ABB: Next stage of unlocking value

· Shaping four focused, market-leading, entrepreneurial divisions:
    · Electrification Products
    · Robotics and Motion
    · Industrial Automation
    · Power Grids

  · Continued Power Grids transformation under ABB ownership:
    · “Power Up” program aiming at growth, lower risk, earnings accretion
    · De-risked EPC business model
      · Partnership with Fluor for substations
      · Partnership with Aibel for offshore wind

    · Divesture of cable business expected in Q1
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    · Raised margin target corridor 200bps to 10-14%, effective 2018

  · Realizing full potential as digital champion
    · “ABB Ability”: fully integrated digital offering across customer segments;
cements ABB’s leadership in the Fourth Industrial Revolution
    · Far-reaching partnership with Microsoft to develop next-generation digital
solutions
    · IoT pioneer Guido Jouret took office as Chief Digital Officer effective
October 1

  · Strengthening global ABB brand
    · Consolidation of 1000+ brands under the ABB master brand
    · Prerequisite for full value creation of digital offering
    · Writes ABB’s heritage as a pioneering technology leader into the future

  · White-collar productivity target increased by 30% to $1.3bn; timeline and
costs unchanged
  · All other financial targets confirmed
  · Second share buyback program of $3bn planned 2017 through 2019; capital
allocation priorities unchanged

[1] (http://file:///C:/Users/secarat/AppData/Local/Microsoft/Windows/Temporary%2
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Next%20stage%20of%20unlocking%20value_en.docx#_ftnref1) Subject to regulatory
clearances and fulfilment of the closing conditions.
ABB today launched Stage 3 of its Next Level strategy to unlock value for
customers and shareholders. The core elements of this include: shaping ABB’s
divisions into four market-leading, entrepreneurial units, including continuing
to transform the Power Grids division under ABB’s ownership; realizing ABB’s
full digital potential; accelerating momentum in operational excellence; and
strengthening ABB’s brand.

ABB CEO Ulrich Spiesshofer said, “Over the last two years, ABB has become
faster, leaner and more efficient. We have continuously improved margins and
further strengthened our cash generation. In Stage 3 of our Next Level strategy,
we are building on our successful transformation momentum and strengthening our
position as a pioneering technology leader and global digital champion. With our
four simplified, market-leading, entrepreneurial businesses, combined with “ABB
Ability”, we address customers’ needs in the Energy and Fourth Industrial
Revolutions in a more focused and agile way.”

Peter Voser, chairman of ABB’s Board of Directors, said, “The successful
execution of our Next Level strategy to date has led to significantly improved
operational and financial performance and a more externally focused, simpler
ABB. The entire board worked with the management and external advisors on all
elements of Stage 3, which will unlock value for customers and all shareholders
while ensuring the company’s long-term success. The continued transformation of
our Power Grids division under ABB’s management is the best of all carefully
assessed options for shareholders. We firmly support the management team and the
action plan presented today.”

Driving growth in four market-leading entrepreneurial divisions

ABB is shaping and focusing its divisional structure into four market-leading
divisions: Electrification Products, Robotics and Motion, Industrial Automation
and Power Grids, effective January 1, 2017. The divisions will be empowered as
entrepreneurial units within ABB, reflected in an enhancement of its performance
and compensation model focusing on individual accountability and responsibility.
They benefit from sales collaboration orchestrated by regions and countries as
well as from the group-wide digital offering; ABB’s leading G&A structure and
costs; common supply chain management; and corporate research centers. ABB will
continue to strengthen its divisions through active portfolio management. This
includes pursuing strategic additions, transforming business models and pruning
non-core businesses.

“Entrepreneurial spirit is the base for our future operating model,” said
Spiesshofer. “Our four market-leading businesses, led by empowered
entrepreneurs, will drive sustainable value creation, supported by regions and
Group oxygen such as ABB Ability and our leading G&A cost level.”

Electrification Products

Electrification Products (EP) will be the partner of choice for electrification
of all consumption points.

