3rd Quarter Results

ABB Ltd 28 October 2005 Q3 results rise sharply on operational improvements and stronger markets • Double-digit order and revenue growth • Group EBIT up 81 percent to $458 million, EBIT margin of 8.1 percent • Net income almost doubled to $188 million • Cash flow from operations higher despite reduced securitization • On track to hit or exceed top end of 2005 group EBIT margin target 2005 Q3 key figures (unaudited) -------------------------- $ in millions Q3 05 Q3 041 Change2 -------- --------- -------- ---------- Orders Group 5,740 4,993 15% ---------- ------------------ -------- --------- -------- Power Technologies 2,724 2,093 30% ------------------ -------- --------- -------- Automation Technologies 2,982 2,728 9% ------------------ -------- --------- -------- Revenues Group 5,648 5,005 13% ---------- ------------------ -------- --------- -------- Power Technologies 2,426 2,108 15% ------------------ -------- --------- -------- Automation Technologies 2,944 2,667 10% ------------------ -------- --------- -------- EBIT3 Group 458 253 81% ---------- ------------------ -------- --------- -------- Power Technologies 219 116 89% ------------------ -------- --------- -------- Automation Technologies 323 266 21% ------------------ -------- --------- -------- Non-core activities 11 (20) ------------------ -------- --------- -------- Corporate (95) (109) ------------------ -------- --------- -------- EBIT margin Group 8.1% 5.1% ---------- ------------------ -------- --------- -------- Power Technologies 9.0% 5.5% ------------------ -------- --------- -------- Automation Technologies 11.0% 10.0% ---------- ------------------ -------- --------- -------- Income (loss) from discontinued operations (50) 3 -------------------------- -------- --------- -------- Net income 188 98 -------------------------- -------- --------- -------- Basic net income per share 0.09 0.05 -------------------------- -------- --------- -------- 1 Adjusted to reflect the reclassification of the oil, gas and petrochemicals business to continuing operations, and of other activities to Discontinued operations. 2 In U.S. dollars. 3 Earnings before interest and taxes. Zurich, Switzerland, October 28, 2005 - ABB's orders, revenues and earnings before interest and taxes (EBIT) rose sharply in the third quarter of 2005 compared to the same quarter in 2004 as a result of operational improvements and buoyant markets. Group EBIT rose 81 percent to $458 million and net income almost doubled to $188 million. 'ABB turned in a very strong third-quarter performance,' said Fred Kindle, ABB President and CEO. 'Operational improvements and our lead position in key markets produced solid order and revenue growth, and a group EBIT margin of 8.1 percent. 'In view of the positive market conditions and the expected results from our strong focus on execution, we're on track to hit or exceed the top end of our 2005 group EBIT margin target,' Kindle said. The Power Technologies (PT) division reported an 89-percent increase in EBIT, raising its margin to 9.0 percent from 5.5 percent in the year-earlier period, as both the product and systems business areas improved earnings. The Automation Technologies (AT) division increased EBIT by 21 percent, reflecting further operational improvements. Net income rose sharply despite approximately $70 million in non-operational charges in discontinued operations and finance expense. Cash flow from operating activities amounted to $387 million in the quarter, including a negative impact of $246 million from reduced securitization activities. The company cut net debt to $866 million and further decreased financial obligations by repaying maturing bonds and reducing some securitization activities. Third-quarter market overview The economic environment for ABB's businesses remained positive in the third quarter of 2005. In the power sector, utilities in Asia continued to invest in new infrastructure. In the Middle East, high oil prices fueled industrial development and the corresponding need for power infrastructure. Demand was also strong in the Americas and Europe, where utilities are replacing aging equipment and upgrading grid systems. Most of ABB's industrial customer segments continued to increase investments, mainly to improve the performance of existing assets. Greenfield industrial investments continued to take place primarily in Asia. High oil prices and bottlenecks in refining drove investments in the oil and gas sector. The marine sector also experienced strong growth. Investments in the pulp and paper sector remained at low levels in most regions while robotics demand in the automotive sector softened as expected. Construction markets remained weak in Europe but grew in