ABB delivers growth in fourth quarter Solid transformation progress - PowerPoint PPT Presentation

ABB LTD, ZURICH, SWITZERLAND, MARCH 10, 2017, FULL-YEAR AND Q4 2016 RESULTS (RESTATED) ABB delivers growth in fourth quarter Solid transformation progress in 2016 Ulrich Spiesshofer, CEO; Eric Elzvik, CFO

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 global economic conditions, and the economic conditions of the regions and industries that are major markets for ABB Ltd. These expectations, estimates and projections are generally identifiable by statements containing words such as “expects,” “believes,” “estimates,” “targets,” “plans,” “outlook” or similar expressions. There are numerous risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking information and statements made in this presentation and which could affect our ability to achieve any or all of our stated targets. The important factors that could cause such differences include, among others: – business risks associated with the volatile global economic environment and political conditions – costs associated with compliance activities – market acceptance of new products and services – changes in governmental regulations and currency exchange rates, and – such other factors as may be discussed from time to time in ABB Ltd’s filings with the U.S. Securities and Exchange Commission, including its Annual Reports on Form 20-F. Although ABB Ltd believes that its expectations reflected in any such forward-looking statement are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved. This presentation contains non-GAAP measures of performance. Definitions of these measures and reconciliations between these measures and their US GAAP counterparts can be found in the ‘Supplemental reconciliations and definitions’ section of “Financial Information” under “Quarterly results and annual reports” on our website at www.abb.com/investorrelations Slide 2 March 10, 2017

Agenda Q4 and full-year 2016 performance Next Level transformation Outlook and priorities 2017 Slide 3 March 10, 2017

Full-year and Q4 2016 Orders Revenues Operational Operational EPS Free cash flow EBITA margin FY 2016 $33.4 bn $33.8 bn 12.4 % $1.29 $3.1 bn -5% 1 -1% 1 +50 bps +4% 2 +2% Orders Base orders Revenues Operational EBITA margin Q4 2016 $8.3 bn $6.9 bn $9.0 bn 11.7 % +3% 1 -1% 1 +1% 1 -20 bps 3 1 On a comparable basis; 2 Operational EPS growth is in constant currency (2014 foreign Slide 4 March 10, 2017 exchange rates) ; 3 Excluding unique events operational EBITA margin improved 10 bps

Q4 2016: ABB delivers growth +3% 1 order growth reflects strong orders in Power Grids, strong growth in US & China +9% 1 Profitable Revenues grew 1 ; positive contribution by Power Grids and Electrification Products Growth Launched ABB Ability TM – significant interest, momentum building Op. EBITA impacted ~30 bps by default of a large distributor and foreign currency losses Relentless Process Automation op. EBITA margin up 130 bps and Power Grids up 90 bps Execution WCP 2 on track to meet $1.3 bn savings; NWC 3 as % of revenues reduced 160 bps Improved country and account collaboration Business-led Global business service centers operational; ramped up >2,500 people Collaboration Successful launch of ABB brand campaign Stage 3 of Next Level Strategy launched – committed to unlocking value 1 On a comparable basis; 2 WCP: White Collar Productivity; 3 NWC: Net Working Capital Slide 5 March 10, 2017

Q4 2016: strong growth in the US and China Q4 2016 total order growth by region Q4 2016 base order growth 2 Change on a comparable basis Change on a comparable basis Brazil -36% Europe Canada -30% Total -8% China +11% -9% Germany Germany +3% UK +16% India +14% +48% Italy Turkey -78% Americas AMEA 1 Italy +2% Base orders 0% Total +17% Norway +44% Total 0% Saudi Arabia -44% China +9% US +9% India 3.5x Canada -35% South Korea +17% Brazil +36% Spain Base orders -2% +58% Base orders -3% Sweden +1% UK +7% US +6% 1 AMEA: Asia, Middle East and Africa; 2 Selected countries from among ABB’s Top 20 countries Slide 6 March 10, 2017 by total order volume