By bringing together all electrification components, mainly by transferring
businesses from the existing Discrete Automation and Motion (DM) division, EP
will be the global #2 in that segment, offering a one-stop shop for customers.

The electric vehicle charging, solar, and power quality businesses will be
transferred from the DM division to serve as growth platforms within the
Electrification Products division. The necessary investment to continue the
growth momentum of these businesses will initially have a dampening impact on
the division’s profit margin.

The growth of power consumption is outpacing overall energy consumption, as more
people have access to electricity and new forms of electricity consumption, such
as e-vehicle charging, are driving demand. There are significant opportunities
to digitalize and innovate around our current offerings.

Robotics and Motion

Robotics and Motion will be the partner of choice for robotics and intelligent
motion solutions.

ABB’s leading offering in industrial motors and drives as well as its strongly
performing robotics business are the building blocks of this newly shaped
division which succeeds the former Discrete Automation and Motion division.

By focusing on the fast-growing robotics market and leveraging ABB’s technology
platform and global scale, the company is ideally positioned to move from its
current #2 position in robotics to #1 in this highly attractive market. ABB will
benefit from its strong position in the Fourth Industrial Revolution, its global
reach and service platforms.

ABB will continue to invest in and shape its #1 position in industrial motors
and drives by focusing on fast-growing segments and moving into light industry
and emerging growth areas like Asia.

Intelligent services and a leading digital offering are already a strong pillar
of the division’s performance and open significant growth opportunities. ABB
will strengthen divisional profitability through continued focus on operational
excellence and value chain optimization.

Industrial Automation

Industrial Automation will be the partner of choice for industrial automation.

This division succeeds the former Process Automation division.

ABB will drive digitalization across industry sectors, building on its #1
position in process control through software and services. ABB has a unique
combination of domain expertise that allows it to master the control room in a
wide range of industries such as pharmaceuticals, mining, shipping and oil &
gas. By focusing on growing segments and bringing together maintenance,
operation and control, ABB will drive penetration of strongholds and create
differentiation for customers.

Power Grids

Power Grids will be the partner of choice for stronger, smarter and greener
grids.

Following a comprehensive strategic portfolio review, the Board and Executive
Committee of ABB have concluded that the transformation of Power Grids under ABB
ownership will unlock maximum shareholder value compared to other ownership
options such as sale, IPO, spin-off or joint venture.

Key factors in the decision-making process included market attractiveness, the
existing and future product offerings, business model opportunities and best
ownership, as well as all alternative value creation options for ABB
shareholders. This review included independent analyses from McKinsey and
independent financial advice from Goldman Sachs and Credit Suisse.

The division, which is #1 globally, will take advantage of the Energy and Fourth
Industrial Revolutions. These are creating significant demand for Power Grids’
products, systems, software and services, and support the portfolio shift
towards digitalization.

To realize the full potential of the division and continue the ongoing
transformation, “Power Up,” a massive program covering key aspects of the
business, was introduced today. It will drive growth and enhance earnings
accretion by focusing on core operational strengths and high growth segments as
well as digitally enabled services and software.

A key element of the division’s ongoing transformation is the de-risking of the
business model and tapping of growth opportunities through two strategic
partnerships announced today – with Fluor for large electrical substations, and
Aibel for offshore wind connections. Both partnerships combine ABB’s market
leadership in power technologies with the respective partner’s expertise –
Fluor’s in managing large engineering, procurement and construction (EPC)
projects, and Aibel’s in offshore wind projects.

Another key element is ABB’s pruning of niche non-core businesses such as the
recently announced sale of ABB’s cable business to NKT cables while preserving
access to technology through a strategic partnership.

As a consequence of the transformation, ABB is raising the operational EBITA
margin target corridor for the division from 8-12% to 10-14%, effective 2018.

“In our strategic portfolio review we have listened carefully to all
stakeholders and all expressed views. After a very thorough and detailed
process, supported by leading advisors, we have concluded that the continued
transformation of Power Grids under ABB’s ownership creates the highest value
for our shareholders and customers. Building on the transformation success and
momentum to date, the Power Grids division is ideally positioned within ABB to
drive long-term, profitable growth during the Energy and Fourth Industrial
Revolutions and is an integral part of our offering,” Spiesshofer said.

