually deprioritize certain business. So when it comes to the DCS proper, there's fairly good market research available there, and there's no evidence of this frequently made claims. So I would like to see some numbers next time I hear that -- where that will be coming from.

There's a challenge for you, Will. We'll take the next question, please? No, that's from Will from Kepler Cheuvreux.

Sorry. 2 questions. The first one is when we think about your strategy to grow in digital Solutions and digital business over the coming years, how do you anticipate the success there? Is it mainly building on instrumentation and digital offerings to your existing systems like 800xA or Symphony, or do you also have a strategy to be able to attack or cannibalize -- not rather cannibalize attack some of your competitor systems such as delta V or the Foxboro system? So where does the growth come from in digital? And do you have a strategy to attack the existing incumbent competitor systems? The second question is about measurement and analytics. When we look at the competitors in management and analytics, their returns are much higher than the ones that you are suggesting here. Are we just looking at the returns today being impacted by the cyclical downturn in a number of your end markets like oil and gas? Or is there a structural difference in the returns you achieved in measurement and analytics compared to your competitors?

Thanks, Will. These are 2 great questions. And if we look into the first one first, in terms of the success in digitalization, I deliberately painted the picture of these 3 categories we are pursuing. The first being around the equipment that we've delivered differentiated by software. The second, then the system solutions around very typically, the control systems and then devices that are out there. And I wouldn't think of it as attacking anybody's installed base. I'd rather describe it as adding value for customers who have a mixed installed base of different things, but they don't want to buy into digitalization in a captive way, was this control system vendor or that one, but they rather look for proper digitalization that serves their need. So we think it from the customer and not from the point of what has been installed. But connectivity, of course, is important there. And then I described also the going beyond the operations technology space, which is really rather than saying, yes, in digitalization, there's OT, there's ET, there's IT and they're all different fields, how can we pull relevant data for customer decisions together and contextualize it and make that into insights and decisions for customers. So that's our strategy in digitalization. We have that by division, by each of these areas in numbers, but of course, not prepared to share those at this point in time. When we then look at measurement and analytics, your question there, yes, I think it's clear that especially on the instrumentation side of measurement and analytics, we're currently behind some of our competitors. And that's why we showed it in the transform category. Our portfolio management has shown the alarm light and basically said, let's do something here to get that into a better trajectory. And yes, the trigger for that has been partly cyclical. We've had some parts that were very successful in serving onshore and conventional oil and gas. So when that went down, we saw also our overall KPIs going down. But at the same time, yes, there is a structural element, and we're committed to really working hard on improving that.

Thank you. And with that, we're going to have to close this Q&A session. Thank you, Peter. Thank you, Brandon. We go into -- listen to another business area. We're going to listen to Tarak Mehta, who is the President of business area, Electrification. Please go ahead, Tarak.

