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First nine month results, 2000 Göran Lindahl President and CEO

First nine month results, 2000 Göran Lindahl President and CEO. Agenda - first nine month results, 2000. Highlights Financials Segments Key initiatives Outlook. Highlights - first nine months. Orders * and operating margins up in all business segments

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First nine month results, 2000 Göran Lindahl President and CEO

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  1. First nine month results, 2000 Göran Lindahl President and CEO

  2. Agenda - first nine month results, 2000 • Highlights • Financials • Segments • Key initiatives • Outlook

  3. Highlights - first nine months • Orders* and operating margins up in all business segments • Strong order growth in Americas, Middle East & Africa • Orders in Europe up 7 percent in local currencies • Demand continued to grow in Asia • Revenues flat*, strong order backlog • Increased earnings reflect continued expansion intohigh-knowledge areas and successful cost control • Cash flow up 27 percent * In local currencies

  4. Highlights third quarter 2000 • Key initiatives in- software / Industrial IT- telecom- petrochemicals • ABB to launch all employee share/option program

  5. Regional development first nine months 2000 Americas: continued growth driven by deregulation Europe: continued improvement, demand varied by country and business Regional developmentOrders received (in local currencies) Asia: Continued growth in all segments excl. Transmission Middle East/Africa +55% Americas +27% Europe +7% Asia -2% Middle East and Africa:Orders increased sharply

  6. First nine months 2000 vs 1999 (MUS$) Change 2000 Nominal Local currencies Orders received 19,392 +6% +13% Revenues 15,983 -8% -1% Operating earnings (OEAD)* 1,414 +10% +17% Net income fromcontinued operations 848 +16% +23% Net Income per Share $4.17 +13% * Consistent with the half year report, earnings and capital gains related to discontinued operations are reported on a separate line in the income statement and consequently are not included in operating earnings.

  7. Orders received first nine months 2000 (MUS$) Nominal percent change vs. 1999 Power Transmission 2,955 (-3%) Financial Services 545 (+7%) 3% 15% Power Distribution 2,356 (+13%) Building Technologies 4,814 (-3%) 11% 23% Oil, Gas & Petrochemicals 3,225 (+41%) Automation 6,174 (+1%) 15% 29% In local currencies approximately 6-10 percent higher

  8. Operating margins by segment First Nine Months 1999 2000 Power Transmission 9.8% 11.2% Power Distribution 6.3% 7.7% Automation 5.7% 8.2% Oil, Gas and Petrochemicals 5.2% 6.0% Building Technologies 6.8% 7.7%

  9. Automation • High order growth in Asia,L. America and Middle East • Power Products highestgrowth rates, good growth also for Flexible Automation, Marine & Turbochargers • Synergies from integration of Elsag Bailey and reduced cost base increased earnings Change in nominal / local 1-9/00 1-9/99 Orders 6,174 6,093 +1% +9% Revenues 5,419 5,890 -8% -1% OEADmargin 8.2% 5.7% EBITDAmargin 11.7% 8.0% (MUS$)

  10. Power Transmission Change in nominal / local (MUS$) 1-9/00 1-9/99 Orders 2,955 3,061 -3% +3% Revenues 2,346 2,799 -16% -10% OEADmargin 11.2% 9.8% EBITDAmargin 13.9% 12.5% • Orders continued to rebound • Favorable business climatein North America • High demand in service & support • Revenues reflect last year's divestiture of standard cables and low order intake

  11. Power Distribution Change in nominal / local (MUS$) 1-9/00 1-9/99 Orders 2,356 2,080 +13% +20% Revenues 2,083 1,978 +5% +11% OEADmargin 7.7% 6.3% EBITDAmargin 9.9% 8.6% • Deregulation continued tofuel orders and revenues • Demand for distribution solutions increased significantly, especially in Western Europe • Productivity improvements driving earnings increasein all businesses

  12. Oil, Gas and Petrochemicals Change in nominal / local (MUS$) 1-9/00 1-9/99 Orders 3,225 2,286 +41% +49% Revenues 1,845 2,325 -21% -14% OEADmargin 6.0% 5.2% EBITDAmargin 8.4% 6.9% • Business climate remained favorable • Growth in offshore systems, modification/maintenanceand downstream business • Orders will gradually flow through to revenues,starting in the fourth quarter 2000 and continuing throughout 2001

  13. Building Technologies Change in nominal / local (MUS$) 1-9/00 1-9/99 Orders 4,814 4,951 -3% +7% Revenues 4,274 4,551 -6% +4% OEADmargin 7.7% 6.8% EBITDAmargin 9.7% 9.0% • Strong order growth in Asia,Middle East, Africa • Increased orders to build-up telecom and Internet networks • Move from general contractingand non-core service • Significant earnings increasein product business

  14. Financial Services Change in nominal / local (MUS$) 1-9/00 1-9/99 Orders 545 510 +7% +14% Revenues 545 510 +7% +14% IBT 253 257 -2% +5% • Financing for several projects in India, Poland and China closed and the leasing volume increased strongly

  15. Current market conditions Deregulation Sustainability Outsourcing - Focus on core business Performance based contracts Rapid development IT technologies Transformation of global markets

  16. Portfolio of businesses and technologies • Continued expansion in: • Software • Industrial IT • eBusiness • Telecommunications infrastructure • Ensures ABB offering: • More intelligent products, systems and solutions Solidifies portfolio geared to digital economy of the future

  17. Portfolio management - third quarter 2000 Automation Acquired pharmaceutical software technologies Acquired international process automation company Industrial IT joint venture with SKYVA Power Transmission and Distribution Acquired U.S. software and service provider High-voltage transmission network service consortium Oil, Gas & Petrochemicals Acquisition of UMOE completed Partnership to acquire polypropylene technology Investing in China's Sinopec Corp. IPO Heavy Light Asset Base

  18. Wireless, fixed networks • Nordic, Germany, Austria, Eastern Europe Internet centers (PoPs) • Germany, Netherlands, Denmark Enterprise networks • Statoil, Microsoft ABB - Communication solutions • Planning, design, project management, installation • System integration • Service, maintenance ABB has 2,000 people in this business today, with annual revenues ca. US$ 500 million

  19. Employee share ownership program • For all ABB employees • ABB to match with optionsat no cost • For long-term, broad basedownership • Details to be announcedin February

  20. Transformation drives margin growth Net Income Margin Trend % 2.6 9M’00 9M’99

  21. ABB Group outlook 2000 For the full-year 2000, the rate of order growth will be in line with the first nine months. In local currencies, revenues will be above last year’s level.Operating earnings are expected to increase from last year and net income from continuing operations will continue to be well above 1999's performance. Cash flow is expected to exceed the level of last year.The company reconfirms its longer-term targets of6-7 percent average annual growth in revenues during 2000-2003 and an operating margin of 12 percentby 2003.

  22. Safe Harbor Statement This presentation includes forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for ABB Ltd and ABB Ltd’s lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as “expects”, “believes”, “estimates” or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are major markets for ABB’s businesses, market acceptance of new products and services, changes in governmental regulations, interest rates, and fluctuation in currency exchange rates. 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.

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