ABB: Solid Progress on Profitability

Regulatory News:

ABB (STO:ABB):

Second-quarter highlights

• Operational EBITA margin (1) up +100 basis points to 12.7%
• All divisions in target margin corridor
• White collar productivity program delivering results
• Operational earnings per share( 1) up +18% (2)
• Net Income $406 million impacted by $367 million (3) of restructuring and restructuring-related expenses
• Base orders steady (1,4) , continued market headwinds reflected in total orders -5%
• Revenues -2% on lower short-cycle volumes and timing of order backlog execution
• Cash flow from operating activities up +80% at $1,082 million

"We improved our operational margin for the seventh consecutive quarter and significantly increased cash flow through relentless execution amid continued strong market headwinds and economic uncertainties,” said CEO Ulrich Spiesshofer.

"We delivered double digit operational earnings per share growth for the quarter and year-to-date, as cost savings contributed to the bottom line,” he said.

"Our continued focus on high growth segments dampened the impact of challenging markets like the process industries,” Spiesshofer said. "We are improving our cost and capital structure, as well as our productivity, and shaping a leaner, more agile ABB in a disciplined way. We have strengthened our leadership team and are executing our Next Level strategy, focused on accelerating sustainable value creation.”

The complete press release including the appendices is available at www.abb.com/news

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(1) For a reconciliation of non-GAAP measures, see "Supplemental Reconciliations and Definitions” in the attached Q2 2016 Financial Information

(2) EPS growth rates are computed using unrounded amounts. Comparable operational earnings per share is in constant currency (2014 exchange rates and not adjusted for changes in the business portfolio)

(3) Restructuring and restructuring-related expenses include the incremental implementation costs in relation to the white collar productivity program

(4) Growth rates for orders, revenues and order backlog are on a comparable basis (local currency adjusted for acquisitions and divestitures), previously referred to as ‘like-for-like’. US$ growth rates are presented in Key Figures table

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