Thank you, Ansi. Good afternoon, good morning, good evening. Ladies and gentlemen, thank you for joining us. My name is Tarak Mehta, and on behalf of the 50,000 colleagues of the electrification business, I take unique pleasure in giving you an update as part of the ABB Capital Markets Day on where electrification business is headed. So today, I would like to cover what do we do? What do our products, solutions and service do for our customers? How do we see the market, both in terms of current challenges but also future opportunities? Where are we headed as a team? And where are the divisions mandated to perform? How are we executing? Some details on execution, along with how do we generate value together, both as a team, but also working with the customers. So as part of the electrification business, I would like to make sure that you have a better appreciation for how we create differentiation. We create differentiation through innovative technologies, core technologies combined with innovative solutions, driving digital solutions, creating value for customers. We also have a performance management process. Each division knows what their mandate is. And I'm very happy today to give you an update on the great progress the team has made with our GEIS colleagues in terms of improving its performance and the kind of delivery service that the customers and what we see as the future of that particular acquisition. As well as a quick update on the great also [Audio Gap] driving the performance and profitability of the installation products business. We also look at portfolio the same way we look at the individual divisions, a structured process, we will give you a good view on how we drive the portfolio process going [Audio Gap] give you an idea that we're about 30% into the building space. About half of our turnover goes to distributors. And thanks to the acquisitions and the investments made over the years, we are very well balanced geographically. And that certainly in the year of COVID has really helped us. The recovery of China was visible in the performance of the third quarter. As you can see, we have 4 strong divisions, leading positions in the scope and the area of their responsibility. We will also take a look at the business slightly differently. You can imagine this panel in every single large high-rise building or a small industrial location. $10 billion worth of our products wind up in such an electrical panel. So the job of the sales organization is to get as many of our wonderful smart products into these panels as possible. These are engineered. Every single component is selected by people and our customers who put these panels together. We also have 30% of the business, which is outside of the electrical panel. These are items like plugs, sockets, switches, it's also the EV chargers that you might see in the shopping centers. These are making up about 50 -- 30% of the turnover and about 30 product lines that we have that drive the overall business when it comes to the $3 billion of revenue that I just articulated. We also have and we deliver on a daily basis, 1.7 million products. It's literally a river of products. Our teams make 30,000 pricing decisions per day. And thanks to those pricing decisions, we've had a very positive impact to the bottom line, even in a year like we had in 2020, a COVID-affected year. From the market perspective, I'd like to walk you through how do we see the market? It's a $160 billion market. You can cut it up into 4 sectors. The electrification business is well balanced. As the market is from a weight and a percentage perspective, so is our portfolio. When you look at the macro trends, we see 2 which are really driving and creating an exciting future for our business. The shift to electricity. As mentioned earlier, today, we see twice as much shift into electricity as the energy source for the world as any other source of energy. So this is exciting for us in the electrification business. We also see, thanks to the acceleration brought about by the COVID situation, the fact that we are digital together here today, so are our customers. So we see the expansion of e-commerce. We see the expansion of digitalization providing us opportunities. We also see 4 high growth segments. We mentioned before that data centers has been a good growth driver for the electrification business in the last years. I'm happy to report that we see not only good business in 2020 but in the last 2 months, we've seen a very strong acceleration in the data center business. These are all segments where all the divisions are focused, from their portfolio perspective, from the way we go to market, from the tools and processes, so that we participate in a disproportionately positive manner into these high growth segments. Now that you looked at -- we have looked at the business from a sector perspective, from a segment point of view, there's also another way to look at [Audio Gap] please excuse the challenges we have today. We can also look at the business from the geographic dimension. So as you can see here, the top 10 multinationals do not occupy any more than 50% of the geographic market segments. And in the biggest market, which is Asia, Middle East and Africa, it's 75%. Our scale position as #2, what does that mean? That means we have the market volumes, and we have the manufacturing leverage. Combine that with the innovation and the R&D potential of our business, you put scale, R&D innovation on digital platform like ABB Ability, what does that mean? We can take an application, a solution from China for the hospitals to make sure their reliability is better, thanks to the application and information of an ABB [Audio Gap] over to Australia. And from Australia, we can take it to the Albert Einstein Hospital in São Paulo. All of this gives us the opportunity to take market share from the local competitors. When it comes to the direction of the business, you heard about the ABB Way and the purpose. For us, as a team, we stand for safe, smart and sustainable electrification for our customers and our partners, all of which is only possible, thanks to the great team that we have. Electrification as a business. We want to be first. We want to be first for our customers. We want to be easy to do business with. We want to make sure, and we will make sure that we have the shortest lead time and