Joe Hogan, Capital Markets Day, London, September 12, 2012

Implementing our strategy for growth and profitability Joe Hogan, CEO
ABB September 12, 2012 | Slide 1

Update on 2015 commitments

Commitments What we said

Execution What we did

Drive competitiveness Stay relevant in our current markets

11% organic1) revenue growth Stabilizing margins in Power Products

Automation CAGR ~11% from 09 11

Cost out: - $1.1 bn in 2011 - $0.5 bn in 2012 H1 New Chief Technology Officer Increased R&D spend Acquisitions improve Portfolio balance Services growth 16%2) in H1 2012

Continuous cost & quality Improvement Invest in technology leadership Efficient use of assets: cash, people Securing long-term growth

ABB September 12, 2012 | Slide 2

1) Organic excludes acquisitions after October 2011. 18 months CAGR FY 2011 and June 2012, in local currencies 2) In local currencies and excluding Maintenance Outsourcing Contracts

Global economic forecast has changed since 2011 CMD

Global GDP growth
Real, yoy % change; Source: Global Insight

Month of Forecast:

4.3% 3.8% 3.0% 3.0% 2.9% 3.6% 2.7%

4.2% 4.2%

Nov 2011 Aug 2012

2.6%

2011
*Comparison between Nov11 FC and Aug12 FC of the nominal 2015 GDP value

2012

2013

2014

2015

Cumulative loss of $7.5 trillion* in 2015 GDP vs. Nov 2011 FC

ABB September 12, 2012 | Slide 3

ABB expects to outpace the world economy Revenue growth at twice the pace of global GDP
Ambition
Forecast revenue growth 2010 2015

Macro growth drivers

Emerging markets continued growth

Energy savings & climate change investment

Service & Software productivity improvements Global infrastructure spend

Inorganic

3 - 4% potential impact 7 - 10% CAGR*

$38 bn1 $32 bn Organic

Key growth areas

Grid expansion, efficiency & reliability

Emerging country demand for Power & Automation Service & Software growth entitlement DC technology market expansion

2010

2011

2015

Organic growth Inorganic growth *CAGR in local currency. Base year 2010

Automation business expansion

Energy Efficiency & Renewables

ABB September 12, 2012 | Slide 4

Business portfolio mix Contribution of Automation and Power

Revenue
$ Billions

CAGR* 2009-2011
38.0 31.8 31.6 21.1

Strong growth in Automation

Automation helps to balance longer cycle Power Solid contribution from DM and PA in 2012 H1 Leveraging access into large NA market Full contribution from T&B going forward

11%

Automation

16.0

16.5

Power

15.7

15.1

16.9

1%

2009 Automation as of total revenue

2010

2011

50%

52%

55%

ABBs revenue shows increasing contribution from Automation

ABB September 12, 2012 | Slide 5

Note: NA refers to North America. DM: Discrete Automation & Motion. PA: Process Automation. T&B: Thomas & Betts *CAGR in local currency

ABBs strategic development in China Automation is driving todays growth

China revenue as % of total ABB revenue

Economic & business factors

Strong growth, e.g., robotics, service, highvoltage power products, power electronics, low-voltage systems, oil & gas Short-cycle business impacted by economic slow down Power business is stable but at a slower level

12%

13%

12%

2008

2011

1H12

Share of Automation and Power revenue in China

Total CAGR* 4% Automation Power
45%
Automation CAGR*: 15%

Main drivers

Productivity and energy efficiency improvements Growth in manufacturing and process industries Rapid urbanization Growth driven by our Automation business

60% 58% 42%

1H12

55%
2008

Power CAGR*: -6%

40%
2011

ABB September 12, 2012 | Slide 6

*CAGR in local currency

Power Products is a critical business for ABB

25.0%

Power Products revenue and operational EBITDA margin 2001-Q2 2012

US$ billions and % of revenues

20% 19%
20.0%

20% 18%
16%
14.8% 14.5% 14.7%
15.0%

18%
15% 14% 12%

14%

12%

13% 12%
10.0%

5.0%

11.9

11.2

10.2

3.3

3.5

4.5

5.6

6.2

7.3

9.8

10.9

3.1

2.5

2.6
0.0%

Note: For all periods pre-2009, revenues and op EBITDA % are management estimates and have not been adjusted for FX/commodity timing differences

