Slide 1: ABB Q1 2012 results
April 25, 2012 ABB Q1 2012 results © ABB Group Q3 2008 investor presentation Joe Hogan, CEO Michel Demaré, CFO April 26, 2012 © ABB Group April 26, 2012 Chart 1
Slide 2: Safe-harbor statement
Safe-harbor statement 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, includin
Slide 3: Q1 2012: Good top line in a tough environment
Q1 2012: Good top line in a tough environment Top line higher than a very strong Q1 2011 despite challenging markets Weaker China offset by good growth in N America; Europe a mixed picture Strong service performance—20% of total orders in the quarter Volume and cost savings partially compensate cycl
Slide 4: Key figures for Q1 2012
Key figures for Q1 2012 Q1 2012 performance Q1 2012 Q1 2011 Change vs Q1 US$ millions unless otherwise stated 2011 +2%1 Orders 10,368 10,357 (organic flat) +8%1 Revenues 8,907 8,402 (organic +6%) Order backlog 29,910 29,265 +6%1 Operational EBITDA 1,228 1,319 -7% -1.8 Operational EBITDA % 13.9% 15.7
Slide 5: Divisional overview
Divisional overview Good growth, margins reflect current challenges percentage change in local Op. Op. EBITDA currencies vs same period in 2011 Orders Revenues vs Q11 except operational EBITDA vs Q1 11 vs Q1 11 EBITDA margin (percentage points) percentage change in US$ vs Q1 11 Growth in all Power P
Slide 6: Geographic diversity continues to yield benefits
Geographic diversity continues to yield benefits Growth in Americas mitigates weaker Asia Order growth by region Q1 2012 vs Q1 2011 (in local currencies) Power -13% Automation +5% Europe -1% Americas +27% excl Baldor Asia 23% MEA -11% Power +30% Automation +24% +2% Power -20% Automation -3% Power +3
Slide 7: Most large markets performed well; Europe shows a mixed picture
Most large markets performed well Europe shows a mixed picture Order growth by selected country Q1 2012 vs Q1 2011 (in local currencies) Sweden +21% Canada +48% Germany +14% UK +12% Power +43% U.S. +16% Automation +4% (11% excl. Baldor) Power +20% Italy -26% China -35% Automation +14% Saudi Arabia +
Slide 8: LP and PP impacted by China macro environment
LP and PP impacted by China macro environment Some positive signs but timing is open Example: Low Voltage Products Example: Medium Voltage Products ~10% of total LP revenues linked to China the largest market for MV China construction Rail sector a key demand driver Steady demand drop through H2 201
Slide 9: Evaluating the mix effect in LP
Evaluating the mix effect in LP Business mix Share of LP revenues by geography Q1 2012, and change in revenues vs Q1 20111 LV Systems’ share of total LP revenues up from 12% to 17% China -14% Mainly cyclical shift: LV Systems RoW is a mid- to late-cycle business Italy -24% LV Systems margins well be
Slide 10: Strong contribution from volume and cost savings
Strong contribution from volume and cost savings Lower margins on price & investments in future growth Factors affecting operational EBITDA Q1 2012 Local currency changes Product Volume Project Cost Sales and Business Other* price margins savings R&D Mix 2.8% of +$262mill revenues Net negative impac
Slide 11: Cost savings update Q1 2012
Cost savings update Q1 2012 Approx. share of savings by type Approx. share of savings by business Percent Percent Indirect Sourcing Operational 10% Excellence Automation 35% Power ~$260 60% 40% ~$260 50% Sourcing mill mill 5% Global footprint Sourcing remains the largest Major savings still in power
Slide 12: Division cash from operations $100 mill lower vs Q1 11
Division cash from operations $100 mill lower vs Q1 11 Higher Corporate outflow Total CFO 306 Change in Corporate cash outflow 236 impacted by hedge results and 205 Divisional pension contributions CFO NWC at seasonal peak of 15.6% of revenues—guidance remains at 11- 14% Corporate -22 CFO Inventory
Slide 13: Financing in place for T&B and dividend payment
Financing in place for T&B and dividend payment Balance sheet still net cash, gearing in check CHF 350 mill issued in January Balance sheet position Coupon 1.50% Maturity November 2018 31-Mar-2012 31-Dec-2011 Euro 1.25 bn issued in March Cash and MS 7.6 5.8 Coupon 2.625% Gross debt (6.2) (4.0) Matur
Slide 14: Service orders and revenues outgrew Group total
Service orders and revenues outgrew Group total Lifecycle services up strongly Service orders by quarter, 2009-12 Service orders growth by division US$ millions Change vs Q1 11 in local currencies (unconsolidated) 2500 Power Products +15% 2000 Power Systems +30% Discrete Automation and Motion +18% 1
Slide 15: New products to tap profitable growth opportunities