the best delivery performance. In a business with 500,000 SKUs, we need to [Audio Gap] we have the best fill rates. And because of our products are so critical, the fact that we can deliver and we're easy to do business with, does provide us with a significant competitive advantage. Innovation is the lifeblood of ABB. This is who we are. This is what we bring as value in terms of new solutions, new ideas. I'm very happy to report to all of you that our teams, our colleagues have won 18 awards [Audio Gap] first 9 [Audio Gap]. We were able to drive and get recognized for the value that we provide. Some of our award-winning solutions and products were ease of doing business, ease of navigation, ease of installation. So the customer focus in innovation is driving value. When we think about digital, think about the entire buying experience, from the time you look for a problem to the time you actually implement a solution. So all of these are areas where we have specific KPIs, and we are driving the business. Along with this, we have identified 6 growth drivers for the electrification business. We talked about innovation. We take an architectural control point like a breaker and we make sure that not only do we do the basic function, but we add features, we add embedded software, we add capability that creates a higher value than simply protecting the assets and the people, which is the primary purpose of the device. So these are 6 areas of growth. Moving into how do the businesses and the divisions think about performance. So we look at each of our divisions along the following parameters. What do we want them to do from a performance point of view? What capabilities do they need to succeed? What kind of portfolio moves are needed to make these divisions successful not only today, but also into the future? And where should they invest? As an example, we made the GEIS acquisition so for Alessandro, for Giampiero, and for Oliver, who's here with us today, the #1 priority for them and their teams is to execute. Continue the good work done on the GEIS acquisition, drive the execution, get more value out of it, lift the performance of the business, that's mission #1. And then depending on the business, there are different priorities. If you take a look at the Installation Products business, now that the performance has improved, what is next for Matthias and his team? To actually look at what makes sense to keep in the portfolio, to actually think through what could be the win-win combinations when it comes to execution. So this is the specific mandates for each of the divisions. But at the end, we are 1 team, a team that focuses on agility, a team with common core values within the group, a team that cares about not only each other, not only the customers, but what kind of values do we drive in the communities that we belong. It's an engaged team with a common purpose of driving performance, increasing the effectiveness of our solutions but also making a difference in the world. So let me give you a perspective from the digital. How do we drive value in the digital part of our portfolio? How do we create new revenue streams? We first start with smart products. It's the fact that we've been in the industry, it's the intelligence we gather from our process automation colleagues, we incorporate it into the products. We embed intelligence so that close to the process, while connected to ABB Ability, we're able to provide a customer a fast interactor, the ability to factor costs, the effectiveness, the productivity. On top of the ABB Ability, our teams have developed 4 discrete [Audio Gap] 4 to 5 business segments that you see here, all of which is part of a marketplace where we have partners. We create the smart LEGO blocks, they create integrated solution. All of which means the ease of doing business, the focus on e-commerce provides this team with a very clear objective, drive $1 billion worth of e-commerce in the next years, either through the distributors websites or through the way the customers might want to purchase from us. We want more than $3 billion worth of our portfolio to be searchable online. In the world today, everybody is looking for both the questions, but also the answers to the problems online. And with the product set of 500,000 SKUs, it's not a small task for us to make sure that customers can easily find what they need. Here are a few examples of how we deliver value. A very famous iconic building, Burj Khalifa. What did we do? We help the maintenance department go away from preventive maintenance. Every 2 weeks, go down to the basement, look at the electrical panel, write down the features, write down the performance, make sure that things are going okay. Instead, we have retrofitted in AB Ability connected solution. So we monitor the performance 24 hours a day, 7 days a week. And the maintenance department only needs to go down there when there is an actual need. So we go from preventive maintenance to need-based maintenance. And the amount of time and effort we save translates into many hundreds of thousands of dollars worth of savings a year for the Burj Khalifa electrical maintenance team. Another example, which speaks to the spirit of the electrification business. Here is a GIGA co-locator in North Carolina, a customer of ours. Typically, infrastructure is put in on 10-megawatt increments. So 10 megawatts worth of infrastructure now, 1 year later, 2 years later, another 10 megawatts of infrastructure. Working with the customers, we've been able to design, thanks to the modular construction capabilities and the product portfolio, we're able to design a system and a setup for customers so that they can increase their capacity in 2-megawatt segments. What does that mean? All the cash that they conserve and they preserve, they can use that to fuel a faster growth for the business. Along with the capital savings, we were also able to save them 25% on a typical data center operating costs, thanks to the technology and the solutions from us. The last example for today is, we want to contribute to a better society, lower emissions. What you will see is a short video of how in the e-mobility space, through the electrical vehicle charging system and setup, the electrification business team was able to make an impact in Netherlands. So here's a video showcasing what are we doing. [Presentation]