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2012 2012 Q4 Q1 Q2 Revenue Op. EBITDA%

Focus on margin reinforcement and expansion

ABB September 12, 2012 | Slide 7

Margin target range

Power Products Revenue by Product Group 2011

Revenues
Margin %

Op. EBITDA %

Broad portfolio serving a range of customers across the globe Portfolio and customer diversity positions ABB well to outperform in unpredictable cycles Increasing focus on competitiveness positions for future growth No loss making product groups

Revenue MUSD

1,000s of different products

ABB September 12, 2012 | Slide 8

Product

Product

Product

Product

Product

Strong product and geographic mix reinforces margins

Product

Product

Product

Product

Product

Product

Product

Product

Product

Product

Product

Product

Cost savings 2009 2012 H1

Cost savings evolution and sustainability
in % of cost of sales (COS)

6.5%

6.8%
1.4%

OPEX Global footprint

1.3%

5% of COS
4.1% 4.1%

Optimize footprint Faster customer responsiveness Sustainable cost reduction

1.7% 2.7%

Targeted cost savings range

1.6% 0.2% 1.6% 0.2%

3% of COS

Continuous Improvement

3.5%

Sourcing

2.7%

2.3%

2.3%

2009
Cost savings ($) $1.5bn

2010
$1.5bn

2011
$1.1bn

2012 H1
$0.5bn

Note: General & Admin included in Global Footprint savings

Cost reductions for 2012 already being delivered

ABB September 12, 2012 | Slide 9

2015 Strategy overview Strategy for the next 3 years We will

1

Drive competitiveness and stay relevant in our current markets

Continue to drive cost and quality competitiveness Invest in technology leadership

Efficient use of assets: cash, people, IP & brand People development and investment

2
Capitalize on mega trends

3
Aggressively expand core business

4
Disciplined M&A

5
Exploit disruptive opportunities

ABB September 12, 2012 | Slide 10

Drive competitiveness Ensuring ABBs competitiveness

Growing need for Power and Automation in all regions of the world Opportunities for growth and productivity with R&D investment ABB can drive competitiveness across global regions & markets

Background

Growing competition in some areas of Power (Power transformers)

Recession and lower electricity usage has slowed utility investments in Europe & US

Balanced footprint

Cost control for improved profitability

Differentiated products & packaged solutions

Levers

Leverage economies of scale

Customer loyalty

ABB September 12, 2012 | Slide 11

ABB initiatives

Cost management & integration excellence

In country for country local capability

Targeted R&D / Value Engineering

Focus on & improve NPS

Drive competitiveness Balancing global footprint 2008-2012

Europe

% change in total employees and production area 2008 to June 2012

Asia

Americas Middle East & Africa

ABB has driven a more balanced global footprint

ABB September 12, 2012 | Slide 12

Drive competitiveness The right cost position is a prerequisite for growth

Operational Excellence
Optimize capacity Quality improvements
(40% of total)

Impact 2012 LTM

Cost Management, Control & Savings

Supply Chain / Sourcing

Leverage supply base On-time delivery

Impact 2012 LTM

(55% of total)

Total savings LTM ~$1.14bn

Footprint
Optimize self sufficiency Improve geographic cost base and footprint

Impact 2012 LTM

(5% of total)

ABB September 12, 2012 | Slide 13

LTM: Last twelve months through June 2012

Drive competitiveness R&D as a competitive advantage

Improvements
Upgrades on existing portfolio Bringing cost down
(55% of total)

2011 investment*

ABB R&D spend

% of total revenue

Platforms
3.6% 3.0% 4.0%

2011 investment*

Setting new levels of performance

(30% of total)

2007

2011

2015

Target R&D spend 4% by 2015

Break-through innovations
Generating new ideas for the next level of growth

2011 investment*

(15% of total)

ABB September 12, 2012 | Slide 14

* Estimated

Drive Competitiveness NPS - looking at ABB through our customers eyes

What are we doing about it?

