Slide 1: Profitable growth – Q1 2018 results
— — ABB LTD, ZURICH, SWITZERLAND, APRIL 19, 2018 Profitable growth Q1 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 Q1 2018 financial performance 2018 strategic progress April 19, 2018 Slide 3
Slide 4: Q1 2018 profitable growth
— Q1 2018 profitable growth Total orders +6%1; up in all divisions Continued base order momentum +5%1; up in all regions Profitable Services orders +8%1 Growth ABB Ability™ solutions portfolio expanded B&R integration well advanced; on track to close GE IS acquisition by end Q2 Net cost savings cont
Slide 5: Q1 2018 financial summary
— Q1 2018 financial summary Orders Base orders Revenues $9.8 bn $8.8 bn $8.6 bn 1 1 1 +6% +5% +1% Operational EBITA margin Operational EPS Cash flow from operating activities 12.3% $0.31 -$518 mn +0.2 pts +6%2 1On a comparable basis, % yoy; 2Operational EPS growth is in constant currency (2014 forei
Slide 6: Q1 2018 orders
— Q1 2018 orders Total and base orders up Total orders +6% yoy1 Base orders +5% yoy1 Growth by region1 9.8 8.5 8.4 8.3 8.2 1.0 Europe +2% 0.8 0.7 0.6 Germany 0.8 -1% Italy +15% Sweden -3% AMEA3 +12% Americas +1% China +12% U.S. +2% India +18% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Canada -8% South Korea -4%
Slide 7: Q1 2018 Power Grids
— Q1 2018 Power Grids Total orders up $ mn % 5 1 6 2'500 0 -4 -9 1 1 10.6 -5 10.1 10.4 2'000 0% 9.9 9.7 -4 -10 -5 1'500 -17 -18 -15 1'000 -20 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Large orders 1 Operational EBITA margin (%) Comparable revenues (% y
Slide 8: Q1 2018 Electrification Products
— Q1 2018 Electrification Products Improved operational leverage $ mn % 15 2'800 10 5 7 10 3 16.1 2 2 2'600 4 3 15.2 5 -1 15.0 14.7 -1 0% 14.1 2'400 0 2'200 -5 2'000 -10 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Large orders 1 Operational EBITA margin
Slide 9: Q1 2018 Industrial Automation
— Q1 2018 Industrial Automation Steady execution $ mn % 15 14.9 10 1 8 0 0 14.1 2'000 10 13.7 13.4 13.4 4 0% 5 1'750 -1 -5 0 1'500 -5 -7 -5 1'250 -10 1'000 -15 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Large orders 1 Comparable revenues (% yoy) Operati
Slide 10: Q1 2018 Robotics and Motion
— Q1 2018 Robotics and Motion Order growth across all segments and regions $ mn % 3'000 20 8 8 15 2'500 15 6 16.4 11 5 5 15.1 15.3 2'000 7 10 14.8 6 4 13.8 1'500 5 1'000 0 0% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Large orders 1 Comparable revenues
Slide 11: Q1 2018 Operational EBITA
— Q1 2018 Operational EBITA Operational EBITA bridge Q1 2017 to Q1 2018, $ mn 12.1% op. 12.3% op. EBITA margin EBITA margin +87 -26 +29 -57 +28 -49 +24 +81 1,060 943 Op. EBITA Net Commodities Net Invest growth, Mix Other Acq./Div. Forex Op. EBITA Q1 2017 savings Volume incl. digital Q1 2018 April 19
Slide 12: Other financial items
— Other financial items $ mn unless otherwise stated Q1 2018 FY 2018 framework Corporate Operational EBITA (149) ~(500) Including non-core Business Unit ~250 PPA-related amortization2 ~200-250 normal restructuring Non-operating items1 (165) ~80 GE IS integration costs ~40 Power Up program Strong cas
Slide 13: Driving profitable growth in four entrepreneurial divisions
— Driving profitable growth in four entrepreneurial divisions Q1 highlights Bringing electricity from any Automating industries from natural power plant to any plug resources to finished products Power Grids Electrification Products Industrial Automation Robotics and Motion Large orders e.g. grid Pe
Slide 14: Investing for profitable growth
