UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2024
Commission File Number 001-16429
ABB Ltd
(Translation of registrant’s name into English)
Affolternstrasse 44, CH-8050, Zurich, Switzerland
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
☒
⬜
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
⬜
Note:
attached annual report to security holders.
Indication by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
⬜
Note:
other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in
which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the
home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press
release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event,
has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing
the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
⬜
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If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
This Form 6-K consists of the following:
1.
Press release issued by ABB Ltd dated February 1, 2024 titled “Q4 2023 results”.
2.
Q4 2023 Financial Information.
3.
Press release issued by ABB Ltd dated January 31, 2024 titled “Changes to composition of ABB Board of
Directors”.
4.
Announcements regarding transactions in ABB Ltd’s Securities made by the directors or the members of the
Executive Committee.
The information provided by Item 2 above is hereby incorporated by reference into the Registration Statements on Form F-3 of
ABB Ltd and ABB Finance (USA) Inc. (File Nos. 333-223907 and 333-223907-01) and registration statements on Form S-8
(File Nos. 333-190180, 333-181583, 333-179472, 333-171971 and 333-129271) each of which was previously filed with the
Securities and Exchange Commission.
2
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ZURICH, SWITZERLAND, FEBRUARY 1, 2024
Q4 2023 results
Solid finish to a record year
Q4 2023
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FY 2023
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Ad hoc Announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange
—
Q4 2023
Full year
Press Release
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“Our strong 2023 delivery was the result of both our leading market position in electrification and
automation, as well as ABB being a more agile and efficient company in its execution. With our
upgraded financial and sustainability targets we look to the future with confidence.”
Björn Rosengren,
KEY FIGURES
CHANGE
CHANGE
($ millions, unless otherwise indicated)
Q4 2023
Q4 2022
US$
Comparable
1
FY 2023
FY 2022
US$
Comparable
1
Orders
7,649
7,620
0%
0%
33,818
33,988
-1%
3%
Revenues
8,245
7,824
5%
6%
32,235
29,446
9%
14%
Gross Profit
2,848
2,658
7%
11,214
9,710
15%
as % of revenues
34.5%
34.0%
+0.5 pts
34.8%
33.0%
+1.8 pts
Income from operations
1,116
1,185
-6%
4,871
3,337
46%
Operational EBITA
1
1,333
1,146
16%
13%
5,427
4,510
20%
20%
as % of operational revenues
1
16.3%
14.8%
+1.5 pts
16.9%
15.3%
+1.6 pts
Income from continuing operations, net of tax
946
1,168
-19%
3,848
2,637
46%
Net income attributable to ABB
921
1,132
-19%
3,745
2,475
51%
Basic earnings per share ($)
0.50
0.61
-18%
2
2.02
1.30
55%
2
Cash flow from operating activities
4
1,897
687
176%
4,290
1,287
233%
1
For a reconciliation of non-GAAP measures, see “supplemental reconciliations and definitions” in the attached Q4 2023 Financial Information.
2
EPS growth rates are computed using unrounded amounts.
3
Constant currency (not adjusted for portfolio changes).
4
Amount represents total for both continuing and discontinued operations.
ABB INTERIM REPORT
I
Q4 2023
The fourth quarter of 2023, was a solid end to a fantastic year.
We improved operational performance and deliver ed a very
strong cash flow year -on-year. We increased the annual return
on capital employed (ROCE) by 460bps
1
utilizing our strong balance sheet by recently signing seven
small bolt-on acquisitions , with the majority adding additional
embedded software and AI capabilities to our customer
offerings. We delivered in line with our guidance, and I am
pleased with the solid finish to the year.
Comparable order intake remained stable year-on-year, with
increases noted in three out of four business areas. Most
customer segments improved or remained stable , with softer
demand noted mainly in residential construction and discrete
automation, with the latter hampered by normalizing order
patterns as well as by weakness in the robotics market. In tune
with the historical fourth quarter pattern the book-to-bill ratio
was below one, at 0. 93, when revenues tend to be supported
by end-of-the-year systems deliveries.
Revenues amounted to $8,245 million and increased by 5%
(6% comparable), supported by both higher volumes and
contribution from earlier implemented price increases . Thanks
to our ongoing focus on improving the quality of revenues, the
gross margin improved by 50 basis points to 34.5%,
contributing to the Operational EBITA margin improvement of
150 basis points to 16.3%. The contribution from mainly price
and leverage on higher volumes clearly offset the impact mainly
from higher labor costs. This represents the highest fourth
quarter margin in recent history. The historical pattern of a
sequentially softer fourth quarter margin repeated, as expected.
In the quarter we generated Cash flow from operating activities
of $1.9 billion. This contributed to Free Cash Flow of $3.7 billion
for the year, even stronger than what we originally expected.
In my view, the strong 2023 performance is evidence of ABB
being a more efficient and agile company, but also of how
demand for our offerings benefits from our leading position in
markets accelerating the energy transition towards
electrification and increased automation and digitalization. We
feel confident in future performance, which led us to raising our
financial and sustainability targets at our Capital Markets Day in
November. In short, we are targeting higher growth and higher
returns while enabling a net zero world.
Looking to 2024, the geopolitical situation adds uncertainty,
however we currently expect another year of good
performance. We expect a positive book-to-bill and revenues to
be supported by execution of parts of the $21.6 billion order
backlog. In the projects- and systems business we expect
continued high customer activity, although we face high
comparables from last year when large orders came through at
a very high level. In total, order growth year-on-year should
show stronger momentum in the latter part of the year when
comparables ease. We expect to improve on comparable
revenues as well as on Operational EBITA margin, and cash
flow should benefit from continued strong operational
performance and our continued focus on net working capital
efficiency.
Considering the improving performance, robust cash flow and a
solid balance sheet, the Board of Directors proposes an
ordinary dividend of CHF 0.87 per share, up from CHF 0.84 in
the previous year . We also plan to continue utilizing share
buybacks as a tool to return excess cash to shareholders also
during 2024.
Björn Rosengren
CEO
In the
first quarter of 2024
, we anticipate a low to mid-single
digit comparable revenue growth and the Operational EBITA
margin to remain stable or slightly improve year-on -year.
In full-year 2024
, we expect a positive book -to-bill, comparable
revenue growth to be about 5% and the Operational EBITA
margin to slightly improve from the 2023 level of 16. 9%.
CEO summary
Outlook
ABB INTERIM REPORT
I
Q4 2023
Orders were flat year -on-year (comparable 0%) at $7,649
million, with strong contribution from large orders, including
one in business area Process Automation for approximately
$150 million. This offset a mid-single digit order decline in
the short-cycle businesses , year-on-year. Comparable
orders increased in three business areas, while Robotics &
Discrete Automation declined sharply as customers for
machine automation continued the sequential trend of
normalizing order patterns, and due to inventory adjustments
in a declining robotics market. These inventory adjustments
are expected to level off towards the end of the first quarter.
Orders increased in two out of the three regions. Americas
was up by 3% (comparable 3%) driven by strong
improvement of 5% (comparable 6%) in the United States.
Asia, Middle East and Africa remained overall stable (up
comparable 2%) where the strong development in countries
like India and South Korea more than offset the decline in
China of 8% (comparable 7%). Europe softened by 2%
(comparable 5%) due mainly to a double-digit decline in
Germany.
Orders in the automotive segment softened slightly year-on-
year due to timing impacts for some larger orders. General
industry and consumer -related robotics segments declined.
The machine builder segment declined as customers
normalized order patterns in the face of shortening delivery
lead times.
In transport & infrastructure, there were positive
developments in marine, ports and renewables.
The buildings segment declined overall, weighed down by the
residential construction segment where the quarterly pattern
included stabilization in Europe and declines in China and the
United States. The commercial construction segment was
broadly stable, compared with last year, in the United States
and Europe while China declined.
Demand in the process -related businesses was strong in
most segments, with particular strength in the oil & gas
segment. It held up well also for refining, petrochemicals
and the energy-related low carbon segments. Pulp & paper
remained stable.
Revenues amounted to $8,245 million and the growth of 5%
year-on-year (comparable 6%) was driven by both higher
volumes and a positive price development. Execution of the
strong order backlog supported revenue growth and more than
offset weakness in parts of the short-cycle demand.
Consequently, three out of four business areas improved
comparable revenues, with only Robotics & Discrete
Automation declining.
Orders and revenues
Growth
Q4
Q4
Change year-on-year
Orders
Revenues
Comparable
0%
6%
FX
1%
1%
Portfolio changes
-1%
-2%
Total
0%
5%
Revenues by region
($ in millions,
unless otherwise
indicated)
CHANGE
Q4 2023
Q4 2022
US$
Comparable
Europe
2,951
2,765
7%
4%
The Americas
2,847
2,555
11%
14%
Asia, Middle East
and Africa
2,447
2,504
-2%
0%
ABB Group
8,245
7,824
5%
6%
Orders by region
($ in millions,
unless otherwise
indicated)
CHANGE
Q4 2023
Q4 2022
US$
Comparable
Europe
2,554
2,604
-2%
-5%
The Americas
2,985
2,898
3%
3%
Asia, Middle East
and Africa
2,110
2,118
0%
2%
ABB Group
7,649
7,620
0%
0%
ABB INTERIM REPORT
I
Q4 2023
Gross profit
Gross profit increased by 7% (6% constant currency) to $2,848
million, reflecting a gross margin improvement of 50 basis points to
34.5%. Gross margin improved in all four business areas .
Income from operations
Income from operations amounted to $1,116 million and dropped
by 6% year-on-year, mainly due to higher restructuring and
transformation related costs year-on-year, and the provision
release related to the non-core operations which supported last
year’s result. Margin on Income from operations was 13.5%, down
by 160 basis points year-on-year.
Operational EBITA
Operational EBITA improved by 16 % year-on-year to $1,333
million and the margin was up by 150 basis points to 16.3%. Key
drivers to the higher earnings were the impacts from robust pricing
activities and operational leverage on higher volumes, which more
than offset adverse impacts from mainly increased labor costs.
Selling, general and administrative expenses increased in relation
to revenues to 18%, from 16.6% last year. Operational EBITA in
Corporate and Other amounted to -$67 million, of which -$34
million related to the underlying Corporate costs which were lower
than expected mainly due to real estate book gains. The
remaining-$33 million related to the E-mobility business where
operational performance was hampered by the ongoing
reorganization to ensure a more focused portfolio, and some
inventory-related provisions. While E-mobility is on track towards
the improved portfolio, the financial benefits may not be visible
until towards the end of 2024. Thus, we only expect a slight
improvement in the E-mobility Operational EBITA, year-on-year.
Net finance expenses
Net finance expense was $28 million, an increase from last year’s
level of $1 million which was unusually low due to reversal of
interest charges related to income tax risks.
Income tax
In line with the historical pattern, the fourth quarter tax rate was low.
Income tax expense was $136 million with an effective tax rate of
12.6%, lower than expected mainly due to the geographical profit
mix and releases of valuation allowances on deferred tax assets.
Net income and earnings per share
Net income attributable to ABB was $921 million, representing a
reduction of 19% from last year, as the improved operational
performance this year did not offset the positive impacts from last
year’s benefits from the provision reduction in non-core operations
and a reduction in tax valuation allowances. This resulted in basic
earnings per share of $0.50, down from $0.61 year -on-year.
Operational EBITA
($ millions)
Q4 2023
Q4 2022
Corporate and Other
E-mobility
(33)
(3)
Corporate costs, intersegment
eliminations and other
1
(34)
(72)
Total
(67)
(75)
1
Majority of which relates to underlying corporate
Earnings
ABB INTERIM REPORT
I
Q4 2023
Net working capital
Net working capital amounted to $3,257 million, increasing
slightly year-on-year from $3,216 million driven mainly by an
increase in receivables on the back of higher revenues,
which was however largely offset by customer advances.
Net working capital decreased sequentially from $4,041
million driven mainly by sound trade net working capital
management resulting in lower inventories and receivables.
Net working capital as a percentage of revenues
1
10.2%, down sequentially from 12.8% and year-on-year
11.1%.
Capital expenditures
Purchases of property, plant and equipment and intangible
assets amounted to $264 million.
Net debt
Net debt
1
and decreased from $2,779 million year-on-year and declined
sequentially from $2,872 million. The sequential net debt
decrease was driven by the strong free cash flow in the
quarter.
Cash flows
Cash flow from operating activities was $1,897 million,
representing a steep year-on-year increase from
$687 million. All business areas increased cash flow from
operating activities in the quarter. The increase was driven by
better operational performance and a strong sequential
reduction of net working capital in the quarter driven by lower
inventories and receivables as well as higher customer
advances. Additionally, the prior year quarter was hampered by
settlements for the Kusile project.
Share buyback program
A share buyback program of up to $1 billion was launched on
April 3, 2023. During the fourth quarter, 6,143,500 shares were
repurchased on the second trading line for approximately $230
million. ABB’s total number of issued shares, including shares
held in treasury, amounts to 1,882,002,575.
($ millions,
unless otherwise indicated)
Dec. 31
2023
Dec. 31
2022
Short term debt and current
maturities of long-term debt
2,607
2,535
Long-term debt
5,221
5,143
Total debt
7,828
7,678
Cash & equivalents
3,891
4,156
Restricted cash - current
18
18
Marketable securities and
short-term investments
1,928
725
Cash and marketable securities
5,837
4,899
Net debt (cash)*
1,991
2,779
Net debt (cash)* to EBITDA ratio
0.4
0.7
Net debt (cash)* to Equity ratio
0.14
0.21
*
At Dec. 31, 2023 and Dec. 31, 2022, net debt(cash) excludes net pension (assets)/liabilities of
$(191) million and $(276) million, respectively.
Balance sheet & Cash flow
ABB INTERIM REPORT
I
Q4 2023
Orders and revenues
Overall, the short -cycle businesses stabilized after some
weak quarters, and customer activity in the project- and
systems-related offering was robust. Total order intake was
virtually unchanged from last year, limited by the divestment
of the Power Conversion division (up comparable 2%) at
$3,395 million, to some extent hampered by timing -related
impacts in medium voltage orders.
●
Market activity was generally solid year-on-year outside
of the areas of residential building, which stabilized in
Europe at a low level but declined in both United States
and China. In China weakness was noted in several
customer segments.
●
From a geographical perspective order intake remained
stable or improved in all three regions. Europe was up by
7% (comparable 4%). The underlying order intake
improved slightly in the Americas, however portfolio
changes limited total order growth to -1% (up comparable
1%). In Asia, Middle East and Africa orders declined by
5% (stable comparable 0%), the result of strength on
comparable basis in countries like India offsetting
weakness in China which declined by 9% (comparable
6%).
●
Revenues amounted to $3,698 million, representing an
improvement of 6% (comparable 8%) from last year,
supported by both volumes and price impacts. This was
supported by all divisions except for Smart Buildings
division where the short-cycle weakness in residential
segment weighed on the total.
Profit
Strong operational performance clearly offset the small
adverse impact from portfolio changes and triggered a 26%
improvement in Operational EBITA to $725 million and 310
basis points rise in Operational EBITA margin, year-on-
year.
●
Strong gross margin improvement supported by
contributions from price, leverage on higher volumes in
production and improved operational efficiency. All of
which more than offset slightly higher spend on labor,
R&D and Selling, General and Administration.
CHANGE
CHANGE
($ millions, unless otherwise indicated)
Q4 2023
Q4 2022
US$
Comparable
FY 2023
FY 2022
US$
Comparable
Orders
3,395
3,385
0%
2%
15,189
15,182
0%
3%
Order backlog
6,808
6,404
6%
14%
6,808
6,404
6%
14%
Revenues
3,698
3,498
6%
8%
14,584
13,619
7%
10%
Operational EBITA
725
575
26%
2,937
2,343
25%
as % of operational revenues
19.7%
16.6%
+3.1 pts
20.1%
17.2%
+2.9 pts
Cash flow from operating activities
1,068
857
25%
3,211
2,115
52%
No. of employees (FTE equiv.)
50,300
50,600
-1%
Growth
Q4
Q4
Change year-on-year
Orders
Revenues
Comparable
2%
8%
FX
1%
1%
Portfolio changes
-3%
-3%
Total
0%
6%
—
Electrification
ABB INTERIM REPORT
I
Q4 2023
Orders and revenues
On continued robust performance in the long-cycle business
with some large orders booked mainly in the Traction division,
the total order intake reached $1,937 million, up 17%
(comparable 13%) from the relatively low comparable last year.
Book-to-bill was at 1 for the quarter.
●
Stronger order momentum was noted in the process-
related segments of oil & gas, chemicals and mining as
well as for food & beverage and rail. A weak construction
market weighed on demand for HVAC, with some
slowness noted also in pulp & paper.
●
Orders increased at a double-digit rate in all three regions.
Europe increased by 30% (comparable 18%). The Americas
improved by 14% (comparable 9%) with strong contribution
from the United States being up by 14% (comparable 10%).
Asia, Middle East and Africa was up by 10% (comparable
12%) including China being up by 10% (comparable 11%).
●
Revenues amounted to $1,946 million and were up by 5%
(comparable 2%) year -on-year, with price as the key positive
driver. Execution of the order backlog supported revenue
generation, with the improvement rate however hampered by
lower deliveries in the motors business.
Profit
Operational EBITA remained stable year-on-year at
$318 million. Revenues increased and gross margin improved
somewhat, however the Operational EBITA margin declined by
80 basis points to 16.6%.
●
While price increases contributed to earnings, these were more
than offset by one -time product quality costs which impacted
Operational EBITA margin by approximately 60 basis points.
●
The Large Motors & Generators division made a significant
profitability improvement, however, this was more than offset
mainly by the impacts from some underabsorption in parts of
the low voltage motor manufacturing and higher labor costs,
year-on-year.