Asia. Summary of third-quarter 2005 results This strong economic environment in the third quarter, coupled with ABB's leading position in high-growth market sectors and regions, was reflected in a 15-percent increase in orders received (local currencies: 14 percent) to $5,740 million, with increases in both base orders (less than $15 million) and large orders (more than $15 million). Base orders grew to $4,972 million, up 11 percent (local currencies: 10 percent) compared to the same period in 2004. Large orders increased by 47 percent (local currencies: 43 percent) to $768 million, with most of the increase coming from the power systems business. In both the Middle East and Africa and the Americas, demand for power infrastructure helped to lift orders during the quarter. Orders in the Middle East and Africa almost doubled (local currencies: up 90 percent) to $724 million, while orders in the Americas rose 15 percent (local currencies: 11 percent) to $1,173 million, driven mainly by South America where both divisions increased orders received. Orders in Europe were 10 percent lower (local currencies: 9 percent) at $2,291 million. Orders in western Europe were unchanged from the year-earlier period, while orders from eastern Europe decreased due to a reduction in large orders compared to the same quarter in 2004. In Asia, orders grew 46 percent (local currencies: 43 percent) to $1,552 million, again led by growth in both divisions in China and India. The order backlog for the group, including Non-core activities, at the end of the third quarter of 2005 was $12,915 million, unchanged compared to the end of the second quarter of 2005 (local currencies: up 3 percent). The combined order backlog for the two divisions amounted to $12,292 million at the end of September 2005, up 3 percent compared to the end of June 2005 (local currencies: 4 percent). Revenues in the third quarter amounted to $5,648 million, an increase of 13 percent (local currencies: 12 percent), primarily the result of higher volumes, although some price increases were achieved, especially in power products with a high raw materials content. EBIT was $458 million in the third quarter of 2005, up 81 percent compared to the same period in 2004. Higher revenues, ongoing productivity improvements, including further reductions in corporate costs, and cost migration to low-cost countries in both divisions contributed to the improvement. EBIT from Non-core activities improved by $31 million as a result of higher earnings in the oil, gas and petrochemicals business and lower losses in Building Systems. As a result, the EBIT margin in the third quarter rose to 8.1 percent from 5.1 percent in the same quarter of 2004. Finance net (1) was an expense of $55 million in the third quarter, compared to an expense of $29 million recorded in the third quarter of 2004. Interest and other finance expense in this year's quarter included a net negative impact of $18 million from a number of exceptional items, the largest of which was an adjustment in the fair value calculation of hedged bonds issued in 2002. The loss in Discontinued operations amounted to $50 million, including a $26-million loss related to the planned sale of a portfolio of finance leases in Finland and a $23-million expense on the mark-to-market treatment of the approximately 30 million ABB shares reserved to cover part of the company's asbestos liabilities (please refer to the table in Appendix I to this release for more information). Despite the negative impact from Discontinued operations and finance expense, ABB's net income for the third quarter increased to $188 million from $98 million in the same period in 2004. Balance sheet Net debt (total debt less cash and marketable securities) was $866 million at the end of the third quarter of 2005, compared to approximately $1.2 billion at the end of the second quarter of 2005. Positive cash flows in the third quarter, despite the negative impact of reduced securitization, were the main contributors to the lower net debt. Gearing, defined as total debt divided by total debt plus stockholders' equity (including minority interest), was reduced to 56 percent at the end of September 2005, from 59 percent at the end of the previous quarter. Contributing to the decrease was the positive net income in the quarter and the repayment of approximately $200 million in maturing bonds during the third quarter of 2005. Total debt of approximately $170 million in the lease portfolio that ABB intends to divest was reclassified in the balance sheet from borrowings to Liabilities held for sale and in discontinued operations. In addition, outstanding bonds with a nominal value of 392 million Swiss francs were repurchased at the beginning