New products to tap profitable growth opportunities Smaller, use less materials, more efficient Example: New GIS in Power Products Example: New motor/drive package in Discrete Automation and Motion R&D focus on performance and cost-efficient designs High output synchronous New 420kV Gas Insulated re
Slide 16: Q1 2012 summary and outlook
Q1 2012 summary and outlook Summary: Good top line development in a tough environment Solid contribution from DM and PA Encouraging signals on stabilizing profitability in power Successful bond issues at low rates for more financial flexibility Outlook No change to long-term Continued investments in
Slide 17: Chart 17
© ABB Group April © ABB 26,2009 2012 Chart 17
Slide 18: Balanced business and geographic portfolio
Balanced business and geographic portfolio Orders by division Orders by region % of total orders Q1 2012 (non-consolidated) % of total orders Q1 2012 Middle East Process Power & Africa Automation Products Europe 10% 22% 27% Asia 37% LV 27% Products 11% 17% 23% 26% Discrete Power Automation Systems A
Slide 19: Orders and Revenues by Region and Division Q1 2012
Orders and Revenues by Region and Division Q1 2012 Percentage of Total Orders and Revenues in Nominal Currency 3% 11% 9% 7% Orders 22% 33% 27% 38% 36% 28% 26% 44% 27% 54% 21% 24% 24% 34% 9% 23% Power Products Power Systems Discrete Automation Low Voltage Process & Motion Products Automation 3% Reven
Slide 20: Power Products Q1 2012 summary
Power Products Q1 2012 summary Key data Q1 2012 Change US$ millions unless otherwise stated Q1 2012 Q1 2011 US$ Local Orders received 3,117 2,860 9% 11% Order backlog (end Mar) 8,859 8,850 0% 3% Revenues 2,513 2,327 8% 9% EBIT 323 350 -8% as % of revenues 12.9% 15.0% Operational EBITDA 363 404 -10%
Slide 21: Power Systems Q1 2012 summary
Power Systems Q1 2012 summary Key data Q1 2012 Change US$ millions unless otherwise stated Q1 2012 Q1 2011 US$ Local Orders received 1,958 1,937 1% 3% Order backlog (end Mar) 12,115 11,498 5% 10% Revenues 1,807 1,833 -1% 1% EBIT 88 105 -16% as % of revenues 4.9% 5.7% Operational EBITDA 117 132 -11%
Slide 22: Discrete Automation and Motion Q1 2012 summary
Discrete Automation and Motion Q1 2012 summary Key data Q1 2012 Change US$ millions unless otherwise stated Q1 2012 Q1 2011 US$ Local Orders received 2,678 2,344 14% 15% Order backlog (end Mar) 4,675 4,117 14% 16% Revenues 2,242 1,880 19% 21% EBIT 354 225 57% as % of revenues 15.8% 12.0% Operational
Slide 23: Low Voltage Products Q1 2012 summary
Low Voltage Products Q1 2012 summary Key data Q1 2012 Change US$ millions unless otherwise stated Q1 2012 Q1 2011 US$ Local Orders received 1,337 1,409 -5% -3% Order backlog (end Mar) 1,049 1108 -5% -3% Revenues 1,192 1,195 0% 2% EBIT 180 235 -23% as % of revenues 15.1% 19.7% Operational EBITDA 197
Slide 24: Process Automation Q1 2012 summary
Process Automation Q1 2012 summary Key data Q1 2012 Change US$ millions unless otherwise stated Q1 2012 Q1 2011 US$ Local Orders received 2,540 2,606 -3% -1% Order backlog (end Mar) 6,483 6,447 1% 4% Revenues 1,970 1,900 4% 6% EBIT 234 251 -7% as % of revenues 11.9% 13.2% Operational EBITDA 243 246
Slide 25: Maturity profile of long-term debt securities
Maturity profile of long-term debt securities Total debt securities of approx. $5.2 billion Principal outstanding at March 31st, 2012 US$ millions 1,153 1,667 1,037 933 387 Based on March 31, 2012 FX rates Chart 25
Slide 26: Reconciliation of Operational EBITDA by Division
Reconciliation of Operational EBITDA by Division Q1 2012 vs Q1 2011 Chart 26
Slide 27: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures ($ in millions) Net Cash Mar. 31, Dec. 31, (= Cash and equivalents plus marketable securities and short-term investments, less total 2012 2011 debt) Cash and equivalents 5,751 4,819 Marketable securities and short-term investments 1,837 948 Cash and marketable sec
Slide 28: Appendix: Definitions
Appendix: Definitions Net cash: Cash and equivalents plus marketable securities and short-term investments, less total debt Net working capital (NWC): the sum of i) receivables, net, ii) inventories, net, and iii) prepaid expenses; less iv) accounts payable, trade, v) billings in excess of sales, vi
Slide 29: For more information, call ABB Investor Relations
For more information, call ABB Investor Relations or visit our website at www.abb.com/investorrelations Telephone e-mail John Fox +41 43 317 3812 john.fox@ch.abb.com (Zurich) Alanna Abrahamson +1 919 856 3827 alanna.abrahamson@us.abb.com (Cary, NC) Tatyana Dubina +41 43 317 3816 tatyana.dubina@ch.ab