Growth
Q4
Q4
Change year-on-year
Orders
Revenues
Comparable
13%
2%
FX
2%
1%
Portfolio changes
2%
2%
Total
17%
5%
—
Motion
CHANGE
CHANGE
($ millions, unless otherwise indicated)
Q4 2023
Q4 2022
US$
Comparable
FY 2023
FY 2022
US$
Comparable
Orders
1,937
1,649
17%
13%
8,222
7,896
4%
4%
Order backlog
5,343
4,726
13%
8%
5,343
4,726
13%
8%
Revenues
1,946
1,845
5%
2%
7,814
6,745
16%
15%
Operational EBITA
318
318
0%
1,475
1,163
27%
as % of operational revenues
16.6%
17.4%
-0.8 pts
18.9%
17.3%
+1.6 pts
Cash flow from operating activities
597
346
73%
1,532
853
80%
No. of employees (FTE equiv.)
22,300
21,100
6%
ABB INTERIM REPORT
I
Q4 2023
Orders and revenues
Market demand remained robust and order intake was up
7% (comparable 5%) to $1,870 million, with the fourth
quarter being a strong finish to a year in which large orders
contributed more than usual, which more than compensated
for slowing momentum in the short-cycle offering. Fourth
quarter orders included a booking of approximately $150
million with long delivery schedule.
●
Consistent with recent quarters, customer activity was at
a high level in all customer segments. The market
environment remained at a high level in the traditional oil
& gas segment, but there was also high activity in the low
carbon-related areas such as hydrogen, LNG and carbon
capture. Order momentum was strong in the marine
segment. Customer activity was robust in the process-
related segments of mining, metals and remained stable
in pulp & paper.
●
Revenues improved strongly in all divisions and in all
regions and amounted to $1,727 million, supported by
execution of the order backlog. Book-to-bill was positive
at 1.08.
Profit
Gross margin improved and revenues were higher, driving
the 18% year-on-year increase in Operational EBITA to
$239 million and the 80 basis points rise in Operational
EBITA margin to 14.0%.
●
Improved project execution and the impact from higher
volumes in the product business both contributed to the
higher earnings, with some additional support stemming
from price increases.
●
All divisions performed at a double-digit margin level, with
the year-on-year profitability improvement led by the
Measurement & Analytics business.
CHANGE
CHANGE
($ millions, unless otherwise indicated)
Q4 2023
Q4 2022
US$
Comparable
FY 2023
FY 2022
US$
Comparable
Orders
1,870
1,746
7%
5%
7,535
6,825
10%
24%
Order backlog
7,519
6,229
21%
19%
7,519
6,229
21%
19%
Revenues
1,727
1,551
11%
10%
6,270
6,044
4%
16%
Operational EBITA
239
203
18%
909
848
7%
as % of operational revenues
14.0%
13.2%
+0.8 pts
14.5%
14.0%
+0.5 pts
Cash flow from operating activities
444
205
117%
1,002
675
48%
No. of employees (FTE equiv.)
21,100
20,100
5%
Growth
Q4
Q4
Change year-on-year
Orders
Revenues
Comparable
5%
10%
FX
2%
1%
Portfolio changes
0%
0%
Total
7%
11%
—
Process Automation
ABB INTERIM REPORT
I
Q4 2023
Orders and revenues
Markets are still adjusting to shorter delivery lead times,
putting pressure on order intake which amounted to $550
million, representing a sharp drop of 31% (comparable 33%)
year-on-year. Although the challenging market situation is
expected to persist near-term, the fourth quarter of 2023 is
anticipated to have been the trough quarter for absolute order
intake.
●
Machine Automation
successfully reducing lead times in deliveries after
customers pre-ordering during the period of supply chain
constraints in 2022. The long-term strength of the Machine
Automation market is intact, however, the order
normalization is expected to persist through the next couple
of quarters.
●
Robotics
on-year, with the most significant drop in 3C electronics.
The softening in the automotive segment was mostly due to
timing impacts for some larger orders. Inventory
adjustments among channel partners were noted in China,
and are expected to level off towards the end of the first
quarter.
●
From a geographical perspective, orders in the Americas
declined by 19% (21% comparable). The decline in
Europe was 34% (comparable 38%). In Asia, Middle East
and Africa orders declined by 33% (comparable 31%),
hampered by China being down by 36% (comparable
34%).
●
Revenues were down by 4% (comparable 7%) and amounted
to $852 million as the positive price development was more
than offset by lower volumes in the Robotics division where the
order backlog has normalized and weak short-cycle demand
weighed on customer deliveries. Machine Automation improved
revenues on execution of the large order backlog.
Profit
Operational EBITA of $118 million softened by 6% year -on-year
on the back of lower revenues. However, the Operational EBITA
margin remained largely stable at 13.8%, down only 20 basis
points from last year.
●
Price impact and the positive mix from higher share of
revenues from Machine Automation were key positive
contributors to earnings, however slightly more than offset by
the impact from underabsorption in production due to low
Robotics volumes and increased cost for labor.
CHANGE
CHANGE
($ millions, unless otherwise indicated)
Q4 2023
Q4 2022
US$
Comparable
FY 2023
FY 2022
US$
Comparable
Orders
550
798
-31%
-33%
3,066
4,116
-26%
-25%
Order backlog
2,141
2,679
-20%
-20%
2,141
2,679
-20%
-20%
Revenues
852
891
-4%
-7%
3,640
3,181
14%
14%
Operational EBITA
118
125
-6%
536
340
58%
as % of operational revenues
13.8%
14.0%
-0.2 pts
14.7%
10.7%
+4 pts
Cash flow from operating activities
170
105
62%
436
214
104%
No. of employees (FTE equiv.)
11,300
10,700
5%
Growth
Q4
Q4
Change year-on-year
Orders
Revenues
Comparable
-33%
-7%
FX
2%
3%
Portfolio changes
0%
0%
Total
-31%
-4%
—
Robotics & Discrete Automation
ABB INTERIM REPORT
I
Q4 2023
10
Events from the Quarter
●
Despite ABB’s concerted efforts, there was one fatal
incident in the quarter involving one contractor, working
on a project in Algeria. A root cause investigation and
remediation plan are underway. The thoughts of the
senior management and everyone at ABB go out to the
family of the deceased. The health and safety of ABB
employees are alwa ys of highest priority and the foremost
standard by which performance is measured. ABB is
working to ensure that such an incident never happens
again.
●
The 2023 ABB Accelerating Circularity Challenge led by
Motion and Electrification set out to find innovative
customer solutions that design out waste and pollution
and keep products and materials in use for as long as
possible. More than 100 startups from around the world
participated, the three winners received $30,000 each to
develop their concepts in collaboration with ABB. The
winners included Molg from the United Sates who
developed a take-back care of a Variable Speed Drive.
Minespider from Switzerland won for their design of a
reliable circularity certificate management tool. Lastly,
Excess Materials Exchange from the Netherlands won for
their digital platform designed to generate value from
Power Distribution End-of-Life.
●
ABB’s Motion business area successfully launched a new
Energy Appraisal tool that is able to assess complex
motor-driven systems to determine optimum energy
efficiency set ups for its customers. Using the tool ABB
identified an average energy-saving potential of 31
percent per motor across 2,000 motors assessed. These
findings provide compelling evidence for both the financial
and environmental benefits of using ABB's leading
technology.
●
H2 Energy Esbjerg ApS contracted ABB’s Process
Automation business area to provide basic electrical
engineering for the power distribution from grid point of
connection to electrolyzers, and for other process
equipment at its 1 GW hydrogen production facility in
Esbjerg and hydrogen distribution hub in Fredericia,
Denmark. The plant is expected to be among the largest
hydrogen developments in Europe.
●
In the quarter ABB’s D&I activities focused on the Abilities
dimension with global events addressing mental health
awareness topics such as grief/loss, dyslexia and digital
accessibility. In addition, Abilities training sessions were
made available firmwide. During the European Disability
Week in November, ABB participated in a hackathon in
association with Avec Nos Proches (Caregiving) and in
December Karin Lepasoon, Chief Communications and
Sustainability Officer , was named Executive Committee
Sponsor for Abilities .
Q4 outcome
●
40% reduction year-on-year of CO
₂
e emissions in own
operations due to a shift to green electricity and an
increase in energy efficiency in our operations.
●
10% decrease year-on-year in LTIFR continuing its
downward trend
●
3%-points increase year-on-year in share of women in
senior management, demonstrating strong progress
towards our target.
—
Sustainability
Q4 2023
Q4 2022
CHANGE
12M ROLLING
CO
₂
e own operations emissions,
Ktons scope 1 and 2
1
27
44
-40%
160
Lost Time Injury Frequency Rate (LTIFR),
frequency / 200,000 working hours
2
0.09
0.10
-10%
0.13
Share of females in senior management
positions, %
21.0
17.8
+3.2 pts
20.2
1
CO
₂
₆
2
Current quarter Includes all incidents reported until January 10, 2024
ABB INTERIM REPORT
I
Q4 2023
11
During Q4 2023
●
On November 30, ABB hosted its Capital Markets Day.
At the event, ABB provided an update on its successful
transformation, continuous improvements and how the
company will benefit from key secular trends across its
business areas. Both financial and sustainability targets
were updated to include:
o
Comparable revenue growth of 5%-7% through the
economic cycle
o
Operational EBITA margin in the range of 16%-19%
o
EPS growth of at least high single-digit through the
economic cycle
o
Return on Capital Employed of >18%
o
Net-zero targets for scopes 1, 2 and 3 for 2030 and
2050
o
Support our customers to avoid 600Mt avoided CO2e
emissions by 2030. Aligned with WBCSD 2023
guidance.
●
On October 30, ABB announced that Mathias Gaertner
has been appointed General Counsel and Company
Secretary and a Member of the Executive Committee. He
will join ABB in 2024. He will succeed Andrea Antonelli,
who has, as previously announced, left the company to
pursue other opportunities.
After Q4 2023
●
On January 31, ABB announced that the Board of
Directors will propose Johan Forssell and Mats
Rahmström as new members for election at the
company’s Annual General Meeting (AGM) on March 21,
2024. They will replace Jacob Wallenberg and Gunnar
Brock who have decided not to stand for re-election. ABB
will publish its invitation to the 2024 AGM on February 23,
2024.
In 2023 the overall demand for ABB’s offering remained
robust, with most customer segments improving or remaining
stable. Weakness in the short-cycle businesses related
primarily to residential construction and discrete automation
was however more than offset by strong momentum in the
project- and systems-related businesses . Orders remained
stable or increased in three out of four business areas, with a
decline noted only in Robotics & Discrete Automation. Orders
amounted to $33, 818 million and were down 1% versus the
prior year (up 3 % comparable).
Revenues were supported by execution of the large order
backlog as supply chains normalized early in the year and
amounted to $32,235 million, up by 9% (14% comparable),
overall implying a book -to-bill of 1.05.
Income from operations amounted to $4,871 million, up from
$3,337 million year-on-year. This increase can be attributed
mostly to an improved operational performance. In addition,
the prior year was hampered by charges of approximately
$195 million due to the exit of the legacy full-train retrofit
business as well as a provision of $325 million related to the
legacy Kusile project in South Africa awarded in 2015.
Operational EBITA increased by 20% year-on-year to
$5,427 million, up from $4,510 million in last year’s period
and the Operational EBITA margin improved by 160 basis
points to 16.9%. The increase was driven by higher margins
across all business areas. Main drivers of the margin
expansion were operating leverage on higher volumes as
well as the impacts from implemented price increases,
which more than offset inflation in labor and input cost.
Corporate and Other Operational EBITA amounted to -$430
million. This includes a loss of $167 million that can be
attributed to the E-mobility business, which was negatively
affected by the ongoing reorganization to ensure a more
focused portfolio, and some inventory-related provisions.
Net finance expenses increased by $52 million to
$110 million, primarily driven by higher interest rates on
higher debt levels compared to the prior year. The non-
operational pension credits decreased by $98 million to
$17 million in comparison to last year’s period, reflecting the
impact of higher interest rates. Income tax expense was
$930 million reflecting a tax rate of 19.5%. This includes a
net benefit realized on a favorable resolution of a prior year
tax matter relating to the Power Grids business.
Net income attributable to ABB was $3,745 million, up from
$2,475 million year-on-year. Basic earnings per share was
$2.02, representing an increase of 55% compared with the
prior year.
Significant events
Full year 2023
ABB INTERIM REPORT
I
Q4 2023
12
ABB Group
Q1 2022
Q2 2022
Q3 2022
Q4 2022
FY 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
FY 2023
EBITDA, $ in million
1,067
794
906
1,384
4,151
1,389
1,494
1,453
1,315
5,651
Return on Capital Employed, %
n.a.
n.a.
n.a.
n.a.
16.50
n.a.
n.a.
n.a.
n.a.
21.10
Net debt/Equity
0.20
0.34
0.34
0.21
0.21
0.30
0.31
0.21
0.14
0.14
Net debt/ EBITDA 12M rolling
0.4
0.7
0.7
0.7
0.7
0.9
0.8
0.5
0.4
0.4
Net working capital, % of 12M rolling
revenues
12.1%
12.8%
11.7%
11.1%
11.1%
13.9%
14.7%
12.8%
10.2%
10.2%
Earnings per share, basic, $
0.31
0.20
0.19
0.61
1.30
0.56
0.49
0.48
0.50
2.02
Earnings per share, diluted, $
0.31
0.20
0.19
0.60
1.30
0.55
0.48
0.47
0.50
2.01
Dividend per share, CHF
n.a.
n.a.
n.a.
n.a.
0.84
n.a.
n.a.
n.a.
n.a.
*
Share price at the end of period, CHF
1
29.12
24.57
24.90
28.06
28.06
31.37
35.18
32.80
37.30
37.30
Share price at the end of period, $
1
30.76
25.43
24.41
30.46
30.46
34.30
39.32
35.86
44.32
44.32
Number of employees (FTE equivalents)
104,720
106,380
106,830
105,130
105,130
106,170
108,320
107,430
107,870
107,870
No. of shares outstanding at end of period
(in millions)
1,929
1,892
1,875
1,865
1,865
1,862
1,860
1,849
1,842
1,842
1
Data prior to October 3, 2022, has been adjusted for the Accelleron spin-off (Source: FactSet).
*
Dividend proposal subject to shareholder approval at the 2024 AGM
Additional figures
Note: comparable growth calculation includes acquisitions and divestments with revenues of greater than $50 million.
1
Represents the estimated revenues for the last fiscal year prior to the announcement of the respective acquisition/divestment unless otherwise stated.
Additional 2024 guidance
($ in millions, unless otherwise stated)
FY 2024
Net finance expenses
~(120)
Effective tax rate
~25%
Capital Expenditures
~(900)
($ in millions, unless otherwise stated)
FY 2024
1
Q1 2024
Corporate and Other Operational EBITA
2
~(300)
~(75)
Non-operating items
Acquisition-related amortization
~(210)
~(55)
Restructuring and related
3
~(200)
~(50)
ABB Way transformation
~(180)
~(55)
Divestments
Company/unit
Closing date
Revenues, $ million
1
No. of employees
2023
Electrification
Power Conversion division
3-Jul
~440
1,500
Electrification
Industrial Plugs & Sockets business
3-Jul
~12
2
Process Automation
UK technical engineering consultancy
business
1-May
~20
160
Acquisitions
Company/unit
Closing date
Revenues, $ million
1
No. of employees
2023
Robotics & Discrete Automation
Sevensense
21-Dec
<5
35
E-mobility
Imagen Energy Inc
13-Nov
<5
4
Motion
Spring Point Solutions Llc
1-Nov
<5
13
E-mobility
Vourity AB
25-Oct
<5
9
Electrification
Eve Systems
1-Jun
~20
50
Motion
Siemens low voltage NEMA Motors
2-May
~60
600
1
Excludes one project estimated to a total of ~$100 million, that is ongoing in the non-core business. Exact exit timing is difficult to assess due to legal proceedings etc.
2
Excludes Operational EBITA from E-mobility business.
3
Includes restructuring and restructuring-related as well as separation and integration costs.
4
Excludes the impact of acquisitions or divestments or any significant non-operational items.
Acquisitions and divestments, last twelve months
ABB INTERIM REPORT
I
Q4 2023
13
For additional information please contact:
Media Relations
Phone: +41 43 317 71 11
Email: [email protected]
Investor Relations
Phone: +41 43 317 71 11
Email: [email protected]
ABB Ltd
Affolternstrasse 44
8050 Zurich
Switzerland
Financial calendar
2024
March 21
Annual General Meeting, Zurich
April 18
Q1 2024 results
July 18 Q2 2024 results
October 17 Q3 2024 results
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 “CEO summary,” “Outlook,” and
“Sustainability”. 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.
These expectations, estimates and projections are generally
identifiable by statements containing words such as
“anticipates,” “expects,” “estimates,” “plans,” “targets ,”
“guidance,” “likely” 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.
Some 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.
The Q4 2023 results press release and presentation slides
are available on the ABB News Center at
www.abb.com/news and on the Investor Relations
homepage at www.abb.com/investorrelations.
A conference call and webcast for analysts and investors is
scheduled to begin at 10:00 a.m. CET.
To pre-register for the conference call or to join the
webcast, please refer to the ABB website:
www.abb.com/investorrelations.
The recorded session will be available after the event on
ABB’s website.
Important notice about forward-looking information
Q4 results presentation on February 1, 2024
ABB
company’s solutions connect engineering know -how and software to optimize how things are manufactured, moved, powered and
operated. Building on over 140 years of excellence, ABB’s more than 105,000 employees are committed to driving innovations that
accelerate industrial transformation.
