Slide 1: Continued profitable growth – Q2 2018 results
— — ABB LTD, ZURICH, SWITZERLAND, JULY 19, 2018 Continued profitable growth Q2 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 Q2 2018 financial performance 2018 update July 19, 2018 Slide 3
Slide 4: Q2 2018 continued profitable growth
— Q2 2018 continued profitable growth Total orders +8%, base orders +9%1 Order growth up in all divisions and regions Profitable Book to bill 1.07x, >1x in all divisions Growth ABB Ability™ solutions driving growth GEIS integration process well underway Operational EBITA margin +60 bps to 13.0% Rele
Slide 5: Q2 2018 financial summary
— Q2 2018 financial summary Orders Base orders Revenues $9.5 bn $8.8 bn $8.9 bn +8%1 +9%1 +1%1 Operational EBITA margin Operational EPS Cash flow from operating activities 13.0% $0.38 $1,010 mn +60 bps +27%2 1On a comparable basis, % yoy; 2Operational EPS growth is in constant currency (2014 foreign
Slide 6: Q2 2018 orders
— Q2 2018 orders Order growth in all regions Total orders +8% yoy1 Base orders +9% yoy1 Growth by region and top 3 country markets in $ terms1 9.8 9.5 8.4 8.3 8.2 8.5 8.8 8.8 USA +7% China +23% 7.9 Canada +10% India +1% 7.6 7.7 7.4 Brazil -13% S. Korea -17% AMERICAS +7% AMEA3 +7% EUROPE +12% Germany
Slide 7: Q2 2018 Power Grids
— Q2 2018 Power Grids Order growth $ mn % 10 5 2,500 1 5 6 -4 0 1 1 10.6 10.4 2,000 -9 9.9 10.1 -5 0% -4 9.7 9.7 -5 -10 -8 1,500 -17 -18 -15 1,000 -20 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Large orders 1 Operational EBITA margin (
Slide 8: Q2 2018 Electrification Products
— Q2 2018 Electrification Products Continued operational leverage $ mn % 15 2,800 10 5 4 7 10 3 16.1 6 2 2 16.0 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 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Large orders
Slide 9: Q2 2018 Industrial Automation
— Q2 2018 Industrial Automation Exceptional order growth $ mn % 20 15 1 14.9 15 0 0 0 14.1 14.1 2,000 10 13.7 8 0% 13.4 13.4 10 1,750 4 5 -5 -1 1,500 -5 0 -7 -5 1,250 -10 1,000 -15 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 1 Large ord
Slide 10: Q2 2018 Robotics and Motion
— Q2 2018 Robotics and Motion Strong execution $ mn % 3,000 20 8 8 8 15 2,500 15 6 16.4 16.1 11 11 5 5 2,000 10 15.1 15.3 7 6 14.8 4 13.8 1,500 5 1,000 0 0% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Large orders 1 Comparable revenues
Slide 11: Q2 2018 Operational EBITA
— Q2 2018 Operational EBITA Operational EBITA bridge Q2 2017 to Q2 2018 ($ mn) 12.4% op. 13.0% op. EBITA margin EBITA margin +94 -35 +19 -56 +27 0 +42 +34 1,167 1,042 Op. EBITA Net Commodities Net Invest growth, Mix Other Acq./Div. Forex Op. EBITA Q2 2017 savings Volume incl. digital Q2 2018 July 19
Slide 12: Other financial items
— Other financial items FY 2018 H2 2018 $ mn unless otherwise stated H1 2018 H1 2018 framework framework Corporate Operational Net finance expense (102) ~(120) (278) ~(550) EBITA Non-operating items Cash flow from Solid cash 492 Normal restructuring (17) ~(200) operating activities delivery Power Up
Slide 13: Driving profitable growth in four entrepreneurial divisions
— Driving profitable growth in four entrepreneurial divisions Q2 highlights – penetration, innovation, expansion Power Grids Electrification Products Industrial Automation Robotics and Motion Power Up driving growth Penetration across high Selective recovery in Expansion of robotics and market expan
Slide 14: ABB Ability – making a quantum leap in digital
— ABB Ability™ – making a quantum leap in digital Q2 growth highlights Power Grids Electrification Products Industrial Automation Robotics and Motion ABB Ability™ Network ABB Ability™ MNS Digital2 ABB Ability™ MineOptimize ABB Ability™ Connected Manager – DERMS1 Services Smart distribution network S
Slide 15: Leading position in e-mobility
— Leading position in e-mobility Attractive market ABB’s position Number of EV charging points installed Early mover (start up 2011) ~23 (millions per year) Technology leadership – 350kW DC fast chargers EV charge points – ABB Ability™ Connected Services % EV of car sales 24% Large installed base ~2
Slide 16: Ongoing portfolio management
— Ongoing portfolio management Shifting ABB’s center of gravity Strengthening competitiveness Solutions & service KEYMILE acquisition Partnerships: IBM, Robotics acquisitions, Azure, HPE, Rittal, e.g. NUB3D, AT Rotech Kawasaki, Ballard GEIS Discrete B&R acquisition Expand in earlier cycle industries
Slide 17: ABB completes acquisition of GE Industrial Solutions (GEIS)
