Slide 1: Solid progress on profitability
Ulrich Spiesshofer, President and CEO, ABB Ltd.; Eric Elzvik, CFO, ABB Ltd., July 21, 2016 Solid progress on profitability 2016 Q2 Results © ABB 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 2016: Solid progress on profitability
Q2 2016: Solid progress on profitability Double digit growth in operational earnings and cash flow Orders Base orders Revenues $8.3 bn $7.7 bn $8.7 bn -5%1 0%1 -2%1 Cash flow from Op. EBITA margin Operational EPS operating activities 12.7% $0.35 $1.1 bn +1.0 pts. +18%2 +80% 1 On a comparable basis;
Slide 4: Q2 2016: Solid progress on profitability
Q2 2016: Solid progress on profitability Next Level Strategy delivering results Base orders steady1 amid continued market headwinds Profitable PIE3 continued to show positive results Growth NPS2 increased 7 points to 57 points, an industry high Power Grids strategic portfolio review on track Operati
Slide 5: Q2 2016: Steady base orders
Q2 2016: Steady base orders Europe continues growth pattern, China solid 2016 Q2 base order 2016 Q2 total order growth by region growth2 Change on a comparable basis Change on a comparable basis Europe Brazil +24% Total +2% Canada +4% Germany +9% China 0% UK -34% Germany +13% Sweden +18% India +15%
Slide 6: Q2 2016: achievements by division
Q2 2016: achievements by division All divisions in target margin corridor Discrete Electrification Process Power $ bn ABB Group Products Automation Automation Grids unless otherwise stated and Motion Orders 8.3 2.5 2.2 1.4 2.7 Comparable -5% -2% -8% -20% 0% Revenues 8.7 2.4 2.2 1.7 2.8 Comparabl
Slide 7: Operational EBITA margin up 100 bpts.
Operational EBITA margin up 100 bpts. Net savings hitting bottom line 11.7% op. 12.7% op. EBITA margin EBITA margin Operational EBITA bridge Q2 2015 to Q2 2016 $ mn +143 -24 -26 +18 -42 -21 1,058 1,106 Op. EBITA Net Net Project Mix Other Forex Op. EBITA Q2 2015 savings volume margins Q2 2016 © ABB A
Slide 8: Strong capital management
Strong capital management Working capital initiative yielding results A solid cash generator Cash flow from operating activities, $ mn +80% 1,082 598 Strong working capital management 598 Timing of tax payments Q2 2015 1 Q2 2016 2 Status of share buyback 2016 dividend distribution Q2: 37.6 mn shares
Slide 9: ABB – Next Level Stage 2
ABB – Next Level Stage 2 Accelerating transformation Presented September 9th, 2015 Shifting the Center of Gravity Divisional realignment along markets Profitable Accelerating organic growth Growth Ready for inorganic moves Value from partnerships Advancing leading operating model Stage 2 Relentl
Slide 10: Q2 2016: Profitable Growth
Q2 2016: Profitable Growth Shifting the Center of Gravity – driving organic growth Examples Profitable Orders up in Brazil, Russia, India, China Penetration: Growth Base orders up overall, steady in China BRIC Framework for growth working Relentless Innovation: IoTSP1 Connected Services and SafeMove
Slide 11: Q2 2016: Relentless Execution
Q2 2016: Relentless Execution White Collar Productivity on track Today Profitable Lean World wide roll-out of transport mgmt. centers Growth business ~90 factories in 13 countries addressed functions 2 global service centers (IN, PL) Global operational Relentless shared Finance (shared accounting se
Slide 12: Q2 2016: Relentless Execution
Q2 2016: Relentless Execution Working Capital improvements increased cash flow NWC Approach $ bn Profitable Growth 6.2 Relentless 5.1 Execution Business- Q2 2015 Q2 2016 led Collabo- ration NWC as a percentage of revenues down 150 basis points © ABB August 16, 2016 Slide 12
Slide 13: Q2 2016: Business-led Collaboration
Q2 2016: Business-led Collaboration Customers Leadership Profitable Growth Cross-divisional New EC appointment New DM Head: Sami Atiya Greenfield Mexican car factory Brings extensive industrial experience Relentless Combined solutions LV, MV, and robotics in Europe, MEA & US Execution Productivity a
Slide 14: Q2 2016 summary and outlook
Q2 2016 summary and outlook Q2 results Outlook Op. EBITA margin up +100 bpts. to 12.7% Mixed short-term picture All divisions in target margin corridor Modest growth and increased uncertainties in White collar productivity delivering results Europe e.g. Brexit; slower growth in China; continued mark
Slide 15: ABB Next Level