Unfavourable comments feed directly into complaint management system
Received more customer feedback Increased NPS score Results regularly reviewed part of management meetings, at all levels (+6,000 completed surveys) (+15,000 completed surveys)

Top issues receive highest possible attention EC sponsors Level of progress is linked to our bonus scorecard

Customers like our

Technical support Industry & application knowledge Engineering / design capability

They tell us to improve

On-time delivery Issue resolution Complete & timely quotes

Goal: increase NPS score each year

Source: ABBs Net Promoter Score (NPS) program, 2011 Data

It is 6-7 times more expensive to acquire a new customer than it is to keep a current one
ABB September 12, 2012 | Slide 15

Capitalizing on mega trends Ahead of the upcoming opportunities

Growing demand for electricity Different needs for electrification in developed and emerging countries Increasing demand for limited resources, e.g. oil, gas, water and minerals Shale gas phenomena changing some investment dynamics in other energy sources Increasing globalization driving demand for transportation Late player in the Data Center market but room to grow

Background

Levers

Electrification

Resource constraints

Green

Digital information

Transportation

ABB September 12, 2012 | Slide 16

ABB initiatives

Capitalizing our core portfolio strengths on Energy Efficiency

Providing energy efficient solutions to match power demand

Investing & growing in O&G business

Capitalizing on mega trends Electrification: Different Global demand drivers

Electricity consumption
Gross domestic electricity consumption: gross production plus imports minus exports and distribution losses; source: EIU; Aug 2012
+7.1% p.a. +1.2% p.a.
8.5tr GWh 8.9tr GWh 9.2tr GWh

13.6tr GWh

Other Commercial sector Residential sector Transport sector Industry sector

11.2tr GWh 9.0tr GWh

2009

2012FC

2015FC

2009

2012FC

2015FC

Developed countries

Emerging countries

Transmission Stability investments Grid reinforcement & reliability focus Move to alternative energy sources Offshore wind in North Sea

Industrial growth > 8% p.a. 2009-2016 Building & reinforcing grids Electrification in rural and urban areas Reliability of supply is critical

ABB September 12, 2012 | Slide 17

Capitalizing on mega trends

Electrification - Power outages signal a need for increased investments

ABB September 12, 2012 | Slide 18

Capitalizing on mega trends

Electrification - Power outages signal a need for increased investments

2003
US, Canada

508 generating units at 265 power plants shut down during the outage Total costs estimated to be between $ 4 -10 bn, GDP Canada down by 0.7% in August 2003

ABB September 12, 2012 | Slide 19

Source: Final Report on the August 14, 2003 Blackout in the United States and Canada: Causes and Recommendations, U.S.-Canada Power System Outage Task Force

Capitalizing on mega trends

Electrification - Power outages signal a need for increased investments

Largest cities, including capital, affected Supply shortfall of 2,700MW; ~50% of original supply

2005
Indonesia

ABB September 12, 2012 | Slide 20

Source: Financial Times, Indonesian outage leaves 100m without electricity, August 19, 2005

Capitalizing on mega trends

Electrification - Power outages signal a need for increased investments
T&D losses of electricity supply are still roughly 25% Electricity demand to increase from ~1,000 TWh in 2011/12 to ~1,400TWh in 2016/17 The IEA predicts that India will need to invest ~$0.7bn between now and 2035 to meet the demands

2012
India

ABB September 12, 2012 | Slide 21

Source: Global Insight, India's "Blackout Tuesday" Turns Into Largest Power Failure in Country's History, August 1, 2012

Capitalizing on mega trends ABB investing in subsea Oil & Gas technology vision
Today transformer Subsea Ongoing Tomorrow

Platform based power generation or power from shore

Platform based power generation or power from shore

Long distance power from shore

Topside AC

Subsea AC

Subsea DC
+ Subsea O&G processing + No platforms/floaters + One cable + Cheaper cable + Longest distance + Common DC: no rectifiers
Step-up DC DC transmission Step-down DC Subsea drive

Subsea Platforms/floaters needed Many cables needed High OPEX, CAPEX People safety procedures Environmental impact Limited step-out distance

transformer Limited distance

+ Subsea O&G processing + No platforms/floaters + One cable + Longer distance

drive ABBTopside investing in subseaStep-up AC AC transmission Step-up transformer electrification & automation solutions Step-down AC Long AC cables to enable future subsea Subsea processing drive Step-down transformer