1 Q4 2023 FINANCIAL INFORMATION
February 1, 2024
Q4 2023
Financial information
2 Q4 2023 FINANCIAL INFORMATION
—
Financial Information
Contents
03
─ 07 Key Figures
08 ─
33 Consolidated Financial Information (unaudited)
34 ─
47 Supplemental Reconciliations and Definitions
3 Q4 2023 FINANCIAL INFORMATION
—
Key Figures
CHANGE
($ in millions, unless otherwise indicated)
Q4 2023
Q4 2022
US$
Comparable
(1)
Orders
7,649
7,620
0%
0%
Order backlog (end December)
21,567
19,867
9%
9%
Revenues
8,245
7,824
5%
6%
Gross Profit
2,848
2,658
7%
as % of revenues
34.5%
34.0%
+0.5 pts
Income from operations
1,116
1,185
-6%
Operational EBITA
(1)
1,333
1,146
16%
13%
(2)
as % of operational revenues
(1)
16.3%
14.8%
+1.5 pts
Income from continuing operations, net of tax
946
1,168
-19%
Net income attributable to ABB
921
1,132
-19%
Basic earnings per share ($)
0.50
0.61
-18%
(3)
Cash flow from operating activities
(4)
1,897
687
176%
Cash flow from operating activities in continuing operations
1,897
720
163%
CHANGE
($ in millions, unless otherwise indicated)
FY 2023
FY 2022
US$
Comparable
(1)
Orders
33,818
33,988
-1%
3%
Revenues
32,235
29,446
9%
14%
Gross Profit
11,214
9,710
15%
as % of revenues
34.8%
33.0%
+1.8 pts
Income from operations
4,871
3,337
46%
Operational EBITA
(1)
5,427
4,510
20%
20%
(2)
as % of operational revenues
(1)
16.9%
15.3%
+1.6 pts
Income from continuing operations, net of tax
3,848
2,637
46%
Net income attributable to ABB
3,745
2,475
51%
Basic earnings per share ($)
2.02
1.30
55%
(3)
Cash flow from operating activities
(4)
4,290
1,287
233%
Cash flow from operating activities in continuing operations
4,301
1,334
222%
(1) For a reconciliation of non-GAAP measures see “
” on page 34.
(2) Constant currency (not adjusted for portfolio changes).
(3) EPS growth rates are computed using unrounded amounts.
(4) Cash flow from operating activities includes both continuing and discontinued operations.
4 Q4 2023 FINANCIAL INFORMATION
CHANGE
($ in millions, unless otherwise indicated)
Q4 2023
Q4 2022
US$
Local
Comparable
Orders
ABB Group
7,649
7,620
0%
-1%
0%
Electrification
3,395
3,385
0%
-1%
2%
Motion
1,937
1,649
17%
15%
13%
Process Automation
1,870
1,746
7%
5%
5%
Robotics & Discrete Automation
550
798
-31%
-33%
-33%
Corporate and Other
125
257
Intersegment eliminations
(228)
(215)
Order backlog (end December)
ABB Group
21,567
19,867
9%
7%
9%
Electrification
6,808
6,404
6%
6%
14%
Motion
5,343
4,726
13%
9%
8%
Process Automation
7,519
6,229
21%
19%
19%
Robotics & Discrete Automation
2,141
2,679
-20%
-20%
-20%
Corporate and Other
(incl. intersegment eliminations)
(244)
(171)
Revenues
ABB Group
8,245
7,824
5%
4%
6%
Electrification
3,698
3,498
6%
5%
8%
Motion
1,946
1,845
5%
4%
2%
Process Automation
1,727
1,551
11%
10%
10%
Robotics & Discrete Automation
852
891
-4%
-7%
-7%
Corporate and Other
229
258
Intersegment eliminations
(207)
(219)
Income from operations
ABB Group
1,116
1,185
Electrification
670
569
Motion
292
316
Process Automation
259
183
Robotics & Discrete Automation
99
101
Corporate and Other
(incl. intersegment eliminations)
(204)
16
Income from operations %
ABB Group
13.5%
15.1%
Electrification
18.1%
16.3%
Motion
15.0%
17.1%
Process Automation
15.0%
11.8%
Robotics & Discrete Automation
11.6%
11.3%
Operational EBITA
ABB Group
1,333
1,146
16%
13%
Electrification
725
575
26%
24%
Motion
318
318
0%
-1%
Process Automation
239
203
18%
19%
Robotics & Discrete Automation
118
125
-6%
-6%
Corporate and Other
(1)
(incl. intersegment eliminations)
(67)
(75)
Operational EBITA %
ABB Group
16.3%
14.8%
Electrification
19.7%
16.6%
Motion
16.6%
17.4%
Process Automation
14.0%
13.2%
Robotics & Discrete Automation
13.8%
14.0%
Cash flow from operating activities
ABB Group
1,897
687
Electrification
1,068
857
Motion
597
346
Process Automation
444
205
Robotics & Discrete Automation
170
105
Corporate and Other
(incl. intersegment eliminations)
(382)
(793)
Discontinued operations
–
(33)
(1)
Corporate and Other at Q4 2023 and Q4 2022 includes losses of $33 million and $3 million, respectively, relating to E-mobility.
5 Q4 2023 FINANCIAL INFORMATION
CHANGE
($ in millions, unless otherwise indicated)
FY 2023
FY 2022
US$
Local
Comparable
Orders
ABB Group
33,818
33,988
-1%
1%
3%
Electrification
15,189
15,182
0%
1%
3%
Motion
8,222
7,896
4%
5%
4%
Process Automation
7,535
6,825
10%
12%
24%
Robotics & Discrete Automation
3,066
4,116
-26%
-25%
-25%
Corporate and Other
720
787
Intersegment eliminations
(914)
(818)
Order backlog (end December)
ABB Group
21,567
19,867
9%
7%
9%
Electrification
6,808
6,404
6%
6%
14%
Motion
5,343
4,726
13%
9%
8%
Process Automation
7,519
6,229
21%
19%
19%
Robotics & Discrete Automation
2,141
2,679
-20%
-20%
-20%
Corporate and Other
(incl. intersegment eliminations)
(244)
(171)
Revenues
ABB Group
32,235
29,446
9%
11%
14%
Electrification
14,584
13,619
7%
8%
10%
Motion
7,814
6,745
16%
17%
15%
Process Automation
6,270
6,044
4%
5%
16%
Robotics & Discrete Automation
3,640
3,181
14%
14%
14%
Corporate and Other
769
653
Intersegment eliminations
(842)
(796)
Income from operations
ABB Group
4,871
3,337
Electrification
2,800
2,140
Motion
1,390
1,092
Process Automation
947
663
Robotics & Discrete Automation
446
247
Corporate and Other
(incl. intersegment eliminations)
(712)
(805)
Income from operations %
ABB Group
15.1%
11.3%
Electrification
19.2%
15.7%
Motion
17.8%
16.2%
Process Automation
15.1%
11.0%
Robotics & Discrete Automation
12.3%
7.8%
Operational EBITA
ABB Group
5,427
4,510
20%
20%
Electrification
2,937
2,343
25%
27%
Motion
1,475
1,163
27%
27%
Process Automation
909
848
7%
10%
Robotics & Discrete Automation
536
340
58%
58%
Corporate and Other
(1)
(incl. intersegment eliminations)
(430)
(184)
Operational EBITA %
ABB Group
16.9%
15.3%
Electrification
20.1%
17.2%
Motion
18.9%
17.3%
Process Automation
14.5%
14.0%
Robotics & Discrete Automation
14.7%
10.7%
Cash flow from operating activities
ABB Group
4,290
1,287
Electrification
3,211
2,115
Motion
1,532
853
Process Automation
1,002
675
Robotics & Discrete Automation
436
214
Corporate and Other
(incl. intersegment eliminations)
(1,880)
(2,523)
Discontinued operations
(11)
(47)
(1)
Corporate and Other at FY 2023 and FY 2022 includes losses of $167 million and $15 million, respectively, relating to E-mobility.
6 Q4 2023 FINANCIAL INFORMATION
Operational EBITA
Process
Robotics & Discrete
ABB
Electrification
Motion
Automation
Automation
($ in millions, unless otherwise indicated)
Q4 23
Q4 22
Q4 23
Q4 22
Q4 23
Q4 22
Q4 23
Q4 22
Q4 23
Q4 22
Revenues
8,245
7,824
3,698
3,498
1,946
1,845
1,727
1,551
852
891
Foreign exchange/commodity timing
differences in total revenues
(66)
(62)
(15)
(31)
(35)
(22)
(21)
(12)
2
1
Operational revenues
8,179
7,762
3,683
3,467
1,911
1,823
1,706
1,539
854
892
Income from operations
1,116
1,185
670
569
292
316
259
183
99
101
Acquisition-related amortization
56
55
22
24
9
8
1
1
20
19
Restructuring, related and
implementation costs
(1)
127
47
50
10
41
5
(4)
23
6
2
Changes in obligations related to
divested businesses
2
(71)
–
1
–
–
–
–
–
–
Gains and losses from sale of businesses
(4)
3
(4)
–
–
3
–
–
–
–
Acquisition- and divestment-related
expenses and integration costs
19
24
7
5
2
3
(4)
12
7
2
Certain other non-operational items
76
(28)
5
11
2
–
–
–
(14)
(8)
Foreign exchange/commodity timing
differences in income from operations
(59)
(69)
(25)
(45)
(28)
(17)
(13)
(16)
–
9
Operational EBITA
1,333
1,146
725
575
318
318
239
203
118
125
Operational EBITA margin (%)
16.3%
14.8%
19.7%
16.6%
16.6%
17.4%
14.0%
13.2%
13.8%
14.0%
Process
Robotics & Discrete
ABB
Electrification
Motion
Automation
Automation
($ in millions, unless otherwise indicated)
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
Revenues
32,235
29,446
14,584
13,619
7,814
6,745
6,270
6,044
3,640
3,181
Foreign exchange/commodity timing
differences in total revenues
(41)
28
(3)
(20)
(23)
(14)
(18)
33
4
6
Operational revenues
32,194
29,474
14,581
13,599
7,791
6,731
6,252
6,077
3,644
3,187
Income from operations
4,871
3,337
2,800
2,140
1,390
1,092
947
663
446
247
Acquisition-related amortization
220
229
88
104
35
31
5
4
79
78
Restructuring, related and
implementation costs
(1)
219
347
76
28
46
16
3
29
6
11
Changes in obligations related to
divested businesses
(3)
(88)
1
1
–
–
–
–
–
–
Gains and losses from sale of businesses
(101)
7
(75)
(1)
–
8
(26)
–
–
–
Acquisition- and divestment-related
expenses and integration costs
74
195
30
36
17
15
(7)
134
14
6
Certain other non-operational items
165
452
16
41
6
–
–
–
(10)
(8)
Foreign exchange/commodity timing
differences in income from operations
(18)
31
1
(6)
(19)
1
(13)
18
1
6
Operational EBITA
5,427
4,510
2,937
2,343
1,475
1,163
909
848
536
340
Operational EBITA margin (%)
16.9%
15.3%
20.1%
17.2%
18.9%
17.3%
14.5%
14.0%
14.7%
10.7%
(1) Includes impairment of certain assets.
7 Q4 2023 FINANCIAL INFORMATION
Depreciation and Amortization
Process
Robotics & Discrete
ABB
Electrification
Motion
Automation
Automation
($ in millions)
Q4 23
Q4 22
Q4 23
Q4 22
Q4 23
Q4 22
Q4 23
Q4 22
Q4 23
Q4 22
Depreciation
133
130
66
62
28
27
12
13
14
16
Amortization
66
69
28
31
10
10
2
3
20
19
including total acquisition-related amortization of:
56
55
22
24
9
8
1
1
20
19
Process
Robotics & Discrete
ABB
Electrification
Motion
Automation
Automation
($ in millions)
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
FY 23
FY 22
Depreciation
517
531
256
253
108
105
47
64
57
62
Amortization
263
283
109
129
41
36
9
11
81
79
including total acquisition-related amortization of:
220
229
88
104
35
31
5
4
79
78
Orders received and revenues by region
($ in millions, unless otherwise indicated)
Orders received
CHANGE
Revenues
CHANGE
Com-
Com-
Q4 23
Q4 22
US$
Local
parable
Q4 23
Q4 22
US$
Local
parable
Europe
2,554
2,604
-2%
-7%
-5%
2,951
2,765
7%
2%
4%
The Americas
2,985
2,898
3%
2%
3%
2,847
2,555
11%
10%
14%
of which United States
2,277
2,167
5%
4%
6%
2,105
1,898
11%
11%
15%
Asia, Middle East and Africa
2,110
2,118
0%
1%
2%
2,447
2,504
-2%
0%
0%
of which China
895
976
-8%
-7%
-7%
1,064
1,133
-6%
-6%
-5%
ABB Group
7,649
7,620
0%
-1%
0%
8,245
7,824
5%
4%
6%
($ in millions, unless otherwise indicated)
Orders received
CHANGE
Revenues
CHANGE
Com-
Com-
FY 23
FY 22
US$
Local
parable
FY 23
FY 22
US$
Local
parable
Europe
11,458
11,778
-3%
-4%
-1%
11,568
10,285
12%
11%
14%
The Americas
12,437
11,825
5%
5%
7%
11,090
9,573
16%
15%
18%
of which United States
9,204
8,920
3%
3%
5%
8,248
7,023
17%
17%
21%
Asia, Middle East and Africa
9,923
10,385
-4%
1%
4%
9,577
9,588
0%
5%
8%
of which China
4,488
5,087
-12%
-7%
-5%
4,468
4,696
-5%
-1%
1%
ABB Group
33,818
33,988
-1%
1%
3%
32,235
29,446
9%
11%
14%
8 Q4 2023 FINANCIAL INFORMATION
—
Consolidated Financial Information
ABB Ltd Consolidated Income Statements (unaudited)
Year ended
Three months ended
($ in millions, except per share data in $)
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Sales of products
27,010
24,471
6,800
6,525
Sales of services and other
5,225
4,975
1,445
1,299
Total revenues
32,235
29,446
8,245
7,824
Cost of sales of products
(17,938)
(16,804)
(4,545)
(4,365)
Cost of services and other
(3,083)
(2,932)
(852)
(801)
Total cost of sales
(21,021)
(19,736)
(5,397)
(5,166)
Gross profit
11,214
9,710
2,848
2,658
Selling, general and administrative expenses
(5,543)
(5,132)
(1,485)
(1,299)
Non-order related research and development expenses
(1,317)
(1,166)
(366)
(322)
Other income (expense), net
517
(75)
119
148
Income from operations
4,871
3,337
1,116
1,185
Interest and dividend income
165
72
50
22
Interest and other finance expense
(275)
(130)
(78)
(23)
Non-operational pension (cost) credit
17
115
(6)
13
Income from continuing operations before taxes
4,778
3,394
1,082
1,197
Income tax expense
(930)
(757)
(136)
(29)
Income from continuing operations, net of tax
3,848
2,637
946
1,168
Loss from discontinued operations, net of tax
(24)
(43)
(8)
(7)
Net income
3,824
2,594
938
1,161
Net income attributable to noncontrolling
interests and redeemable noncontrolling interests
(79)
(119)
(17)
(29)
Net income attributable to ABB
3,745
2,475
921
1,132
Amounts attributable to ABB shareholders:
Income from continuing operations, net of tax
3,769
2,517
929
1,138
Loss from discontinued operations, net of tax
(24)
(42)
(8)
(6)
Net income
3,745
2,475
921
1,132
Basic earnings per share attributable to ABB shareholders:
Income from continuing operations, net of tax
2.03
1.33
0.50
0.61
Loss from discontinued operations, net of tax
(0.01)
(0.02)
0.00
0.00
Net income
2.02
1.30
0.50
0.61
Diluted earnings per share attributable to ABB shareholders:
Income from continuing operations, net of tax
2.02
1.32
0.50
0.60
Loss from discontinued operations, net of tax
(0.01)
(0.02)
0.00
0.00
Net income
2.01
1.30
0.50
0.60
Weighted-average number of shares outstanding (in millions) used to compute:
Basic earnings per share attributable to ABB shareholders
1,855
1,899
1,845
1,870
Diluted earnings per share attributable to ABB shareholders
1,867
1,910
1,856
1,881
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
9 Q4 2023 FINANCIAL INFORMATION
—
ABB Ltd Condensed Consolidated Statements of Comprehensive
Income (unaudited)
Year ended
Three months ended
($ in millions)
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Total comprehensive income, net of tax
3,315
2,189
586
1,414
Total comprehensive income attributable to noncontrolling interests and
redeemable noncontrolling interests, net of tax
(84)
(87)
(30)
(29)
Total comprehensive income attributable to ABB shareholders, net of tax
3,231
2,102
556
1,385
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
10 Q4 2023 FINANCIAL INFORMATION
—
ABB Ltd Consolidated Balance Sheets (unaudited)
($ in millions)
Dec. 31, 2023
Dec. 31, 2022
Cash and equivalents
3,891
4,156
Restricted cash
18
18
Marketable securities and short-term investments
1,928
725
Receivables, net
7,446
6,858
Contract assets
1,090
954
Inventories, net
6,149
6,028
Prepaid expenses
235
230
Other current assets
520
601
Total current assets
21,277
19,570
Property, plant and equipment, net
4,142
3,911
Operating lease right-of-use assets
893
841
Investments in equity-accounted companies
187
130
Prepaid pension and other employee benefits
780
916
Intangible assets, net
1,223
1,406
Goodwill
10,561
10,511
Deferred taxes
1,381
1,396
Other non-current assets
496
467
Total assets
40,940
39,148
Accounts payable, trade
4,847
4,904
Contract liabilities
2,844
2,216
Short-term debt and current maturities of long-term debt
2,607
2,535
Current operating leases
249
220
Provisions for warranties
1,210
1,028
Other provisions
1,201
1,171
Other current liabilities
5,046
4,455
Total current liabilities
18,004
16,529
Long-term debt
5,221
5,143
Non-current operating leases
666
651
Pension and other employee benefits
686
719
Deferred taxes
669
729
Other non-current liabilities
1,548
2,105
Total liabilities
26,794
25,876
Commitments and contingencies
Redeemable noncontrolling interest
89
85
Stockholders’ equity:
Common stock, CHF 0.12 par value
(1,882 million and 1,965 million shares issued at December 31, 2023 and 2022, respectively)
163
171
Additional paid-in capital
7
141
Retained earnings
19,724
20,082
Accumulated other comprehensive loss
(5,070)
(4,556)
Treasury stock, at cost
(40 million and 100 million shares at December 31, 2023 and 2022, respectively)
(1,414)
(3,061)
Total ABB stockholders’ equity
13,410
12,777
Noncontrolling interests
647
410
Total stockholders’ equity
14,057
13,187
Total liabilities and stockholders’ equity
40,940
39,148
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
11 Q4 2023 FINANCIAL INFORMATION
—
ABB Ltd Consolidated Statements of Cash Flows (unaudited)
Year ended
Three months ended
($ in millions)
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Operating activities:
Net income
3,824
2,594
938
1,161
Loss from discontinued operations, net of tax
24
43
8
7
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization
780
814
199
199
Changes in fair values of investments
(29)
(33)
(1)
6
Pension and other employee benefits
(48)
(125)
19
(18)
Deferred taxes
(25)
(344)
17
(161)
Loss from equity-accounted companies
16
102
5
2
Net gain from derivatives and foreign exchange
(55)
(23)
(11)
(67)
Net gain from sale of property, plant and equipment
(116)
(84)
(77)
(20)
Net loss (gain) from sale of businesses
(101)
7
(4)
3
Other
158
66
43
5
Changes in operating assets and liabilities:
Trade receivables, net
(661)
(831)
158
(174)
Contract assets and liabilities
412
416
169
63
Inventories, net
(3)
(1,599)
435
68
Accounts payable, trade
(106)
395
(69)
5
Accrued liabilities
254
136
114
84
Provisions, net
211
(70)
105
(382)
Income taxes payable and receivable
(190)
(94)
(181)
(113)
Other assets and liabilities, net
(44)
(36)
30
52
Net cash provided by operating activities – continuing operations
4,301
1,334
1,897
720
Net cash provided by (used in) operating activities – discontinued operations
(11)
(47)
–
(33)
Net cash provided by operating activities
4,290
1,287
1,897
687
Investing activities:
Purchases of investments
(1,957)
(321)
(854)
(50)
Purchases of property, plant and equipment and intangible assets
(770)
(762)
(264)
(259)
Acquisition of businesses (net of cash acquired)
and increases in cost- and equity-accounted companies
(225)
(288)
(65)
(62)
Proceeds from sales of investments
610
697
12
43
Proceeds from maturity of investments
149
73
11
73
Proceeds from sales of property, plant and equipment
147
127
80
42
Proceeds from sales of businesses (net of transaction costs
and cash disposed) and cost- and equity-accounted companies
553
1,541
1
1,549
Net cash from settlement of foreign currency derivatives
(109)
(166)
(33)
(12)
Changes in loans receivable, net
3
320
(5)
309
Other investing activities
7
(14)
(2)
(4)
Net cash provided by (used in) investing activities – continuing operations
(1,592)
1,207
(1,119)
1,629