— Investing for profitable growth Landmark investment in global innovation and training campus “Factory of the Future” at B&R in Eggelsberg, Austria R&D investment of €100 mn; operational by 2020 Builds on successful integration of B&R State-of-the-art, customer centric R&D ABB Ability™ solutions fo
Slide 15: ABB Ability – creating market impact
— ABB AbilityTM – creating market impact Power Electrification Industrial Robotics and Grids Products Automation Motion ABB Ability™ Control & ABB Ability™ Connected ABB Ability™ ABB Ability™ Connected Protection System Solutions Collaborative Operations Services Murraylink & Directlink, City of Tro
Slide 16: Active portfolio management
— Active portfolio management Ongoing integration Global business unit in place On track to deliver $1 bn revenues mid-term Combining B&R and ABB product and solution offering Landmark €100 mn investment in global innovation and training campus Preparing for integration Closing expected by end Q2; c
Slide 17: Focus on relentless execution
— Focus on relentless execution Cost savings momentum in Supply Chain Management and Quality & Operations Focus on cost Net cost savings outpace commodity effect 500+ Lean Six Sigma projects across global operations Operations effectiveness Continued process automation in Global Business Services Co
Slide 18: ABB positioned for profitable growth
— ABB positioned for profitable growth Summary Market growth across sectors ABB base order growth, yoy, comparable Share of ABB total market >3% p.a. 9% negative 2017 1-3% p.a. 0-1 % p.a. 6% 5% >3% p.a. 2% 3% 2018–20 >3% p.a. 1-3% p.a. 0-1% p.a. Q1 2017 Q4 Q1 ABB better positioned in a better market
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Slide 20: Key figures Q1 2018
— Key figures Q1 2018 Q1 18 Q1 17 Change yoy in $ mn unless stated otherwise $ Local currency Comparable Orders 9,772 8,403 +16% +9% +6% Order backlog (end March) 23,737 23,084 +3% -3% -3% Revenues 8,627 7,854 +10% +3% +1% Operational EBITA 1,060 943 +12% +4% as % of operational revenues 12.3% 12.1%
Slide 21: Third-party base orders by division
— Third-party base orders by division Q1 18 Q1 17 Change yoy in $ mn unless stated otherwise Comparable Power Grids 1,992 1,763 +7% Electrification Products 2,647 2,365 +5% Industrial Automation 1,787 1,441 0% Robotics and Motion 2,313 1,991 +9% Corporate and Other 12 38 n.a. ABB Group 8,751 7,598 +
Slide 22: Cash flow from operating activities by division
— Cash flow from operating activities by division Q1 18 Q1 17 Change yoy in $ mn unless stated otherwise Comparable Power Grids (250) 190 n.a. Electrification Products 81 205 -60% Industrial Automation 79 120 -34% Robotics and Motion 73 263 -72% Corporate and Other (501) (269) n.a. ABB Group (518) 5
Slide 23: Order backlog by division
— Order backlog by division Q1 18 Q1 17 Change yoy in $ mn unless stated otherwise1 $ Comparable Power Grids 10,700 10,890 -2% -7% Electrification Products 3,441 3,157 +9% +3% Industrial Automation 5,595 5,456 +3% -8% Robotics and Motion 4,261 3,818 +12% +4% Corporate and Other (260) (237) n.a. n.a.
Slide 24: Operational EPS analysis
— Operational EPS analysis Q1 18 Q1 17 Change yoy1 $ mn, except per share data in $ EPS EPS Net income (attributable to ABB) 572 0.27 724 0.34 -21% Operational adjustments: Acquisition-related amortization 73 59 Restructuring and restructuring-related expenses2 11 48 Non-operational pension cost (cr
Slide 25: Regional share of total orders and revenues by division
— Regional share of total orders and revenues by division Q1 2018, in % terms Power Grids Electrification Products Industrial Automation Robotics and Motion 17 Orders 27 24 28 36 31 34 47 26 40 52 38 20 29 27 31 33 33 Revenues 40 35 31 40 45 36 Europe Americas Asia, Middle East and Africa April 19,