Slide 1: ABB Q2 2012 results
July 26, 2012 ABB Q2 2012 results © ABB Group Q3 2008 investor presentation Joe Hogan, CEO Michel Demaré, CFO July 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: Q2 2012: Higher top line in a mixed market
Q2 2012: Higher top line in a mixed market Sequential improvement in operating margins § Both orders and revenues higher despite uncertain markets § Currency translation reduced reported revenues by ~$600 mill, op EBITDA by ~$100 mill § China orders stabilized, North America still strong, rebound in
Slide 4: Key figures for Q2 2012
Key figures for Q2 2012 Q2 2012 performance1 Q2 2012 Q2 2011 Change vs Q2 2011 Change vs Q2 2011 US$ millions unless otherwise stated US$ local currencies +9% Orders 10,052 9,867 +2% (organic +6%) +6% Revenues 9,663 9,680 0% (organic +3%) Order backlog 29,070 29,983 -3% +6% -5% Operational EBITDA 1,
Slide 5: Steady to higher demand in most regions
Steady to higher demand in most regions Strong Americas, resilient Europe, Asia sequentially better Order growth by region Q2 2012 vs Q2 2011 (in local currencies) Power -2% Automation +4% Europe +2% Americas +20% excl. T&B Asia +10% MEA -1% Power +26% Automation +16% +34% Power +12% Power +23% Auto
Slide 6: Our geographic scope provides a natural hedge
Our geographic scope provides a natural hedge Capturing growth opportunities where they arise Order growth by selected country Q2 2012 vs Q2 2011 (in local currencies) Norway +47% Russia +15% UK +35% Canada +30% Germany -10% (+10% excl T&B) U.S. +26% Spain -30% China -2% Italy -13% (+13% excl T&B) I
Slide 7: Q2 divisional overview: Power
Q2 divisional overview: Power Order price pressure eases, PP margins stabilizing 1 1 Op EBITDA Op EBITDA Δ vs Δ vs Orders Revenues Δ vs Q2 11 Δ vs Q2 11 Δ vs Q2 11 % Q2 11 Q1 12 (percentage pts) (percentage pts) Power +5% +0% -15% 14.7% -1.8 +0.2 Products PP op EBITDA margin Q3 2011-Q2 2012 § Orders
Slide 8: Successes and challenges in Power Q2 2012
Successes and challenges in Power Q2 2012 Quarterly successes § Strong order growth and tendering activity § Power transformer capacity cut by >10% in past 12 months § Major technology advance: World’s first 1,100 KV UHVDC converter transformer § M&A for technology: Tropos, wireless systems for netw
Slide 9: Q2 divisional overview: Automation
Q2 divisional overview: Automation Resilient performance, T&B makes first contribution Orders 1 Revenues 1 Op EBITDA Op Δ vs Q2 11 Δ vs Q1 12 Δ vs Q2 11 Δ vs Q2 11 Δ vs Q2 11 EBITDA % (percentage pts) (percentage pts) Discrete Automation & -2% +11% +6% 18.8% +0.1 +0.2 Motion § Lower demand in renewa
Slide 10: Successes and challenges in Automation Q2 2012
Successes and challenges in Automation Q2 2012 Quarterly successes § Rapid margin recovery in LP vs Q1 2012: China plus cost § Product pricing improvements in parts of DM and LP § Closed T&B acquisition § New launches in cyber security, LV breakers (smart grid), drives, motors, robots § Inaugurated
Slide 11: Thomas & Betts update: A strong start
Thomas & Betts update: A strong start Integration on track § Mid-May to end-June stand-alone1 vs. year-earlier period § 10% revenue growth on full-quarter basis § Q2 operational EBITDA margin2 18.5% vs 16.7% in Q2 2011 § Contributed ~$310 mill in revenues, ~$60 mill in operational EBITDA § Integrati
Slide 12: Operational EBITDA bridge – Q2 12 vs Q2 11
Operational EBITDA bridge – Q2 12 vs Q2 11 Factors affecting operational EBITDA Q2 2012 Product Volume Project Cost Sales and Business Other* T&B price margins savings R&D Mix Net +$277mill negative impact of $76 mill -$135 mill +$58 mill +$122 mill -$38 mill -$61 mill * Other includes FX translatio
Slide 13: Cost savings update Q2 2012
Cost savings update Q2 2012 Confident in our ability to take out cost long term Approx. share of savings by type Approx. share of savings by business Percent Percent Indirect sourcing 10% Operational Automation 25% Excellence 45% ~$280 50% Sourcing ~$280 65% Power mill mill Global 5% footprint § Con
