29.01.2015 Michael Daiber Innovation @ ABB Turbo Systems Organisation and Leadership

29.01.2015 Michael Daiber Innovation @ ABB Turbo Systems Organisation and Leadership

A global leader in power and automation technologies Leading market positions in main businesses ~150,000 employees $ 42 billion In revenue (2013) Present in +100 countries Formed in 1988 merger of Swiss (BBC, 1891) and Swedish (ASEA, 1883) engineering companies February 13, 2014

Turbocharging Main purpose: increase the specific power output of the engine reduce engine raw emissions improve engine efficiency limit engine thermal loading Key performance figures: achievable compressor pressure ratio c turbocharger efficiency TC specific airflow load response capabilities Customer value: 300% more power up to 10% lower specific fuel consumption up to 60% lower NOx emissions

Innovation @ ABB Turbo Systems Organization structure that enables innovation Innovation processes to enable innovation «bottom-up» ABB Group / ABB Turbocharging Standard Presentation

Innovation Process Enable bottom-up innovation Organization structure that enables innovation Innovation processes to enable innovation «bottom-up» Innovation Process Using the creative potential of all employees for CHTUS and ABB Generate and evaluate a lot of ideas Early first evaluation of ideas: «Try often, fail early» Quick feedback to employees that provide ideas Transparent process: Decisions have to be justified Reward System for successful innovations ABB Group January 26, 2015 Slide 5

Innovation Agents Support bottom-up innovation Organization structure that enables innovation Innovation processes to enable innovation «bottom-up» Innovation Agents Are the neutral place to go for every employee for innovation related topics Are the first persons to address with new ideas Support the systematic Idea generation (moderation, creativity techniques,..) Make sure that employees can work on their ideas and drive innovative tasks Make sure that decisions are taken at the filters, that sponsors live the process adequately and do not hamper the process ABB Group January 26, 2015 Slide 6

Reorganization Organization structure that enables innovation Innovation processes to enable innovation «bottom-up» ABB Group January 26, 2015 Slide 7

Our customers needs have common elements but with a different weight TCO Total Cost of Ownership Legislations, regulations and standards Reliable partner first costs maintenance costs fuel costs up-time reliability safety environment delivery performance of products, solutions and services development partner throughout the entire life cycle ABB Group / ABB Turbocharging Standard Presentation 1/26/2015 Slide 8

New Organization structure Location of Innovation ABB Turbo Systems Ltd Organization structure that enables innovation Innovation processes to enable innovation «bottom-up» PATU PG Service PG Medium & Low Speed PG High Speed Technology Supply & Value Chain Excellence Finance, Controlling, IS Start-ups Full P&L Responsibility for respective portfolio including product engineering Addressing the respective customers current product needs Turbocharging Solutions R&D Turbochargers Engineering Support, Mechatronics Develop New Technologies, Offerings beyond Turbocharging Internally or in co-operations Human Resources Customer Feedback & Management Systems Business Development Innovation in Manufacturing Manufacturing Technologies Market Communication This is not the complete organization chart Test Center ABB Group / ABB Turbocharging SAP KW ORG_0001 Rev. CL / EN / Resp. Dept.: PATU / Released PATU-MS: 2015-01-15

Topics VCM Variable Valve Train as adjacent offering to our engine builder customers ABB Group / BU Turbocharging January 26, 2015 Slide 10

Topics Monitoring Future offerings are part of the «Internet of Things» ABB Group / BU Turbocharging January 26, 2015 Slide 11

Topics Waste Heat Recovey Application of Energy Recovery Systems to boost System Efficiency ABB Group / BU Turbocharging January 26, 2015 Slide 12

Decisive factors Everyone has the possibility to contribute with innovative ideas Innovation agents support innovative employees and help them finding the right addressee Innovation culture strengthened throughout the organization Strategic innovation fields: «What is in scope, what is out of scope» Innovation beyond the current product portfolio and current has its place within the organization and resources allocated Targets defined for innovation beyond existing boundaries ABB Group January 26, 2015 Slide 13