of October 2005. The transaction is expected to result in an expense of $17 million on the income statement in the fourth quarter of 2005 to reflect the premium paid by ABB above the book value of the bonds. Cash flow from operating activities Net cash generated from operating activities for the group in the third quarter of 2005 amounted to $387 million, compared to $322 million for the same period in 2004. Reduced securitization negatively affected cash flow from operations by $246 million in the third quarter of 2005, and by $16 million in the third quarter of 2004. Excluding the impact of reduced securitization in both quarters, cash flow from operations increased by $295 million from the same quarter last year. The reduction of securitization activities in the group decreased cash flow from operations over the first nine months of 2005 by more than $400 million. Asbestos Following a hearing on September 28, 2005, before the U.S. Bankruptcy Court in Pittsburgh, Pennsylvania, ABB and all other parties filed with the court a consensual proposed confirmation order with respect to the Combustion Engineering revised plan of reorganization. The revised plan is based on an agreement in March 2005 with various asbestos claimants, and was subsequently approved in a vote by more than 95 percent of claimants. The company is currently awaiting the issuance of the confirmation order by the Bankruptcy Court. In a parallel asbestos-related process, claimants to a pre-packaged Plan of Reorganization for another U.S. subsidiary, ABB Lummus Global Inc., participated in a preliminary vote, which was completed in September 2005 with 96 percent of claimants voting in favor of the plan. Publication of 2005-2009 targets and new executive management On September 6, 2005, ABB published new performance targets for the period 2005 to 2009. The targets cover revenue growth, EBIT margin, net margin, free cash flow conversion and return on capital employed. In connection with the new targets, ABB also announced that the two core divisions, Power Technologies and Automation Technologies, will be eliminated, and their respective business areas will become the new divisions, effective January 1, 2006. As a result, a number of changes to the company's executive management were also announced. Please refer to Appendix II to this press release for more information. Delisting of shares in London and Frankfurt ABB announced on August 4, 2005, its intention to delist its shares from trading on the Frankfurt Stock Exchange (FWB) and the London Stock Exchange (LSE). ABB made the decision because the average daily trading volume of its shares on the FWB and the LSE has become insignificant over the past three years. The delisting process at the LSE was completed on September 2, 2005. The FWB delisting is expected to be complete on December 21, 2005. Group outlook At the end of June 2005, ABB adjusted its EBIT margin guidance for 2005 to 6.6-7.1 percent for the group and to 6.8-7.3 percent for the Power Technologies division. The company reconfirmed the 10.7 percent EBIT margin target for the Automation Technologies division. ABB continues to make good progress towards the previously communicated guidance on corporate costs ($450 million or less for the full year 2005) and the operational performance of Non-core activities (break-even for the full year 2005). In view of the ongoing positive market conditions and the expected results from ABB's strong focus on execution, management believes the company is on track to reach or exceed the top end of the 2005 group EBIT margin target communicated in June. Divisional performance Q3 2005 Power Technologies (unaudited) $ in millions (except where indicated) Q3 2005 Q3 20041 Change ----------------------- --------- ----------- --------- Orders 2,724 2,093 30% ----------------------- --------- ----------- --------- Revenues 2,426 2,108 15% ----------------------- --------- ----------- --------- EBIT 219 116 89% ----------------------- --------- ----------- --------- EBIT margin 9.0% 5.5% ----------------------- --------- ----------- --------- 1 Adjusted to reflect the move of activities to Discontinued operations. Higher base orders in both business areas and a strong increase in large orders in the systems business led to a 30-percent increase in orders received for the Power Technologies division in the third quarter of 2005 (local currencies: 28 percent). In the Power Technology Products business area, orders were higher across all major business lines, led by medium-voltage products. Regionally, orders grew strongest in the Americas and the Middle East. Investments in Europe to replace existing equipment remained at modest levels and orders in the region increased