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

ABB LTD, ZURICH, SWITZERLAND, FEBRUARY 8, 2017, FULL-YEAR AND Q4 2016 RESULTS 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 February 8, 2017

Agenda Q4 and full-year 2016 performance Next Level transformation Outlook and priorities 2017 Slide 3 February 8, 2017

ABB: the pioneering technology leader What Pioneering technology (Offering) Products 58% Systems 24% Services & software 18% For whom Utilities Industry Transport & Infrastructure (Customers) ~35% of revenue ~40% of revenue ~25% of revenue Where Globally (Geographies) Asia, Middle East, Africa 38% Americas 29% Europe 33% ~$34 bn revenue ~100 countries ~132,000 employees Slide 4 February 8, 2017

Full-year and Q4 2016 Orders Revenues Operational Operational Free cash EBITA margin EPS flow FY 2016 $33.4 bn $33.8 bn 12.4 % $1.29 $3.2 bn -5% 1 -1% 1 +50 bps +4% 2 +5% 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 bps³ 1 On a comparable basis; 2 Operational EPS growth is in constant currency (2014 foreign exchange rates) ; 3 Excluding unique events operational Slide 5 February 8, 2017 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 150 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 6 February 8, 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% Canada -30% Europe China +11% Total -8% Germany +3% -9% Germany UK +16% India +14% +48% Italy Americas AMEA 1 Italy +2% Turkey -78% Norway Total +17% +44% Total 0% Base orders 0% Saudi Arabia -44% China +9% US +9% India >250% Canada -35% South Korea +17% Brazil +36% Spain +58% Base orders -2% 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 by total order volume Slide 7 February 8, 2017

Q4 2016: Power Grids orders >$840 million, 3 continents India USA Brazil Philippines Raigarh-Pugalur 800kV Sylmar converter station Pacific Belo Monte National Grid Corp of Philippines Intertie power link $640 mn $100 mn $75 mn $27 mn UHVDC system India Upgrade HVDC station includes ABB 800kV ultra-high voltage converter Design, supply & commission Ability TM to monitor, control & protect transformers transformers Integrate renewable & conventional power over long Advanced fault registration & remote Integrate clean power from hydro Support power infrastructure distances at low losses control over long distance upgrade Reliable, efficient electricity Improves operational efficiency Efficient and safe UHVDC Improve grid reliability and to 80 mn people and reliability conversion with low losses increase power capacity UHVDC: Ultra-High-Voltage Direct Current; HVDC: High-Voltage Direct Current Slide 8 February 8, 2017

Q4 2016: performance by division Key figures Electrification Discrete Automation Process Power $ bn ABB Group unless otherwise Products and Motion Automation Grids stated Orders 8.3 2.2 2.0 1.5 2.9 +3% -5% +4% -14% +15%  Comparable Revenues 9.0 2.5 2.2 1.7 3.0 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 9 February 8, 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 +32 -8 -26 +111 -132 -21 1,101 1,057 (e.g. 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 10 February 8, 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 3,934 4500 3,818 17 4000 16 3500 Q4 1,519 15 3000 1,994 Q3 14 2500 2014 13 2000 Q2 1,081 2015 1500 12 Q1 1,173 2016 1000 11 1,082 500 598 10 252 53 0 Q1 Q2 Q3 Q4 FY 2015 FY 2016 150 bps reduction 2015 vs 2016 Strong working capital management contributions Opportunities in value chain optimization Consistent cash generation through the year Slide 11 February 8, 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 February 8, 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 February 8, 2017