Slide 1: ABB delivers strong order growth
Ulrich Spiesshofer, CEO; Eric Elzvik, CFO, October 22nd, 2014 ABB delivers strong order growth Q3 2014 results presentation © ABB October 22, 2014 | Slide 1
Slide 2: Important notices
Important notices This presentation includes forward-looking information and statements including statements concerning the outlook for our businesses. These statements are based on current expectations, estimates and projections about the factors that may affect our future performance, including gl
Slide 3: Q3 2014 key takeaways
Q3 2014 key takeaways ABB delivers strong order growth in Q3 Profitable Growth Relentless Execution Business-led Collaboration Orders up 28%1, large orders PS ‘step change’ on track; Q3 Organizational realignment in power and oil & gas operational EBITDA breakeven well underway for smooth implementa
Slide 4: Q3 2014 Key figures
Q3 2014 Key figures Q3 14 Q3 13 Change $ mn unless otherwise indicated Orders 11,225 9,089 +28%1 Revenues 9,823 10,535 -4%1 Operational EBITDA 1,418 1,638 -13% as % of operational revenues 14.3% 15.7% Income from operations 1,222 1,324 -8% as % of revenues 12.4% 12.6% Net income 734 835 -12% Basic e
Slide 5: Power and automation growth in all regions
Power and automation growth in all regions Overview 2014 Q3 order growth by region Change on a like-for-like basis Europe Automation + 10% Power +102% Total +40% Germany -9% UK +353% Americas Italy +4% Asia Automation +14% Automation +39% Power +8% Power + 2% MEA1 Total +11% Total +25% Automation +9
Slide 6: Large orders more than tripled
Large orders more than tripled 2014 Q3 large order examples Europe $800-mn HVDC, UK § Attractive profitability and risk profile § Leverage ABB technology, strong track Americas record on execution Asia $100-mn mine $30-mn power substation, automation, Brazil Bangladesh § Combined automation MEA § Ta
Slide 7: Broad-based order momentum through PIE
Broad-based order momentum through PIE Well executed across businesses and regions Base order growth Book-to-bill ratio % change1 Q3 14 vs Q3 13 Orders over revenues Brazil +3% Canada +9% 1.14x China +4% Finland +13% Germany +4% 0.86x France +6% Japan +7% Saudi Arabia +63% Switzerland +8% Q3 Q4 Q1 Q
Slide 8: Operational EBITDA bridge
Operational EBITDA bridge Solid execution on cost offset by volume effects and PS Factors affecting operational EBITDA Q3 2014 vs Q3 2013 $ mn Excluding the impact from Power Systems +41 -102 +25 -52 -132 Net Net Mix/ Other Power savings volume project G&A, Systems Cost savings Revenue margins forex
Slide 9: Cash flow
Cash flow Cash from operations up ~$400 million year-to-date Quarterly cash from operations ($ mn) Q3 cash flow lower vs 2013 2013 2014 § NWC improvements—lower as % of 2,012 revenues YTD 1,561 § Offset by net income decrease YTD 1’169 Cash from operations up 29% year-to-date 1'241 Focused efforts t
Slide 10: Key figures Q3 2014
Key figures Q3 2014 Divisional overview $ mn r r Operational Cash flow from unless otherwise stated Orders Like-for-like Revenues Like-for-like EBITDA% r operations r Discrete Automation 2,697 +14% 2,635 +4% 18.1% -0.7pts 409 -117 and Motion Low Voltage 1,914 +3% 1,921 +3% 18.9% -0.8 pts 308 -127 Pr
Slide 11: ABB – Next Level
ABB – Next Level Shaping a global leader in power & automation Presented September 9th, 2014 Shifting the center of gravity § Strengthening competitiveness Profitable § Driving organic growth momentum growth § Lowering risk Well positioned Incremental acquisitions and partnerships Leading operating
Slide 12: ABB – Next Level: Profitable growth
ABB – Next Level Profitable growth: Penetration, innovation and expansion Example Penetration Profitable Industry growth initiatives drove solid order growth in PP growth $70-mn rail modernization order for Swiss Federal Railways Well positioned Improved penetration of installed base drives 10%1 ser
Slide 13: ABB – Next Level: ABB-Vestas microgrid alliance
ABB – Next Level Expansion: ABB-Vestas microgrid alliance Example Affordable, reliable, environmentally friendly electricity for Profitable communities in Africa growth Well positioned Microgrid solutions Refurbished wind turbines Relentless Grid control Project development execution Electrical infr
Slide 14: ABB – Next Level: Driving cost savings and profitability
ABB – Next Level Relentless execution: Driving cost savings and profitability Example Cost savings Leading operating model Profitable Q3 savings in line with long- Operational improvements in growth term ambition (3-5% COS1) high-voltage capacitors (Sweden) Well positioned Project examples: Actions:
Slide 15: ABB – Next Level: Power Systems 'step change' update
