ABB

ABB Strategy 2005-2009 Power and productivity for a better world
September 2005
ABB Group - 1 Aug 2, 2011
Safe harbor statement

This presentation includes forward-looking information and statements including statements concerning the outlook, and revenue and margin targets 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, the economic conditions of the regions and industries that are major markets for ABB Ltd and ABB Ltds lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates, targets, plans or similar expressions. However, there are many 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 press release. The important factors that could cause such differences include, among others, ABBs ability to dispose of certain of our non-core businesses on terms and conditions acceptable to it, the terms and conditions on which asbestos claims can be resolved, trends in raw materials prices, market acceptance of new products and services, changes in governmental regulations and costs associated with compliance activities, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in ABBs 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.
ABB Group - 2 ug 2, 2011
Agenda

Introduction ABB strategy 2005-2009

Strategic priorities in historical context ABB mission and vision Divisional strategies Regional opportunities Acquisition priorities

Organization and management Financial targets Summary
Putting the future into historical context
*
30,000
10%
Revenues in $ million
20,000
10,000 2%
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: 1988-1993 and 1998-1999 as per respective annual reports; 1994-1997 as per 1997 annual report; 2000 to 2004 as per the 2004 Form 20-F filing with the U.S. Securities and Exchange Commission.
* 1999 profit contains major gains from divestitures
EBIT margin (% revenues)
8%
6%
4%
0%

Stage 1: Post-merger acquisition drive
Massive expansion through acquisitions (e.g., Combustion Engineering, Westinghouse T&D) Extreme decentralization (5000 profit centers, matrix) EBIT margin stagnant below 5% *
30,000
10%
8%
20,000
6%
4%
10,000 2%
0%
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
1
Post-merger acquisition drive

Stage 2: New Economy-related portfolio transactions

Large scale JVs and divestitures (e.g., ADtranz, ABB Alstom Power) ABB follows New Economy theme EBIT very volatile, includes significant divestiture gains, underlying performance deteriorates *
30,000
10%
20,000
10,000 2%
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
New Economy-related portfolio transactions
8%
6%
4%
0%

Stage 3: Crisis years and turn-around
Volume, EBIT and cash flow plummet at same time Asbestos and share buy-back further aggravate the situation Turn-around initiated and swiftly executed (balance sheet, portfolio, cost structure and corporate governance) *
10%
30,000
8%
20,000
6%
4%
10,000 2%
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
0%
Crisis Years / Turnaround
Lessons learned Strategy 2009

Lessons learned

Strategy 2009

ABB strategy and organization cant be modeled on the 90s Operating profitability at core of ABBs portfolio and business strategy Growth momentum important, but margin comes first Solid foundation built in last three years Performance going in the right direction
Build on ABBs power and automation core Drive culture of operational excellence and execution Maintain growth momentum with solid margins Further strengthen worldwide market presence and global culture At home everywhere Continued technology innovation for utility and industry customers

Grid reliability and availability of power Industrial productivity Energy savings and environmental benefits
Evolution not revolution
Shifting focus in value creation

Value Creation Growth Operating Margin Capital Efficiency
Focus 2005-2009:

Credibility/ Consistency
Focus 1990s:

Superior growth through acquisitions Operating profit propped up by nonoperational items Very high debt leverage to drive ROE
Drive operating margin, consistent EPS growth Maintain organic growth momentum Improve capital efficiency via operating measures
Extreme decentralization as corporate Disciplined acquisitions approach architecture Focus corporate architecture on execution
Agenda



ABB: A focused engineering company

Interlinked businesses
Process Automation Power Systems

Similar success factors

Cost leadership
Exploiting economies of scale Taking advantage of low-cost opportunities
Technology Automation Products Power Products

Innovation deeply ingrained in ABB DNA $900 mill. per year in R&D*
Mfg. Automation
Customer-sharing and pull-through Technology- and cost-sharing
Customer positioning

