Slide 1: Steady execution in challenging markets
Ulrich Spiesshofer, CEO ABB; Eric Elzvik, CFO ABB, July 23rd, 2015 Steady execution in challenging markets 2015 Q2 and H1 results © ABB July 23, 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: Q2 2015 – Steady execution in challenging markets
Q2 2015 – Steady execution in challenging markets Delivering along our three focus areas Orders reflect challenging market dynamics (-4%) 1 Profitable Revenues continued to grow (+3%) growth Book-to-bill for first 6 months 1.09x, >1.0x in every division Growth initiatives mitigate market headwinds G
Slide 4: Q2 and first half 2015 key figures
Q2 and first half 2015 Key figures Q2 15 Q2 14 Change H1 15 H1 14 Change $ mn unless otherwise indicated Orders 8,996 10,567 -4%1 19,400 20,925 +6%1 Order backlog (end June) 26,028 27,089 +9%1 Revenues 9,165 10,190 +3%1 17,720 19,661 +3%1 Operational EBITA 1,058 1,094 +8%1 2,007 2,133 +7%1 as % of o
Slide 5: Focused growth initiatives bear fruit in key markets
Focused growth initiatives bear fruit in key markets Orders reflect market headwinds & challenging comparable 2015 Q2 base order 2015 Q2 total order growth by region growth2 Change on a like-for-like basis Change on a like-for-like basis Australia +16% Europe Brazil -29% Automation +5% Power +12% Ca
Slide 6: Operational EBITA bridge
Operational EBITA bridge Driving relentless execution Factors affecting operational EBITA Q2 2015 vs Q2 2014 +35 -92 +47 +89 1,179 -112 1,094 +6 -9 1,058 Mix Project Net Net volume margins Other Forex Divestments savings Revenue Translation Cost impact effects savings minus offset price investments
Slide 7: Q2 2015 performance by division
Q2 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 2,428 0% 2,348 +2% 14.5% -1.2 pts 261 -30% and Motion Low Voltage 1,703 +2% 1,731 +4% 16.8% +0.2
Slide 8: Capital management
Capital management Cash from operations reflects Q2 revenue pattern Late quarter revenue drives receivables Cash from operations build-up $ mn 888 598 Q2 14 Q2 15 Q2 14 Q2 15 Q2 2014 Q2 2015 Current rec Overdues Trade receivables1 Overdues 2015 dividend Status of share buyback ~$1.4 bn (0.55CHF/shar
Slide 9: 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 Incremental acquisitions and partnerships positioned Leading operating
Slide 10: Profitable growth
Profitable growth Driving organic growth momentum Examples Profitable OEMS: growth Tap European machinery Penetration Well channels, e.g., YTD orders positioned >10% in key sectors Marine: Relentless Azipod D propulsion Innovation execution “Innovation of the Year,” boosts fuel efficiency 10-15% Att
Slide 11: Profitable growth
Profitable growth Shifting the center of gravity Example Strengthening competitiveness Profitable growth Well Solution offering positioned Services Software-led differentiation Future Customer value Technological proposition leadership Relentless execution Economic cycle High-growth imbalance Starti
Slide 12: Profitable growth: Q2 actions – shifting the center of gravity
Profitable growth Q2 actions – shifting the center of gravity Example Strengthening competitiveness Profitable growth New service suite Expansion of Well for solar customers robot studio for positioned general industry Grid consulting for utility and industry Industry 4.0 customers turbochar
Slide 13: Relentless execution: Power Systems delivering on step change
Relentless execution Power Systems delivering on ‘step change’ What we said What we delivered Profitable growth Progress on profitability in 2015 Margin up 580 bps y-o-y Well positioned New team deeply rooted in Strengthen leadership customer base and operations Complete off-shore wind Milestone pro
Slide 14: Relentless execution
Relentless execution Stronger focus on operational performance management Examples Relentless Execution Dashboard Profitable growth Care Customer Cost Cash Well OTD NPS Field Cost OPQ Product DPO Invent DSO Failur positioned Hazard Ratio e Rate out as % cost as % COS Coeffic Δ Δ* Actual Turns Δ* Δ*
Slide 15: Relentless execution: new compensation model
Relentless execution New compensation model to drive performance culture Example Better link to individual performance Profitable growth Well positioned Short-term Incentive payout* Relentless execution Past Present Attractive Low performer 86% 48% markets Illustrative Business-led example: collabor
Slide 16: Business-led collaboration
Business-led collaboration Delivering greater customer value Examples Profitable Organization Processes & tools Go-to-market growth Well New Country Common channel positioned Manager role Salesforce.com strategy Focus on customer Common sales tools Key channel collaboration penetration More time wit
Slide 17: Q2 summary and outlook
Q2 summary and outlook Q2 results Outlook Orders reflect challenging market dynamics (-4%) Hard-weather sailing: Mixed short-term Continued revenue growth (+3%) picture, uncertainty remains Operational EBITA margin 11.7%, up 100 basis Continued growth in US; slower growth in points, led by progress
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Slide 19: Key figures Q2 2015
Key figures Q2 2015 Q2 15 Q2 14 Change $ mn unless $ Local currency Like-for-like otherwise indicated Orders 8,996 10,567 -15% -6% -4% Order backlog (end June) 26,028 27,089 -4% +8% +9% Revenues 9,165 10,190 -10% 0% +3% Operational EBITA 1,058 1,094 -3% +7% +8% as % of operational revenues 11.7% 10.
