— — ABB LTD, ZURICH, SWITZERLAND, JULY 19, 2018 Continued profitable growth Q2 2018 results Ulrich Spiesshofer, CEO; Timo Ihamuotila, 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”, “on track”, “2018 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. 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 July 19, 2018 Slide 2
— Agenda Q2 2018 financial performance 2018 update July 19, 2018 Slide 3
— Q2 2018 continued profitable growth Total orders +8%, base orders +9% 1 Order growth up in all divisions and regions Profitable Book to bill 1.07x, >1x in all divisions Growth ABB Ability™ solutions driving growth GEIS integration process well underway Operational EBITA margin +60 bps to 13.0% Relentless Operating EPS growth +27% 2 Execution Ongoing net cost savings Global Strategic Alliance with HPE, Rittal for edge data center solutions Business-led Collaboration Strategic brand migration; ABB Formula-E 1 On a comparable basis, % yoy; 2 Operational EPS growth is in constant currency (2014 foreign July 19, 2018 Slide 4 exchange rates)
— Q2 2018 financial summary Orders Base orders Revenues $9.5 bn $8.8 bn $8.9 bn +8% 1 +9% 1 +1% 1 Operational EBITA margin Operational EPS Cash flow from operating activities 13.0% $0.38 $1,010 mn +60 bps +27% 2 1 On a comparable basis, % yoy; 2 Operational EPS growth is in constant currency (2014 foreign July 19, 2018 Slide 5 exchange rates)
— Q2 2018 orders Order growth in all regions Total orders +8% yoy 1 Base orders +9% yoy 1 Growth by region and top 3 country markets in $ terms 1 9.5 9.8 8.5 8.3 8.2 8.4 USA +7% China +23% 8.8 8.8 Canada +10% India +1% 7.9 7.7 7.6 7.4 Brazil -13% S. Korea -17% AMERICAS +7% AMEA 3 +7% EUROPE +12% Germany +2% Italy +19% Sweden -7% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 2 Base orders ($ bn) Large orders ($ bn) 1 Change on a comparable basis; 2 Defined as orders above $15 mn; 3 AMEA: Asia, Middle East July 19, 2018 Slide 6 and Africa
— Q2 2018 Power Grids Order growth % $ mn 10 5 2,500 1 6 5 1 1 -4 10.6 0 10.4 10.1 -9 2,000 9.9 9.7 9.7 0% -4 -5 -5 -8 -10 1,500 -17 -18 -15 1,000 -20 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Operational EBITA margin (%) Large orders 1 Comparable revenues (% yoy) Target corridor 2015-17, 2018-20 Target corridor to end 2017 3rd party base orders Target corridor from 2018 Comparable total orders (% yoy) Orders $2,577 mn Revenues $2,354 mn Operational EBITA $232 mn 2 Third-party base orders +7% yoy Order backlog end Q1 -7% yoy, Margin yoy -40 bps weighed on revenues Growth from digital grid solutions, Impacted by lower revenues renewables integration Backlog to -4% yoy end Q2 Cost management initiatives in place Power Up initiatives gaining traction 1 Large orders in the chart above includes large orders (defined as orders above $15 mn) and July 19, 2018 Slide 7 internal Group orders; 2 On a comparable basis
— Q2 2018 Electrification Products Continued operational leverage % $ mn 15 10 5 4 2,800 3 7 16.1 10 2 2 6 16.0 4 15.2 2,600 3 15.0 -1 5 14.7 0% 14.1 -1 2,400 0 2,200 -5 2,000 -10 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Large orders 1 Operational EBITA margin (%) Comparable revenues (% yoy) 3rd party base orders Target corridor 2015-20 Comparable total orders (% yoy) Orders $2,727 mn Revenues $2,673 mn Operational EBITA $430 mn Third-party base orders +4% yoy 2 Order backlog end Q2 +5% yoy Margin yoy +100 bps Broad based growth Operating leverage, pricing measures Growth for data center, e-mobility solutions 1 Large orders in the chart above includes large orders (defined as orders above $15 mn) and July 19, 2018 Slide 8 internal Group orders; 2 On a comparable basis
— Q2 2018 Industrial Automation Exceptional order growth % $ mn 15 20 14.9 1 0 0 0 14.1 14.1 10 15 13.7 2,000 13.4 13.4 8 0% 10 4 1,750 -5 5 -1 -7 -5 0 1,500 -5 1,250 -10 1,000 -15 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 1 Large orders Operational EBITA margin (%) Comparable revenues (% yoy) 3rd party base orders Target corridor 2015-20 Comparable total orders (% yoy) Orders $2,005 mn Revenues $1,839 mn Operational EBITA $260 mn Total orders +30% yoy 2 reflects Order backlog end Q1 -8% yoy; end Margin yoy +70 bps strong B&R contribution Q2 -4% yoy Positive mix, strong project Third-party base orders +9% yoy 3 Strong book-and-bill offsets lower execution, some one-time effects backlog Broad based growth across business units and regions Signs of recovery in process industries 1 Large orders in the chart above includes large orders (defined as orders above $15 mn) and July 19, 2018 Slide 9 internal Group orders; 2 Reported orders in local currency terms including portfolio changes; 3 On a comparable basis
— Q2 2018 Robotics and Motion Strong execution % $ mn 3,000 20 8 8 8 15 16.4 6 2,500 15 16.1 11 11 5 5 15.3 15.1 2,000 7 10 14.8 6 4 13.8 1,500 5 1,000 0 0% Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 1 Large orders Operational EBITA margin (%) Comparable revenues (% yoy) 3rd party base orders Target Corridor 2015-20 Comparable total orders (% yoy) Orders $2,540 mn Revenues $2,316 mn Operational EBITA $374 mn Third-party base orders +16% yoy 2 Order backlog end Q2 +6% yoy Margin yoy +100 bps Growth across all business units and Solid execution of order backlog and Positive volume and mix, continued regions book-and-bill productivity efforts Recovery in process industries 1 Large orders in the chart above includes large orders (defined as orders above $15 mn) and July 19, 2018 Slide 10 internal Group orders; 2 On a comparable basis
— Q2 2018 Operational EBITA Operational EBITA bridge Q2 2017 to Q2 2018 ($ mn) 12.4% op. 13.0% op. EBITA margin EBITA margin +94 -35 +19 -56 +27 +42 +34 0 1,167 1,042 Op. EBITA Net Commodities Net Invest growth, Mix Acq./Div. Forex Op. EBITA Other Volume Q2 2017 savings incl. digital Q2 2018 July 19, 2018 Slide 11
— Other financial items FY 2018 H2 2018 H1 2018 H1 2018 $ mn unless otherwise stated framework framework Corporate Operational Net finance expense (102) ~(120) (278) ~(550) EBITA Non-operating items Cash flow from Solid cash 492 Normal restructuring (17) ~(200) operating activities delivery Power Up program ~(20) ~(20) PPA-related amortization (145) ~(145) Capital expenditure (465) ~(1,000) GEIS PPA-related n.a. ~(25) amortization GEIS inventory revaluation n.a. ~(25) Effective tax rate 27.5% 27% GEIS integration costs (62) ~(120) July 19, 2018 Slide 12
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