Record revenues, higher earnings and free cash flow - increased dividend proposed

Zurich, (PresseBox) - .
- Record annual revenues; higher operational EBITDA and earnings per share vs 2012
- Free cash flow and operational EBITDA margin up despite Power Systems setback
- Solid execution on cost yields savings of $1.2 billion
- Early-cycle orders continue positive trend; large order intake remains low
- Board recommends 5thconsecutive dividend increase to CHF 0.70 per share
- Systematic and robust approach for shareholder value creation via profitable growth, business-led collaboration, relentless execution

ABB today reported record full-year revenues and higher operational EBITDA, net income and free cash flow despite a challenging market environment. The Board of Directors has proposed to increase the dividend for 2013 to CHF 0.70 per share.

"These solid results, delivered in a mixed business climate and despite the setback in Power Systems, show the strength of ABB and our global team," said ABB Chief Executive Officer Ulrich Spiesshofer.

"Our expanded product and geographic scope enabled us to increase profitability in automation, while we continued to generate market-leading returns in Power Products. We are confident Power Systems will deliver higher, more consistent returns once certain legacy projects have been executed and actions to improve risk and project management are complete.

"We again demonstrated good execution on costs savings and strong cash performance, allowing us to return a higher dividend to shareholders for the 5th consecutive year," he said.

Early-cycle demand continued to trend positively in the second half of 2013 but was offset by delayed large project awards, leading to a lower order backlog at the end of the year. Orders also declined due to the effects of increased order selectivity in the Power Systems division.

"We confirm our margin and cash conversion targets, which are important health indicators for an industrial business," Spiesshofer said. "Our current revenue CAGR expectation over the planning cycle reflects the slower than originally expected global economic recovery and the PS realignment. We aim to deliver attractive mid-teen CROI and continue to drive EPS growth over the current planning cycle of 2011-2015. We will share with the market our strategic ambitions and long-term financial targets in September.

"For 2014 we have a clear action plan with a focus on organic growth, further cost savings, higher cash flow generation and more consistent returns in Power Systems," he said. "Our strong financial position gives us full flexibility to accomplish these goals, even in uncertain times. We are taking a systematic and robust approach to increasing shareholder value based on profitable growth, business-led collaboration and relentless execution."

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

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