Slide 1: Sustained growth: Q3 2018 results
— ABB LTD, ZURICH, SWITZERLAND, OCTOBER 25, 2018 Sustained growth Q3 2018 results Ulrich Spiesshofer, CEO; Timo Ihamuotila, 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
Slide 3: Agenda
— Agenda Q3 2018 financial performance 2018 update October 25, 2018 Slide 3
Slide 4: Q3 2018 sustained growth
— Q3 2018 sustained growth Total orders +9%, up in all divisions and regions Profitable Base orders +7%, up in all divisions and regions Growth Revenues +3%; service revenues +11% ABB Ability™ recognized as Global #1 in Distributed Control Systems, Global #1 in Enterprise Asset Management1 Group Ope
Slide 5: Q3 2018 financial summary
— Q3 2018 financial summary Orders Base orders Revenues $8.9 bn $8.3 bn $9.3 bn +9%1 +7%1 +3%1 Operational EBITA margin Operational EPS Cash flow from operating activities 12.1% $0.34 $565 mn -80 bps2 +4%3 1On a comparable basis, yoy; 2Impacted 120 basis points by GEIS and charge related to legacy t
Slide 6: Q3 2018 orders
— Q3 2018 orders Order growth in all regions Total orders +9% yoy1 Base orders +7% yoy1 Growth by region and top 3 country markets in $ terms1 9.8 9.5 8.9 USA +5% China +17% 8.3 8.2 8.5 Canada +7% India +4% 8.8 8.8 Brazil +35% -28% 7.9 8.3 S. Korea 7.7 7.4 AMERICAS +9% AMEA3 +5% EUROPE +6% Germany +
Slide 7: Q3 2018 Power Grids
— Q3 2018 Power Grids Strong order momentum, margin at target corridor % $ mn 11 5 10 2,500 1 5 10.6 10.4 1 1 0 10.1 10.0 -4 0 0% 9.7 9.7 2,000 -9 -5 -5 -4 1,500 -10 -8 -18 -15 1,000 -20 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Large orders 1 Q2 17 Q3 17 Q4 17 Q1 18 Q2
Slide 8: Q3 2018 Electrification Products
— Q3 2018 Electrification Products Robust organic growth, GEIS integration on track % $ mn 15 3,200 10 5 4 16.1 16.0 7 10 3 3,000 6 6 2 2 15.2 15.0 14.7 2,800 3 5 0% -1 -1 13.5 2,600 0 2,400 -5 2,200 2,000 -10 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 1 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 1
Slide 9: Q3 2018 Industrial Automation
— Q3 2018 Industrial Automation Solid delivery % $ mn 20 15 3 14.9 2,000 10 15 1 14.1 14.1 14.1 8 7 0 0 0 10 13.4 13.4 1,750 4 5 0% -1 1,500 0 -7 -5 1,250 -10 1,000 -15 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Large orders 1 3rd part
Slide 10: Q3 2018 Robotics and Motion
— Q3 2018 Robotics and Motion Strong execution % $ mn 3,000 20 17.0 15 15 16.4 8 8 8 16.1 2,500 15 7 11 11 6 5 15.3 15.1 2,000 10 6 4 0% 13.8 1,500 5 1,000 0 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Large orders 1 3rd party base orde
Slide 11: Q3 2018 Operational EBITA
— Q3 2018 Operational EBITA Operational EBITA bridge Q3 2017 to Q3 2018 ($ mn) 12.9% op. 12.1% op. EBITA margin EBITA margin -120 bps GEIS and non-core1 +102 -30 +94 -35 -25 -80 +16 -48 1,124 1,118 Op. EBITA Net Commodities Net Growth Mix Other2 Acq./Div. FX Op. EBITA Q3 2017 savings volume investme
Slide 12: Other financial items
— Other financial items $ mn unless otherwise stated 9M 18A FY 18 $ mn unless otherwise stated 9M 18A FY 18 framework framework Corporate & Other Operational EBITA (455) ~(600) Net finance expense (180) (250) Key non-operating items: Effective tax rate 27% 27% PPA-related amortization (225) ~(315) N
Slide 13: Driving profitable growth in four entrepreneurial divisions
— Driving profitable growth in four entrepreneurial divisions Q3 highlights – penetration, innovation, expansion Power Grids Electrification Products Industrial Automation Robotics and Motion Penetration of emerging Innovation for industrial data Penetration of recovering Expansion of robotics marke
Slide 14: Driving profitable growth in China – ABB's #2 market