Net cash used in investing activities – discontinued operations
(23)
(226)
(1)
(135)
Net cash provided by (used in) investing activities
(1,615)
981
(1,120)
1,494
Financing activities:
Net changes in debt with original maturities of 90 days or less
(1,365)
1,366
(368)
(109)
Increase in debt
2,586
3,849
2
295
Repayment of debt
(1,567)
(2,703)
(130)
(678)
Delivery of shares
154
394
36
5
Purchase of treasury stock
(1,258)
(3,553)
(349)
(302)
Dividends paid
(1,713)
(1,698)
–
–
Cash associated with the spin-off of the Turbocharging Division
–
(172)
–
(172)
Dividends paid to noncontrolling shareholders
(93)
(99)
(4)
(16)
Proceeds from issuance of subsidiary shares
328
216
–
216
Other financing activities
31
6
27
64
Net cash used in financing activities – continuing operations
(2,897)
(2,394)
(786)
(697)
Net cash provided by financing activities – discontinued operations
–
–
–
–
Net cash used in financing activities
(2,897)
(2,394)
(786)
(697)
Effects of exchange rate changes on cash and equivalents and restricted cash
(43)
(189)
31
2
Net change in cash and equivalents and restricted cash
(265)
(315)
22
1,486
Cash and equivalents and restricted cash, beginning of period
4,174
4,489
3,887
2,688
Cash and equivalents and restricted cash, end of period
3,909
4,174
3,909
4,174
Supplementary disclosure of cash flow information:
Interest paid
250
90
99
43
Income taxes paid
1,147
1,188
282
281
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
12 Q4 2023 FINANCIAL INFORMATION
—
ABB Ltd Consolidated Statements of Changes in Stockholders’ Equity (unaudited)
($ in millions)
Common
stock
Additional
paid-in
capital
Retained
earnings
Accumulated
other
comprehensive
loss
Treasury
stock
Total ABB
stockholders’
equity
Non-
controlling
interests
Total
stockholders’
equity
Balance at January 1, 2022
178
22
22,477
(4,088)
(3,010)
15,579
378
15,957
Net income
(1)
2,475
2,475
124
2,599
Foreign currency translation
adjustments, net of tax of $0
(608)
(608)
(31)
(639)
Effect of change in fair value of
available-for-sale securities,
net of tax of $(5)
(21)
(21)
(21)
Unrecognized income (expense)
related to pensions and other
postretirement plans,
net of tax of $86
256
256
(1)
255
Change in derivative instruments
and hedges, net of tax of $2
–
–
–
Issuance of subsidiary shares
120
120
86
206
Other changes in
noncontrolling interests
10
10
(34)
(24)
Dividends to
noncontrolling shareholders
–
(100)
(100)
Dividends to shareholders
(1,700)
(1,700)
(1,700)
Spin-off of the Turbocharging Division
(177)
(95)
(272)
(12)
(284)
Cancellation of treasury shares
(8)
(4)
(2,864)
2,876
–
–
Share-based payment arrangements
42
42
42
Purchase of treasury stock
(3,502)
(3,502)
(3,502)
Delivery of shares
(51)
(130)
575
394
394
Other
2
2
2
Balance at December 31, 2022
171
141
20,082
(4,556)
(3,061)
12,777
410
13,187
Balance at January 1, 2023
171
141
20,082
(4,556)
(3,061)
12,777
410
13,187
Net income
(1)
3,745
3,745
83
3,828
Foreign currency translation
adjustments, net of tax of $(2)
(286)
(286)
5
(281)
Effect of change in fair value of
available-for-sale securities,
net of tax of $3
11
11
11
Unrecognized income (expense)
related to pensions and other
postretirement plans,
net of tax of $(45)
(237)
(237)
(237)
Change in derivative instruments
and hedges, net of tax of $(1)
(2)
(2)
(2)
Issuance of subsidiary shares
170
170
168
338
Other changes in
noncontrolling interests
(31)
(37)
(68)
67
(1)
Dividends to
noncontrolling shareholders
–
(93)
(93)
Dividends to shareholders
(1,706)
(1,706)
(1,706)
Cancellation of treasury shares
(7)
(201)
(2,359)
2,567
–
–
Share-based payment arrangements
101
101
2
103
Purchase of treasury stock
(1,247)
(1,247)
(1,247)
Delivery of shares
(173)
327
154
154
Other
(2)
(2)
5
3
Balance at December 31, 2023
163
7
19,724
(5,070)
(1,414)
13,410
647
14,057
(1)
Amounts attributable to noncontrolling interests for the year ended December 31, 2023 and 2022, exclude net losses of $4 million and $5 million, respectively, related to redeemable
noncontrolling interests, which are reported in the mezzanine equity section on the Consolidated Balance Sheets. See Note 4 for details.
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
13 Q4 2023 FINANCIAL INFORMATION
—
Notes to the Consolidated Financial Information (unaudited)
─
Note 1
The Company and basis of presentation
ABB Ltd and its subsidiaries (collectively, the Company) together form a technology leader in electrification and automation, enabling a more sustainable and
resource-efficient future. The Company’s solutions connect engineering know-how and software to optimize how things are manufactured, moved, powered, and
operated.
The Company’s Consolidated Financial Information is prepared in accordance with United States of America generally accepted accounting principles (U.S.
GAAP) for interim financial reporting. As such, the Consolidated Financial Information does not include all the information and notes required under U.S. GAAP for
annual consolidated financial statements. Therefore, such financial information should be read in conjunction with the audited consolidated financial statements in
the Company’s Annual Report for the year ended December 31, 2022.
The preparation of financial information in conformity with U.S. GAAP requires management to make assumptions and estimates that directly affect the amounts
reported in the Consolidated Financial Information. These accounting assumptions and estimates include:
●
estimates to determine valuation allowances for deferred tax assets and amounts recorded for unrecognized tax benefits,
●
estimates related to credit losses expected to occur over the remaining life of financial assets such as trade and other receivables, loans and other
instruments,
●
estimates of loss contingencies associated with litigation or threatened litigation and other claims and inquiries, environmental damages, product
warranties, self-insurance reserves, regulatory and other proceedings,
●
assumptions and projections, principally related to future material, labor and project-related overhead costs, used in determining the percentage-of-
completion on projects where revenue is recognized over time, as well as the amount of variable consideration the Company expects to be entitled to,
●
assumptions used in the calculation of pension and postretirement benefits and the fair value of pension plan assets,
●
estimates used to record expected costs for employee severance in connection with restructuring programs,
●
assumptions used in determining inventory obsolescence and net realizable value,
●
growth rates, discount rates and other assumptions used to determine impairment of long-lived assets and in testing goodwill for impairment,
●
estimates and assumptions used in determining the fair values of assets and liabilities assumed in business combinations, and
●
estimates and assumptions used in determining the initial fair value of retained noncontrolling interests and certain obligations in connection with
divestments.
The actual results and outcomes may differ from the Company’s estimates and assumptions.
A portion of the Company’s activities (primarily long-term construction activities) has an operating cycle that exceeds one year. For classification of current assets
and liabilities related to such activities, the Company elected to use the duration of the individual contracts as its operating cycle. Accordingly, there are accounts
receivable, contract assets, inventories and provisions related to these contracts which will not be realized within one year that have been classified as current.
Basis of presentation
In the opinion of management, the unaudited Consolidated Financial Information contains all necessary adjustments to present fairly the financial position, results
of operations and cash flows for the reported periods. Management considers all such adjustments to be of a normal recurring nature. The Consolidated Financial
Information is presented in United States dollars ($) unless otherwise stated. Due to rounding, numbers presented in the Consolidated Financial Information may
not add to the totals provided.
Certain amounts reported in the Consolidated Financial Information for prior periods have been reclassified to conform to the current year’s presentation. These
changes relate primarily to the reorganization of the Company’s operating segments (see Note 17 for details).
14 Q4 2023 FINANCIAL INFORMATION
─
Note 2
Recent accounting pronouncements
Applicable for current periods
Disclosure about supplier finance program obligations
In January 2023, the Company adopted an accounting standard update which requires entities to disclose information related to supplier finance programs. Under
the update, the Company is required to disclose annually (i) the key terms of the program, (ii) the amount of the supplier finance obligations outstanding and where
those obligations are presented in the balance sheet at the reporting date, and (iii) a rollforward of the supplier finance obligation program within the reporting
period. The Company adopted this update retrospectively for all in-scope transactions, with the exception of the rollforward disclosures, which will be adopted
prospectively for annual periods beginning January 1, 2024. Apart from the additional disclosure requirements, this update does not have a significant impact on
the Company’s consolidated financial statements.
The total outstanding supplier finance obligation included in “Accounts payable, trade” in the Consolidated Balance Sheets at December 31, 2023 and
December 31, 2022, amounted to $415 million and $477 million, respectively. The Company’s payment terms related to suppliers’ finance programs are not
impacted by the suppliers’ decisions to sell amounts under the arrangements and are typically consistent with local market practices.
Facilitation of the effects of reference rate reform on financial reporting
In January 2023, the Company adopted an accounting standard update which provides temporary optional expedients and exceptions to the current guidance on
contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered
Rate (LIBOR) and other interbank offered rates to alternative reference rates. The Company is applying this standard update as relevant contract and hedge
accounting relationship modifications are made during the course of the transition period ending December 31, 2024. This update does not have a significant
impact on the Company’s consolidated financial statements.
Applicable for future periods
Improvements to reportable segment disclosures
In November 2023, an accounting standard update was issued which requires the Company to disclose additional reportable segment information primarily
through enhanced disclosures about significant segment expenses and extending certain annual disclosure requirements to quarterly. This update is effective for
the Company for annual periods beginning January 1, 2024, and interim periods beginning January 1, 2025, and is to be applied retrospectively to each prior
reporting period presented. The Company is currently evaluating the impact of adopting this update on its consolidated financial statements.
Improvements to income tax disclosures
In December 2023, an accounting standard update was issued which requires the Company to disclose additional information related to income taxes. Under the
update, the Company is required to annually disclose by jurisdiction (i) additional disaggregated information within the tax rate reconciliation and (ii) income taxes
paid. This update is effective for the Company prospectively, with retrospective adoption permitted, for annual periods beginning January 1, 2025. The Company is
currently evaluating the impact of adopting this update on its consolidated financial statements.
─
Note 3
Discontinued operations
In 2020, the Company completed the divestment of its Power Grids business to Hitachi Ltd (Hitachi). As this divestment represented a strategic shift that would
have a major effect on the Company’s operations and financial results, the results of operations for this business are presented as discontinued operations. Certain
of the business contracts in the Power Grids business continue to be executed by subsidiaries of the Company for the benefit/risk of Hitachi Energy. The remaining
business activities of the Power Grids business being executed by the Company are not significant.
Upon closing of the sale, the Company entered into various transition services agreements (TSAs), some of which continue to have services performed. Pursuant
to these TSAs, the Company and Hitachi Energy provide to each other, on a transitional basis, various services. The services provided by the Company primarily
include finance, information technology, human resources and certain other administrative services. The TSAs were to be performed for up to 3 years with the
possibility to agree on extensions on an exceptional basis for business-critical services which are reasonably necessary to avoid a material adverse impact on the
business. The TSA for information technology services was extended until mid-2025. In the year and three months ended December 31, 2023, the Company has
recognized within its continuing operations, general and administrative expenses incurred to perform the TSAs, offset by $121 million and $20 million in
TSA-related income for such services that is reported in Other income (expense), net. In the year and three months ended December 31, 2022, the Company has
recognized within its continuing operations, general and administrative expenses incurred to perform the TSAs, offset by $162 million and $47 million in
TSA-related income for such services that is reported in Other income (expense), net.
In addition, the Company also has retained obligations (primarily for environmental and taxes) related to other businesses disposed or otherwise exited that
qualified as discontinued operations at the time of their disposal. Changes to these retained obligations are also included in Loss from discontinued operations, net
of tax.
15 Q4 2023 FINANCIAL INFORMATION
─
Note 4
Acquisitions and equity-accounted companies
Acquisition of controlling interests
Acquisitions of controlling interests were as follows:
Year ended December 31,
Three months ended December 31,
($ in millions, except number of acquired businesses)
2023
2022
2023
2022
Purchase price for acquisitions (net of cash acquired)
(1)
175
195
61
46
Aggregate excess of purchase price over
fair value of net assets acquired
(2)
142
229
87
24
Number of acquired businesses
7
5
4
2
(1) Excluding changes in cost- and equity-accounted companies.
(2) Recorded as goodwill.
In the table above, the “Purchase price for acquisitions” and “Aggregate excess of purchase price over fair value of net assets acquired” amounts in the year ended
December 31, 2022, relate primarily to the acquisition of InCharge Energy, Inc. (In-Charge).
Acquisitions of controlling interests have been accounted for under the acquisition method and have been included in the Comp any’s consolidated financial
statements since the date of acquisition.
On January 26, 2022, the Company increased its ownership in In-Charge to a 60 percent controlling interest through a stock purchase agreement. In-Charge is
headquartered in Santa Monica, USA, and is a provider of turn-key commercial electric vehicle charging hardware and software solutions. The resulting cash
outflows for the Company amounted to $134 million (net of cash acquired of $4 million). The acquisition expands the market presence of the E-mobility operating
segment, particularly in the North American market. In connection with the acquisition, the Company’s pre-existing 13.2 percent ownership of In-Charge was
revalued to fair value and a gain of $32 million was recorded in “Other income (expense), net” in the year ended December 31, 2022. The Company entered into
an agreement with the remaining noncontrolling shareholders allowing either party to put or call the remaining 40 percent of the shares until 2027. The amount for
which either party can exercise their option is dependent on a formula based on revenues and thus, the amount is subject to change. As a result of this agreement,
the noncontrolling interest is classified as Redeemable noncontrolling interest (i.e. mezzanine equity) in the Consolidated Balance Sheets and was initially
recognized at fair value.
While the Company uses its best estimates and assumptions as part of the purchase price allocation process to value assets acquired and liabilities assumed at
the acquisition date, the purchase price allocation for acquisitions is preliminary for up to 12 months after the acquisition date and is subject to refinement as more
detailed analyses are completed and additional information about the fair values of the assets and liabilities becomes available.
Business divestments
In the year and three months ended December 31, 2023, the Company received proceeds (net of transaction costs and cash disposed) of $553 million and
$1 million, respectively, relating to divestments of consolidated businesses and recorded gains of $101 million and $4 million, respectively, in “Other income
(expense), net” on the sale of such businesses. These are primarily due the divestment of the Company’s Power Conversion Division to AcBel Polytech Inc., which
prior to its sale was part of the Company’s Electrification operating segment. Certain amounts included in the net gain for the sale of Power Conversion Division
are estimated or otherwise subject to change in value and, as a result, the Company may record additional adjustments to the gain in future periods which are not
expected to have a material impact on the consolidated financial statements.