So really exciting to see the kind of impact we can make and support the society in terms of carbon emissions reductions. So moving on from examples to creating value. For those of you who were with us in November of last year, we had an investor event where we highlighted 3 areas that we needed to focus on to improve the performance of the business: solar inverters, installation products and GE Industrial Solutions. So how has the team executed in the last year? Very happy to report that the solar inverter business we exited in Q1 of 2020. The Installation Products business is doing just fine. I will give you a quick update on how that business is performing. The GE Industrial Solutions business, we've handed it over to the 3 divisions, distribution solutions, smart power and smart building. And thanks to the very good execution despite the challenges of COVID in 2020, the electrification team was able to hit the margin corridor in the third quarter of this year. I'm very proud of the achievement of the team. It wasn't easy. Lots of personal sacrifices, lots of hard work, but nevertheless, the determination towards achieving the objectives and the commitments we made, at least for me, was a very personally satisfying moment of my career so far in ABB. So well done to the team. From the execution perspective, let me give you a little bit of a preview into how, not only are we doing on GEIS, but what does the future look like? So 5-year plan for GEIS. Remember, this was an under-invested business. We focused on product conversion, cost outs, optimizing the footprint and investing in an under-invested business in order to improve its performance from where it was to where we think it should be. So very happy to report that out of the $260 million of product conversion, the team has already achieved around $130 million, and we expect to reach $260 million worth of product conversion from the GE product to the better and more profitable part of the portfolio, which is the ABB product for the customer, we will get there even 1 year ahead of schedule. When it comes to the cost synergies, we're already $140 million by the end of this year, that's our projection. We will be more than $200 million 1 year earlier than originally planned, thanks to the efforts and the speed of the execution of the team. When it comes to investments, we needed to invest a lot of money to improve the performance of this business. We have already invested $330 million, and we will finish the program of investment with $410 million. That's our current estimate of the business. In the meantime, during a difficult 2019, we got $97 million back from GE as a combined team effort with our M&A organization and our finance team. The proudest achievements for us has been the 52 new products introduced into the U.S. and the global market in 2020. The customers accepted them, we have sold them, and the team has done a great job of getting 52 new products out into the market. The second business from a turnaround is Installation Products. Less than 1 year, more than 250 basis points improvement. This business now is operating at low teens. They've done a great job. The future look for win-win with the distributors. Focus on the strong product brands, which our customers love, drive the business profitability through not only cost but also through growth. This is a business which is poised for growth given the performance improvements that we've seen so far. So now we looked at the business, the 2 specific businesses. Here is what we do on a day-to-day basis. Through the first 9 months of this year, the entire team has reduced our SG&A costs by 8%, certainly contributing to the better performance that you have seen versus expectation, and in some cases, even versus our own expectations. We have a continuous improvement philosophy in electrification, hundreds of projects, maybe even thousands of projects. The biggest 1 might be $1 million, most of them are probably $10,000 or less. All of those projects contribute to a $200 million improvement on an annual basis. And despite COVID, the team was able to hit that particular target, and we will hit the target of over $200 million in operational improvements. And pricing has become more of a religion inside of the electrification than just a process. The reason I say that is, even in a COVID year, we expect to get $71 million of benefit from price and commodity execution when it comes to the product side of the business. So this is what we do with on a continuous basis. We also look at our product portfolio on a continuous basis. What you see in front of you, and we just announced this morning, the decision on power conversion as part of the portfolio assessment process. But each and every 1 of those dots is some product line that a particular division needs to a close look at. We run it on a structured way every quarter. We take a look and see the performance, make an assessment on the strategic fit and then we make a decision. The best is for an organic improvement of this business, this particular business line or that particular business line inside of a division. You also see 2 acquisitions that we have made, which have been run by the divisions. So in 1 case, it was Oliver. In the other case, it was Giampiero. So they made strategic acquisitions run by the divisions, selected by the divisions, supported by the business area. So it's a structured process to drive performance and improvement. So when you look and put everything together. So how do we take this business from where it is to be solidly, and we aim to be very solidly in the margin corridor by 2023. Key action items, high segment, high-growth segment focus to drive the top line, continuous improvement, more than $200 million a year, thousands of projects. Continue the pricing discipline, find opportunities to segment the market and get the value, not only of the existing portfolio, but of the margin accretive digital part of the portfolio. Then we also look at the overall portfolio, continue the execution and we will continue the good momentum on the GEIS business and also the continued improvement in the installation products business to drive the portfolio of contributions. And at the end, this business does need, in some specific areas, more R&D, for example, in digital, more investments in sales incentives so that we can sell the digital portfolio. So when you put the whole picture together, what you see is a business with exciting prospects in terms of positioning itself to high growth segments, a business where innovation in core technologies combined with the digital solutions based on a ABB Ability, provide us with profitable growth opportunities, a business where we look at not only continuous improvement, we don't only look at GEIS turnaround, but we also look at increasing the profitability through selectivity, focus and segmentations. You combine that with a portfolio management concept, which includes turnarounds and for the divisions who have the performance where it needs to be, bolt-on acquisitions to drive both the technology portfolio, the revenue portfolio and even in some cases, adjacencies that make sense for them. So when you put it all together, I feel we are in a fantastic business great market potential. The team has proven a track record of improving business sequentially quarter-on-quarter over the last 6 quarters, so we feel very strongly that barring unforeseen economic circumstances, we are on a good trajectory to be well within our margin corridor by 2023. So thank you very much. Ansi, over to you for Q&A.