High-speed machine

High-speed machine

High-speed machine

ABB September 12, 2012 | Slide 22

Capitalizing on mega trends ABB investing in subsea Oil & Gas technology vision
Today drive Subsea Ongoing Tomorrow

Platform based power generation or power from shore

Platform based power generation or power from shore

Long distance power from shore

Topside AC

Subsea AC

Subsea DC
+ Subsea O&G processing + No platforms/floaters + One cable + Cheaper cable + Longest distance + Common DC: no rectifiers
Step-up DC DC transmission Step-down DC Subsea drive

Subsea Platforms/floaters needed Many cables needed High OPEX, CAPEX People safety procedures Environmental impact Limited step-out distance

transformer Limited distance

+ Subsea O&G processing + No platforms/floaters + One cable + Longer distance

drive ABBTopside investing in subseaStep-up AC AC transmission Step-up transformer electrification & automation solutions Step-down AC Long AC cables to enable future subsea Subsea processing drive Step-down transformer

High-speed machine

High-speed machine

High-speed machine

ABB September 12, 2012 | Slide 23

Expand core business Leveraging existing expertise

We aim to grow faster than our end markets by capturing market share Power and Automation offering converging across many industries CAPEX for equipment replacement is volatile, driving need for lifecycle services

Background

Software integration in the Automation and Power businesses

Levers

Installed base & lifecycle services

Software

Data Centers

Automation investment

Integration synergies

ABB September 12, 2012 | Slide 24

ABB initiatives

Industrialized service offering portfolio

Increased offering solutions & technology to Data Centers end-market

Aligned One ABB go-to-market approach to strengthen value proposition

Expand core business Executing on the service strategy

Service as % of total revenue1, history & ambition
40%
35% 30% 25% 20% 15% 10% 5% 0% 2007 2008 2009 2010 2011 1H12 2015 15% 15%

Takeaways from pilot countries 2)

Actions and initiatives are in line with customer feedback Still large potential to further penetrate own installed base One ABB Service leverages company scale Service hubs / stations network extend coverage

Impact of Service Strategy

16%

17%

17%

18%

20-25%

Services revenues

Full potential service strategy

+1-2% 20-25%

Strategic priorities
Drive installed base penetration Expand service portfolio

+4-5%

17%

Enhance geographic coverage & local capabilities

2010 Products/ System services Extended BU Services & Group Sector Services 2015 Ambition

Improve execution

ABB September 12, 2012 | Slide 25

Expand core business Bringing software to ABBs core

Improving our software related business portfolio
Enterprise Software

Significant opportunities for Growth & Profitability

Software-related revenues* (incl. acquisitions) in $ Millions
2,000

Industrial Software
SCADA Network Manager
1,000

System 800xA Symphony Harmony Melody

2008

2009

2010

2011

*Management estimates. Includes enterprise software (principally physical asset, work and operations management software) & industrial software (principally for process and network optimization and control) and related services

Moving software into the core of ABBs business

ABB September 12, 2012 | Slide 26

Expand core business Data Centers large, attractive, fast-growing market

Drivers
Mobile phone & apps, cloud computing Energy is 45% of OPEX and 20% of Total Cost of Ownership
175

Revenue1) $ Million
500

Size: $32bn power and cooling equipment and services in ABB scope (2011)

2011

2015

Market

Services ~30% of market spend Balanced geography Growth: 8-12% p.a.

ABB differentiators

DC and AC portfolio Data Center infrastructure management Data Center & utility Global footprint with local services Both IEA and NEMA capability

Trends

Modular solutions to manage speed and cost Using industrial automation software Scale, flexibility and upgradability

ABB September 12, 2012 | Slide 27

Source: Uptime Institute, EPA report, ABB internal analysis 1) Estimated

Disciplined M&A Effectively filling white spots

M&A investment criteria

Background

Targeting M&A that solves specific portfolio gaps

Balancing geographic presence and market access

Cash return > WACC within 3 years IRR > WACC + specific hurdles Priority is to retain investment grade