On September 7, 2022, the shareholders approved the spin-off of the Company’s Turbocharging Division into an independent, publicly traded company, Accelleron
Industries AG (Accelleron), which was completed through the distribution of common stock of Accelleron to the stockholders of ABB on October 3, 2022. As a
result of the spin-off of this Division, the Company distributed net assets of $272 million, net of amounts attributable to noncontrolling interests of $12 million, which
was reflected as a reduction in Retained earnings. In addition, total accumulated comprehensive income of $95 million, including the cumulative translation
adjustment, was reclassified to Retained earnings. Cash and cash equivalents distributed with Accelleron was $172 million. The results of operations of the
Turbocharging Division, are included in the continuing operations of the Process Automation operating segment for all periods presented through to the spin -off
date. In the year ended December 31, 2022, Income continuing operations before taxes, included income of $134 million from this Division. In anticipation of the
spin-off, the Company granted to a subsidiary of Accelleron access to funds in the form of a short-term intercompany loan. At the spin-off date, this loan, having a
principal amount of 300 million Swiss francs ($306 million at the date of spin-off), was due to the Company and subsequently collected in October 2022.
Investments in equity-accounted companies
In connection with the divestment of its Power Grids business to Hitachi in 2020 (see Note 3), the Company initially retained a 19.9 percent interest in the business
until December 2022, when the retained investment was sold to Hitachi. During the Company’s period of ownership of the retained 19.9 percent interest, based on
its continuing involvement with the Power Grids business, including the membership in its governing board of directors, the Company concluded that it had
significant influence over Hitachi Energy. As a result, the investment was accounted for using the equity method through to the date of its sale.
In September 2022, the Company and Hitachi agreed terms to sell the Company’s remaining investment in Hitachi Energy to Hitachi and simultaneously settle
certain outstanding contractual obligations relating to the initial sale of the Power Grids business, including certain indemnification guarantees (see Note 15). The
sale of the remaining investment was completed in December 2022, resulting in cash proceeds of $1,552 million and a gain of $43 million which was recorded in
“Other income (expense), net”.
In the year and three months ended December 31, 2023 and 2022, the Company recorded its share of the earnings of investees accounted for under the equity
method of accounting in Other income (expense), net, as follows:
Year ended December 31,
Three months ended December 31,
($ in millions)
2023
2022
2023
2022
Income (loss) from equity-accounted companies, net of taxes
(16)
(22)
(5)
12
Basis difference amortization (net of deferred income tax benefit)
–
(80)
–
(14)
Loss from equity-accounted companies
(16)
(102)
(5)
(2)
16 Q4 2023 FINANCIAL INFORMATION
─
Note 5
Cash and equivalents, marketable securities and short-term investments
Cash and equivalents, marketable securities and short-term investments consisted of the following:
December 31, 2023
Cash and
Marketable
Gross
Gross
equivalents
securities
unrealized
unrealized
and restricted
and short-term
($ in millions)
Cost basis
gains
losses
Fair value
cash
investments
Changes in fair value
recorded in net income
Cash
1,449
1,449
1,449
Time deposits
2,923
2,923
2,460
463
Equity securities
1,250
32
1,282
1,282
5,622
32
–
5,654
3,909
1,745
Changes in fair value recorded
in other comprehensive income
Debt securities available-for-sale:
U.S. government obligations
189
2
(8)
183
183
189
2
(8)
183
–
183
Total
5,811
34
(8)
5,837
3,909
1,928
Of which:
Restricted cash, current
18
December 31, 2022
Cash and
Marketable
Gross
Gross
equivalents
securities
unrealized
unrealized
and restricted
and short-term
($ in millions)
Cost basis
gains
losses
Fair value
cash
investments
Changes in fair value
recorded in net income
Cash
1,715
1,715
1,715
Time deposits
2,459
2,459
2,459
Equity securities
345
10
355
355
4,519
10
–
4,529
4,174
355
Changes in fair value recorded
in other comprehensive income
Debt securities available-for-sale:
U.S. government obligations
269
1
(15)
255
255
Other government obligations
58
58
58
Corporate
64
(7)
57
57
391
1
(22)
370
–
370
Total
4,910
11
(22)
4,899
4,174
725
Of which:
Restricted cash, current
18
17 Q4 2023 FINANCIAL INFORMATION
─
Note 6
Derivative financial instruments
The Company is exposed to certain currency, commodity and interest rate risks arising from its global operating, financing and investing activities. The Company
uses derivative instruments to reduce and manage the economic impact of these exposures.
Currency risk
Due to the global nature of the Company’s operations, many of its subsidiaries are exposed to currency risk in their operating activities from entering into
transactions in currencies other than their functional currency. To manage such currency risks, the Company’s policies require its subsidiaries to hedge their
foreign currency exposures from binding sales and purchase contracts denominated in foreign currencies. For forecasted foreign currency denominated sales of
standard products and the related foreign currency denominated purchas es, the Company’s policy is to hedge up to a maximum of 100 percent of the forecasted
foreign currency denominated exposures, depending on the length of the forecasted exposures. Forecasted exposures greater than 12 months are not hedged.
Forward foreign exchange contracts are the main instrument used to protect the Company against the volatility of future cash flows (caused by changes in
exchange rates) of contracted and forecasted sales and purchases denominated in foreign currencies. In addition, within its treasury operations, the Company
primarily uses foreign exchange swaps and forward foreign exchange contracts to manage the currency and timing mismatches arising in its liquidity management
activities.
Commodity risk
Various commodity products are used in the Company’s manufacturing activities. Consequently it is exposed to volatility in future cash flows arising from changes
in commodity prices. To manage the price risk of commodities, the Company’s policies require that its subsidiaries hedge the commodity price risk exposures from
binding contracts, as well as at least 50 percent (up to a maximum of 100 percent) of the forecasted commodity exposure over the next 12 months or longer (up to
a maximum of 18 months). Primarily swap contracts are used to manage the associated price risks of commodities.
Interest rate risk
The Company has issued bonds at fixed rates. Interest rate swaps and cross-currency interest rate swaps are used to manage the interest rate and foreign
currency risk associated with certain debt and generally such swaps are designated as fair value hedges. In addition, from time to time, the Company uses
instruments such as interest rate swaps, interest rate futures, bond futures or forward rate agreements to manage interest rate risk arising from the Company’s
balance sheet structure but does not designate such instruments as hedges.
Volume of derivative activity
In general, while the Company’s primary objective in its use of derivatives is to minimize exposures arising from its business, certain derivatives are designated
and qualify for hedge accounting treatment while others either are not designated or do not qualify for hedge accounting.
Foreign exchange and interest rate derivatives
The gross notional amounts of outstanding foreign exchange and interest rate derivatives (whether designated as hedges or not) were as follows:
Type of derivative
Total notional amounts at
($ in millions)
December 31, 2023
December 31, 2022
Foreign exchange contracts
12,335
13,509
Embedded foreign exchange derivatives
1,137
933
Cross-currency interest rate swaps
886
855
Interest rate contracts
1,606
2,830
Derivative commodity contracts
The Company uses derivatives to hedge its direct or indirect exposure to the movement in the prices of commodities which are primarily copper, silver, steel and
aluminum. The following table shows the notional amounts of outstanding derivatives (whether designated as hedges or not), on a net basis, to reflect the
Company’s requirements for these commodities:
Type of derivative
Unit
Total notional amounts at
December 31, 2023
December 31, 2022
Copper swaps
metric tonnes
35,015
29,281
Silver swaps
ounces
2,359,363
2,012,213
Steel swaps
metric tonnes
10,206
–
Aluminum swaps
metric tonnes
5,900
6,825
Cash flow hedges
As noted above, the Company mainly uses forward foreign exchange contracts to manage the foreign exchange risk of its operations and commodity swaps to
manage its commodity risks. The Company applies cash flow hedge accounting in only limited cases. In these cases, the effective portion of the changes in their
fair value is recorded in “Accumulated other comprehensive loss” and subsequently reclassified into earnings in the same line item and in the same period as the
underlying hedged transaction affects earnings. For the year and three months ended December 31, 2023 and 202 2, there were no significant amounts recorded
for cash flow hedge accounting activities.
Fair value hedges
To reduce its interest rate exposure arising primarily from its debt issuance activities, the Company uses interest rate swaps and cross -currency interest rate
swaps. Where such instruments are designated as fair value hedges, the changes in the fair value of these instruments, as well as the changes in the fair value of
the risk component of the underlying debt being hedged, are recorded as offsetting gains and losses in “Interest and other finance expense”.
The effect of derivative instruments, designated and qualifying as fair value hedges, on the Consolidated Income Statements was as follows:
Year ended December 31,
Three months ended December 31,
($ in millions)
2023
2022
2023
2022
Gains (losses) recognized in Interest and other finance expense:
Interest rate contracts
Designated as fair value hedges
44
(91)
14
(8)
Hedged item
(45)
93
(14)
8
Cross-currency interest rate swaps
Designated as fair value hedges
30
(134)
43
(9)
Hedged item
(40)
135
(42)
16
18 Q4 2023 FINANCIAL INFORMATION
Derivatives not designated in hedge relationships
Derivative instruments that are not designated as hedges or do not qualify as either cash flow or fair value hedges are economic hedges used for risk management
purposes. Gains and losses from changes in the fair values of such derivatives are recognized in the same line in the income statement as the economically
hedged transaction.
Furthermore, under certain circumstances, the Company is required to split and account separately for foreign currency derivatives that are embedded within
certain binding sales or purchase contracts denominated in a currency other than the functional currency of the subsidiary and the counterparty.
The gains (losses) recognized in the Consolidated Income Statements on derivatives not designated in hedging relationships were as follows:
Type of derivative not
Gains (losses) recognized in income
designated as a hedge
Year ended December 31,
Three months ended December 31,
($ in millions)
Location
2023
2022
2023
2022
Foreign exchange contracts
Total revenues
145
(56)
158
145
Total cost of sales
(71)
21
(51)
(36)
SG&A expenses
(1)
27
27
3
(8)
Non-order related research
and development
(7)
–
(3)
(2)
Interest and other finance expense
(240)
(128)
(224)
11
Embedded foreign exchange
Total revenues
18
(3)
(21)
(15)
contracts
Total cost of sales
1
(11)
1
1
Commodity contracts
Total cost of sales
(3)
(47)
4
25
Other
Interest and other finance expense
1
4
–
–
Total
(129)
(193)
(133)
121
(1) SG&A expenses represent “Selling, general and administrative expenses”.
The fair values of derivatives included in the Consolidated Balance Sheets were as follows:
December 31, 2023
Derivative assets
Derivative liabilities
Current in
Non-current in
Current in
Non-current in
“Other current
“Other non-current
“Other current
“Other non-current
($ in millions)
assets”
assets”
liabilities”
liabilities”
Derivatives designated as hedging instruments:
Foreign exchange contracts
–
–
5
2
Interest rate contracts
–
–
18
–
Cross-currency interest rate swaps
–
–
–
230
Other
10
–
–
–
Total
10
–
23
232
Derivatives not designated as hedging instruments:
Foreign exchange contracts
123
30
177
9
Commodity contracts
8
–
3
–
Interest rate contracts
1
–
1
–
Other equity contracts
4
–
–
–
Embedded foreign exchange derivatives
23
5
26
5
Total
159
35
207
14
Total fair value
169
35
230
246
December 31, 2022
Derivative assets
Derivative liabilities
Current in
Non-current in
Current in
Non-current in
“Other current
“Other non-current
“Other current
“Other non-current
($ in millions)
assets”
assets”
liabilities”
liabilities”
Derivatives designated as hedging instruments:
Foreign exchange contracts
–
–
4
4
Interest rate contracts
–
–
5
57
Cross-currency interest rate swaps
–
–
–
288
Other
15
–
–
–
Total
15
–
9
349
Derivatives not designated as hedging instruments:
Foreign exchange contracts
140
21
80
5
Commodity contracts
13
–
12
–
Interest rate contracts
5
–
3
–
Embedded foreign exchange derivatives
11
6
17
13
Total
169
27
112
18
Total fair value
184
27
121
367
Close-out netting agreements provide for the termination, valuation and net settlement of some or all outstanding transactions between two counterparties on the
occurrence of one or more pre-defined trigger events.
19 Q4 2023 FINANCIAL INFORMATION
Although the Company is party to close-out netting agreements with most derivative counterparties, the fair values in the tables above and in the Consolidated
Balance Sheets at December 31, 2023 and 2022, have been presented on a gross basis.
The Company’s netting agreements and other similar arrangements allow net settlements under certain conditions. At December 31, 2023 and 2022, information
related to these offsetting arrangements was as follows:
($ in millions)
December 31, 2023
Gross amount
Derivative liabilities
Cash
Non-cash
Type of agreement or
of recognized
eligible for set-off
collateral
collateral
Net asset
similar arrangement
assets
in case of default
received
received
exposure
Derivatives
176
(111)
–
–
65
Total
176
(111)
–
–
65
($ in millions)
December 31, 2023
Gross amount
Derivative liabilities
Cash
Non-cash
Type of agreement or
eligible for set-off
collateral
collateral
Net liability
similar arrangement
liabilities
in case of default
pledged
pledged
exposure
Derivatives
445
(111)
–
–
334
Total
445
(111)
–
–
334
($ in millions)
December 31, 2022
Gross amount
Derivative liabilities
Cash
Non-cash
Type of agreement or
eligible for set-off
collateral
collateral
Net asset
similar arrangement
in case of default
received
received
exposure
Derivatives
194
(96)
–
–
98
Total
194
(96)
–
–
98
($ in millions)
December 31, 2022
Gross amount
Derivative liabilities
Cash
Non-cash
Type of agreement or
eligible for set-off
collateral
Net liability
similar arrangement
liabilities
pledged
pledged
exposure
Derivatives
458
(96)
–
–
362
Total
458
(96)
–
–
362
20 Q4 2023 FINANCIAL INFORMATION
─
Note 7
Fair values
The Company uses fair value measurement principles to record certain financial assets and liabilities on a recurring basis and, when necessary, to record certain
non-financial assets at fair value on a non-recurring basis, as well as to determine fair value disclosures for certain financial instruments carried at amortized cost
in the financial statements. Financial assets and liabilities recorded at fair value on a recurring basis include foreign currency, commodity and interest rate
derivatives, as well as available-for-sale securities. Non-financial assets recorded at fair value on a non-recurring basis include long-lived assets that are reduced
to their estimated fair value due to impairments.
Fair value is the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. In determining fair value, the Company uses various valuation techniques including the market approach (using observable market data for
identical or similar assets and liabilities), the income approach (discounted cash flow models) and the cost approach (using costs a market participant would incur
to develop a comparable asset). Inputs used to determine the fair value of assets and liabilities are defined by a three -level hierarchy, depending on the nature of
those inputs. The Company has categorized its financial assets and liabilities and non-financial assets measured at fair value within this hierarchy based on
whether the inputs to the valuation technique are observable or unobservable. An observable input is based on market data obtained from independent sources,
while an unobservable input reflects the Company’s assumptions about market data.
The levels of the fair value hierarchy are as follows:
Level 1:
Valuation inputs consist of quoted prices in an active market for identical assets or liabilities (observable quoted prices). Assets and liabilities valued
using Level 1 inputs include exchange
‑
traded equity securities, listed derivatives which are actively traded such as commodity futures, interest rate
futures and certain actively traded debt securities.
Level 2:
Valuation inputs consist of observable inputs (other than Level 1 inputs) such as actively quoted prices for similar assets, quoted prices in inactive
markets and inputs other than quoted prices such as interest rate yield curves, credit spreads, or inputs derived from other observable data by
interpolation, correlation, regression or other means. The adjustments applied to quoted prices or the inputs used in valuation models may be both
observable and unobservable. In these cases, the fair value measurement is classified as Level 2 unless the unobservable portion of the adjustment or
the unobservable input to the valuation model is significant, in which case the fair value measurement would be classified as Level 3. Assets and
liabilities valued or disclosed using Level 2 inputs include investments in certain funds, certain debt securities that are not actively traded, interest rate
swaps, cross-currency interest rate swaps, commodity swaps, forward foreign exchange contracts, foreign exchange swaps and forward rate
agreements, time deposits, as well as financing receivables and debt.
Level 3:
Valuation inputs are based on the Company’s assumptions of relevant market data (unobservable input).
Whenever quoted prices involve bid-ask spreads, the Company ordinarily determines fair values based on mid-market quotes. However, for the purpose of
determining the fair value of cash-settled call options serving as hedges of the Company’s management incentive plan, bid prices are used.
When determining fair values based on quoted prices in an active market, the Company considers if the level of transaction activity for the financial instrument has
significantly decreased or would not be considered orderly. In such cases, the resulting changes in valuation techniques would be disclosed. If the market is
considered disorderly or if quoted prices are not available, the Company is required to use another valuation technique, such as an income approach.
Recurring fair value measures
The fair values of financial assets and liabilities measured at fair value on a recurring basis were as follows:
December 31, 2023
($ in millions)
Level 1
Level 2
Level 3
Total fair value
Assets
Securities in “Marketable securities and short-term investments”:
Equity securities
–
1,282
–
1,282
Debt securities—U.S. government obligations
183
–
–
183
Derivative assets—current in “Other current assets”
–
169
–
169
Derivative assets—non-current in “Other non-current assets”
–
35
–
35
Total
183
1,486
–
1,669
Liabilities
Derivative liabilities—current in “Other current liabilities”
–
230
–
230
Derivative liabilities—non-current in “Other non-current liabilities”
–
246
–
246
Total
–
476
–
476
21 Q4 2023 FINANCIAL INFORMATION
December 31, 2022
($ in millions)
Level 1
Level 2
Level 3
Total fair value
Assets
Securities in “Marketable securities and short-term investments”:
Equity securities
–
355
–
355
Debt securities—U.S. government obligations
255
–
–
255
Debt securities—European government obligations
–
58
–
58
Debt securities—Corporate
–
57
–
57
Derivative assets—current in “Other current assets”
–
184
–
184
Derivative assets—non-current in “Other non-current assets”
–
27
–
27
Total
255
681
–
936
Liabilities
Derivative liabilities—current in “Other current liabilities”
–
121
–
121
Derivative liabilities—non-current in “Other non-current liabilities”
–
367
–
367
Total
–
488
–
488
The Company uses the following methods and assumptions in estimating fair values of financial assets and liabilities measured at fair value on a recurring basis:
●
If quoted market prices in active markets for identical assets are available, these are
considered Level 1 inputs; however, when markets are not active, these inputs are considered Level 2. If such quoted market prices are not available,
fair value is determined using market prices for similar assets or present value techniques, applying an appropriate risk-free interest rate adjusted for
non-performance risk. The inputs used in present value techniques are observable and fall into the Level 2 category.
