Slide 1: Steering through challenging times
Ulrich Spiesshofer, CEO ABB; Eric Elzvik, CFO ABB, October 21st, 2015 Steering through challenging times 2015 Q3 and nine months results © ABB October 21, 2015 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 2015 – Steering through challenging markets
Q3 2015 – Steering through challenging markets Delivering along our three focus areas Orders and revenues1 impacted by the adverse market conditions Profitable Book-to-bill positive 1.03x in the quarter and 1.07x YTD Growth Growth initiatives and large utility orders mitigating market headwinds Grou
Slide 4: Q3 and nine months 2015 key figures
Q3 and nine months 2015 Key figures Q3 15 Q3 14 Change 9M 15 9M 14 Change $ mn unless otherwise indicated Orders 8,767 11,225 -12%1 28,167 32,150 0%1 Order backlog (end Sept.) 25,371 27,005 +4%1 Revenues 8,519 9,823 -2%1 26,239 29,484 +1%1 Operational EBITA 1,081 1,189 -1%1 3,088 3,322 +4%1 as % of
Slide 5: Orders in key markets
Orders in key markets Continued hard weather sailing 2015 Q3 base order 2015 Q3 total order growth by region growth2 Change on a like-for-like basis Change on a like-for-like basis Canada -11% Europe China -15% Automation -5% Power -21% Finland +20% Germany +1% Total -13 % Americas Germany +33% AMEA
Slide 6: Market conditions: trends into 2016
Market conditions Trends into 2016 Global end-markets Countries Oil & Gas USA Upstream O&G Feed stock related investment Upstream O&G Transmission Offshore drilling investment Reallocation of oil subsidies Mining Automotive Onshore unconventional Food & Beverage upstream Residential construction Uti
Slide 7: Operational EBITA bridge
Operational EBITA bridge Driving Relentless Execution Factors affecting operational EBITA Q3 2015 vs Q3 2014 +141 -38 -9 -110 1,189 +8 1,181 -97 Mix -3 1,081 Other Net Net volume Project savings Revenue margins Forex Divestments Cost impact Translation savings minus effects could investments offset
Slide 8: Q3 2015 performance by division
Q3 2015 performance by division Key figures quarter on quarter $ mn Operational Cash from unless otherwise stated Orders Like-for-like Revenues Like-for-like EBITA% operations Discrete Automation 2,241 -9% 2,220 -7% 14.8% -1.7pts 420 +3% and Motion Low Voltage 1,645 0% 1,637 -3% 18.1% +1.8pt
Slide 9: Improved cash management
Improved cash management Free cash flow conversion 116% Net Working Capital / % of revenues Working Capital program priorities $ mn Reduce value chain complexity Improve inventory management from product 16.6% design to manufacturing through logistics 15.9% Integrate project management 6,660 Reduce
Slide 10: ABB – Next Level Stage 2: Accelerating transformation
ABB – Next Level Stage 2 Accelerating transformation Presented September 9th, 2015 Shifting the Center of Gravity Divisional realignment along markets Profitable Accelerating organic growth Growth Ready for inorganic moves Value from partnerships Advancing leading operating model Stage 2 Relentl
Slide 11: Profitable Growth: Shifting the Center of Gravity
Profitable Growth Shifting the Center of Gravity Presented September 9th, 2014 Strengthening competitiveness Profitable Growth Solution offering Software-led Services differentiation Future Customer value Technological proposition leadership Stage 2 Relentless Execution Economic cycle High-growth im
Slide 12: Shifting the Center of Gravity – Q3 actions
Profitable Growth Shifting the Center of Gravity – Q3 actions Example Strengthening competitiveness IEC motor line launch in China and India Profitable World’s first eco-efficient Industry leading marine Growth switchgear solution in routing software for Maersk operation in Switzerland Fast
Slide 13: Driving organic growth momentum – PIE
Profitable Growth Driving organic growth momentum – PIE Example Renewable 2GW of installed solar inverters Profitable power Growth Penetration capacity generation in India 50% of all installed capacity Stage 2 Relentless Marine routing Equip 140 ships to optimize routes, Execution Innovation softwar
Slide 14: High growth segments: e-mobility
Profitable Growth High growth segments e-mobility Example Fast charging robot for EV charging services platform Profitable public buses Growth Fast charging solution for electric buses Cloud-based services provide stability, Enables 24/7 operation of bus scalability & advanced mgmt. features Stage 2
Slide 15: Power Systems delivering on step change program
Relentless Execution Power Systems delivering on “step change” program Example What we said What we did Profitable Return business to profitability Margin up 520 bps y-o-y Growth Project & engineering hubs established, Strengthen leadership Phase 1 of NE Agra energized Complete offshore wind DolWin
Slide 16: Accelerating cost reduction and productivity programs
