ABB Group Rating Affirmed by Standard & Poor's: Outlook Positive; Agency Cites Shift to Knowledge and Service, Growth Potential.

Business and Technology Editors

ZURICH, Switzerland--(BUSINESS WIRE)--Sept. 6, 2000

Global technology group ABB said today that Standard & Poor's has affirmed its long-term corporate credit rating of AA- and changed the ratings outlook from stable to "positive."

Standard & Poor's said the new ratings outlook follows demonstrated improvements across ABB's business segments since adapting the group structure in August 1998. The agency also said ABB has a low level of financial indebtedness and a conservative financial profile.

"Since the beginning of 1999, ABB has consequently been transforming its business portfolio, aiming to increase value creation by shifting to higher value-added, more knowledge-based activities and away from very asset intensive businesses," the agency said.

"The group's strategy aims to increase its reliance on IT-driven technology solutions, as well as strengthening its positions in high-tech systems and service operations," the agency added, citing several milestones in ABB's transformation. The milestones include ABB's divestiture of the traditional power generation business earlier this year, the divestiture of the 50 percent stake in the rail joint venture Adtranz and the acquisition of Alfa Laval Automation and Elsag Bailey Process Automation.

ABB president and CEO Goran Lindahl said, "The positive ratings outlook is another confirmation that we are moving in the right direction. We are pleased to see that our strong efforts to create more shareholder value are being recognized."

Standard & Poor's added that ABB's management has a strong track record of maintaining group profitability at a good level, considering the difficult market conditions of some operations.

"The business profile restructuring, coupled with an overall favorable economic climate, should support management in achieving its target of 6 percent-7 percent average annual growth during 2000-2003 and an operating margin of 12 percent by 2003," said the agency, adding that ABB has under certain circumstances some financial flexibility to carry out a more aggressive growth strategy in the next few years.

The ABB Group serves customers in power transmission and distribution; automation; oil, gas, and petrochemicals; building technologies; and in financial services. With novel IT applications, tailored software solutions, growing eBusiness and a fast-expanding knowledge and service base, ABB is building links to the new economy. The ABB Group employs about 160,000 people in more than 100 countries.