●
: The fair values of derivative instruments are determined using quoted prices of identical instruments from an active market, if available
(Level 1 inputs). If quoted prices are not available, price quotes for similar instruments, appropriately adjusted, or present value techniques, based on
available market data, or option pricing models are used. The fair values obtained using price quotes for similar instruments or valuation techniques
represent a Level 2 input unless significant unobservable inputs are used.
Non-recurring fair value measures
There were no significant non-recurring fair value measurements during the years ended December 31, 2023 and 2022.
Disclosure about financial instruments carried on a cost basis
The fair values of financial instruments carried on a cost basis were as follows:
December 31, 2023
($ in millions)
Carrying value
Level 1
Level 2
Level 3
Total fair value
Assets
Cash and equivalents (excluding securities with original
maturities up to 3 months):
Cash
1,431
1,431
–
–
1,431
Time deposits
2,460
–
2,460
–
2,460
Restricted cash
18
18
–
–
18
Marketable securities and short-term investments
(excluding securities):
Time deposits
463
–
463
–
463
Liabilities
Short-term debt and current maturities of long-term debt
(excluding finance lease obligations)
2,576
2,521
55
–
2,576
Long-term debt (excluding finance lease obligations)
5,060
5,096
5
–
5,101
December 31, 2022
($ in millions)
Carrying value
Level 1
Level 2
Level 3
Total fair value
Assets
Cash and equivalents (excluding securities with original
maturities up to 3 months):
Cash
1,697
1,697
–
–
1,697
Time deposits
2,459
–
2,459
–
2,459
Restricted cash
18
18
–
–
18
Liabilities
Short-term debt and current maturities of long-term debt
(excluding finance lease obligations)
2,500
1,068
1,432
–
2,500
Long-term debt (excluding finance lease obligations)
4,976
4,813
30
–
4,843
The Company uses the following methods and assumptions in estimating fair values of financial instruments carried on a cost basis:
●
investments (excluding securities):
The carrying amounts approximate the fair values as the items are short-term in nature or, for cash held in banks,
are equal to the deposit amount.
22 Q4 2023 FINANCIAL INFORMATION
●
Short-term debt includes commercial paper, bank
borrowings and overdrafts. The carrying amounts of short-term debt and current maturities of long-term debt, excluding finance lease obligations,
approximate their fair values.
●
Fair values of bonds are determined using quoted market prices (Level 1 inputs), if available. For
bonds without available quoted market prices and other long-term debt, the fair values are determined using a discounted cash flow methodology
based upon borrowing rates of similar debt instruments and reflecting appropriate adjustments for non-performance risk (Level 2 inputs).
─
Note 8
Contract assets and liabilities
The following table provides information about Contract assets and Contract liabilities:
($ in millions)
December 31, 2023
December 31, 2022
December 31, 2021
Contract assets
1,090
954
990
Contract liabilities
2,844
2,216
1,894
Contract assets primarily relate to the Company’s right to receive consideration for work completed but for which no invoice has been issued at the reporting date.
Contract assets are transferred to receivables when rights to receive payment become unconditional. Management expects that the majority of the amounts will be
collected within one year of the respective balance sheet date.
Contract liabilities primarily relate to up-front advances received on orders from customers as well as amounts invoiced to customers in excess of revenues
recognized predominantly on long-term projects. Contract liabilities are reduced as work is performed and as revenues are recognized .
The significant changes in the Contract assets and Contract liabilities balances were as follows:
Year ended December 31,
2023
2022
Contract
Contract
Contract
Contract
($ in millions)
assets
liabilities
assets
liabilities
Revenue recognized, which was included in the Contract liabilities balance at Jan 1, 2023/2022
(1,311)
(1,043)
Additions to Contract liabilities - excluding amounts recognized as revenue during the period
1,845
1,481
Receivables recognized that were included in the Contract assets balance at Jan 1, 2023/2022
(622)
(591)
The Company considers its order backlog to represent its unsatisfied performance obligations. At December 31, 2023, the Company had unsatisfied performance
obligations totaling $21,567 million and, of this amount, the Company expects to fulfill approximately 69 percent of the obligations in 2024, approximately
16 percent of the obligations in 2025 and the balance thereafter.
23 Q4 2023 FINANCIAL INFORMATION
─
Note 9
Debt
The Company’s total debt at December 31, 2023 and 2022, amounted to $7,828 million and $7,678 million, respectively.
Short-term debt and current maturities of long-term debt
The Company’s “Short-term debt and current maturities of long-term debt” consisted of the following:
($ in millions)
December 31, 2023
December 31, 2022
Short-term debt
87
1,448
Current maturities of long-term debt
2,520
1,087
Total
2,607
2,535
Short-term debt primarily represented issued commercial paper and short-term bank borrowings from various banks. At December 31, 2023, no amount was
outstanding under the $2 billion Euro-commercial paper program, while at December 31, 2022, $1,383 million was outstanding under this program.
In September 2023, the Company repaid at maturity its CHF 275 million 0% Bonds, equivalent to $302 million on date of repayment. In May 2023, the Company
repaid at maturity its EUR 700 million 0.625% Instruments, equivalent to $772 million on date of repayment.
Long-term debt
The Company’s long-term debt at December 31, 2023 and 2022, amounted to $5,221 million and $5,143 million, respectively.
Outstanding bonds (including maturities within the next 12 months) were as follows:
December 31, 2023
December 31, 2022
(in millions)
Nominal outstanding
(1)
Nominal outstanding
(1)
Bonds:
0.625% EUR Instruments, due 2023
EUR
700
$
742
0% CHF Bonds, due 2023
CHF
275
$
298
0.625% EUR Instruments, due 2024
EUR
700
$
768
EUR
700
$
720
Floating Rate EUR Instruments, due 2024
EUR
500
$
554
EUR
500
$
536
0.75% EUR Instruments, due 2024
EUR
750
$
819
EUR
750
$
769
0.3% CHF Bonds, due 2024
CHF
280
$
335
CHF
280
$
303
2.1% CHF Bonds, due 2025
CHF
150
$
179
CHF
150
$
162
1.965% CHF Bonds, due 2026
CHF
325
$
387
3.25% EUR Instruments, due 2027
EUR
500
$
551
0.75% CHF Bonds, due 2027
CHF
425
$
507
CHF
425
$
460
3.8% USD Notes, due 2028
(2)
USD
383
$
382
USD
383
$
381
1.9775% CHF Bonds, due 2028
CHF
150
$
179
1.0% CHF Bonds, due 2029
CHF
170
$
203
CHF
170
$
184
0% EUR Instruments, due 2030
EUR
800
$
749
EUR
800
$
677
2.375% CHF Bonds, due 2030
CHF
150
$
178
CHF
150
$
162
3.375% EUR Instruments, due 2031
EUR
750
$
818
2.1125% CHF Bonds, due 2033
CHF
275
$
327
4.375% USD Notes, due 2042
(2)
USD
609
$
591
USD
609
$
590
Total
$
7,527
$
5,984
(1) USD carrying values include unamortized debt issuance costs, bond discounts or premiums, as well as adjustments for fair value hedge accounting, where appropriate.
(2) Prior to completing a cash tender offer in November 2020, the original principal amount outstanding, on each of the 3.8% USD Notes, due 2028, and the 4.375% USD Notes, due
2042, was USD 750 million.
In January 2023, the Company issued the following EUR Instruments: (i) EUR 500 million of 3.25 percent Instruments, due 2027, and (ii) EUR 750 million of
3.375 percent Instruments, due 2031, both paying interest annually in arrears. The aggregate net proceeds of these EUR Instruments, after discount and fees,
amounted to EUR 1,235 million (equivalent to approximately $1,338 million on date of issuance).
In September 2023, the Company issued the following CHF Bonds: (i) CHF 325 million of 1.965 percent Bonds, due 2026, (ii) CHF 150 million of 1.9775 percent
Bonds, due 2028, and (iii) CHF 275 million of 2.1125 percent Bonds, due 2033, all paying interest annually in arrears. The aggregate net proceeds of these CHF
Bonds, after fees, amounted to CHF 748 million (equivalent to approximately $825 million on date of issuance).
Subsequent events
In January 2024, the Company issued the following EUR Instruments : (i) EUR 500 million of 3.125 percent notes, due 2029, and (ii) EUR 750 million of
3.375 percent notes, due 2034, both paying interest annually in arrears. The aggregate net proceeds of these EUR Instruments, after discount and fees, amounted
to EUR 1,243 million (equivalent to approximately $1,360 million on date of issuance).
24 Q4 2023 FINANCIAL INFORMATION
─
Note 10
Commitments and contingencies
Contingencies—Regulatory, Compliance and Legal
Regulatory
Based on findings during an internal investigation, the Company self-reported to the SEC and the DoJ, in the United States, to the Special Investigating Unit (SIU)
and the National Prosecuting Authority (NPA) in South Africa as well as to various authorities in other countries potential suspect payments and other compliance
concerns in connection with some of the Company’s dealings with Eskom and related persons. Many of those parties have expressed an interest in, or
commenced an investigation into, these matters and the Company is cooperating fully with them. The Company paid $104 million to Eskom in December 2020 as
part of a full and final settlement with Eskom and the SIU relating to improper payments and other compliance issues associated with the Controls and
Instrumentation Contract, and its Variation Orders for Units 1 and 2 at Kusile. The Company made a provision of approximately $325 million which was recorded in
Other income (expense), net, during the third quarter of 2022. In December 2022, the Company settled with the SEC and DoJ as well as the authorities in South
Africa and Switzerland. The matter is still pending with the authorities in Germany, but the Company does not believe that it will need to record any additional
provisions for this matter.
General
The Company is aware of proceedings, or the threat of proceedings, against it and others in respect of private claims by customers and other third parties with
regard to certain actual or alleged anticompetitive practices. Also, the Company is subject to other claims and legal proceedings, as well as investigations carried
out by various law enforcement authorities. With respect to the above-mentioned claims, regulatory matters, and any related proceedings, the Company will bear
the related costs, including costs necessary to resolve them.
Liabilities recognized
At December 31, 2023 and 2022, the Company had aggregate liabilities of $101 million and $86 million, respectively, included in “Other provisions” and “Other
non
‑
current liabilities”, for the above regulatory, compliance and legal contingencies, and none of the individual liabilities recognized was significant. As it is not
possible to make an informed judgment on, or reasonably predict, the outcome of certain matters and as it is not possible, based on information currently available
to management, to estimate the maximum potential liability on other matters, there could be adverse outcomes beyond the amounts accrued.
Guarantees
General
The following table provides quantitative data regarding the Company’s third-party guarantees. The maximum potential payments represent a “worst-case
scenario”, and do not reflect management’s expected outcomes.
Maximum potential payments
($ in millions)
December 31, 2023
December 31, 2022
Performance guarantees
3,451
4,300
Financial guarantees
94
96
Total
(1)
3,545
4,396
(1)
The carrying amount of liabilities recorded in the Consolidated Balance Sheets reflects the Company’s best estimate of future payments, which it may incur as part
of fulfilling its guarantee obligations. In respect of the above guarantees, the carrying amounts of liabilities at December 31, 2023 and 2022, were not significant.
The Company is party to various guarantees providing financial or performance assurances to certain third parties. These guarantees, which have various
maturities up to 2032, mainly consist of performance guarantees whereby (i) the Company guarantees the performance of a third party’s product or service
according to the terms of a contract and (ii) as member of a consortium/joint-venture that includes third parties, the Company guarantees not only its own
performance but also the work of third parties. Such guarantees may include guarantees that a project will be completed within a specified time. If the third party
does not fulfill the obligation, the Company will compensate the guaranteed party in cash or in kind. The original maturity dates for the majority of these
performance guarantees range from one to ten years.
In conjunction with the divestment of the high-voltage cable and cables accessories businesses, the Company has entered into various performance guarantees
with other parties with respect to certain liabilities of the divested business. At December 31, 2023 and 2022, the maximum potential payable under these
guarantees amounts to $874 million and $843 million, respectively, and these guarantees have various original maturities ranging from five to ten years.
The Company retained obligations for financial and performance guarantees related to the sale of the Power Grids business (see Note 3 for details). At both
December 31, 2023 and 2022, the performance and financial guarantees have been fully indemnified by Hitachi Ltd. These guarantees, which have various
maturities up to 2032, primarily consist of bank guarantees, standby letters of credit, business performance guarantees and other trade-related guarantees, the
majority of which have original maturity dates ranging from one to ten years. The maximum amount payable under these guarantees at December 31, 2023 and
2022, is approximately $2.2 billion and $3.0 billion, respectively. On completing the sale of the Company’s remaining 19.9 percent interest in Hitachi Energy Ltd. to
Hitachi in 2022, the Company also settled certain existing indemnification guarantees that were due to be settled concurrent with such transaction. As a result, in
2022, the Company recorded $136 million of cash outflows for the settlement of these liabilities (recorded in discontinued operations).
Commercial commitments
In addition, in the normal course of bidding for and executing certain projects, the Company has entered into standby letters of credit, bid/performance bonds and
surety bonds (collectively “performance bonds”) with various financial institutions. Customers can draw on such performance bonds in the event that the Company
does not fulfill its contractual obligations. The Company would then have an obligation to reimburse the financial institution for amounts paid under the performance
bonds. At December 31, 2023 and 2022, the total outstanding performance bonds aggregated to $3.1 billion and $2.9 billion, respectively . There have been no
significant amounts reimbursed to financial institutions under these types of arrangements in the year and three months ended December 31, 2023 and 2022.
25 Q4 2023 FINANCIAL INFORMATION
Product and order-related contingencies
The Company calculates its provision for product warranties based on historical claims experience and specific review of certain contracts. The reconciliation of the
“Provisions for warranties”, including guarantees of product performance, was as follows:
($ in millions)
2023
2022
Balance at January 1,
1,028
1,005
Net change in warranties due to acquisitions, divestments and spin-offs
–
(24)
Claims paid in cash or in kind
(171)
(157)
Net increase in provision for changes in estimates, warranties issued and warranties expired
327
252
Exchange rate differences
26
(48)
Balance at December 31,
1,210
1,028
Provisions for contractual penalties
During the three months ended December 31, 2022, the Company reversed a provision of $61 million it had previously recorded relating to one of its divested
businesses based on a settlement proposal issued by the ruling court . As the provision related to a customer contractual obligation, the adjustment was reported
as an increase in Sales of products and resulted in an increase in earnings per share (basic and diluted) of $0.03 for both the year and three months ended
December 31, 2022. In addition, as this amount relates to a divested business, it has been excluded from the Company’s primary measure of segment
performance, Operational EBITA (See Note 17).
─
Note 11
Income taxes
The effective tax rate of 19.5 percent in the year ended December 31, 2023, was lower than the effective tax rate of 22.3 percent in the year ended December 31,
2022, primarily due to a net benefit realized on a favorable resolution of an uncertain tax position in the year ended December 31, 2023, while 2022 included
positive impacts from a reversal of a valuation allowance in the Americas partially offset by the negative impact of non-deductible regulatory penalties in connection
with the Kusile project.
In February 2023, on completion of a tax audit, the Company obtained resolution of the uncertain tax position for which an amount was recorded within Other non-
current liabilities as of December 31, 2022. In the year ended December 31, 2023, the Company released the provision of $206 million, due to the resolution of this
matter, which resulted in an increase of $0.11 in earnings per share (basic and diluted) for the year ended December 31, 2023.
─
Note 12
Employee benefits
The Company operates defined benefit pension plans, defined contribution pension plans, and termination indemnity plans, in accordance with local regulations
and practices. At December 31, 2023, the Company’s most significant defined benefit pension plans are in Switzerland as well as in Germany, the United
Kingdom, and the United States. These plans cover a large portion of the Company’s employees and provide benefits to employees in the event of death,
disability, retirement, or termination of employment. Certain of these plans are multi-employer plans. The Company also operates other postretirement benefit
plans including postretirement health care benefits and other employee-related benefits for active employees including long-service award plans. The
measurement date used for the Company’s employee benefit plans is December 31. The funding policies of the Company’s plans are consistent with the local
government and tax requirements.
Net periodic benefit cost of the Company’s defined benefit pension and other postretirement benefit plans consisted of the following:
($ in millions)
Defined pension benefits
Other postretirement
Switzerland
International
benefits
Year ended December 31,
2023
2022
2023
2022
2023
2022
Operational pension cost:
Service cost
40
50
30
38
–
–
Operational pension cost
40
50
30
38
–
–
Non-operational pension cost (credit):
Interest cost
48
13
166
87
2
1
Expected return on plan assets
(129)
(116)
(157)
(153)
–
–
Amortization of prior service cost (credit)
(8)
(9)
(2)
(2)
(1)
(2)
Amortization of net actuarial loss
–
–
52
58
(4)
(3)
Curtailments, settlements and special termination benefits
13
4
19
7
(16)
–
Non-operational pension cost (credit)
(76)
(108)
78
(3)
(19)
(4)
Net periodic benefit cost (credit)
(36)
(58)
108
35
(19)
(4)
26 Q4 2023 FINANCIAL INFORMATION
($ in millions)
Defined pension benefits
Other postretirement
Switzerland
International
benefits
Three months ended December 31,
2023
2022
2023
2022
2023
2022
Operational pension cost:
Service cost
11
10
9
12
–
–
Operational pension cost
11
10
9
12
–
–
Non-operational pension cost (credit):
Interest cost
13
11
44
26
1
–
Expected return on plan assets
(35)
(29)
(41)
(40)
–
–
Amortization of prior service cost (credit)
(2)
(4)
–
–
–
(1)
Amortization of net actuarial loss
–
–
13
14
(1)
(1)
Curtailments, settlements and special termination benefits
13
4
1
7
–
–
Non-operational pension cost (credit)
(11)
(18)
17
7
–
(2)
Net periodic benefit cost (credit)
–
(8)
26
19
–
(2)
The components of net periodic benefit cost other than the service cost component are included in the line “Non-operational pension cost (credit)” in the income
statement.
