Slide 1: ABB Q2 Presentation
July 23, 2014 ABB Q2 Presentation Ulrich Spiesshofer, CEO Eric Elzvik, CFO
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: ABB Q2: Orders up 13%, strong cash generation
ABB Q2: Orders up 13%, strong cash generation Solid progress in PS “step change” Organic growth initiatives bearing fruit § Orders up 13%1, steady to higher in all divisions and regions § Large orders up >70%, early-cycle trend positive § Book-to-bill ratio back in positive territory at 1.04x Good e
Slide 4: Key figures second quarter 2014
Key figures second quarter 2014 Q2 14 Q2 13 Change $ millions unless Local Like-for- US$ otherwise indicated currency like Orders 10,567 9,312 13% 14% 13% Order backlog (end June) 27,089 28,292 -4% -5% Revenues 10,190 10,225 0% 0% -1% Income from operations 1,052 1,188 -11% as % of revenues 10.3% 11
Slide 5: Order momentum continues to trend positively
Order momentum continues to trend positively Order backlog Book-to-bill ratio Base order growth Q2 2013-Q2 2014 Q2 2012-Q2 2014 Q2 2013-Q2 2014 US$ millions, % change in local currency Orders over revenues % change year-over-year (like-for-like) 1.04 1.04 28'292 +5% 0.91 27'089 26'046 +7% Q2 Q3 Q4 Q
Slide 6: Orders received by region overview
Orders received by region overview 2014 Q2 order growth by region Europe Change on a like-for-like basis Automation -2% Power 0% Total -1% Germany +5% Russia +14% Italy -13% Americas Automation +13% Power +63% Asia Total +31% Automation +14% US +12% MEA* Power +12% Canada* >2x Brazil +25% Automation
Slide 7: Operational EBITDA bridge
Operational EBITDA bridge Power Systems impacted Group results Factors affecting operational EBITDA Q2 2014 vs Q2 2013 US$ millions Excluding the impact from Power Systems +13 -22 -24 +27 -41 1,561 Net Net Project Other Mix -183 savings volume Mainly LP margins G&A, Power 1,331 Cost savings Flat rev
Slide 8: Group Q2 cash flow significantly improved
Group Q2 cash flow significantly improved Cash from operations Q2 2014 vs Q2 2013 US$ millions Divisional cash flow Group cash flow § Group cash flow 64% higher than year earlier § Divisional cash flows $280 mill higher § Cash initiatives drove results: § Improved NWC management remains a 1'096 888
Slide 9: Key figures ABB and by division second quarter 2014
Key figures ABB and by division second quarter 2014 US$ millions r r Operational Cash flow from r unless otherwise stated Orders Local currency Revenues Local currency EBITDA% r operations US$ Discrete Automation 2,667 +11% 2,543 +7% 17.4%1 -0.7 pts1 +374 15% and Motion Like-for-like +7% +3% Low Vol
Slide 10: A glance at Power Systems
A glance at Power Systems Decisive actions taken, “step change” program in place Why we like it Current issues Actions § Long-term growth opportunities § Handful of complex project § Focused resources on “high risk” areas, § Aging grids in developed markets situations with operational special action
Slide 11: Three focus areas: Growth momentum
Three focus areas Accelerated value creation momentum Tomorrow Growth momentum Today Profit Focus on EPS and CROI Chart 11
Slide 12: Executing along the three focus areas in Q2: Profitable growth in China
Executing along the three focus areas in Q2 Example: Profitable growth in China Strategic levers Recent examples Penetration Expanded further into tier 2 & tier 3 cities § Selling more of our § Cover >500 cities together with partners existing offering to § Own presence in >100 cities, adding access
Slide 13: Executing along the three focus areas in Q2: Profitable growth in transportation
Executing along the three focus areas in Q2 Example: Profitable growth in transportation Strategic levers Recent example: Rail Penetration Broad geographic coverage § Selling more of our § Growth initiatives drive $1 bn orders in H1 existing offering to 2014, +78% vs 2013 § High customer value throu
Slide 14: Executing along the three focus areas in Q2: Collaboration for onboard DC grid
Executing along the three focus areas in Q2 Example: Collaboration in ABB for onboard DC grid Strategic levers Recent example Packaged solutions Onboard DC grid § Integrated product offering, § 4 divisions collaborate to deliver breakthough combined marketing value proposition to customers aimed at
Slide 15: Executing along the three focus areas in Q2: Portfolio pruning & cash