slightly in dollars and local currencies, mainly in eastern Europe. Orders in Asia increased in dollars and local currencies, again led by China and India. In Power Technology Systems, orders received were up by more than 40 percent in both dollars and local currencies in the third quarter, mainly the result of large orders in the Middle East and higher base orders. Orders increased in Asia (flat in local currencies), with lower orders in China offset by an increase in India. Orders in both North and South America were up in dollars and local currencies, while European orders also increased in dollars and local currencies as growth in the large western European market more than offset lower large orders in eastern Europe. Revenues in PT in the quarter increased 15 percent compared to the year-earlier period (local currencies: up 13 percent) as a result of higher base order volumes and the revenue impact of large systems orders booked in 2004. Third-quarter EBIT grew 89 percent versus the year-earlier period and was up in both business areas. The increase was partly the result of higher revenues in the product, systems and service businesses. In addition, continuing productivity improvements and supply management initiatives, including higher levels of sourcing from low-cost countries, led to a significant EBIT margin improvement in the product business. The systems business also contributed to the earnings growth through higher margins out of the order backlog. Higher raw materials prices did not have a negative effect on EBIT in the third quarter due to price increases and other measures taken since the beginning of the year. The division's third-quarter EBIT this year included costs of $14 million related to the ongoing consolidation of the transformer business, announced at the end of June 2005. The consolidation program is expected to cost approximately $240 million from 2005 to 2008, with about $120 million expected in 2005. So far this year, $80 million in charges have been recorded for the program. The EBIT margin for the Power Technologies division in the quarter increased to 9.0 percent from 5.5 percent in the third quarter of 2004. Cash flow from operating activities in the quarter amounted to $225 million, compared to $67 million in the same quarter in 2004. The increase resulted from higher earnings and customer advances, and improved payment terms. Cash flow in the third quarter of 2005 improved despite a negative impact of $51 million from reduced securitization activities. Automation Technologies (unaudited) $ in millions (except where indicated) Q3 2005 Q3 20041 Change ----------------------- --------- ----------- --------- Orders 2,982 2,728 9% ----------------------- --------- ----------- --------- Revenues 2,944 2,667 10% ----------------------- --------- ----------- --------- EBIT 323 266 21% ----------------------- --------- ----------- --------- EBIT margin 11.0% 10.0% ----------------------- --------- ----------- --------- 1 Adjusted to reflect the move of activities to Discontinued operations. Higher orders received in Automation Technologies reflect the ongoing positive development in most of ABB's industrial end markets in the third quarter of 2005. Order growth in Automation Products and Process Automation - especially an increase in base orders of more than 10 percent in dollars and local currencies - more than compensated for lower orders in Manufacturing Automation. The increase in orders in the Automation Products business area was seen across most product lines and all regions. The strongest growth was in Asia, mainly China and India, reflecting continued economic growth in those countries. In the Americas, orders increased in both South America and in the U.S. in response to higher demand in most industrial sectors and the construction industry. Orders were also higher in the large western European market, in line with the region's economic growth, and were up more than 10 percent in eastern Europe in both dollars and local currencies. In Process Automation, orders improved in dollar and local currency terms in the third quarter compared to the same quarter in 2004. Order growth was led by the marine, service and turbochargers businesses. Process Automation orders in Asia more than doubled compared to the same quarter a year ago as continued steady growth in India was augmented by a return to order growth in China and an oil refinery order in Thailand of more than $100 million. Orders in the Americas were lower, with flat growth in North America and a decrease in South America. Orders decreased in western Europe compared to a very strong third quarter in 2004. Orders in eastern Europe were lower compared to the same period in 2004 during