What a good note to end. We'll now go into the Q&A session, and we'll have the first question from Gael at Deutsche Bank.

I have 2 questions, actually. The first 1 is about the commercial buildings market that you identified as a high-growth segment for the division. So could you describe a bit more what you assumed in your guidance for the nonresidential construction market outlook over the next couple of years in the context of the pandemic and the development of work-from-home? And the second question is about the sort of digital investments you may or may not do in the future. I mean, some of your competitors have just started to accelerate the digitalization of their electrification business by, for example, making some inroads in areas like the design and simulation of electrical networks. So I'd just like to get your thoughts on this. If it is a path you could embark at some point in time as well.

Thank you, Gael, for your questions. So let me try to answer them. First, on the commercial building side, we are focused more on the smaller buildings, where the innovation portfolio that we have developed, Oliver and his team have developed, allows us to automate buildings that were not possible for us to automate in the future. We're reaching price points and performance on smaller buildings and providing a much better environment in those buildings, thanks to the innovation potential and innovation -- innovative solutions, which are more open architecture rather than typically the dedicated networks that the buildings have. In terms of the economic outlook, we see more in the building automation space, the opportunity to grow rather than just pure commercial building construction. So it's really on the automation side of the commercial buildings where we see bigger opportunity than per se, the commercial building sector, which everybody has an opinion in terms of what's going to happen. So far, in terms of the actual performance, in terms of the actual construction and the needs on our portfolio, we don't see commercial buildings at this point in the economic cycle as being soft. Don't know what's going to happen 6 months from now, but at this point, we do not see the softness. When it comes to the digital investments, we are more interested in digital investments including M&A. Each division leader knows that they have a green light to both look at but also evaluate and then make acquisitions if it makes sense, focused on the application. Does it add value? Does it help us pull-through more of the product? Does it make a difference to the customer? So instead of a platform approach on digital, we're taking a more focus based on vertical segment approach on digital. So if there are solutions for food and beverage, there are solutions for grid, as you mentioned, complexity and grid automation, those are the areas where we are absolutely looking for as well as our competitors into those spaces for M&A and acquisitions.

Thank you. Ben Uglow at Morgan Stanley is next in line. Will you please put through your question? Ben, are you there? No, we don't -- I think -- no, we haven't got him. We're going to see if Will is on the line.