Global reach, at home everywhere (geographically and culturally) Service and solutions offering to complement products Group Account Management
* Combined 2004 R&D and order-related development investments in the AT and PT divisions
ABBs Mission
As one of the worlds leading engineering companies, we help our customers to use electrical power effectively and to increase industrial productivity in a sustainable way.
Power and productivity for a better world
ABB Vision
ABB delivers attractive profitable growth by providing leading power and automation technologies to customers throughout the world. We help them improve their performance and productivity, save energy and lower environmental impact.
ABBs technology competence, broad application know-how and global presence offer ABB will be recognized as the top global engineering By 2009, customers easy access to leading electrical engineering and industry automation solutions. Innovation and quality areprofitability, value company in terms of market impact, growth and key characteristics of our service and product offering. We build ethical behavior. creation, sustainability and on long-lasting, value-creating partnerships with customers and suppliers. As one of the worlds most global and dynamic companies, ABB is unique in its multicultural environment and attitude. We are committed to attracting and retaining dedicated and skilled people and offering employees an attractive working environment and excellent development opportunities.
Agenda



ABBs business portfolio

New names effective Jan 1, 2006
ABB
Sales: $20.7 bn Employees: 103000
Power Products Power Technology Products

Sales*: $6.0 bn Employees: 27,500
Power Systems Power Technology Systems

Automation Products
Process Automation
Robotics Manufacturing Automation

High- and medium-voltage switchgear, breakers, transformers, etc. Mainly for utilities and industrial plants
HVDC and HVDC light, FACTS, power plant and network automation, substations, etc. Mostly for utilities and industrial plants
Low-voltage products and systems, drives, motors, power electronics, etc. Mainly a product business shipping one million products a day Wide variety of customers
Automation solutions for the process industries (DCS, SCADA, controllers) Oil & gas, chemicals, pharmaceuticals, pulp & paper, metals, minerals, marine, etc.
Robots, robotic systems and services Mainly for the automotive industry, but also for other segments
* 2004 numbers include internal sales to other divisions
Power Products overview

Key products: High- and medium-voltage products, power and distribution transformers, product service Key applications: Switching, protecting, transforming, measuring, and automating in power transmission & distribution, industrial electrification, power generation systems 2004: $6.0 bn revenues, 8.3% EBIT margin, 27,500 employees Further enlargement, reinforcement of grids in emerging markets Service and replacement demand in North America, Europe
Market position 2004

Business line
High-voltage products Medium-voltage products Transformers
2
Siemens Schneider Siemens
3
Areva Siemens Areva
ABB ABB ABB
Market outlook/drivers

Source: ABB, Goulden Reports, ABS, Bear Stearns
Re-sellers 6% OEM 11% EPC 11%
ABB systems 15%
Utilities 48%
Channels to
Industry 9% market*
World market: $29 bn Avg. market growth (03-06): 3-4%

* Expressed as percentage of total 2004 Power Products revenues
Power Products strategy and targets

Main strategic actions Fix transformer business Continue cost migration Streamline product portfolio (for mass customization) Update high-voltage product platform Strengthen indirect channels to market
Targets
Revenue growth

2004: $6.0 bn. CAGR 2005-09: >6%
EBIT margin
8.3% >11%
Summary

2004
2009
Build on No. 1 position to increase share and margins in growth markets Focus on margin improvement and organic growth in transformers, accelerated growth (organic and acquisitions) in high- and mediumvoltage
Power Systems overview

Key products: Grid systems (HVDC, HVDC Light, FACTS, etc.), network management systems, electrical and control systems for power plants, substation automation products, systems and complete turnkey substations, services Key applications: Transmitting and distributing power, management and control of electrical networks and power plants, optimizing power generation and flow 2004: $3.7 bn revenues, 3.2% EBIT margin, 13,000 employees

Business line
Grid systems Substations Network management Power generation
2
Siemens Siemens Siemens Siemens
3
Areva Areva Areva Areva
ABB ABB ABB ABB
Market outlook/drivers GDP growth in emerging markets Increasing demand in North America, Europe and Middle East
Source: ABB, Goulden, ABS, ARC, Bear Stearns
Industrial 10%
EPC 11%
Channels to market*
Utilities 79%
World market: $23 bn Avg. market growth 03-06: ~4%

* Expressed as percentage of total 2004 Power Systems revenues
Power Systems strategy and targets

Main strategic actions
Focus on higher margin projects, strengthen project execution Leverage installed base for service Further process and system standardization Push new applications and products
Targets
Revenue growth