Quantum leap in digital with ABB AbilityTM

ABB is a hidden digital champion today. It is ideally positioned to win in the
digital space with new and existing end-to-end digital solutions that build on
the intelligent cloud and close the loop with connected devices. ABB will use
its profound knowledge of its customers’ domains to plan, build and operate a
unique digital offering which will deliver true operational differentiation for
customers.

The newly launched ABB Ability offering combines ABB’s portfolio of digital
solutions and services across all customer segments, cementing the group’s
leading position in the Fourth Industrial Revolution and support the
competiveness of ABB’s four entrepreneurial divisions.

ABB today announced a far-reaching strategic partnership with Microsoft, the
world’s largest software company, to develop next-generation digital solutions
on an integrated cloud platform. Customers will benefit from the unique
combination of ABB’s deep domain knowledge and extensive portfolio of industrial
solutions and Microsoft’s Azure intelligent cloud as well as B2B engineering
competence. Together, the partners will drive digital transformation in customer
segments across ABB’s businesses such as robotics, marine and e-mobility.

“This partnership will provide unique benefits to our customers in utilities,
industry, transport & infrastructure, building on the combined strength of
Microsoft and ABB,” said Spiesshofer. “Building on ABB’s installed base of more
than 70 million connected devices and more than 70,000 installed control
systems, the next step is to develop one of the world’s largest industrial cloud
platforms.”

ABB’s digital transformation will be led by Guido Jouret, a pioneer in the
Internet of Things, who began his role as Chief Digital Officer, reporting
directly to the CEO, on October 1, 2016.

Strengthening the global ABB brand

ABB will adopt a single corporate brand, consolidating all its brands around the
world under one umbrella. ABB’s portfolio of companies will be unified,
showcasing the full breadth and depth of the company’s global offering under one
master brand. This transition is expected to take up to two years.

The unified brand plays a key part in realizing the value potential of ABB’s
digital offering, as it increases customer loyalty, price premiums and purchase
probability. One master brand allows ABB to better present its strategy to
relevant stakeholders, emphasizes the Group’s customer-first, digital-first
thinking and makes it easier to interact with existing and future customers.

The brand will feature design elements intended to clearly articulate ABB’s
vision, direction and unique market position to customers, shareholders,
employees and all other stakeholders. ABB’s heritage as a pioneering technology
leader and the three focus areas of its Next Level strategy are reflected in its
new brand promise:
“Let’s write the future. Together.”TM

Accelerating momentum in operational excellence

ABB continues to build on its existing momentum and is further accelerating its
operational excellence.

The company’s white-collar productivity savings program has outperformed
expectations since its launch last year. As a result, ABB has increased the
program’s cost reduction target by 30% to $1.3 billion. ABB will achieve these
additional savings within the initially announced timeframe and with unchanged
restructuring and implementation costs. ABB is continuing its regular cost
-savings programs, leveraging operational excellence and world-class supply
chain management to achieve savings equivalent to 3-5% of cost of sales each
year.

ABB reaffirms the target of its 1,000-day working capital program to free up
approximately $2 billion by the end of 2017. The program is well on track and
focuses on improving inventory management by optimizing the entire value chain,
from product design to manufacturing, and by optimizing other net working
capital measures.

The Group reaffirms its 2015-2020 financial targets as laid out below.

ABB Next Level – 2015-2020
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+-------------------------------------------------------------+------+
|Revenue                                                      |  3   |
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+-------------------------------------------------------------+------+
|Operational EBITA                                            |  11  |
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|Operational EPS growth                                       |  10  |
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|Free cash flow conversion to net income                      |  >90%|
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|Cash return on investment                                    |  Mid |
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Operational EBITA % – 2015-2020 divisional targets

+------------------------+---------+
|Electrification Products|  15-19% |
+------------------------+---------+
|Robotics and Motion     |  14-19% |
+------------------------+---------+
|Industrial Automation   |  11-15% |
+------------------------+---------+
|Power Grids             |  10-14%*|
+------------------------+---------+

*The margin target for Power Grids will be in effect as of Jan. 1, 2018.