I have a couple of questions, please. The first, could we start just to discuss Distribution Solutions. The segment that Distribution Solutions competes within is notoriously competitive and often deals with large projects with demanding customers. When I look at your peer group performance, it is often below the level of the division or your business area target margin. I just wonder, do you realistically think you can get that Distribution Solutions division into or comfortably into the middle of your business area target margin range? Or would it just be good enough to be on par with your competitors? The second is regarding the SG&A. Congratulations on getting the costs down on the indirect level. How sustainable is that, given that a lot of it will have been linked to the pandemic effects which will probably unwind through 2021 and 2022 onwards? I'll stop there.

Thank you, Will. On the Distribution Solutions side, our business is a little bit unique in Distribution Solutions in the sense that we have perhaps the biggest industrial exposure, plus we have a significant utility part of the business which keeps us sharp, which keeps Alessandro and his team quite competitive. So we like the exposure in utilities, which is, as you said, very cost competitive. But that cost competitiveness translates itself into good value for the customers and good margins for us on the industrial side. Second, we also have a significant amount of component business in the Distribution Solutions. So not everything we do is projects which are complex. Yes, we do have demanding customers but we watch very carefully, both the commercial terms, but more importantly, the technical terms for the execution and the requirements. So we take the right quantity of value-added ABB scope projects, and we push as hard as we can with Alessandro and the team, Mike and there is our global markets organization to sell as many of the very good margin components that are quite critical for all suppliers of switchgear and projects. When it comes to the SG&A question, absolutely right. Some of the SG&A specifically associated with travel, we do want our salespeople to go see customers and when the customers are willing to see them. Some might never be willing to see them. So there is a structural element of cost that is permanently reduced even in travel. But we also see that there will be some bounce back up on the SG&A side. The 2020 levels are probably not sustainable if you want to profitably grow, invest in digital solutions. So yes, we do see some element of that savings will need to be put back into the business in order for it to grow profitably into the future.

Thank you. Let's see if we have another question. From James Moore, perhaps, at Redburn. Are you there, James?

I am, and hopefully, you can hear me. Tarak, I wonder if I could ask you 2; 1 on GEIS and 1 on Thomas & Betts or Installation Products. Just on GEIS just can I clarify, did you say that the margin went up 250 bps to hit a double-digit margin expected for 2020? And if so, could you help me a little bit on the progression because I thought the GEIS margin had gone from 3% in '18 to 4.5% in '19, which would suggest the biggest jump. Maybe you could correct me on the progression, if I did hear correctly. And my question on Thomas & Betts is I was partly expecting Thomas & Betts to be on the noncore list because I've always felt that you bought it for a distribution channel. It wasn't the right channel. You bought GEIS to get the right channel. And maybe I could think about Thomas & Betts as becoming less core further down the line 2, 3, 4, 5 years' time when you've got the margin to the desired level because there are no electrons flowing through it, now digital, no peak shaving, less environmental potential. Is that a fair characterization of Installation Products or not at all?

Thanks, James. Let me try to clarify the GEIS question and the Installation Products very clearly. So the GEIS business is on a $200 million bottom line improvement trajectory as we had committed. When it comes to the Installation Products, for some reason, don't know why, even though it's mathematically easy to calculate in November, we never said that, that business was single digits. So it has been a double-digits business. It has improved under new management and the new efforts of selectivity and focus to be in the low teens. So the Installation Products business is in the low teens, is executing well. So in terms of the Thomas & Betts portfolio Installation Products, there are some product lines in that portfolio that we will, working with the divisions, take a look at where with Matthias and his team to take a look at, do they belong in the long-term future of that business. However, it's 1 of the more under -- is not as well understood businesses in our portfolio. There is significant amount of good margin, high value-add utility exposure. And then we have also some very good margin industrial components of the Thomas & Betts business. It does go on the same truck as our rest of our portfolio, to the same-site, installed by the same individual. So there is a supply synergy, there is a sales synergy and there is a distribution synergy of Installation Products portfolio. But we will take a look at all elements and all product lines inside of Installation Products to make a decision in terms of do all of them belong as part of the electrification portfolio going forward. Thank you.