Slide 20: Key figures first 6 months 2015
Key figures first 6 months 2015 H1 15 H1 14 Change $ mn unless $ Local currency Like-for-like otherwise indicated Orders 19,400 20,925 -7% +3% +6% Order backlog (end June) 26,028 27,089 -4% +8% +9% Revenues 17,720 19,661 -10% 0% +3% Operational EBITA 2,007 2,133 -6% +4% +7% as % of operational reven
Slide 21: Order backlog by division
Order backlog by division Q2 2015 Q2 2014 Change % Order backlog (end June) $ Like-for like $ mn Discrete Automation and Motion 4,761 4,896 -3% +7% Low Voltage Products 978 1,170 -16% +1% Process Automation 5,709 5,858 -3% +16% Power Products 8,170 8,454 -3% +7% Power Systems 8,721 9,177 -5% +9% Con
Slide 22: Operational EPS analysis
Operational EPS analysis Q2 2015 Q2 2014 mn $ except per share data in $ EPS1 EPS 2 Net income 588 0.26 636 0.28 -5% (attributable to ABB) Restructuring and restructuring- 42 0.02 28 0.01 related expenses3 Gains and losses on sale of businesses, acquisition- 38 0.02 (50) (0.02) related expenses and
Slide 23: Revenues
Regional share of total orders and revenues by division Q2 2015 Discrete Low Voltage Process Power Power Automation & Motion Products Automation Products Systems Orders 31% 34% 29% 30% 35% 37% 35% 42% 42% 51% 29% 19% 34% 29% 23% Revenues 31% 32% 26% 34% 34% 37% 34% 42% 41% 47% 27% 35% 29% 26% 25% ©
Slide 24: Discrete Automation & Motion
Discrete Automation & Motion Q2 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 0% margin +2% 14.5% 2.667 2.543 2.428 2.392 399 2.362 2.348 390 339 Q2113 Q2214 Q2315 Q2113 Q22 14 Q23 15 Q21 13 Q22 14 Q23 15 Hig
Slide 25: Low Voltage Products
Low Voltage Products Q2 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% +4% 16.8% 1.980 1.939 1.703 1.936 1.929 321 315 1.731 289 Q2113 Q2214 Q2315 Q2 1 13 Q2 2 14 Q2 3 15 Q2113 Q2214 Q2315 Orders re
Slide 26: Process Automation
Process Automation Q2 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 -10% -1% 12.4% 2.130 2.044 2.012 1.788 233 229 1.660 1.580 204 Q2113 Q2214 Q2315 Q2 1 13 Q2 2 14 Q2 3 15 Q2113 Q2214 Q2315 Decline ma
Slide 27: Power Products
Power Products Q2 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 -1% margin 0% 2.781 2.662 12.6% 2.399 2.766 2.596 2.533 362 343 301 Q2113 Q2214 Q2315 Q2 1 13 Q2 2 14 Q2 3 15 Q2113 Q2214 Q2315 Both large and b
Slide 28: Power Systems
Power Systems Q2 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 -12% +4% 2.7% 1.767 136 1.962 1.810 42 1.374 42 1.307 1.634 57 -57 Q2113 Q2214 Q2315 Q2 1 13 Q2 2 14 Q2 3 15 Q2113 Q2214 Q2315 Orders decl
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