which a large order was booked in Poland. Orders were lower in Manufacturing Automation, reflecting the decrease in new vehicle platforms that are the primary demand driver for robotics products and systems in this business. Weakness in the U.S. automotive market also reduced orders received. Orders were higher in both eastern and western Europe and unchanged in Asia. Revenues in AT rose 10 percent (local currencies: 9 percent) compared to the third quarter of 2004. Revenues were higher in all business areas, mainly reflecting higher volumes. Revenues in Manufacturing Automation increased by more than 20 percent in both dollars and local currencies, reflecting revenues on large orders from an automaker in the U.S. announced in 2004. The Automation Technology division's EBIT grew 21 percent versus the same quarter in 2004. It was the twelfth consecutive quarter of higher EBIT and revenues for AT. EBIT growth was strongest in Process Automation, reflecting higher quality in the project portfolio, continuing productivity gains and the effects of cost migration efforts in addition to higher revenues. EBIT also improved in Automation Products on higher revenues, improved factory loading, cost migration and productivity improvements. EBIT increased in Manufacturing Automation as a result of higher revenues. The division's EBIT margin increased to 11.0 percent from 10.0 percent in the third quarter of last year. Cash flow from operations for the division amounted to $102 million compared to $239 million in the third quarter of 2004. Cash flows from higher earnings in the third quarter of 2005 were partly offset by a negative impact of $283 million from reduced securitization activities. Non-core activities (unaudited) EBIT ($ in millions) Q3 2005 Q3 20041 ------------------------ ------------- -------------- Oil, gas and petrochemicals 15 (9) ------------------------ ------------- -------------- Building Systems (5) (12) ------------------------ ------------- -------------- Equity Ventures 12 9 ------------------------ ------------- -------------- Other non-core activities2 (11) (8) ------------------------ ------------- -------------- Total 11 (20) ------------------------ ------------- -------------- 1 Adjusted to reflect the reclassification of the oil, gas and petrochemicals business to continuing operations, and of other activities to Discontinued operations. 2 Comprises mainly remaining Structured Finance and New Ventures activities. The oil, gas and petrochemicals business, ABB Lummus Global, rebounded to a profit in the third quarter compared to the year-earlier period as a result of further margin improvements in its large project business, and the non-recurrence of the 2004 losses in its now divested floating production systems business. Corporate (unaudited) EBIT ($ in millions) Q3 2005 Q3 20041 ------------------------ ------------- -------------- Headquarters/stewardship (67) (84) ------------------------ ------------- -------------- Research and development (24) (23) ------------------------ ------------- -------------- Other2 (4) (2) ------------------------ ------------- -------------- Total (95) (109) ------------------------ ------------- -------------- 1 Adjusted to reflect the reclassification of the oil, gas and petrochemicals business to continuing operations, and of other activities to Discontinued operations. 2 Includes consolidation effects, real estate and treasury services. Headquarters and stewardship costs decreased as local and Zurich head office costs were further reduced in line with the previously announced corporate cost reduction program. Appendix I Income (loss) from discontinued operations (not included in EBIT) (unaudited) $ in millions Q3 2005 Q3 20041 ----------------------- --------------- ------------ Asbestos (24) (24) ----------------------- --------------- ------------ Lease portfolio (prev. in Structured Finance) (26) 20 ----------------------- --------------- ------------ Power lines (1) (6) ----------------------- --------------- ------------ Other 1 13 ----------------------- --------------- ------------ Net loss (50) 3 ----------------------- --------------- ------------ 1 Adjusted to reflect the reclassification of the oil, gas and petrochemicals business to continuing operations, and of other activities to Discontinued operations. Appendix II Summary of 2009 group targets Revenue growth 2005-2009 > 5% (CAGR1) -------------------------- --------------------- EBIT margin > 10% -------------------------- --------------------- Net margin > 5% -------------------------- --------------------- Return on capital employed (after tax) (ROCE) Mid-teens -------------------------- --------------------- Free cash flow as share of net income 100% -------------------------- --------------------- 1 Compound annual growth rate over five years from 2005 to 2009, excluding major acquisitions and divestitures and assuming constant exchange rates. Summary of 2009 division targets Summary of 2009 division targets Division1 Corresponding Revenue EBIT margin 2009 business area growth in current 2005/092 structure Power ProductsPower Technology Products > 6% > 11% Power Systems Power Technology Systems > 5% > 6% Automation Products same > 5% > 14% Process Automation same > 5% > 9% Robotics Manufacturing Automation > 4% > 9% 1 Division structure effective January 1, 2006. 