Relentless Execution Accelerating cost reduction and productivity programs Example Regular cost savings White Collar Productivity Profitable (3-5% of cost of sales p.a. ) ($1 bn structural cost savings Growth program by 20172) Savings ($ bn p.a.) 1.5 1.2 1.1 1.1 1.1 1.11 Stage 2 Relentless Execution
Slide 17: Simplifying and market focused organization
Business-Led Collaboration Simplifying and market focused organization Example Organization Processes & tools Go-to-market Profitable Growth Group Account Divisional Realignment Salesforce.com Management From 5 to 4 divisions Operational in 14 countries Focused approach Organization and Stage 2 stre
Slide 18: Q3 summary and outlook
Q3 summary and outlook Q3 results Outlook Orders impacted by adverse market conditions Hard-weather sailing: Mixed short-term picture, uncertainty remains Book to bill positive at 1.03x; 1.07x year to date Modest growth in Europe and the US; slower Revenues -2% on short cycle volumes growth in China
Slide 19: Power and productivity for a better world
Power and productivity Ah aD ED for a better world™ P | aD aD
Slide 20: Key figures Q3 2015
Key figures Q3 2015 Q3 15 Q3 14 Change $ mn unless $ Local currency Like-for-like otherwise indicated Orders 8,767 11,225 -22% -12% -12% Order backlog (end September) 25,371 27,005 -6% +4% +4% Revenues 8,519 9,823 -13% -3% -2% Operational EBITA 1,081 1,189 -9% -1% -1% as % of operational revenues 12
Slide 21: Key figures first 9 months 2015
Key figures first 9 months 2015 9M 15 9M 14 Change $ mn unless $ Local currency Like-for-like otherwise indicated Orders 28,167 32,150 -12% -2% 0% Order backlog (end September) 25,371 27,005 -6% +4% +4% Revenues 26,239 29,484 -11% -1% +1% Operational EBITA 3,088 3,322 -7% +2% +4% as % of operational
Slide 22: White Collar Productivity detailed financials
Relentless Execution White Collar Productivity detailed financials Presented September 9th, 2014 Run-rate at 2015 2016 2017 Profitable $ mn unless otherwise stated1 the end 2017 Growth Savings Gross savings ~1’000 ~25 ~400 ~800 Stage 2 Relentless $ mn unless otherwise stated1 Total 2015 2016 2017 Ex
Slide 23: Order backlog by division
Order backlog by division Q3 2015 Q3 2014 Change % Order backlog (end September) $ Like-for-like $ mn Discrete Automation and Motion 4,601 4,741 -3% +5% Low Voltage Products 961 994 -3% +9% Process Automation 5,404 6,230 -13% 0% Power Products 7,974 8,297 -4% +5% Power Systems 8,676 9,128 -5% +6% Co
Slide 24: Operational EPS analysis
Operational EPS analysis Q3 2015 Q3 2014 mn $ except per share data in $ EPS1 EPS1 2 Net income 577 0.26 734 0.32 -19% (attributable to ABB) Restructuring and restructuring- 32 0.01 40 0.02 related expenses3 Gains and losses on sale of businesses, acquisition- 5 0.00 (103) (0.04) related expenses a
Slide 25: Regional share of total orders and revenues by division
Regional share of total orders and revenues by division Q3 2015 Discrete Low Voltage Process Power Power Automation & Motion Products Automation Products Systems 31% 33% 39% Orders 32% 37% 36% 25% 33% 42% 47% 25% 33% 20% 37% 30% Revenues 26% 30% 33% 40% 38% 39% 34% 37% 37% 44% 36% 30% 23% 30% 23% ©
Slide 26: Discrete Automation & Motion
Discrete Automation & Motion Q3 2015 Orders received Revenues Operational EBITA $ mn, y-o-y change like-for-like $ mn, y-o-y change like-for-like $ mn, operational EBITA margin -9% -7% 14.8% 2'697 2'635 436 435 2'539 2'410 2,697 2,635 2'241 2,410 2,539 2'220 435 436 335 2,241 2,220 335 Q3 13 Q3 13 Q
Slide 27: Low Voltage Products
Low Voltage Products Q3 2015 Orders received Revenues Operational EBITA $ mn, y-o-y change like-for-like $ mn, y-o-y change like-for-like $ mn, operational EBITA margin 0% -3% 18.1% 1'938 1'914 1,938 1,914 346 1'646 2'001 1'921 1,645 314 345 296 2,001 1,921 314 1'637 1,637 296 Q3 13 Q3 13 Q3 14 Q3 1
Slide 28: Process Automation
Process Automation Q3 2015 Orders received Revenues Operational EBITA $ mn, y-o-y change like-for-like $ mn, y-o-y change like-for-like $ mn, operational EBITA margin 2'622 2,622 -39% -8% 2'128 271 10.5% 1'899 2,128 1,899 270 1'688 221 1,688 1'372 1'461 1,461 1,372 221 158 Q3 13 Q3 13 Q3 14 Q3 14 Q3
Slide 29: Power Products
Power Products Q3 2015 Orders received Revenues Operational EBITA $ mn, y-o-y change like-for-like $ mn, y-o-y change like-for-like $ mn, operational EBITA margin +6% 0% 2'692 12.5% 2,692 2'455 2'725 2'332 2,332 2,455 2,725 2'450 2'445 341 2,446 2,450 311 342 295 295 312 Q3 13 Q3 13 Q3 14 Q3 14 Q3 1
Slide 30: Power Systems
Power Systems Q3 2015 Orders received Revenues Operational EBITA $ mn, y-o-y change like-for-like $ mn, y-o-y change like-for-like $ mn, operational EBITA margin -11% +3% 2'692 4.6% 2'062 2'455 2'725 2'332 2,062 119 2'177 119 2,177 2'450 2'445 1,637 1,481 1'637 1,692 1,216 1'481 69 1'691 -11 1'261 -
Slide 31: 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 Binit Sanghvi +41 43 317 3832 binit.sanghvi@ch.abb.com Beat Fueglistaller +41 43 317 4144 beat.fueglistaller@ch.abb.com Annatina Tunkel