— Driving profitable growth in China – ABB’s #2 market Key contributor to China’s reform agenda ABB end-markets where China is #1 Well aligned to China’s 13th 5 Year Plan Transmission & Distribution Electrical Power High-end robotics Next Gen IT & AI Mining & Minerals Metals New EVs & equipment Rail
Slide 15: ABB Ability™ – quantum leap in digital
— ABB Ability™ – quantum leap in digital Recognized as market leader Customer asset lifecycle Plan / design Build Operate ABB Ability™ ABB Ability™ Robot Studio ABB Ability™ DCS 800xA ABB Ability™ Ellipse solutions (Examples) ABB Ability™ Minescape ABB Ability™ MES ABB Ability™ Collaborative Operati
Slide 16: ABB better positioned in a better market
— ABB better positioned in a better market Summary Market outlook1 Q3 highlights2 2018 – 2020 Total orders +9%, up in all divisions and regions Renewables Utilities Transmission & distribution Base orders +7%, up in all divisions and regions Conventional power generation O&G upstream Revenues +3%; s
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Slide 18: Key figures Q3 2018
— Key figures Q3 2018 Q3 18 Q3 17 Change yoy in $ mn unless stated otherwise $ Local currency Comparable Orders 8,941 8,157 +10% +13% +9% Order backlog (end September) 23,480 23,424 0% +4% +2% Revenues 9,257 8,724 +6% +9% +3% Operational EBITA 1,118 1,124 -1% +4% as % of operational revenues 12.1% 1
Slide 19: Total and base orders by division
— Total and base orders By division Q3 18 Q3 17 Change yoy in $ mn unless stated otherwise Comparable Total orders 2,207 2,072 +11% Power Grids 3rd party base orders 1,802 1,654 +13% Total orders 3,215 2,547 +6% Electrification Products 3rd party base orders 3,008 2,407 +3% Total orders 1,643 1,592
Slide 20: Total and base orders by region
— Total and base orders By region Total orders +9% yoy Base orders +7% yoy2 Growth by region1 Growth by region1 USA +10% China +13% USA +5% China +17% Canada -13% India +12% Canada +7% India +4% Brazil +54% South Korea -36% Brazil +35% S. Korea -28% AMERICAS +9% AMEA3 +4% AMERICAS +9% AMEA3 +5% EURO
Slide 21: Order backlog
— Order backlog By division End September 2018 End September 2017 Change yoy in $ mn unless stated otherwise $ Comparable Power Grids 10,272 10,833 -5% -1% Electrification Products 4,426 3,228 +37% +8% Industrial Automation 5,307 5,595 -5% -2% Robotics and Motion 4,204 3,958 +6% +10% Corporate and O
Slide 22: Cash flow from operating activities
— Cash flow from operating activities By division Q3 18 Q3 17 Change yoy in $ mn unless stated otherwise Power Grids (162) 182 n.a Electrification Products 375 304 +23% Industrial Automation 174 236 -26% Robotics and Motion 300 247 +21% Corporate and Other (122) (15) n.a ABB Group 565 954 -41% Octob
Slide 23: Operational EPS analysis
— Operational EPS analysis 1 Q3 18 Q3 17 Change yoy $ mn, except per share data in $ EPS EPS Net income (attributable to ABB) 603 0.28 571 0.27 +6% Operational adjustments: Acquisition–related amortization 80 74 2 Restructuring and restructuring-related expenses 44 92 Non-operational pension cost (c
Slide 24: Regional share of orders and revenues by division
— Regional share of total orders and revenues by division Q3 2018, in % terms Power Grids Electrification Products Industrial Automation Robotics and Motion Orders 31 32 31 31 34 34 41 49 28 20 37 32 Revenues 32 32 32 35 35 34 38 43 30 36 22 31 Europe Americas Asia, Middle East and Africa October 25
Slide 25: End-customer and product type revenues by division
— End-customer and product type revenues by division Q3 2018, in % terms Power Grids Electrification Products Industrial Automation Robotics and Motion End-customer market 9 16 16 9 Orders 21 32 31 21 70 37 63 75 18 8 16 Product type 5 32 Orders 40 12 56 26 72 87 28 Utilities Industry Transport & In