2 Compound annual growth rate for the five years from 2005 to 2009, excluding major acquisitions and divestitures and assuming constant exchange rates. Appendix II (cont'd) Targets defined Revenue growth Compound annual growth rate for the five years from 2005 to CAGR 2009, excluding major acquisitions and divestitures and ----------------- assuming constant exchange rates --------------------------- EBIT margin Earnings before interest and taxes as a percentage of ----------------- revenues --------------------------- Net margin Net income as a percentage of revenues ----------------- --------------------------- Free cash flow Free cash flow (cash flow from operating activities adjusted ----------------- for changes in financing receivables as well as net investments in property, plant and equipment) as a percentage of net income --------------------------- Return on capital EBIT (less tax), divided by the sum of fixed assets plus net employed working capital* ----------------- EBIT (less tax) = EBIT x (1 - tax rate) Tax rate = Provision for taxes / Income from continuing operations before taxes and minority interest --------------------------- * The published financial statements for the full years 2004 and 2003 do not present information in a manner that would allow the calculation of return on capital employed as calculated by ABB above. Starting with the 2005 annual financial statements, additional disclosures will be made on the group's balance sheet to allow the above calculation. ABB Executive Committee as of January 1, 2006 Fred Kindle President and ------------------ CEO ------------------------- Dinesh Paliwal President, ------------------ Global Markets & Technology ------------------------- Michel Demare CFO ------------------ ------------------------- Gary Steel Human Resources ------------------ ------------------------- Ulrich Spiesshofer1 Corporate ------------------ Development ------------------------- Bernhard Jucker2 Power Products ------------------ ------------------------- Samir Brikho2 Power Systems ------------------ ------------------------- Tom Sjoekvist2 Automation ------------------ Products ------------------------- Veli-Matti Reinikkala2 Process ------------------ Automation ------------------------- Anders Jonsson2 Robotics ------------------ ------------------------- 1 Appointment effective November 1, 2005. 2 Appointments effective January 1, 2006. Appendix III ABB key figures Q3 2005 (unaudited) $ in millions Q3 2005 Q3 20041 % change ----------------------- -------- -------- ------------ ------- US$ Local ------- ------- -------- ---------------- -------- ------- Orders Group 5,740 4,993 15% 14% -------- ---------------- -------- -------- ------- ------- Power Technologies 2,724 2,093 30% 28% ---------------- -------- -------- ------- ------- Automation Technologies 2,982 2,728 9% 8% ---------------- -------- -------- ------- ------- Non-core activities 250 344 -27% -25% ---------------- -------- -------- ------- ------- Corporate (216) (172) ---------------- -------- -------- ------- ------- -------- Revenues Group 5,648 5,005 13% 12% -------- ---------------- -------- -------- ------- ------- Power Technologies 2,426 2,108 15% 13% ---------------- -------- -------- ------- ------- Automation Technologies 2,944 2,667 10% 9% ---------------- -------- -------- ------- ------- Non-core activities 459 389 18% 26% ---------------- -------- -------- ------- ------- Corporate (181) (159) ---------------- -------- -------- ------- ------- -------- EBIT2 Group 458 253 81% -------- ---------------- -------- -------- ------- Power Technologies 219 116 89% ---------------- -------- -------- ------- Automation Technologies 323 266 21% ---------------- -------- -------- ------- Non-core activities 11 (20) n/a ---------------- -------- -------- Corporate (95) (109) ---------------- -------- -------- -------- EBIT margin Group 8.1% 5.1% -------- ---------------- -------- -------- Power Technologies 9.0% 5.5% ---------------- -------- -------- Automation Technologies 11.0% 10.0% ---------------- -------- -------- ----------------------- Net