Employer contributions were as follows:
($ in millions)
Defined pension benefits
Other postretirement
Switzerland
International
benefits
Year ended December 31,
2023
2022
2023
2022
2023
2022
Total contributions to defined benefit pension and
other postretirement benefit plans
18
37
89
58
32
7
Of which, discretionary contributions to defined benefit
–
–
67
18
25
–
($ in millions)
Defined pension benefits
Other postretirement
Switzerland
International
benefits
Three months ended December 31,
2023
2022
2023
2022
2023
2022
Total contributions to defined benefit pension and
other postretirement benefit plans
10
4
4
34
3
2
Of which, discretionary contributions to defined benefit
pension plans
–
–
11
18
–
–
─
Note 13
Stockholder's equity
At the Annual General Meeting of Shareholders (AGM) on March 23, 2023, shareholders approved the proposal of the Board of Directors to distribute 0.84 Swiss
francs per share to shareholders. The declared dividend amounted to $1,706 million, with the Company disburs ing a portion in March and the remaining amounts
in April.
In March 2023, the Company completed the share buyback program that was launched in April 2022. This program was executed on a second trading line on the
SIX Swiss Exchange. Through this program, the Company purchased a total of 67 million shares for approximately $2.0 billion, of which 8 million shares were
purchased in the first quarter of 2023 (resulting in an increase in Treasury stock of $253 million ).
Also in March 2023, the Company announced a new share buyback program of up to $1 billion. This program, which was launched in April 2023, is being executed
on a second trading line on the SIX Swiss Exchange and is planned to run until the Company’s 2024 AGM. Through this program, the Company purchased, from
the program’s launch in April 2023 to December 31, 2023, 17 million shares, resulting in an increase in Treasury stock of $640 million.
In the second quarter of 2023, the Company cancelled 83 million shares which had been purchased under its share buyback program. This resulted in a decrease
in Treasury stock of $2,567 million and a corresponding total decrease in Capital stock, Additional paid-in capital and Retained earnings.
In addition to the share buyback programs, the Company purchased 9 million of its own shares on the open market in the year ended December 31, 2023, mainly
for use in connection with its employee share plans, resulting in an increase in Treasury stock of $354 million.
In the year ended December 31, 2023, the Company delivered, out of treasury stock, approximately 6 million shares in connection with its Management Incentive
Plan.
In February 2023, the Company obtained funding through a private placement of shares in its ABB E-Mobility subsidiary, ABB E-mobility Holding Ltd
(ABB E-Mobility), receiving gross proceeds of 325 million Swiss francs (approximately $351 million) and reducing the Company’s ownership in ABB E-Mobility from
92 percent to 81 percent. This resulted in an increase in Additional paid-in capital of $170 million. In December 2023, an agreement was reached to increase the
ownership percentage of the investors participating in these private placements to 25 percent for no additional consideration.
27 Q4 2023 FINANCIAL INFORMATION
─
Note 14
Earnings per share
Basic earnings per share is calculated by dividing income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is
calculated by dividing income by the weighted-average number of shares outstanding during the period, assuming that all potentially dilutive securities were
exercised, if dilutive. Potentially dilutive securities comprise outstanding written call options, and outstanding options and shares granted subject to certain
conditions under the Company’s share-based payment arrangements.
Basic earnings per share
Year ended December 31,
Three months ended December 31,
($ in millions, except per share data in $)
2023
2022
2023
2022
Amounts attributable to ABB shareholders:
Income from continuing operations, net of tax
3,769
2,517
929
1,138
Loss from discontinued operations, net of tax
(24)
(42)
(8)
(6)
Net income
3,745
2,475
921
1,132
Weighted-average number of shares outstanding (in millions)
1,855
1,899
1,845
1,870
Basic earnings per share attributable to ABB shareholders:
Income from continuing operations, net of tax
2.03
1.33
0.50
0.61
Loss from discontinued operations, net of tax
(0.01)
(0.02)
0.00
0.00
Net income
2.02
1.30
0.50
0.61
Diluted earnings per share
Year ended December 31,
Three months ended December 31,
($ in millions, except per share data in $)
2023
2022
2023
2022
Amounts attributable to ABB shareholders:
Income from continuing operations, net of tax
3,769
2,517
929
1,138
Loss from discontinued operations, net of tax
(24)
(42)
(8)
(6)
Net income
3,745
2,475
921
1,132
Weighted-average number of shares outstanding (in millions)
1,855
1,899
1,845
1,870
Effect of dilutive securities:
Call options and shares
12
11
11
11
Adjusted weighted-average number of shares outstanding (in millions)
1,867
1,910
1,856
1,881
Diluted earnings per share attributable to ABB shareholders:
Income from continuing operations, net of tax
2.02
1.32
0.50
0.60
Loss from discontinued operations, net of tax
(0.01)
(0.02)
0.00
0.00
Net income
2.01
1.30
0.50
0.60
28 Q4 2023 FINANCIAL INFORMATION
─
Note 15
Reclassifications out of accumulated other comprehensive loss
The following table shows changes in “Accumulated other comprehensive loss” (OCI) attributable to ABB, by component, net of tax:
Unrealized gains
Pension and
Foreign currency
(losses) on
other
Derivative
translation
available-for-sale
postretirement
instruments
($ in millions)
adjustments
securities
plan adjustments
and hedges
Total OCI
Balance at January 1, 2022
(2,993)
2
(1,089)
(8)
(4,088)
Other comprehensive (loss) income:
Other comprehensive (loss) income
before reclassifications
(685)
(23)
226
(12)
(494)
Amounts reclassified from OCI
46
2
29
12
89
Total other comprehensive (loss) income
(639)
(21)
255
–
(405)
Spin-off of the Turbocharging Division
(93)
–
(5)
–
(98)
Less:
Amounts attributable to
(34)
–
(1)
–
(35)
Balance at December 31, 2022
(3,691)
(19)
(838)
(8)
(4,556)
Other comprehensive (loss) income:
Other comprehensive (loss) income
before reclassifications
(290)
5
(283)
(10)
(578)
Amounts reclassified from OCI
9
6
46
8
69
Total other comprehensive (loss) income
(281)
11
(237)
(2)
(509)
Less:
Amounts attributable to
redeemable noncontrolling interests
5
–
–
–
5
Balance at December 31, 2023
(3,977)
(8)
(1,075)
(10)
(5,070)
The following table reflects amounts reclassified out of OCI in respect of Foreign currency translation adjustments and Pension and other postretirement plan
adjustments:
Year ended
Three months ended
($ in millions)
Location of (gains) losses
December 31,
December 31,
Details about OCI components
reclassified from OCI
2023
2022
2023
2022
Foreign currency translation adjustments:
Changes attributable to divestments
Other income (expense), net
9
41
–
41
Net loss on complete or substantially complete
liquidations of foreign subsidiaries
Other income (expense), net
–
5
–
–
Amounts reclassified from OCI
9
46
–
41
Pension and other postretirement plan adjustments:
Amortization of prior service cost (credit)
Non-operational pension (cost) credit
(11)
(13)
(2)
(5)
Amortization of net actuarial loss
Non-operational pension (cost) credit
48
55
12
13
Net gain (loss) from settlements and curtailments
Non-operational pension (cost) credit
16
11
14
11
Changes attributable to divestments
Other income (expense), net
3
(8)
3
(8)
Total before tax
56
45
27
11
Tax
Income tax expense
(10)
(16)
(9)
(6)
Amounts reclassified from OCI
46
29
18
5
The amounts in respect of Unrealized gains (losses) on available-for-sale securities and Derivative instruments and hedges were not significant for the year and
three months ended December 31, 2023 and 2022.
29 Q4 2023 FINANCIAL INFORMATION
─
Note 16
Restructuring and related expenses
Restructuring-related activities
In the year and three months ended December 31, 2023 and 2022, the Company executed various restructuring -related activities and incurred the following
expenses:
Year ended December 31,
Three months ended December 31,
($ in millions)
2023
2022
2023
2022
Employee severance costs
120
81
82
17
Estimated contract settlement, loss order and other costs
7
209
3
4
Inventory and long-lived asset impairments
49
7
31
2
Total
176
297
116
23
Expenses associated with these activities are recorded in the following line items in the Consolidated Income Statements:
Year ended December 31,
Three months ended December 31,
($ in millions)
2023
2022
2023
2022
Total cost of sales
65
24
46
11
Selling, general and administrative expenses
52
40
38
1
Non-order related research and development expenses
3
2
3
–
Other income (expense), net
56
231
29
11
Total
176
297
116
23
During the second quarter of 2022, the Company completed a plan to fully exit its full train retrofit business by transferring the remaining contracts to a third party.
The Company recorded $195 million of restructuring expenses in connection with this business exit primarily for contract settlement costs. Prior to exiting this
business, the business was reported as part of the Company’s non-core business activities within Corporate and Other.
At December 31, 2023 and 2022, $250 million and $198 million, respectively, was recorded for restructuring-related liabilities and is included primarily in Other
provisions.
─
Note 17
Operating segment data
The Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM allocates resources to and assesses the performance of each operating
segment using the information outlined below. The Company is organized into the following segments, based on products and services: Electrification, Motion,
Process Automation and Robotics & Discrete Automation. The remaining operations of the Company are included in Corporate and Other.
Effective January 1, 2023, the E-mobility Division is no longer managed within the Electrification segment and has become a separate operating segment. This
new segment does not currently meet any of the size thresholds to be considered a reportable segment and as such is presented within Corporate and Other. The
segment information for the year and three months ended December 31, 2023 and 2022, and at December 31, 2022, has been recast to reflect this change.
A description of the types of products and services provided by each reportable segment is as follows:
●
manufactures and sells electrical products and solutions which are designed to provide safe, smart and sustainable electrical flow from
the substation to the socket. The portfolio of increasingly digital and connected solutions includes renewable power solutions, modular substation
packages, distribution automation products, switchboards and panelboards, switchgear, UPS solutions, circuit breakers, measuring and sensing
devices, control products, wiring accessories, enclosures and cabling systems and intelligent home and building solutions, designed to integrate and
automate lighting, heating, ventilation, security and data communication networks. The products and services are delivered through six operating
Divisions: Distribution Solutions, Smart Power, Smart Buildings, Installation Products and Service, as well as, prior to its sale in July 2023, the Power
Conversion Division.
●
infrastructure and transportation. These products, digital technology and related services enable industrial customers to increase energy efficiency,
improve safety and reliability, and achieve precise control of their processes. Building on over 140 years of cumulative experience in electric
powertrains, Motion combines domain expertise and technology to deliver the optimum solution for a wide range of applications in all industrial
segments. In addition, Motion, along with its partners, has a leading global service presence. These products and services are delivered through seven
operating Divisions: Large Motors and Generators, IEC LV Motors, NEMA Motors, Drive Products, System Drives, Service and Traction.
30 Q4 2023 FINANCIAL INFORMATION
●
the process, hybrid and marine industries. The product portfolio includes control technologies, industrial software, advanced analytics, sensing and
measurement technology, and marine propulsion systems. In addition, Process Automation offers a comprehensive range of services, from repair to
advanced digital capabilities such as remote monitoring, preventive maintenance, asset performance management, emission monitoring and
cybersecurity. The products, systems and services are currently delivered through four operating Divisions: Energy Industries, Process Industries,
Marine & Ports and Measurement & Analytics, as well as, prior to its spin-off in October 2022, the Turbocharging Division (Accelleron).
●
collaborative robots, autonomous mobile robotics, mapping and navigation solutions, robotic solutions, field services, spare parts and digital services.
Machine Automation specializes in automation solutions based on its programmable logic controllers (PLC), industrial PCs (IPC), servo motion,
transport systems and machine vision. Both divisions offer software across the entire life cycle, including engineering and simulation software as well as
a comprehensive range of digital solutions.
Corporate and Other:
includes the E-mobility operating segment, other non-core operating activities as well as the operating activities of certain divested businesses.
The primary measure of profitability on which the operating segments are evaluated is Operational EBITA, which represents income from operations excluding:
●
●
●
divested businesses),
●
●
●
●
exchange, commodities, embedded derivatives), (b) realized gains and losses on derivatives where the underlying hedged transaction has not yet been
realized, and (c) unrealized foreign exchange movements on receivables/payables (and related assets/liabilities).
Certain other non-operational items generally includes certain regulatory, compliance and legal costs, certain asset write downs/impairments and certain other fair
value changes, changes in estimates relating to opening balance sheets of acquired businesses (changes in pre-acquisition estimates), as well as other items
which are determined by management on a case-by-case basis.
The CODM primarily reviews the results of each segment on a basis that is before the elimination of profits made on inventory sales between segments. Segment
results below are presented before these eliminations, with a total deduction for intersegment profits to arrive at the Company’s consolidated Operational EBITA.
Intersegment sales and transfers are accounted for as if the sales and transfers were to third parties, at current market prices.
The following tables present disaggregated segment revenues from contracts with customers, Operational EBITA, and the reconciliations of consolidated
Operational EBITA to Income from continuing operations before taxes for the year and three months ended December 31, 2023 and 2022, as well as total assets
at December 31, 2023 and 2022.
Year ended December 31, 2023
Robotics &
Process
Discrete
Corporate
($ in millions)
Electrification
Motion
Automation
Automation
and Other
Total
Geographical markets
Europe
4,547
2,455
2,294
1,932
340
11,568
The Americas
5,926
2,562
1,738
573
291
11,090
of which: United States
4,456
2,123
1,076
358
235
8,248
Asia, Middle East and Africa
3,899
2,276
2,212
1,119
71
9,577
of which: China
1,775
1,148
707
804
34
4,468
14,372
7,293
6,244
3,624
702
32,235
Product type
Products
13,437
6,219
3,661
3,063
630
27,010
Services and other
935
1,074
2,583
561
72
5,225
14,372
7,293
6,244
3,624
702
32,235
Third-party revenues
14,372
7,293
6,244
3,624
702
32,235
Intersegment revenues
212
521
26
16
(775)
–
Total revenues
(1)
14,584
7,814
6,270
3,640
(73)
32,235
31 Q4 2023 FINANCIAL INFORMATION
Year ended December 31, 2022
Robotics &
Process
Discrete
Corporate
($ in millions)
Electrification
Motion
Automation
Automation
and Other
Total
Geographical markets
Europe
4,199
2,031
2,248
1,494
313
10,285
The Americas
5,140
2,148
1,566
524
195
9,573
of which: United States
3,769
1,787
943
373
151
7,023
Asia, Middle East and Africa
4,053
2,101
2,199
1,155
80
9,588
of which: China
1,948
1,147
666
897
38
4,696
13,392
6,280
6,013
3,173
588
29,446
Product type
Products
12,535
5,380
3,311
2,695
550
24,471
Services and other
857
900
2,702
478
38
4,975
13,392
6,280
6,013
3,173
588
29,446
Third-party revenues
13,392
6,280
6,013
3,173
588
29,446
Intersegment revenues
227
465
31
8
(731)
–
Total revenues
(1)
13,619
6,745
6,044
3,181
(143)
29,446
Three months ended December 31, 2023
Robotics &
Process
Discrete
Corporate
($ in millions)
Electrification
Motion
Automation
Automation
and Other
Total
Geographical markets
Europe
1,136
597
631
476
111
2,951
The Americas
1,533
638
459
142
75
2,847
of which: United States
1,164
521
278
89
53
2,105
Asia, Middle East and Africa
987
577
632
233
18
2,447
of which: China
419
282
205
147
11
1,064
3,656
1,812
1,722
851
204
8,245
Product type
Products
3,387
1,524
994
710
185
6,800
Services and other
269
288
728
141
19
1,445
3,656
1,812
1,722
851
204
8,245
Third-party revenues
3,656
1,812
1,722
851
204
8,245
Intersegment revenues
42
134
5
1
(182)
–
Total revenues
(1)
3,698
1,946
1,727
852
22
8,245
Three months ended December 31, 2022
Robotics &
Process
Discrete
Corporate
($ in millions)
Electrification
Motion
Automation
Automation
and Other
Total
Geographical markets
Europe
1,074
601
522
424
144
2,765
The Americas
1,341
574
431
147
62
2,555
of which: United States
992
480
262
106
58
1,898
Asia, Middle East and Africa
1,033
537
592
317
25
2,504
of which: China
442
259
168
251
13
1,133
3,448
1,712
1,545
888
231
7,824
Product type
Products
3,207
1,449
891
760
218
6,525
Services and other
241
263
654
128
13
1,299
3,448
1,712
1,545
888
231
7,824
Third-party revenues
3,448
1,712
1,545
888
231
7,824
Intersegment revenues
50
133
6
3
(192)
–
Total revenues
(1)
3,498
1,845
1,551
891
39
7,824
(1) Due to rounding, numbers presented may not add to the totals provided.
