© ABB Ltd - Page 1 Jörgen Centerman President and CEO Sustainability media briefing London, June...

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Jörgen CentermanPresident and CEO

Sustainability media briefingLondon, June 5, 2002

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Overview

ABB in the market

Commitment to sustainability

Examples of sustainable products

Way forward and priorities

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Every single customer of ours needs

both

power and automation technologies

… enabling utility and industry customers to improve performance while lowering environmental impacts

ABB’s focus

We focus on power and automation technologies …

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G r o u p P r o c e s s e s

Automation Technology Products

Power Technology Products

C U S T O M E R S

ExternalChannelPartners

ExternalChannelPartners

Utilities IndustriesOil, Gas

andPetrochem

The customer-centric structure

Generic power and automation products

Industry-specific power and automation

products, solutions and services

ABBin the market

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IndustrialIT key element in our sustainability

IndustrialIT – one architecture – common approach

Plug and produce for all power and automation offerings

Lower cost, higher quality, ease of use and integration

Environmental performance part of product offering

Four levels of IndustrialIT certification

Information

Connectivity

Integration

Optimization

Almost 10,000 products and product groups certifiedAll relevant (40,000) by year-end

ABBin the market

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Less energy consumption

Less raw materials use

Lower environmental impact

Lower costs

IndustrialIT drives sustainability benefitsABB

in the market

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Overview

ABB in the market




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8Commitment

to sustainability Our triple bottom line approach

ABB’s pursuit of sustainability is to balance and continuously improve the three elements of our performance

A triple bottom linefocus on people, planet and profit

Sustain-ability

Environmental Social

Economic

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To ensure ABB’s sustainability, our economic performance is the top priority

EBIT 1.2% in 2001; 4.5% in Q1 2002;aiming for 4-5% in 2002

Net debt US$2 billion reduction in Q4, 2001;cut by another US$1.5 billion in 2002

Revenues 8% in 2001 (local currencies)maintain 6% average growth per year

Commitmentto sustainability Economic performance

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10Commitment

to sustainability Environmental performance

Environ-mentalimpact

Gate 1 Gate 2

ABB

Suppliers ABB

Cradle

Customers

Gate 3

Recycling

10-30 years

Grave

A life cycle focus

Weeks

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11Commitment

to sustainability Environmental performance

Environmental requirements communicated to all major suppliers, SQR (Suppliers’ Qualification Requirements)

Environmental Management Systems implemented in almost all manufacturing sites (531 in 50 countries)

Over 1,000 continual improvement projectsat any point in time

Environmental Product Declarations for core products

Suppliers and ABB

Pioneering environmental performance

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12Commitment

to sustainability Implementation of ISO 14001

600

500

400

300

200

100

0 1997 1998 1999 2000 2001

ABB’s manufacturing sites ISO 14001

(98%)

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Reducing hazardous waste in ABB Shanghai Transformer Co. Ltd, China

0

20

40

60

80

100

120

1998 1999 2000 2001

Commitmentto sustainability Environmental performance - Manufacturing

(ton

s)

50% reduction in three years

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Reducing the consumption of electricity (MWh) for manufacturing of electrical machines at ABB Motors, Sweden

0,00 1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00 9,00 10,00

2001

2000

1999

1998

1997

1996

1995

1994

Commitmentto sustainability Environmental performance - Manufacturing

Target Result

year

MWh of electricity per MW of machine size

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By continuously increasing the environmental performance of our products and services, we have even bigger impact on our customers’ performance

Increased capacity

Increased efficiency of industrial processes

Increased product performance

Less energy consumption

Commitmentto sustainability Environmental performance

Customers and ABB

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Improved efficiency of LV AC motors Further improved by using electrical drives

Commitmentto sustainability

100

95

90

85

80

751981 1985 1995 2000

MotorTotal

Drive*

* Frequency converter & electronics

effi

cien

cy %

Environmental performance

Industry uses 50% of all electricity

- of which 65% for electrical motors

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17Commitment

to sustainability Social performance

Social performance detailed in in our new Sustainability Report

New ABB social policy launched last year

Policy tested through stakeholder engagement (45 dialogues in 34 countries)

We acknowledge the social impacts of ABB’s transformation

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Employees

Occupational health and safety

Suppliers

Community involvement

Business ethics

Commitmentto sustainability Social policy focus

ABB is committed to corporate social responsibility Social performance as important as environmental

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Overview

ABB in the market




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20Examples ofsustainable

products Integrated energy systems

Small-scale, distributed and renewable sources of electricity are key additions

ABB a key integrator and component supplier

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products Windpower

ABB is world’s largest supplier of components for wind technology, e.g. generators, transformers, control systems, cables, substations

HVDC Light technology transmits power to the grid with low losses

ABB’s business for wind power has increased by 25% per year over the past few years

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products Microturbines

Demand for small-size power plantsparticulary where there is no grid

A microturbine comprises a high-speed gas turbine and a direct-driven generator

Hot gas from the turbine can be used as a resource for heating or cooling

(co-generation)

80% efficiency (50% for heat 30% for electricity)

Quick and simple installation Short payback times

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Connects directly to the grid, eliminating ancillary components

Produces reactive power to support the network, i.e. less losses

Replacing a 20 MW conventional machine would reduce CO2

emission by 7,500 tons over 20 years (equals 3,000 households for one year)

Examples ofsustainable

products Motorformer - significant savings

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products Drives

Within industry, electrical motors consume 65% of all electricity

Conventional motors always run at their maximum capacity

70% of the energy can be saved by varying the motor speed to the actual need for energy

ABB drives reduce global CO2 emissions by 50 million tons every year (equal to

annual emission of a city of six million people)

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Deliver average revenue growth 6% per year

Increase EBIT to 9 – 10% by 2005

Improve our balance sheet

Reduce and reschedule our net debt (2/3 long term; 1/3 short term)

Increase productivity, reduce costs

Way forward and priorities Improve our economic performance

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Go beyond manufacturing and apply Environmental Management Systems toour non-manufacturing organizations

Continually improve our performance, e.g. by less use of hazardous material, less use of energy

Create more value for our customers by offering more sustainable solutions

Way forward and priorities Improve our environmental performance

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Implement our social policy worldwide with special emphasis on local needs

Measure continuous improvement by developing relevant indicators (guided by GRI triple bottom line reporting)

Increase focus on business ethics (”zero” tolerance for unethical behaviour)

Pursue high health and safety performance (”zero” target for serious accidents)

Apply our policy to suppliers (urge same standards as ABB)

Way forward and priorities Improve our social performance

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World Energy Council CO2 emissionreduction program, an ABB initiative

China Energy Technology Program,led by ABB

UN Global Compact, ABB an active, early supporter

“Access to Electricity” to provideelectricity and enable development in poor communities

Way forward and priorities Common efforts priorities

ABB advocates fair trade conditions and good development opportunities for everyone

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Asbestos – uncertain, but well-managed

Q1 2001 Q2 2001 Q3 2001 Q4 2001 Q1 2002 *

* * Over 50% settled without payment

13,200 12,200 14,300 15,000 14,300

8,000 6,100 6,600 6,700 13,300 * *

71,400 77,500 85,200 93,500 94,500

$37,400 $29,000 $ 36,100 $ 33,200 $ 51,500

New claims

Settled claims

Pending claims

Cash paid (pre insurance)***

* Combustion Engineering considers that the full-year trends for 2002 as regards new claim filings, claims settled and cash settlement cannot be estimated reliably based on first quarter outcome

Operationalpriorities

* * * Thousand dollars

© ABB Ltd - Page 1 Jörgen Centerman President and CEO Sustainability media briefing London, June...

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