Slide 14: Operational EPS analysis
Operational EPS analysis Q2 11 Q2 12 change change US$ EPS US$ EPS US$ local Net Income 893 0.39 656 0.29 -27% -22% Restructuring-related costs 1 19 0.01 12 0.00 FX/commodity timing differences on EBIT 1 -41 -0.02 60 0.03 Acquisition-related expense and certain non-operational items 1 -1 0.00 65 0.0
Slide 15: Improved cash flow from divisions
Improved cash flow from divisions Strength of US dollar affected total cash flow 891 902 Total § Divisional cash flows increased 862 CFO ~$40 mill versus Q2 a year ago § Group cash flow reflects lower cash 595 Divisional generation from hedging of CFO corporate exposures as a result of the strengthe
Slide 16: 2011-2015 strategic plan
2011-2015 strategic plan Five elements that drive management decisions Strategic Elements Group targets – 2012 status Organic1 revenue 1 Drive competitiveness growth (CAGR2) 7-10% Op EBITDA 2 Capitalize on mega trends margin corridor 13-19% Aggressively expand core Organic1 EPS 10-15% 3 business gro
Slide 17: Outlook for the remainder of 2012
Outlook for the remainder of 2012 Short-term view § Macro indicators in US, Europe and emerging markets remain mixed But Q2 provided reasons for optimism § Stability in op EBITDA margins in PP in recent quarters § Price pressure easing in orders vs a year ago § Resilience of orders in Europe § Highe
Slide 18: Appendix
© ABB Group © ABB July 26,2009 2012 Chart 18
Slide 19: Balanced business and geographic portfolio
Balanced business and geographic portfolio Orders by division Orders by region % of total orders Q2 2012 (non-consolidated) % of total orders Q2 2012 Power Middle East Process Products & Africa Automation 20% 11% 26% Europe 32% LV Asia 28% Products 15% 17% 22% Power 29% Discrete Systems Automation A
Slide 20: Orders and revenues by region and division Q2 2012
Orders and revenues by region and division Q2 2012 Regional share of total orders and revenues by division US$ 4% 11% 9% Orders 13% 23% 30% 26% 33% 31% 36% 29% 25% 43% 19% 31% 29% 28% 34% 23% 23% Power Products Power Systems Discrete Automation Low Voltage Process & Motion Products Automation 3% Rev
Slide 21: Maturity profile of long-term debt securities
Maturity profile of long-term debt securities Total debt securities of approx. $7.7 billion Principal outstanding at June 30th, 2012 US$ millions 1574 1266 1250 1123 881 750 500 366 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 … … … 2042 Based on June 30, 2012 FX rates Chart 21
Slide 22: Reconciliation of Operational EBITDA by Division
Reconciliation of Operational EBITDA by Division Q2 2012 vs Q2 2011 Operational EBITDA Q2 2012 vs Q2 2011 Power Power Discrete Automation Low Voltage ABB Process Automation Products Systems & Motion Products Q2 12 Q2 11 Q2 12 Q2 11 Q2 12 Q2 11 Q2 12 Q2 11 Q2 12 Q2 11 Q2 12 Q2 11 Operational revenues
Slide 23: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures ($ in millions) Net Cash (Net Debt) Jun. 30, Dec. 31, (= Cash and equivalents plus marketable securities and short-term investments, less total debt) 2012 2011 Cash and equivalents 4'773 4'819 Marketable securities and short-term investments 375 948 Cash and marke
Slide 24: Major forex movements
Major forex movements USD change Q2 2012 vs. Q2 2011 23% 21% 12% 11% 8% 5% 3% -3% BRL INR EUR SKR CHF AUD GBP RMB Chart 24
Slide 25: Appendix: Definitions
Appendix: Definitions § 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) employee and other payables, vii) advances from customers, and viii) accrued expenses § Operationa
Slide 26: 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 Alanna Abrahamson +1 919 856 3827 alanna.abrahamson@us.abb.com (Cary, NC) John Fox +41 43 317 3812 john.fox@ch.abb.com (Zurich) Tatyana Dubina +41 43 317 3816 tatyana.dubina@ch.ab