Capital allocation

ABB today announced its plans for a new share buyback program of up to $3
billion from 2017 through 2019. This reflects the company’s confidence and the
continued strength of ABB’s cash generation and financial position. On September
30, 2016, ABB announced the completion of its recent share buyback program in
which it returned $3.5bn to its shareholders. Over the last three years, ABB has
returned $8.7bn to shareholders in the form of dividends and share buybacks.

Active portfolio management remains a key aspect of ABB’s operating pattern as
demonstrated in the recent portfolio pruning and bolt on acquisitions as well as
the announced cable business divestiture and business model changes in Power
Grids.

ABB’s capital allocation priorities remain unchanged: 1) funding organic growth,
R&D and capital expenditures at attractive cash returns; 2) paying a steadily
rising, sustainable dividend; 3) investing in value-creating acquisitions; and
4) returning additional cash to shareholders.

About ABB

ABB (ABBN: SIX Swiss Ex) is a pioneering technology leader in electrification
products, robotics and motion, industrial automation and power grids serving
customers in utilities, industry and transport & infrastructure globally. For
more than four decades, ABB is writing the future of industrial digitalization.
With more than 70 million devices connected through its installed base of more
than 70,000 control systems across all customer segments, ABB is ideally
positioned to benefit from the Energy and Fourth Industrial Revolution. With a
heritage of more than 130 years, ABB operates in more than 100 countries with
about 135,000 employees. www.abb.com

Important notice about forward-looking information

This press release includes forward-looking information and statements as well
as other statements concerning the outlook for our business, including those in
the sections of this release titled “Accelerating momentum in operational
excellence”, “ABB Next Level – 2015-2020 targets”, “Operational EBITA % - 2015
-2020 divisional targets” and “Capital allocation”. 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. These expectations, estimates and projections are generally identifiable by
statements containing words such as “expects,” “believes,” “estimates,”
“targets,” “plans,” “is likely”, “intends” 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 and which could
affect our ability to achieve any or all of our stated targets. The important
factors that could cause such differences include, among others, business risks
associated with the volatile global economic environment and political
conditions, costs associated with compliance activities, market acceptance of
new products and services, changes in governmental regulations and currency
exchange rates and such other factors as may be discussed from time to time in
ABB Ltd’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.

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[1] (http://file:///C:/Users/secarat/AppData/Local/Microsoft/Windows/Temporary%2
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_ 
Next%20stage%20of%20unlocking%20value_en.docx#_ftnref1) For definitions refer to
“Supplemental Financial Information” under “Capital Markets Day 2016” – “More
information” on our website at www.abb.com/investorrelations

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Next%20stage%20of%20unlocking%20value_en.docx#_ftnref2) Average annual revenue
growth on a comparable basis, over six years, base year 2014.

[3] (http://file:///C:/Users/secarat/AppData/Local/Microsoft/Windows/Temporary%2
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Next%20stage%20of%20unlocking%20value_en.docx#_ftnref3) Target is on a full-year
basis

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Next%20stage%20of%20unlocking%20value_en.docx#_ftnref4) CAGR = Compound Annual
Growth Rate. Base year is 2014 and target assumes constant exchange rates.

[5] (http://file:///C:/Users/secarat/AppData/Local/Microsoft/Windows/Temporary%2
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possible in the event of large acquisitions.
För mer information, kontakta:

Media Relations
Saswato Das,
Antonio Ligi, Domenico Truncellito,
Sandra Wiesner
Tel: +41 43 317 65 68
media.relations@ch.abb.com

Investor Relations:
Tel. 41 43 317 7111
investor.relations@ch.abb.com

ABB Ltd
Affolternstrasse 44
CH-8050 Zurich, Switzerland