2004: $3.7 bn CAGR 2005-09: >5%

>6%
EBIT margin
3.2%
2004
2009
Summary

Use strong position to focus on higher margin opportunities Focus on margin improvement and organic growth
Automation Products overview
Key products: Low-voltage products and systems, drives, power electronics, motors, machines, instrumentation, product service Key applications: Power distribution, protection and control, energy conversion, data acquisition and processing, actuation 2004: $5.4 bn revenues, 12.4% EBIT margin, 28,500 employees
Market position1 2004

Business line
Drives and power electronics Low-voltage systems2 Motors and machines Industrial low-voltage products Installation material2 Instrumentation
1
2
Siemens Siemens Siemens Siemens Legrand Yokogawa
3
Mitsubishi Schneider Baldor
ABB ABB ABB

Schneider Schneider Rosemount
ABB ABB ABB
Market outlook/drivers Industrial growth, electricity consumption, degree of automation, construction investments General GDP development
ABB estimates
IEC standard
ABB Systems 8% Resellers 20%
Endusers 20%
World market: ca. $60 bn Avg. market growth (03-06): 3-4 %

40% Channels to market* OEM
EPC 12%
* Expressed as percentage of total 2004 Automation Products revenues
Automation Products strategy and targets

Exploit opportunities in regional growth, e.g., China and India, and application areas, e.g., rail, water, power generation (incl. wind) Continue with cost migration and operational excellence Keep technology leadership, push smart design of standardized products (functionality and cost) Tap service opportunities
Targets
Revenue growth

2004: $5.4 bn CAGR 2005-09: >5%
EBIT margin
12.4% >14%
2004
2009
Summary
Drive growth and sustain high profitability Focus on accelerated growth (organic and acquisitions)
Process Automation overview
Key products: Integrated process control and information management systems (SCADA, DCS), industry-specific applications, component controls, instrumentation, services Key applications: Control, automation, and optimization for pulp & paper, minerals, metals, chemicals, pharma, oil & gas, marine 2004: $4.7 bn revenues, 6.0% EBIT margin, 20,500 employees Systems demand growth primarily in Asia, Middle East, eastern Europe Services to drive growth in North America, Western Europe
Market Position 2004

Business line
Pulp & paper Marine Oil & gas Pharmaceuticals Turbocharging Minerals Metals Chemicals
2
Honeywell Alstom Honeywell
3
METSO Siemens Emerson Honeywell MET Siemens Via Yokogawa
ABB ABB ABB

Invensys
ABB
MAN Rockwell
ABB ABB
Siemens Honeywell
Market outlook/drivers

ABB ABB
Source: ABB, ARC Advisory Group 2001, 2002; Clarkson Research, Diesel and Gas Turbine & Motorship magazine
Others 31%
Oil & gas 23% Metals & minerals 17%
Marine 9%
World market: $21 bn (PAS & DCS) Avg. market growth (03-06): 3-4 %
Chemical pharma 9%
Pulp & paper 11%
End markets*
* Expressed as percentage of total 2004 Process Automation revenues
Process Automation strategy and targets


Targets
Revenue growth

Further improve risk management and project execution in systems business Fully exploit state-of-the-art 800xA technology platform Tap installed base to increase service revenues Expand full-service contracts, specifically in Americas Utilize low-cost engineering and global sourcing in systems business Widen product offering in control and analytical products
2004: $4.7 bn CAGR 2005-09: >5%
EBIT margin
6.0%
>9%
2004
2009
Summary
Reap benefits from System 800xA, lift margins with technology and installed base advantages Focus on selective profitable growth (primarily organic with opportunistic acquisitions)
Division to be based in Norwalk, Ct, USA
Robotics overview
Key products: Robots (4-6 axis), robotic systems, service Key applications: Material handling, picking, packing, palletizing, welding, painting, gluing, sealing, and assembling in various industries 2004: $1.4 bn revenues, 5.9% EBIT margin, 6,000 employees Market outlook/drivers Ca. 80% of revenues automotive-related (no. of new models) Increased use of robots for more flexible production and improved process quality