income 188 98 ----------------------- -------- -------- ------- ------- ABB key figures first nine months 2005 (unaudited) $ in millions Jan-Sept Jan-Sept % change ----------------------- 2005 20041 ------------ -------- -------- ------- US$ Local ------- ------- -------- ---------------- -------- ------- Orders Group 18,124 16,447 10% 6% -------- ---------------- -------- -------- ------- ------- Power Technologies 8,241 7,156 15% 11% ---------------- -------- -------- ------- ------- Automation Technologies 9,750 8,587 14% 10% ---------------- -------- -------- ------- ------- Non-core activities 780 1,250 -38% -40% ---------------- -------- -------- ------- ------- Corporate (647) (546) ---------------- -------- -------- ------- ------- -------- Revenues Group 16,443 14,726 12% 8% -------- ---------------- -------- -------- ------- ------- Power Technologies 6,973 6,181 13% 9% ---------------- -------- -------- ------- ------- Automation Technologies 8,895 7,839 13% 10% ---------------- -------- -------- ------- ------- Non-core activities 1,178 1,251 -6% -8% ---------------- -------- -------- ------- ------- Corporate (603) (545) ---------------- -------- -------- ------- ------- -------- EBIT2 Group 1,218 818 49% -------- ---------------- -------- -------- ------- Power Technologies 520 446 17% ---------------- -------- -------- ------- Automation Technologies 963 743 30% ---------------- -------- -------- ------- Non-core activities 10 (18) ---------------- -------- -------- Corporate (275) (353) ---------------- -------- -------- -------- EBIT margin Group 7.4% 5.6% -------- ---------------- -------- -------- Power Technologies 7.5% 7.2% ---------------- -------- -------- Automation Technologies 10.8% 9.5% ---------------- -------- -------- ----------------------- Net income 513 188 ----------------------- -------- -------- ------- ------- 1 Adjusted to reflect the reclassification of the oil, gas and petrochemicals business to continuing operations, and of other activities to Discontinued operations. 2 Earnings before interest and taxes. See Summary Financial Information for more information. More information The 2005 Q3 results press release and presentation slides are available from October 28, 2005 on the ABB News Center at www.abb.com/news and on the Investor Relations homepage at www.abb.com/investorrelations. ABB will host a telephone conference for journalists today starting at 11:00 a.m. Central European Time (CET). U.K. callers should dial +44 20 7107 0611. From Sweden, +46 8 5069 2105, and from the rest of Europe, +41 91 610 56 00. Lines will be open 15 minutes before the start of the conference. Audio playback of the call will start one hour after the call ends and will be available for 72 hours: Playback numbers: +44 207 108 6233 (U.K.), +41 91 612 4330 (rest of Europe) or +1 866 416 2558 (U.S./Canada). The code is 354, followed by the # key. A conference call for analysts and investors is scheduled to begin today at 3:00 p.m. CET (9:00 a.m. EST). Callers should dial +1 866 291 4166 (from the U.S./ Canada) or +41 91 610 56 00 (Europe and the rest of the world). Callers are requested to phone in 10 minutes before the start of the call. The audio playback of the call will start one hour after the end of the call and be available for 96 hours. Playback numbers: +1 866 416 2558 (U.S./Canada) or +41 91 612 4330 (Europe and the rest of the world). The code is 405, followed by the # key. Investor calendar 2006 Q4 and full-year 2005 results February 16, 2006 Q1 2006 results April 27, 2006 ABB Ltd Annual General Meeting May 4, 2006 Q2 2006 results July 27, 2006 Q3 2006 results October 26, 2006 ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 103,000 people. Zurich, October 28, 2005 Fred Kindle, CEO Important notice about forward-looking information This press release includes forward-looking information and statements including statements concerning the outlook, and revenue and margin targets for our businesses and statements about the future process and expense of resolving the company's asbestos liability. 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 Ltd's 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, the terms and conditions on which asbestos claims can be resolved, the amount of revenues we are able to generate from backlog and orders received, 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 ABB'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. -------------------------- (1) Finance net is the difference between interest and dividend income and interest and other finance expense. This information is provided by RNS The company news service from the London Stock Exchange

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