Q4 2016: Power Grids orders >$840 million, 3 continents India USA Brazil Philippines Sylmar converter station Raigarh-Pugalur 800kV Belo Monte National Grid Corp of Pacific Intertie power link Philippines $640 mn $100 mn $75 mn $27 mn UHVDC system India Upgrade HVDC station 800kV ultra-high voltage Design, supply & includes ABB Ability TM to converter transformers commission transformers Integrate renewable & monitor, control & protect conventional power over Integrate clean power Support power long distances at low losses Advanced fault registration & from hydro over long infrastructure upgrade remote control distance Improves operational Reliable, efficient Efficient and safe UHVDC Improve grid reliability and efficiency and reliability electricity to 80 mn people conversion with low losses increase power capacity UHVDC: Ultra-High-Voltage Direct Current; HVDC: High-Voltage Direct Current Slide 7 March 10, 2017

Q4 2016: performance by division Key figures Discrete Electrification Process Power $ bn ABB Group Automation unless otherwise Products Automation Grids and Motion stated 8.3 2.2 2.0 1.5 2.9 Orders +3% -5% +4% -14% +15%  Comparable 9.0 2.5 2.2 1.7 3.0 Revenues 1% +3% -1% -8% +4%  Comparable 15.5% 11.7% 13.4% 10.4% 11.7% Op. EBITA % -20 bps -90 bps -100 bps +130 bps +90 bps  Slide 8 March 10, 2017

Q4 2016: Operational EBITA margin bridge 11.9% op. 11.7% op. EBITA margin EBITA margin Operational EBITA bridge Q4 2015 to Q4 2016, $ mn +111 +32 -8 -26 -132 -21 1,101 (e.g. 1,057 1,057 Distributor default; operational currency losses) Op. EBITA Net Net Project Mix Other Forex Op. EBITA Q4 2015 savings volume margins Q4 2016 Large distributor default and Egyptian currency losses impacted op. EBITA margin ~30 bps Slide 9 March 10, 2017

Q4 2016: Operational EBITA to net income bridge -67 -68 1,057 -38 -92 -73 Q4 2016 -54 +13 -12 -194 -47 425 -73 -531 1,101 Q4 2015 -12 -8 0 -76 -54 -42 -66 -35 204 Op. PPA Restructuring Non- Changes in South Other FX/ Finance net Tax Disc. ops & Net EBITA amortization related operational pre-acquisition Korea timing minority income Pension estimates differences interest = indicating against expectations Slide 10 March 10, 2017

2016: Working Capital program yielding results Net Working Capital reduction A solid, consistent cash generator NWC as a % of revenues Cash flow from operating activities, $ mn 18 5000 17 3,843 3,818 Q4 16 4000 15 Q3 1,428 3000 1,994 14 2014 Q2 13 2000 1,081 2015 Q1 12 1,173 1000 2016 1,082 11 598 53 252 10 0 Q1 Q2 Q3 Q4 FY 2015 FY 2016 160 bps reduction 2015 vs 2016 Strong working capital management contributions Opportunities in value chain optimization Consistent cash generation through the year Slide 11 March 10, 2017

Next Level transformation Starting point 2013 2016 achievements Growth momentum building (i.e. PIE 1 ) in key markets Profitable Double digit growth in F&B 2 , robotics Lack of organic growth focus Growth Launch of ABB Ability TM , 3 partnerships Strategic portfolio review Power Grids completed Power Grids transformation delivered Underperforming units Delivered +$1 bn normal cost savings Relentless Fat, inefficient white collar organization Delivered ~$550 mn of WCP gross savings Execution Inadequate cash culture Reduced working capital ~$550 mn Static, lack of accountability >70k people on performance / compensation system Business-led Complex organizational setup Simpler, customer-focused organization Collaboration Fragmented brand landscape Unified brand and brand migration ABB ready to deliver on growth – Next Level Stage 3 1 PIE: Penetration, Innovation, Expansion; 2 F&B: Food and Beverage Slide 12 March 10, 2017

Next Level Stage 3 – committed to unlocking value Four actions ANNOUNCED OCTOBER 4 TH , 2016 1 Driving growth in four market-leading entrepreneurial divisions Profitable Growth 2 Quantum leap in digital Relentless 3 Accelerating momentum in operational excellence Execution Business-led 4 Strengthening the global ABB brand Collaboration Delivering attractive shareholder returns Slide 13 March 10, 2017