ABB Next Level Pioneering technology leader with strong positions in attractive markets Clear transformation agenda driving EPS and CROI Strong balance sheet; committed to attractive returns to shareholders Next Level Strategy: accelerating sustainable value creation © ABB August 16, 2016 Slide 15
Slide 16: Power and productivity for a better world
Power and productivity A |! +H YEARS SeAvNG for a better world™
Slide 17: Key figures Q2 2016
Key figures Q2 2016 Q2 16 Q2 15 Change $ mn unless $ Local currency Comparable otherwise indicated Orders 8,316 8,996 -8% -5% -5% Order backlog (end June) 25,338 26,028 -3% 0% +2% Revenues 8,677 9,165 -5% -3% -2% Operational EBITA 1,106 1,058 +5% +7% as % of operational revenues 12.7% 11.7% +1.0 pts
Slide 18: Key figures first half 2016
Key figures first half 2016 H1 16 H1 15 Change $ mn unless $ Local currency Comparable otherwise indicated Orders 17,569 19,400 -9% -6% -6% Order backlog (end June) 25,338 26,028 -3% 0% +2% Revenues 16,580 17,720 -6% -3% -2% Operational EBITA 2,049 2,007 +2% +5% as % of operational revenues 12.3% 11
Slide 19: Order backlog by division
Order backlog by division Q2 2016 Q2 2015 Change % Order backlog (end June) $ Comparable $ mn Electrification Products 3,164 3,120 +1% +6% Discrete Automation and Motion 4,532 4,761 -5% -1% Process Automation 5,985 6,677 -10% -7% Power Grids 13,310 13,239 +1% +7% Corporate and Other -1,653 -1,769 (i
Slide 20: Third party base orders by division
Third party base orders by division Q2 2016 Q2 2015 Change % Third-party base orders Comparable $ mn Electrification Products 2,330 2,428 -1% Discrete Automation and Motion 2,037 2,080 0% Process Automation 1,277 1,422 -8% Power Grids 2,000 1,924 7% Corporate and other 13 20 Total Group 7,657 7,874
Slide 21: Cash flow from operating activities by division
Cash flow from operating activities by division Q2 2016 Q2 2015 Change % Cash flow from operating activities $ mn Electrification Products 364 346 +5% Discrete Automation and Motion 258 266 -3% Process Automation 260 98 +165% Power Grids 289 68 +325% Corporate and other -89 -180 Total Group 1,082 59
Slide 22: Operational EPS analysis
Operational EPS analysis Q2 2016 Q2 2015 mn $, except per share data in $ EPS EPS 1 Net income 406 0.19 588 0.26 -28% (attributable to ABB) Operational adjustments: Acquisition–related amortization 71 80 Restructuring and restructuring- 367 58 related expenses (including WCP implementation costs) G
Slide 23: Regional share of total orders and revenues by division
Regional share of total orders and revenues by division Q2 2016 Discrete Electricfication Process Power Automation and Products Automation Grids Motion 37% 29% 38% 44% Orders 37% 37% 40% 27% 26% 34% 22% 29% Revenues 38% 37% 30% 36% 40% 38% 39% 31% 25% 34% 22% 30% © ABB Europe Americas Asia, Middle E
Slide 24: Electrification Products
Electrification Products Q2 2016 In $ mn, y-o-y change comparable -2% Orders mixed as growth in Europe could not offset declines in the Americas and AMEA. Orders 2,573 2,451 Product orders were stronger in Germany and Russia but softer in China, Saudi Arabia, and the US. Q2 2015 1 Q2 22016 -1% Reven
Slide 25: Discrete Automation & Motion
Discrete Automation & Motion Q2 2016 In $ mn, y-o-y change comparable -8% Total orders were impacted by lower large orders and steady third party base orders. Orders 2,428 2,201 Continued strong demand in automotive and F&B could not fully offset capex declines in process Q2 2015 1 Q2 22016 industri
Slide 26: Process Automation
Process Automation Q2 2016 In $ mn, y-o-y change comparable -20% Reduced capex & cautious discretionary spending in process industries impacted large Orders 1,750 1,369 and base orders. Total orders declined 20 percent; third party base Q2 2015 1 Q2 22016 orders were 8 percent lower. -6% Revenues we
Slide 27: Power Grids
Power Grids Q2 2016 In $ mn, y-o-y change comparable 0% Total orders were steady Orders 2,754 2,655 Strong third party base order growth of 7 percent compensated for lower large orders. Q2 2015 1 Q2 22016 +1% Revenues were higher, reflecting solid Revenues conversion of the order backlog. 2,951 2,77
Slide 28: 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 Binit Sanghvi +41 43 317 3832 binit.sanghvi@ch.abb.com Beat Fueglistaller +41 43 317 4144 beat.fueglistaller@ch.abb.com Annatina Tunkel