Business line (Products)
Foundry Painting Plastics Metal fabrication Packaging Body-in-white
2
Fanuc Yaskawa
3
Kuka Fanuc Kuka Fanuc Kuka
ABB ABB
Fanuc Yaskawa Fanuc Kuka/Fanuc
ABB ABB ABB
ABB
2
Kuka, Fanuc, Comau
Business line (Systems)

Process automation
ABB
Durr Krause Comau
Food beverage 5%
Other 14%
Paint process automation Powertrain assembly
ABB ABB
Kuka
Fanuc Comau
Auto parts 36%
Body-in-white
ABB
Plastic 9%
Source: ABB, McKinsey, IFR, Company Reports
World market: $10 bn Avg. market growth (03-06): 5-6 %

Auto OEMs 23%
End markets*
Foundry 13%
* Expressed as percentage of total 2004 Robotics revenues
Robotics strategy and targets

Simplify product portfolio and implement product re-design to cost Accelerate cost migration Take advantage of global opportunities and trends, e.g. in China Expand further into non-automotive sectors
Targets
Revenue growth

2004: $1.4 bn CAGR 2005-09: >4%
EBIT margin
>9% 5.9%
Summary

2004
2009
Lift margins through operational excellence and cost focus Focus on selective growth (primarily organic with opportunistic acquisitions)
Division to be based in Shanghai
Non-core portfolio
ABB Lummus Global
Successful turnaround Strong positions in growth markets, e.g., China, Russia, Middle East, eastern Europe Premium international and local customer base

2004 revenues of $1.1 bn, EBIT loss of $4 mill.
na ed o n ag Man concer going sis ba or are f Prep titure dives lio ortfo p nistic p tu ppor lean-u O c
Building Systems

German business near break-even after significant restructuring 2004 revenues of $508 mill., EBIT loss of $70 mill.
Equity Ventures
Investments mainly in power infrastructure projects Provides steady earnings stream 2004 revenues of $7 mill., EBIT of $69 mill.
Agenda



ABB regional opportunities

Pole position 2005
Further opportunities
ABB present in ~100 countries
At home with customers anywhere

Optimize functional and operating cost across regions Improve global sourcing Capture growth opportunities for full-portfolio ABB offering Drive account management, simplify customer interfaces Tap local service opportunities, supported by global products
Long history in all major markets
Strong installed base and manufacturing footprint Technologies and project delivery Premium products at premium prices
Proven track record in all regions
Strong brand and customer loyalty
Optimizing global reach with regional synergy

Northern Europe
Sweden
North America
USA
Southern Europe
Italy
Central Europe
Germany
North Asia
China
Middle East and Africa

UAE
South Asia
India
South America
Regions
Brazil
Regional hub
Eight regions with borderless ABB teams
Europe
Demand drivers
52%* of world sales

20 16
Gradual but encouraging economic recovery EU expansion and energy trading Established countries under pressure for productivity and efficiency gains Power constraints leading slowly to new investments Strong GDP growth in Central and Eastern Europe countries
Planned increase in interconnections (as % installed generation capacity)
12 8 4 0
Source: EU Directorate General for Energy & Transport, 2000
ABBs position

1950
1960
1970
1980
1990
2000
2010
Huge installed base = service opportunity Strong manufacturing base, gaining efficiency
Excellent brand and customer recognition Skilled resources and relationships across Northern, Central and Southern Europe
EU 2010 target for cross-border interconnection is 20% of grid capacity (todays avg only 7%) Renewable energy build-up demands additional grid capacity
Build on our historical strengths and huge installed base

* Based on 2004 revenues
North America
Demand drivers

14%* of world sales
Largest world market, with largest ABB opportunity
New US Energy Bill will accelerate delayed power sector investments Manufacturers under pressure to compete with new productivity and energy efficiency
Manufacturing Offices
ABB North America footprint
ABBs position

Largest installed base of automation products and systems Two-thirds of the regions electric power delivered with help from ABB technologies ABB has reversed top and bottom line decline and grown 4x GDP
Aiming to match Europe in market penetration

South America
Demand drivers

3%* of world sales
~ $2 trillion GDP and 500 million people Financial and economic stability returning, GDP growth above 5% in key countries Need for grid expansion and interconnection to make better use of hydro resources Increasing pressure to improve international competitiveness via higher industrial productivity and efficiency Long history, strong presence in the region Important element in global sourcing initiatives More than 5,000 employees with more than 10 key manufacturing plants
ABBs position