Deepening vertical competencies and applications

Deal timing, integration and execution are crucial

Levers

Geographic expansion

Automation opportunities

Economies of scale

Effective integration

Geographic penetration

ABB September 12, 2012 | Slide 28

ABB initiatives

Acquisitions that give us access to large markets

Key acquisitions in Automation, Low Voltage & Software

Technology Ventures to stay abreast of emerging business models

Disciplined M&A Better divisional and geographic balance

M&A spend* breakdown
Approx. by Business
Automation ~ 75%
Americas ~85%

M&A spend* breakdown

Approx. by Region

DM & PA ~40% LP ~35%

Power ~25%

Europe ~10% Asia ~5% MEA <1%

* including repayment of debt PA: Process Automation, DM: Discrete Automation & Motion LV: Low Voltage Products
ABB September 12, 2012 | Slide 29

Based on acquisitions (HQ) between 2008 and June 2012, including Thomas and Betts for Low Voltage Products

Better Geographical & Divisional balance as a result of these strategic investments

Exploit disruptive opportunities Addressing major developments

DC technology & applications is a differentiator growth opportunity Increased need for data storage driven by mobile applications and broadband speed Smart grid market growth globally to optimize load balance and increase reliability

Background

New policies on Energy Efficiency in major markets

Software investments to bring the new levels of productivity and performance

Levers

DC Technology

Power & Automation

Smart grid Capabilities

Energy Efficiency

Software

ABB initiatives

New energy storage systems Energy efficiency

DC applications: Data Center Growth

New value propositions to our customers Asset management

Vertical market approach

ABB September 12, 2012 | Slide 30

Exploit disruptive opportunities Major DC technology breakthroughs

Transformers
Development of 800kV/1100 kV UHVDC* converter transformer: New world record highest DC voltage ever

Record breaking voltage levels Transmission capacity of more than 10GW up to 3,000km in distance Enabling long distance DC

Datacenters (DC and AC)

ABB improves energy efficiency with worlds first DC data center

ABB provided solution for worlds first DC technology Data Center in Switzerland CAPEX costs reported by Green.ch were 15% less than conventional AC platforms Energy Efficiency is 10% higher 25% reduction in real estate space

Ships
DC Power in ships

30% less space & weight, increasing ship payload capacity & revenue 20% more energy efficient

No increase in CAPEX compared to AC distribution

First order by Myklebusthaug management in Q1 2012

*Ultra-high Voltage Direct Current

ABB September 12, 2012 | Slide 31

Exploit disruptive opportunities Disruptive technology and / or business models

Energy storage
PCS100 Energy Storage System provides battery solution to one of Switzerlands largest energy distributors

DC offshore
Being the first with new value proposition for customers

DC transmission link to connect offshore wind farms to the grid

OT/IT Integration

Asset Health Center (AHC), combining OT from PP & PS, along with T&D products and diagnostic expertise with IT from Ventyx

Synchronous Reluctance Motor-Drive Package

ABB September 12, 2012 | Slide 32

Newly designed Synchronous Reluctance Motor-Drive Package, allowing for up to 40% lower losses and 50% increase of bearings life time

2015 Strategy overview Strategy for the next 3 years We will

1

Drive competitiveness and stay relevant in our current markets

Continue to drive cost and quality competitiveness Invest in technology leadership

Efficient use of assets: cash, people, IP & brand People development and investment

2
Capitalize on mega trends

3
Aggressively expand core business

4
Disciplined M&A

5
Exploit disruptive opportunities

ABB September 12, 2012 | Slide 33

Opening Summary

Competitiveness is our core strategic objective Automation becoming more important to our portfolio Power Products margins are stabilizing Confident in our ability to drive 3-5% reduction in cost of sales per year Growth in China despite slowdown in Power Acquisitions have led to a better portfolio & geographic balance Core expansions, mega trends & disruptive technologies support growth Service is on track to meet our target of 20-25% of revenue by 2015

ABB September 12, 2012 | Slide 34

Expand core business Bringing software to ABBs core

Improving our software related business portfolio
Enterprise Software

Significant opportunities for Growth & Profitability

Software-related revenues* (incl. acquisitions) in $ Millions
2,000

1,000

Industrial Software
System 800xA Symphony Harmony Melody Network Manager

2008

2009

2010

2011

*Management estimates. Includes enterprise software (principally physical asset, work and operations management software) & industrial software (principally for process and network optimization and control) and related services

Moving software into the core of ABBs business

ABB September 12, 2012 | Slide 36