ABB – Next Level Relentless execution: Power Systems ‘step change’ update Power Systems update Profitable Milestones achieved in critical projects growth § Dolwin 1 HVDC system energized Well § Dolwin 2 platform being commissioned in Norway positioned § Solar EPC on track to close 90% by end 2014 Lo
Slide 16: ABB – Next Level: Simplifying how we work together
ABB – Next Level Business-led collaboration: Simplifying how we work together Example Organizational realignment well underway for smooth Profitable implementation on Jan. 1 growth § Roles and responsibilities § Regional structure Well § Global business lines § Management appointments positioned Rel
Slide 17: Implementing the Next Level strategy
Implementing the Next Level strategy Management team is mobilizing the entire organization Next Level: accelerating sustainable value creation Strategy and new financial targets announced in September Focused, phased and rigorous implementation § Internal communication and employee mobilization on t
Slide 18: Q3 summary and outlook
Q3 summary and outlook Solid results despite increased uncertainty Q3 results Outlook ABB delivers strong order growth Long-term demand outlook remains positive • Orders up 28%1 driven by large orders in Growth drivers in place for utility, industry and power infrastructure and oil and gas transport
Slide 19: Chart 19
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Slide 20: Key figures Q3 and 9-months 2014
Key figures Q3 and 9-months 2014 9-mo. 9-mo. Q3 14 Q3 13 Change Change 14 13 $ mn unless Local Like- Local Like- $ $ otherwise indicated currency for-like currency for-like Orders 11'225 9'089 +24% +25% +28% 32'150 28'893 +11% +13% +13% Order backlog (end 27'005 27'454 -2% +4% September) Revenues 9'
Slide 21: Order backlog by division
Order backlog by division 2014 2013 Change % Order backlog (end September) $ Local currencies $ mn Discrete Automation and Motion 4'741 4'532 +5% +9% Low Voltage Products 994 1'242 -20% -17% Process Automation 6'230 5'995 +4% +10% Power Products 8'297 8'479 -2% +3% Power Systems 9'128 9'954 -8% -2%
Slide 22: Operational EPS analysis
Operational EPS analysis Q3 14 Q3 13 $ mn, except per share data in $ EPS1 EPS1 r2 Net income 734 0.32 835 0.36 -12% (attributable to ABB) Restructuring and restructuring- 40 0.02 29 0.01 related expenses3 Gains and losses from sale of businesses, acquisition-related (103) (0.04) 43 0.02 expenses an
Slide 23: Regional share of total orders and revenues by division
Regional share of total orders and revenues by division Q3 2014 Discrete Low Voltage Process Power Power Automation and Motion Products Automation Products Systems 3% 7% 12% 14% 14% 27% Orders 27% 29% 37% 26% 36% 12% 26% 42% 13% 61% 19% 33% 31% 31% 2% 7% 10% Revenues 8% 20% 28% 36% 34% 32% 37% 25% 3
Slide 24: Discrete Automation & Motion
Discrete Automation & Motion Q3 2014 summary Orders received Revenues Operational EBITDA $ mn, y-o-y change like-for-like $ mn, y-o-y change like-for-like $ mn, operational EBITDA margin +14% +4% 2'697 2'635 2'539 2'410 2'306 2'266 18.1% 478 476 437 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3
Slide 25: Low Voltage Products
Low Voltage Products Q3 2014 summary Orders received Revenues Operational EBITDA $ mn, y-o-y change like-for-like $ mn, y-o-y change like-for-like $ mn, operational EBITDA margin +3% +3% 18.9% 2'001 1'938 1'921 1'914 1'880 1'861 366 395 364 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Like-
Slide 26: Process Automation
Process Automation Q3 2014 summary Orders received Revenues Operational EBITDA $ mn, y-o-y change like-for-like $ mn, y-o-y change like-for-like $ mn, operational EBITDA margin +58% -6% 2'622 12.6% 2'128 1'904 1'899 289 1'706 1'688 239 233 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Large
Slide 27: Power Products
Power Products Q3 2014 summary Orders received Revenues Operational EBITDA $ mn, y-o-y change local currency $ mn, y-o-y change local currency $ mn, operational EBITDA margin +13% -8% 2'725 2'692 2'526 2'455 2'450 2'401 14.6% 374 389 362 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Large an
Slide 28: Power Systems
Power Systems Q3 2014 summary Orders received Revenues Operational EBITDA $ mn, y-o-y change local currency $ mn, y-o-y change local currency $ mn, operational EBITDA margin +84% 2'177 -19% 141 2'062 1'765 1'901 0.5% 1'637 109 1'216 9 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Q3 12 Q3 13 Q3 14 Base and la
Slide 29: More information available at ABB Investor Relations
More information available at ABB Investor Relations Name Telephone E-Mail Alanna Abrahamson +41 43 317 3804 alanna.abrahamson@ch.abb.com Head of Investor Relations John Fox +41 43 317 3812 john.fox@ch.abb.com Binit Sanghvi +41 43 317 3832 binit.sanghvi@ch.abb.com Beat Fueglistaller +41 43 317 4144