Build on strong local brand to support infrastructure growth

Middle East and Africa

Demand drivers
10%* of world sales
Oil & gas investments driving high demand for power and automation Higher value-added chemical products High-end residential areas with advanced building automation and power systems New Gulf Grid, connecting Kuwait, Saudi Arabia, Bahrain, UAE, Oman in tender phase Countries moving to balance GDP beyond oil
ABBs position

ABB has proven project reputation and local resources who understand the local cultures Well-established working relationships with major global energy and EPC players
Market nearly as large as China . . . and growing

India and South Asia

Demand drivers
India GDP growth 7%, industrial growth 7-7.5%

8%* of world sales
Steel production doubling to 75 million tpy Aluminum capacity expansion to 400,000 tpy Construction/housing expected to grow ~20% Strong demand in pharmaceuticals, textiles, automotive to support rapid lifestyle growth $200 bn investment for national power grid
VADODARA FARIDABAD
DELHI
100,000 MW greater power capacity by 2012

MUMBAI
NASHIK
KOLKATA
Electrification of 25 million new households next 5 years
BANGALORE
ABBs position

CHENNAI
More than 40 manufacturing plants in South Asia More than 30% year-over-year growth during last 4 years in India
ABB India footprint
Recent local expansion in low-voltage products, transformers, high-voltage machines, frequency converters, control product components, engineering footprint
Strong ABB footprint in place to support new growth

China and North Asia

Demand drivers

9 -10% GDP growth expected to continue 10%+ annual growth in power consumption, China planning worlds 1st super grid Rapid growth in transportation and building infrastructure Low industrial, environmental, and energy efficiency

ABBs position

144 new power plants (2x capacity) by 2020 Olympic Games 2008, World Expo 2010
ABB has grown >30% year-over-year in China since 2000 More than 30 manufacturing plants, 8,000+ employees in China Respected track record for implementation with local and global customers
13%* of world sales
Continuing immediate and long-term opportunities

Catalyst: Group Account Management

ABBs position

30 global accounts with executive sponsors Strategic selection of customers for crossABB portfolio opportunities
Program benefits

Early identification of project opportunities, trends and market drivers Raises visibility of cross-business opportunities, higher value-added offering Key customer stake in ABB technology development, lifecycle support and industryspecific solutions
Group account order growth in first 6 months of 2005 up 15% compared to year-earlier period, versus 8% for Group
Catalyst: World-class ABB technology

ABBs position

Almost $1 bn in research, product- and order-related development annually More than 6,000 researchers and developers across 9 global R&D centers Research partnerships with leading universities More than 18,000 active patents worldwide
Leading differentiators

Wide area power management High-Voltage Direct Current System 800xA Automation products portfolio
Preventing future blackouts Flexible and reliable power transmission and interconnections Unified platform for process automation Best-in-class building blocks
A global technology leader in power and automation
ABB is well positioned for profitable growth

Market growth opportunities go beyond GDP High structural need for energy and industry infrastructure

New power, industrial plants and efficiency in emerging countries Strong upgrade and service opportunities in OECD markets
Group Account Management for strategic global customers Respected technology offering, supported by customer needs Strong ABB footprint and balance across all key regions Regional business approach proven in North America
Agenda



Growth and margin ambitions

>6%
Margin improvement ambitions
(Transformers)
Power Products Power Systems
Disciplined acquisition approach (strategy / operations / financial)
Process Robotics Automation
Power Products
(HV, MV)
Automation Products
0%
Focus
Organic growth only, possibly some further focusing
* versus 2004 performance
Selective Growth
Primarily organic growth, with opportunistic acquisitions
Accelerated Growth
Organic growth and acquisitions
Acquisition guidelines 2005 - 2009

Re-establish investment grade rating Focus on execution and margin improvement
Assumptions Assumptions
Net income > $1 bn
Steady-state operations with sound profit, cash flow Healthy balance sheet
2005
2006
2007
2008
2009
Acquisitions < $100 mn: $100-300 mn: $300-700 mn: >$700 mn:
likely possible only if very convincing unlikely
Any size considered within ABBs strategic criteria and financing capability
Possible portfolio expansion into new, but related areas
Agenda