Executing along the three focus areas in Q2 Example: Strong execution in portfolio pruning & cash Strategic levers Recent examples PS “step change” program § Decisive actions taken for EPC solar and § Address immediate issues and ensure offshore wind longer-term profitable growth § De-risking projec
Slide 16: Successful execution of announced portfolio pruning
Successful execution of announced portfolio pruning Baldor’s Full-service T&B Power-One T&B steel genset JV Finland HVAC Power structures business Solutions Entity divested Announced Oct. 2013 Jan. 2014 March 2014 April 2014 June 2014 Closed Nov. 2013 Jan. 2014 May 2014 June 2014 Q3 2014 expected 20
Slide 17: Q2 summary and outlook
Q2 summary and outlook Q2 results Outlook § Organic growth initiatives bear § Macro outlook unchanged fruit with strong order growth § Some encouraging early-cycle indicators § Revenues steady despite lower § Uncertainty remains on pace of opening order backlog recovery in key markets § Results burd
Slide 18: Chart 18
© ABB Group July 23, 2014 | Slide 18 Chart 18
Slide 19: Key figures Q2 and H1 2014
Key figures Q2 and H1 2014 Q2 14 Q2 13 Change H1 14 H1 13 Change $ millions unless Local Like-for- Local Like-for- US$ US$ otherwise indicated currency like currency like Orders 10'567 9'312 13% 14% 13% 20'925 19'804 6% 7% 6% Order backlog (end June) 27'089 28'292 -4% -5% Revenues 10'190 10'225 0% 0
Slide 20: Order backlog by division
Order backlog by division Order backlog (end June) US$ millions 2014 2013 Change % US$ Local currencies Discrete Automation and Motion 4,896 4,481 9% 7% Low Voltage Products 1,170 1,289 -9% -9% Process Automation 5,858 6,361 -8% -8% Power Products 8,454 8,578 -1% -2% Power Systems 9,177 10,598 -13%
Slide 21: Operational EPS analysis
Operational EPS analysis Q2 14 Q2 13 US$ millions, EPS1 EPS1 r2 except per share data in US$ Net income 636 0.28 763 0.33 -17% (attributable to ABB) Restructuring and 1 EPS amounts are restructuring- 28 0.01 25 0.01 computed related expenses3 separately, therefore the sum of the per Gains and losses
Slide 22: Regional share of total orders and revenues by division
Regional share of total orders and revenues by division Q2 2014 3% 8% 6% 15% 16% 10% 7% 26% 24% Orders 28% 36% 38% 23% 35% 25% 30% 33% 27% 31% 33% 24% 37% 14% 23% 39% 30% 29% 18% 29% 26% 30% 46% 33% Discrete Automation Low Voltage Process Power Products Power Systems & Motion Products Automation 3%
Slide 23: Discrete Automation and Motion Q2 2014 summary
Discrete Automation and Motion Q2 2014 summary Orders received Revenues Operational EBITDA US$ mill., y-o-y change US$ mill., y-o-y change US$ mill., op EBITDA margin in % -3% +7% +3% -2% +10% -1% 2'667 2'543 2'428 2'392 2'368 2'362 18.8% 18.1% 17.4% 446 443 428 Q2 2012 Q2 2013 Q2 2014 Q2 2012 Q2 20
Slide 24: Low Voltage Products Q2 2014 summary
Low Voltage Products Q2 2014 summary Orders received Revenues Operational EBITDA US$ mill., y-o-y change US$ mill., y-o-y change US$ mill., op EBITDA margin in % 0% 0% 0% +3% +1% -2% 1'936 1'929 1'980 19.0% 1'939 18.8% 1'596 1'655 17.9% 367 364 286 Q2 2012 Q2 2013 Q2 2014 Q2 2012 Q2 2013 Q2 2014 Q2
Slide 25: Process Automation Q2 2014 summary
Process Automation Q2 2014 summary Orders received Revenues Operational EBITDA US$ mill., y-o-y change US$ mill., y-o-y change US$ mill., op EBITDA margin in % +3% +5% +4% -2% -21% +16% 2'247 13.1% 11.8% 12.3% 2'130 2'044 2'052 2'012 1'788 268 252 248 Q2 2012 Q2 2013 Q2 2014 Q2 2012 Q2 2013 Q2 2014
Slide 26: Power Products Q2 2014 summary
Power Products Q2 2014 summary Orders received Revenues Operational EBITDA US$ mill., y-o-y change US$ mill., y-o-y change US$ mill., op EBITDA margin in % +6% -3% -2% 14.7% +5% -7% +7% 14.7% 14.8% 2'781 2'662 2'610 409 393 387 2'791 2'766 2'596 Q2 2012 Q2 2013 Q2 2014 Q2 2012 Q2 2013 Q2 2014 Q2 201
Slide 27: Power Systems Q2 2014 summary
Power Systems Q2 2014 summary Orders received Revenues Operational EBITDA US$ mill., y-o-y change US$ mill., y-o-y change US$ mill., op EBITDA margin in % +25% +5% +39% -1% -7% 1'890 -31% 1'962 1'767 1'872 1'810 7.9% 1'307 6.2% -1.3% 159 119 -24 Q2 2012 Q2 2013 Q2 2014 Q2 2012 Q2 2013 Q2 2014 Q2 201
Slide 28: For more information, call ABB Investor Relations
For more information, call ABB Investor Relations Or visit our website at www.abb.com/investorcenter Name Telephone E-mail Zurich, Switzerland 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 3