— ABB LTD, ZURICH, SWITZERLAND, APRIL 17, 2019 Resilient growth Q1 2019 results Peter Voser, Chairman and interim CEO and Timo Ihamuotila, CFO
Draft – Privileged and Confidential – Prepared at the request of Counsel — 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”, “on track”, “framework” 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. Some of the planned changes might be subject to any relevant I&C processes with the Employee Council Europe and / or local employee representatives / employees. On December 17, 2018, ABB announced an agreed sale of its Power Grids (“PG”) division. Consequently, the results of the Power Grids business are presented as discontinued operations. The company’s results for all periods have been adjusted accordingly. Net income, EPS and Cash flow from operating activities include results from continuing and discontinued operations. 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 April 16, 2019 Q1 2019 results Slide 2
Draft – Privileged and Confidential – Prepared at the request of Counsel — Today’s leadership announcement Selection process for new CEO to commence Chairman to fulfill dual role as interim CEO until new CEO in role Transformation of ABB to continue with full support of the Board April 16, 2019 Q1 2019 results Slide 3
Draft – Privileged and Confidential – Prepared at the request of Counsel — The new ABB investment proposition Medium-term financial framework Uniquely positioned portfolio focused on digital industries 3 – 6% p.a. Attractive Four leading entrepreneurial businesses in attractive growth markets growth comparable revenue growth 1 Value creation through ABB Ability™, innovation Enhanced efficiency through simplification, ABB-OS™ 13 – 16% Stronger margins operational EBITA margin ~$500 million p.a. net savings medium-term across the Group Organic investment in R&D, digital, brand 15 – 20% ROCE Optimized capital Active portfolio management ~100% cash conversion allocation EPS growth > revenue growth Attractive shareholder returns April 16, 2019 Q1 2019 results Slide 4 1 Based on current economic outlook
Draft – Privileged and Confidential – Prepared at the request of Counsel — Q1 2019 resilient growth Financial summary Orders +3% 1 Revenues +4% 1 Operational EBITA Operational EPS Base orders +6% 1 margin -50 bps 2 $0.31 +5% 3 Q1 18 Q1 19 (% or bps) PG PG sale sale impact impact Op. EBITA $6.85 bn 11.7 11.2 Basic EPS margin $7.55 bn $6.44 bn $7.61 bn recast recast $0.25 -6% Stranded -120 -100 costs n.a. -100 GEIS Cash flow dilution from operating activities Q1 18 Q1 19 Q1 18 Q1 19 -120 -200 -$256 mn 4 1 yoy comparable; 2 Impacted 100 basis points yoy by GEIS; 3 Operational EPS growth rate on constant currency basis, 2014 exchange rates; 4 Cash flow from operating activities, continuing and discontinued operations April 16, 2019 Q1 2019 results Slide 5 Note: USD reported orders and revenues are impacted by foreign exchange and changes in the business portfolio GEIS = General Electric Industrial Solutions, acquired June 30, 2018
Draft – Privileged and Confidential – Prepared at the request of Counsel — Q1 2019 orders Base order growth in all regions Total orders +3% 1 Third-party base orders +6% 1 Growth by region and key country markets in $ terms 1 Growth by region and key country markets in $ terms 1 USA +7% China +6% +4% +1% USA China +16% India -2% +16% -2% Canada Canada India -2% S. Korea +9% -2% +10% Brazil Brazil S. Korea AMERICAS +9% AMEA 2 +5% AMERICAS +7% AMEA 2 +4% EUROPE -3% EUROPE +6% Germany -5% Germany +10% Italy +5% Italy +5% Sweden Sweden -8% -9% Q1 2019 results Slide 6 1 yoy comparable; 2 AMEA: Asia, Middle East and Africa
Draft – Privileged and Confidential – Prepared at the request of Counsel — Q1 2019 Electrification Products Strong order and revenue growth $ mn % 5 4,000 15 10 4 16.0 3 3 15.2 6 6 6 10 2 14.7 3 3,000 2 0% 5 -1 13.5 2,000 0 12.4 11.7 -5 1,000 -10 0 -15 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Large orders 1 3rd party base orders Comparable revenues (% yoy) Target corridor medium-term EBITA margin Comparable total orders (% yoy) Orders $3,363 mn Revenues $3,057 mn Operational EBITA $377 mn Third-party base orders +5% 2 Order backlog end Q4 +7%, end Q1 +6% Margin yoy -280 bps Growth across systems and products GEIS dilution -270 bps Positive volumes offset by mix effects Q1 2019 results Slide 7 1 Large orders includes large orders (defined as orders above $15 mn) and internal Group orders; 2 yoy comparable
Draft – Privileged and Confidential – Prepared at the request of Counsel — Q1 2019 Industrial Automation Continued base order momentum 14.9 $ mn % 14.1 14.1 14.1 15 2,500 20 3 13.0 15 12.9 8 2,000 7 10 0 0 0 0 0 4 0% 1,500 5 -1 -5 0 1,000 -5 500 -10 0 -15 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Large orders 1 3rd party base orders Comparable revenues (% yoy) Former target corridor EBITA margin Comparable total orders (% yoy) Orders $1,884 mn Revenues $1,738 mn Operational EBITA $226 mn Third-party base orders +7% 2 Good backlog execution Margin yoy -110 bps, relative to strong Q1 18 Tough comparison for large orders Order backlog end Q4 +2%, end Q1 +2% Mix, growth investments impact Subdued market in discrete Q1 2019 results Slide 8 1 Large orders includes large orders (defined as orders above $15 mn) and internal Group orders; 2 yoy comparable
Draft – Privileged and Confidential – Prepared at the request of Counsel — Q1 2019 Robotics and Motion Solid execution $ mn % 17.0 15 3,000 20 11 16.1 11 11 11 15 15.3 15.1 15.0 6 8 8 5 10 7 7 2,000 13.8 6 5 0 1,000 -5 -10 0% 0 -15 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Large orders 1 3rd party base orders Comparable revenues (% yoy) Former target corridor EBITA margin Comparable total orders (% yoy) Orders $2,545 mn Revenues $2,229 mn Operational EBITA $337 mn Third-party base orders +4% 2 Good book-and-bill in motion Margin yoy -20 bps Tough comparison period Order backlog end Q4 +10%, end Q1 +9% Negative mix effects in robotics Strong growth in motion Q1 2019 results Slide 9 1 Large orders includes large orders (defined as orders above $15 mn) and internal Group orders; 2 yoy comparable
Draft – Privileged and Confidential – Prepared at the request of Counsel — Q1 2019 operational EBITA Operational EBITA bridge Q1 2018 to Q1 2019 ($ mn) 11.7% op. 11.2% op. EBITA margin EBITA margin +79 -29 -39 -45 +91 +3 +10 -56 671 552 766 752 Net Commodities Invest growth, Mix Other Forex Op. EBITA Net Acq./Div. Op. EBITA Q1 2018 savings incl. digital Q1 2019 volume Q1 2019 results Slide 10
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