ABBs current organization

CEO
Corporate Center
CFO HR
Power Technologies Division

Power Technology Products Power Technology Systems
Automation Technologies Division
Automation Products
Process Automation
Manufacturing Automation
Organization 2006: Driving execution
Simplify organization by removing one layer

Current divisions serve mainly as span breakers Current Business Areas are true business lines Action: Dissolve PT and AT divisions, former business areas as the new divisions
Better integrate geographic units into execution framework

New head of Global Markets and Technology (GMT) to manage geographic units through regional sub-structure GMT to act as extended arm of CEO
Use opportunities to further cut cost

Divisional staff integrated and partly reduced Geographic structure to consolidate support functions Potential for further cost savings and efficiency gains
ABBs current organization

CEO
Corporate Center
CFO HR
Power Technologies Division

Power Technology Products Power Technology Systems
Automation Technologies Division
Automation Products
Process Automation
Manufacturing Automation
ABBs organizational structure 2006

CEO
Corporate Center
CFO HR
Global Markets & Technology

Geographic P&L
Power Products
Power Systems
Automation Products
Process Automation
Robotics
Five divisions, each with P&L
ABB Executive Committee 2006

CEO
Corporate Center
CFO
CFO
HR
Global Markets & Technology
Power Products
Power Systems
Automation Products
Process Automation
Robotics
Geographic P&L
Five divisions, each with P&L
Fred Kindle (46, CH/FL) Dinesh Paliwal (47, IN/US) Michel Demar (49, BE) Gary Steel (52, UK) Bernhard Jucker (51, CH) Samir Brikho (47, LE/SE) Tom Sjoekvist (57, SE)
ABB Group - 47 ug 2 , 2011
President and Chief Executive Officer President, Global Markets & Technology Chief Financial Officer Head of Human Resources Head of Power Products division Head of Power Systems division Head of Automation Products division Head of Process Automation division Head of Robotics division
Veli-Matti Reinikkala (48, FI) Anders Jonsson (55, SE)
Agenda



Rationale behind the 2002-05 targets

Strategy: ABB turnaround

Simplify organization Re-focus on core activities Regain financial flexibility
2002-05 targets:

Simple Focused on key indicators Aimed at exposing ABBs underlying potential
Revenue growth
Gross debt
EBIT margins
Rationale behind the 2005-09 targets

Strategy: Drive execution, strengthen financial foundation

Continued focus on growing our core activities Consistent growth of bottom line Additional emphasis on balance sheet and cash flow generation
2005-09 targets:
Broaden management focus beyond growth and EBIT Confidence in execution with upside potential
Revenue growth Capital efficiency (ROCE)
EBIT margin
Cash flow generation
Net margin
Plan used to identify potential debt capacity for future strategic moves
2009 Targets

Revenue Growth and EBIT margin remain key targets New targets :
Net Margin to progressively focus stakeholders on bottom line profitability, not just EBIT Cash Flow Generation, to focus on the Companys ability to convert Net Income into Free Cash Flow Return on Capital Employed (ROCE after-tax) to optimize efficient use of ABBs balance sheet and enhance value creation Investment Grade status Balance Sheet structure Dividend policy Tax Rate
Other financial considerations

Divisional target rates of return on new investment
The ROCE approach is intended to increase value creation through better focus on the balance sheet

Reduce low return assets (Non-core, real estate, etc.) Drive incremental value creation on new investments in core businesses
Target rates of return on new investment help achieve this objective

Combine EBIT expectation, capital intensity and risk into one return target Better reflect true economic return for project businesses Allow differentiated return expectations on new investments Power Products, Automation Products (higher margins, stable, high intensity) Power Systems, Process Automation (lower margins, volatile, higher risk, low intensity) Robotics (mix of both) 10-12% 15-20% 12-15%
Overview of Group targets 2009