— ABB completes acquisition of GE Industrial Solutions (GEIS) Global #2 position in electrification strengthened Deal rationale Market access − Expanded access to North America − Significant installed base globally Performance improvement − Non-core business for GE − Significant value creation poten
Slide 18: GEIS – integration process well under way
— GEIS – integration process well under way Future Signing Closing Value creation Process Regulatory approvals completed First joint order received New EP business unit established Build on strong cultural alignment – Key staff retained Expand access to North American market – Leadership structure i
Slide 19: GEIS – synergy capture update
— GEIS – synergy capture update Expected annual cost synergies ($mn) Sources of synergies ~200 Approximately $200 mn run-rate by 2022 – Product and technology portfolio ~120 harmonization – Footprint optimization – Supply chain savings H2 18 2019 2020 2021 2022 – SG&A cost reduction Expected annual
Slide 20: Relentless execution
— Relentless execution Driving performance and productivity through Lean Six Sigma Power Grids Electrification Products Industrial Automation Robotics and Motion HV factory, Sweden Protection & Connection Measurement & Analytics Motor factory, U.S.A products across 12 sites factory, Italy Resolving
Slide 21: Strengthening the global ABB brand
— Strengthening the global ABB brand Brand migration Strategic brand positioning Impact >1,000 trademarks under one Increase in brand equity1 masterbrand >$2.5 bn Recognition as digital leader2 #2 Employer of choice in the technological sector3 #1 Number of job applications4 Q2: ROME, PARIS, BERLIN,
Slide 22: ABB better positioned in a better market
— ABB better positioned in a better market Summary Market outlook1 Q2 highlights 2018 – 2020 Total orders +8%, base orders +9%2 Renewables Utilities Transmission & distribution Order growth up in all divisions and regions Conventional power generation O&G upstream ABB Ability™ solutions driving grow
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Slide 24: Key figures Q2 2018
— Key figures Q2 2018 Q2 18 Q2 17 Change yoy in $ mn unless stated otherwise $ Local currency Comparable Orders 9,483 8,349 +14% +11% +8% Order backlog (end June) 24,214 23,553 +3% +4% -1% Revenues 8,889 8,454 +5% +3% +1% Operational EBITA 1,167 1,042 +12% +8% as % of operational revenues 13.0% 12.4
Slide 25: Total and base orders
— Total and base orders By division Q2 18 Q2 17 Change yoy in $ mn unless stated otherwise Comparable Total orders 2,577 2,427 +5% Power Grids 3rd party base orders 2,128 1,961 +7% Total orders 2,727 2,512 +6% Electrification Products 3rd party base orders 2,553 2,393 +4% Total orders 2,005 1,492 +1
Slide 26: Q2 2018 orders
— Q2 2018 orders Total orders +8% yoy1 Base orders +9% yoy1,2 Growth by region and top 3 country markets in $ terms1 Growth by region and top 3 country markets in $ terms1 USA +6% China +20% USA +7% China +23% Canada +10% India +2% Canada +10% India +1% Brazil -2% UAE +33% Brazil -13% S. Korea -17%
Slide 27: Order backlog by division
— Order backlog by division End June 2018 End June 2017 Change yoy in $ mn unless stated otherwise $ Comparable Power Grids 10,471 11,085 -6% -4% Electrification Products 4,4491 3,220 +38%1 +5% Industrial Automation 5,496 5,578 -1% -4% Robotics and Motion 4,262 4,056 +5% +6% Corporate and Other (464
Slide 28: Cash flow from operating activities by division
— Cash flow from operating activities by division Q2 18 Q2 17 Change yoy in $ mn unless stated otherwise Power Grids 228 77 +196% Electrification Products 297 259 +15% Industrial Automation 208 153 +36% Robotics and Motion 351 221 +59% Corporate and Other (74) (243) n.a. ABB Group 1,010 467 +116% Ju
Slide 29: Operational EPS analysis
— Operational EPS analysis Change Q2 18 Q2 17 yoy1 In $ mn, except per share data in $ EPS EPS Net income (attributable to ABB) 681 0.32 525 0.25 +30% Operational adjustments: Acquisition-related amortization 72 56 Restructuring and restructuring-related expenses2 6 84 Non-operational pension cost (
Slide 30: Regional share of total orders and revenues by division
— Regional share of total orders and revenues by division Q2 2018, in % terms Power Grids Electrification Products Industrial Automation Robotics and Motion Orders 31 35 32 34 39 38 37 50 30 18 27 29 29 Revenues 36 37 35 34 35 40 43 31 27 22 31 July 19, 2018 Slide 30 Key: Europe Americas Asia, Middl
Slide 31: End-customer and product type revenues by division
— End-customer and product type revenues by division Q2 2018, in % terms Power Grids Electrification Products Industrial Automation Robotics and Motion customer market Orders end- 9 16 17 9 25 23 31 24 67 44 61 74 19 7 15 Product type 6 33 Orders 42 13 57 24 72 87 25 Key: Utilities Industry Transpor