Thank you, James. And we will take the last question for this Q&A session from Jane (sic) [ Shane ] McKenna at Barclays.

Shane rather than Jane. I use Jane at the weekends only. Final question really on product introductions from GEIS. In the presentation, you've highlighted, obviously, 52 new products introduced as the sort of best of both. If we go back to sort of pricing in the bridge, I presume that's been 1 of the key drivers. But when we look back at the Capital Markets Day, you talked about 100 new products to be introduced. Have some been held back because of the current environment? Can we expect the rest of those products to be introduced in the earlier part of 2021? And obviously, a similar impact in terms of pricing as we look into next year? And then just 1 final follow-up question on your data center exposure. Are you able to give us a feel for how you're exposed across the 3 different segments in terms of hyperscale, co-location and sort of edge or local? And how you're feeling about the outlook for that market, specifically for next year? Given the acceleration of growth that we've seen this year, there's a lot of concern about a further air pocket and data center for next year. So anything regarding the outlook for that a vertical for next year would be useful.

Thanks, Shane. No, you're right. Our plan was to introduce more products in 2020 than we were able to. The main reason for that was COVID and the challenges of coordinating product introduction plans with customers. So we decided not to go with the entire portfolio all at once. We're happy with the conversion. So we've had a very good hit rates on the products that we have brought into the market. But we didn't want to overload the sales organization and also our customers' organization with too many product changes and specific changes that they would have to make in their own drawings. So most of that was held back because of the challenges of getting to the customers and getting the products specified in terms of the introduction. So yes, we will plan, and we are planning to continue with the product introduction into 2021 and beyond. And in terms of the data centers, we all thought the data center market would be softer than it is. The acceleration of the last 6 to 8 weeks has been quite impressive to say the least. So it's difficult to say whether the momentum will continue to be at that level. That would be a breathtaking growth in the data center market. I don't think it will be that high. But I do believe or we do believe that between the hyper, colo and the edge, we believe that colo will probably be a little bit surprising in terms of its growth. Hyper is dependent on 5 players in the market, as you know, and they all are reaching their capacity to execute more than the desire to add capacity. So it's a little bit on their capability to execute the projects. I think the demand is there. And on the edge, it's a mixed picture. It depends on the geography and depends on your market access vis-à-vis the customers. So we believe data centers will be strong. Will it be as strong as it has been in the third and the fourth quarter of 2020? Probably not as strong. But even then, it will be a good growth trajectory if it continues to be even a little bit lower than what we see in the last 2 to 3 months. Thank you.

Thank you very much. And with that, we're going to close this afternoon. Thank you all for staying with us. I hope you have found it valuable. We're going to hear from Björn, our CEO, for some closing remarks.

Thank you, Ansi, and hello, everybody, again. It's been a long day. And I know it's also cumbersome to sit in front of the computer so many hours. But at the same time, I promised you an exciting afternoon. And from my perspective, I feel very comfortable with what I've heard here today. Number one, I think we have great businesses that are well positioned in what's taking place in our environment. We are market leaders. We are actually leading the businesses where we are operating in the industry segment. And the third one, we have exciting technology. And that can drive value for our customers going forward. And when I talk about technology, I also talk about digitization. And I hope that you today understand that software and digital solution is priority in ABB. And we are accelerating our work in the digital space, just, as I mentioned, to create superior value. We do it through our domain expertise. And it is what we have heard here. It is actually our division that are executing this value. There is the need for better financial performance of the group. And I hope you have heard here today that our businesses, we have heard the business areas representing the divisions, but we also heard 2 divisions. Well, I think it's been very clear that the divisions are accountable for their performance and also the development. And I can assure you that the career of our leaders within ABB is going to be determined on what kind of development that we are going to get in the group. By that, I really want to thank you for bearing with us this full day. And we have also the opportunity to many of you, our IR team is set up and prepared to answer more questions, and I'm looking forward to some of these investment meetings coming up in the near future. Thanks a lot for bearing with us, and have a good evening. Thank you so much.