Criteria Revenue growth1 EBIT margin Net margin ROCE2 Free cash flow (FCF) Target >5% >10% >5% Mid-teens
100% of Net Income
1 2
Compound average growth rate (CAGR) 2005-2009 at constant exchange rates and excluding major acquisitions and divestitures Return on capital employed (after tax)
Overview of division 2009 targets
Revenue 1 growth Power Products Power Systems Automation Products Process Automation Robotics

EBIT margin 2009 > 11% > 6% > 14% > 9% > 9%
EBIT margin 2004 8.3% 3.2% 12.4% 6.0% 5.9%
> 6% > 5% > 5% > 5% > 4%
Five divisions will be segments according to US GAAP Reporting in line with new structure to start January 1, 2006
Compound average growth rate (CAGR) 2005-2009 at constant exchange rates and excluding major acquisitions and divestitures
Targets remain as communicated on June 30
PT EBIT* margin AT EBIT margin Non-core operating profit Corporate costs Group EBIT margin
6.8 7.3% 10.7% zero $450 mill. or less 6.6 7.1%
* Earnings before interest and taxes
Agenda



Key points I
Strategy evolution

More balanced approach to value creation (mainly organic growth, higher margins through better execution, improved capital efficiency) Future strategy represents evolution, not revolution
ABB is a focused engineering company with attractive prospects

Clear mission/vision: Power and productivity for a better world Interlinked, mutually-benefiting businesses Each business with attractive opportunities for profitable growth and the necessary position to exploit them Clear divisional strategies, ambitious but realistic Geographic opportunities abound, ABB set to capture them Disciplined approach to acquisitions
Key points II
More focused ABB organization to execute strategy

Simplified by eliminating one layer Tighter integration of country management (GMT) Strong, experienced, diverse team in Executive Committee
Financial and group targets 2009: Ambitious and realistic

Criteria Revenue growth1 EBIT margin Net margin ROCE2 Target >5% >10% >5% Mid-teens
100% of Net Income
Free cash flow (FCF)
Power and productivity for a better world

ABB

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ABB Strategy 2005-2009 Power and productivity for a better world

ABB Group - 1 Aug 2, 2011

Safe harbor statement

ABB Group - 2 ug 2, 2011

Introduction ABB strategy 2005-2009

Organization and management Financial targets Summary

Putting the future into historical context

* 1999 profit contains major gains from divestitures

EBIT margin (% revenues)

Putting the future into historical context

Post-merger acquisition drive

* 1999 profit contains major gains from divestitures

Putting the future into historical context

ABB Group - 6 ug 2, 2011

New Economy-related portfolio transactions

* 1999 profit contains major gains from divestitures

EBIT margin (% revenues)

Putting the future into historical context

ABB Group - 7 ug 2, 2011

* 1999 profit contains major gains from divestitures

Lessons learned Strategy 2009

ABB Group - 8 ug 2, 2011

Evolution not revolution

Shifting focus in value creation

Introduction ABB strategy 2005-2009

Organization and management Financial targets Summary

ABB: A focused engineering company

Similar success factors

Technology Automation Products Power Products

Power and productivity for a better world

ABB Group - 12 ug 2, 2011

ABB Group - 13 ug 2, 2011

Introduction ABB strategy 2005-2009

Organization and management Financial targets Summary

ABBs business portfolio

Power Products Power Technology Products

Power Systems Power Technology Systems

Robotics Manufacturing Automation

ABB Group - 15 ug 2, 2011

* 2004 numbers include internal sales to other divisions

Power Products overview

Market position 2004

ABB ABB ABB

Source: ABB, Goulden Reports, ABS, Bear Stearns

Re-sellers 6% OEM 11% EPC 11%

ABB systems 15%

ABB Group - 16 ug 2, 2011

World market: $29 bn Avg. market growth (03-06): 3-4%

Power Products strategy and targets

2004: $6.0 bn. CAGR 2005-09: >6%

ABB Group - 17 ug 2, 2011

Power Systems overview

Market position 2004

ABB ABB ABB ABB

Source: ABB, Goulden, ABS, ARC, Bear Stearns

ABB Group - 18 ug 2, 2011

World market: $23 bn Avg. market growth 03-06: ~4%

Power Systems strategy and targets

2004: $3.7 bn CAGR 2005-09: >5%

Automation Products overview

Market position1 2004

ABB ABB ABB

ABB ABB ABB