32 Q4 2023 FINANCIAL INFORMATION
Year ended
Three months ended
December 31,
December 31,
($ in millions)
2023
2022
2023
2022
Operational EBITA:
Electrification
2,937
2,343
725
575
Motion
1,475
1,163
318
318
Process Automation
909
848
239
203
Robotics & Discrete Automation
536
340
118
125
Corporate and Other
‒
E-mobility
(167)
(15)
(33)
(3)
‒ Corporate costs, Intersegment elimination and other
(263)
(169)
(34)
(72)
Total
5,427
4,510
1,333
1,146
Acquisition-related amortization
(220)
(229)
(56)
(55)
Restructuring, related and implementation costs
(1)
(219)
(347)
(127)
(47)
Changes in obligations related to divested businesses
3
88
(2)
71
Gains and losses from sale of businesses
101
(7)
4
(3)
Acquisition- and divestment-related expenses and integration costs
(74)
(195)
(19)
(24)
Foreign exchange/commodity timing differences in income from operations:
Unrealized gains and losses on derivatives (foreign exchange,
commodities, embedded derivatives)
19
32
77
139
Realized gains and losses on derivatives where the underlying hedged
transaction has not yet been realized
12
(48)
20
–
Unrealized foreign exchange movements on receivables/payables (and
related assets/liabilities)
(13)
(15)
(38)
(70)
Certain other non-operational items:
Other income/expense relating to the Power Grids joint venture
36
(57)
9
10
Regulatory, compliance and legal costs
–
(317)
–
16
Business transformation costs
(2)
(205)
(152)
(66)
(38)
Changes in pre-acquisition estimates
(4)
(10)
–
(10)
Gains and losses from sale of investments in
equity-accounted companies
–
43
–
43
Certain other fair value changes, including asset impairments
(10)
45
(13)
(13)
Other non-operational items
18
(4)
(6)
20
Income from operations
4,871
3,337
1,116
1,185
Interest and dividend income
165
72
50
22
Interest and other finance expense
(275)
(130)
(78)
(23)
Non-operational pension (cost) credit
17
115
(6)
13
Income from continuing operations before taxes
4,778
3,394
1,082
1,197
(1) Includes impairment of certain assets.
(2) Amount includes ABB Way process transformation costs of $188 million and $131 million for year ended December 31, 2023 and 2022, respectively, and $66 million and
$33 million for the three months ended December 31, 2023 and 2022 , respectively.
Total assets
(1)
($ in millions)
December 31, 2023
December 31, 2022
Electrification
12,668
12,500
Motion
7,016
6,565
Process Automation
4,971
4,598
Robotics & Discrete Automation
5,047
4,901
Corporate and Other
(2)
11,238
10,584
Consolidated
40,940
39,148
(1) Total assets are after intersegment eliminations and therefore reflect third -party assets only.
(2) At December 31, 2023 and 2022 , respectively, Corporate and Other includes $57 million and $96 million of assets in the Power Grids business which is reported as
discontinued operations (see Note 3).
33 Q4 2023 FINANCIAL INFORMATION
34 Q4 2023 FINANCIAL INFORMATION
—
Supplemental Reconciliations and Definitions
The following reconciliations and definitions include measures which ABB uses to supplement its Consolidated Financial Information (unaudited) which is
prepared in accordance with United States generally accepted accounting principles (U.S. GAAP). Certain of these financial measures are, or may be,
considered non-GAAP financial measures as defined in the rules of the U.S. Securities and Exchange Commission (SEC).
While ABB’s management believes that the non-GAAP financial measures herein are useful in evaluating ABB’s operating results, this information should
be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with U.S. GAAP. Therefore
these measures should not be viewed in isolation but considered together with the Consolidated Financial Information (unaudited) prepared in accordance
with U.S. GAAP as of and for the year and three months ended December 31, 2023.
Comparable growth rates
Growth rates for certain key figures may be presented and discussed on a “comparable” basis. The comparable growth rate measures growth on a constant
currency basis. Since we are a global company, the comparability of our operating results reported in U.S. dollars is affected by foreign currency exchange rate
fluctuations. We calculate the impacts from foreign currency fluctuations by translating the current-year periods’ reported key figures into U.S. dollar amounts using
the exchange rates in effect for the comparable periods in the previous year.
Comparable growth rates are also adjusted for changes in our business portfolio. Adjustments to our business portfolio occur due to acquisitions, divestments, or
by exiting specific business activities or customer markets. The adjustment for portfolio changes is calculated as follows: where the results of any business
acquired or divested have not been consolidated and reported for the entire duration of both the current and comparable periods, the reported key figures of such
business are adjusted to exclude the relevant key figures of any corresponding quarters which are not comparable when computing the comparable growth rate.
Certain portfolio changes which do not qualify as divestments under U.S. GAAP have been treated in a similar manner to divestments. Changes in our portfolio
where we have exited certain business activities or customer markets are adjusted as if the relevant business was divested in the period when the decision to
cease business activities was taken. We do not adjust for portfolio changes where the relevant business has annualized revenues of less than $50 million.
The following tables provide reconciliations of reported growth rates of certain key figures to their respective comparable growth rate.
Comparable growth rate reconciliation by Business Area
Q4 2023 compared to Q4 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Business Area
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Electrification
0%
-1%
3%
2%
6%
-1%
3%
8%
Motion
17%
-2%
-2%
13%
5%
-1%
-2%
2%
Process Automation
7%
-2%
0%
5%
11%
-1%
0%
10%
Robotics & Discrete Automation
-31%
-2%
0%
-33%
-4%
-3%
0%
-7%
ABB Group
0%
-1%
1%
0%
5%
-1%
2%
6%
FY 2023 compared to FY 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Business Area
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Electrification
0%
1%
2%
3%
7%
1%
2%
10%
Motion
4%
1%
-1%
4%
16%
1%
-2%
15%
Process Automation
10%
2%
12%
24%
4%
1%
11%
16%
Robotics & Discrete Automation
-26%
1%
0%
-25%
14%
0%
0%
14%
ABB Group
-1%
2%
2%
3%
9%
2%
3%
14%
35 Q4 2023 FINANCIAL INFORMATION
Regional comparable growth rate reconciliation
Regional comparable growth rate reconciliation for ABB Group - Quarter
Q4 2023 compared to Q4 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
-2%
-5%
2%
-5%
7%
-5%
2%
4%
The Americas
3%
-1%
1%
3%
11%
-1%
4%
14%
of which: United States
5%
-1%
2%
6%
11%
0%
4%
15%
Asia, Middle East and Africa
0%
1%
1%
2%
-2%
2%
0%
0%
of which: China
-8%
1%
0%
-7%
-6%
0%
1%
-5%
ABB Group
0%
-1%
1%
0%
5%
-1%
2%
6%
Regional comparable growth rate reconciliation by Business Area - Quarter
Q4 2023 compared to Q4 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
7%
-5%
2%
4%
5%
-5%
0%
0%
The Americas
-1%
-1%
3%
1%
14%
-1%
8%
21%
of which: United States
-3%
0%
4%
1%
17%
0%
11%
28%
Asia, Middle East and Africa
-5%
3%
2%
0%
-4%
3%
1%
0%
of which: China
-9%
1%
2%
-6%
-4%
1%
1%
-2%
Electrification
0%
-1%
3%
2%
6%
-1%
3%
8%
Q4 2023 compared to Q4 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
30%
-8%
-4%
18%
-1%
-5%
-1%
-7%
The Americas
14%
-2%
-3%
9%
12%
-1%
-4%
7%
of which: United States
14%
-1%
-3%
10%
9%
-1%
-3%
5%
Asia, Middle East and Africa
10%
2%
0%
12%
6%
2%
0%
8%
of which: China
10%
1%
0%
11%
7%
2%
0%
9%
Motion
17%
-2%
-2%
13%
5%
-1%
-2%
2%
Q4 2023 compared to Q4 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
0%
-4%
0%
-4%
21%
-3%
0%
18%
The Americas
13%
-3%
0%
10%
6%
-1%
0%
5%
of which: United States
30%
-5%
0%
25%
6%
-1%
0%
5%
Asia, Middle East and Africa
10%
1%
0%
11%
7%
1%
0%
8%
of which: China
-4%
-1%
0%
-5%
14%
1%
0%
15%
Process Automation
7%
-2%
0%
5%
11%
-1%
0%
10%
Q4 2023 compared to Q4 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
-34%
-4%
0%
-38%
12%
-5%
0%
7%
The Americas
-19%
-2%
0%
-21%
-3%
-2%
0%
-5%
of which: United States
-19%
0%
0%
-19%
-16%
0%
0%
-16%
Asia, Middle East and Africa
-33%
2%
0%
-31%
-28%
1%
0%
-27%
of which: China
-36%
2%
0%
-34%
-42%
1%
0%
-41%
Robotics & Discrete Automation
-31%
-2%
0%
-33%
-4%
-3%
0%
-7%
36 Q4 2023 FINANCIAL INFORMATION
Regional comparable growth rate reconciliation for ABB Group – Year to date
FY 2023 compared to FY 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
-3%
-1%
3%
-1%
12%
-1%
3%
14%
The Americas
5%
0%
2%
7%
16%
-1%
3%
18%
of which: United States
3%
0%
2%
5%
17%
0%
4%
21%
Asia, Middle East and Africa
-4%
5%
3%
4%
0%
5%
3%
8%
of which: China
-12%
5%
2%
-5%
-5%
4%
2%
1%
ABB Group
-1%
2%
2%
3%
9%
2%
3%
14%
Regional comparable growth rate reconciliation by Business Area – Year to date
FY 2023 compared to FY 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
1%
-2%
1%
0%
7%
-2%
1%
6%
The Americas
1%
0%
2%
3%
15%
0%
4%
19%
of which: United States
-1%
0%
3%
2%
18%
0%
5%
23%
Asia, Middle East and Africa
-2%
7%
1%
6%
-4%
7%
1%
4%
of which: China
-9%
5%
1%
-3%
-9%
5%
1%
-3%
Electrification
0%
1%
2%
3%
7%
1%
2%
10%
FY 2023 compared to FY 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
3%
-2%
-1%
0%
19%
-3%
-1%
15%
The Americas
5%
-1%
-2%
2%
20%
0%
-4%
16%
of which: United States
3%
-1%
-2%
0%
19%
0%
-3%
16%
Asia, Middle East and Africa
4%
6%
0%
10%
9%
5%
0%
14%
of which: China
-1%
5%
0%
4%
1%
5%
0%
6%
Motion
4%
1%
-1%
4%
16%
1%
-2%
15%
FY 2023 compared to FY 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
13%
1%
13%
27%
2%
0%
12%
14%
The Americas
22%
-1%
9%
30%
11%
-1%
10%
20%
of which: United States
25%
-3%
12%
34%
14%
0%
12%
26%
Asia, Middle East and Africa
-2%
4%
12%
14%
0%
5%
12%
17%
of which: China
-3%
5%
14%
16%
4%
5%
13%
22%
Process Automation
10%
2%
12%
24%
4%
1%
11%
16%
FY 2023 compared to FY 2022
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Region
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Europe
-28%
0%
0%
-28%
30%
-3%
0%
27%
The Americas
-11%
-1%
0%
-12%
10%
-2%
0%
8%
of which: United States
-17%
0%
0%
-17%
-3%
-1%
0%
-4%
Asia, Middle East and Africa
-29%
4%
0%
-25%
-3%
4%
0%
1%
of which: China
-35%
4%
0%
-31%
-10%
3%
0%
-7%
Robotics & Discrete Automation
-26%
1%
0%
-25%
14%
0%
0%
14%
37 Q4 2023 FINANCIAL INFORMATION
Order backlog growth rate reconciliation
December 31, 2023 compared to December 31, 2022
US$
Foreign
(as
exchange
Portfolio
Business Area
reported)
impact
changes
Comparable
Electrification
6%
0%
8%
14%
Motion
13%
-4%
-1%
8%
Process Automation
21%
-2%
0%
19%
Robotics & Discrete Automation
-20%
0%
0%
-20%
ABB Group
9%
-2%
2%
9%
Other growth rate reconciliations
Q4 2023 compared to Q4 2022
Service orders growth rate
Services revenues growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Business Area
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Electrification
10%
-1%
0%
9%
11%
0%
0%
11%
Motion
32%
-1%
0%
31%
9%
-1%
0%
8%
Process Automation
29%
-3%
0%
26%
11%
-1%
0%
10%
Robotics & Discrete Automation
10%
-2%
0%
8%
11%
-3%
0%
8%
ABB Group
22%
-2%
0%
20%
11%
-1%
0%
10%
FY 2023 compared to FY 2022
Service orders growth rate
Services revenues growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Business Area
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Electrification
7%
1%
0%
8%
9%
1%
0%
10%
Motion
13%
2%
0%
15%
19%
2%
0%
21%
Process Automation
4%
0%
21%
25%
-4%
1%
18%
15%
Robotics & Discrete Automation
10%
0%
0%
10%
17%
0%
0%
17%
ABB Group
7%
1%
10%
18%
5%
1%
10%
16%
38 Q4 2023 FINANCIAL INFORMATION
Operational EBITA as % of operational revenues (Operational EBITA margin)
Definition
Operational EBITA margin
Operational EBITA margin is Operational EBITA as a percentage of operational revenues.
Operational EBITA
Operational earnings before interest, taxes and acquisition-related amortization (Operational EBITA) represents Income from operations excluding:
●
●
●
divested businesses),
●
●
●
●
exchange, commodities, embedded derivatives), (b) realized gains and losses on derivatives where the underlying hedged transaction has not yet been
realized, and (c) unrealized foreign exchange movements on receivables/payables (and related assets/liabilities).
Certain other non-operational items generally includes certain regulatory, compliance and legal costs, certain asset write downs/ impairments and certain other fair
value changes, changes in estimates relating to opening balance sheets of acquired businesses (changes in pre-acquisition estimates), as well as other items
which are determined by management on a case-by-case basis.
Operational EBITA is our measure of segment profit but is also used by management to evaluate the profitability of the Company as a whole.
Acquisition-related amortization
Amortization expense on intangibles arising upon acquisitions.
Restructuring, related and implementation costs
Restructuring, related and implementation costs consists of restructuring and other related expenses, as well as internal and external costs relating to the
implementation of group-wide restructuring programs.
Operational revenues
The Company presents operational revenues solely for the purpose of allowing the computation of Operational EBITA margin. Operational revenues are Total
revenues adjusted for foreign exchange/commodity timing differences in total revenues of: (i) unrealized gains and losses on derivatives, (ii) realized gains and
losses on derivatives where the underlying hedged transaction has not yet been realized, and (iii) unrealized foreign exchange movements on receivables (and
related assets). Operational revenues are not intended to be an alternative measure to Total revenues, which represent our revenues measured in accordance
with U.S. GAAP.
Reconciliation
The following tables provide reconciliations of consolidated Operational EBITA to Net Income and Operational EBITA Margin by business.
Reconciliation of consolidated Operational EBITA to Net Income
Year ended December 31,
Three months ended December 31,
($ in millions)
2023
2022
2023
2022
Operational EBITA
5,427
4,510
1,333
1,146
Acquisition-related amortization
(220)
(229)
(56)
(55)
Restructuring, related and implementation costs
(1)
(219)
(347)
(127)
(47)
Changes in obligations related to divested businesses
3
88
(2)
71
Gains and losses from sale of businesses
101
(7)
4
(3)
Acquisition- and divestment-related expenses and integration costs
(74)
(195)
(19)
(24)
Certain other non-operational items
(165)
(452)
(76)
28
Foreign exchange/commodity timing differences in income from operations
18
(31)
59
69
Income from operations
4,871
3,337
1,116
1,185
Interest and dividend income
165
72
50
22
Interest and other finance expense
(275)
(130)
(78)
(23)
Non-operational pension (cost) credit
17
115
(6)
13
Income from continuing operations before taxes
4,778
3,394
1,082
1,197
Income tax expense
(930)
(757)
(136)
(29)
Income from continuing operations, net of tax
3,848
2,637
946
1,168
Loss from discontinued operations, net of tax
(24)
(43)
(8)
(7)
Net income
3,824
2,594
938
1,161
(1) Includes impairment of certain assets.
39 Q4 2023 FINANCIAL INFORMATION
Reconciliation of Operational EBITA margin by business
Three months ended December 31, 2023
Corporate and
Robotics &
Other and
Process
Discrete
Intersegment
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
elimination
Consolidated
Total revenues
3,698
1,946
1,727
852
22
8,245
Foreign exchange/commodity timing
differences in total revenues:
Unrealized gains and losses
on derivatives
(33)
(48)
(23)
(5)
(4)
(113)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
(3)
1
(10)
(1)
(2)
(15)
Unrealized foreign exchange movements
on receivables (and related assets)
21
12
12
8
9
62
Operational revenues
3,683
1,911
1,706
854
25
8,179
Income (loss) from operations
670
292
259
99
(204)
1,116
Acquisition-related amortization
22
9
1
20
4
56
Restructuring, related and
implementation costs
(1)
50
41
(4)
6
34
127
Changes in obligations related to
divested businesses
–
–
–
–
2
2
Gains and losses from sale of businesses
(4)
–
–
–
–
(4)
Acquisition- and divestment-related expenses
and integration costs
7
2
(4)
7
7
19
Certain other non-operational items
5
2
–
(14)
83
76
Foreign exchange/commodity timing
differences in income from operations:
Unrealized gains and losses on derivatives
(foreign exchange, commodities,
embedded derivatives)
(31)
(36)
(12)
(2)
4
(77)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
(4)
1
(11)
(2)
(4)
(20)
Unrealized foreign exchange movements
on receivables/payables
(and related assets/liabilities)
10
7
10
4
7
38
Operational EBITA
725
318
239
118
(67)
1,333
Operational EBITA margin (%)
19.7%
16.6%
14.0%
13.8%
n.a.
16.3%
(1) Includes impairment of certain assets.
In the three months ended December 31, 2023, Certain other non-operational items in the table above includes the following:
Three months ended December 31, 2023
Robotics &
Process
Discrete
Corporate
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
and Other
Consolidated
Certain other non-operational items:
Other income/expense relating to the
Power Grids joint venture
–
–
–
–
(9)
(9)
Business transformation costs
(1)
3
–
–
(2)
65
66
Certain other fair values changes,
including asset impairments
1
1
–
(11)
22
13
Other non-operational items
1
1
–
(1)
5
6
Total
5
2
–
(14)
83
76
(1) Amounts include ABB Way process transformation costs of $66 million for the three months ended December 31, 2023.
40 Q4 2023 FINANCIAL INFORMATION
Three months ended December 31, 2022
Corporate and
Robotics &
Other and
Process
Discrete
Intersegment
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
elimination
Consolidated
Total revenues
3,498
1,845
1,551
891
39
7,824
Foreign exchange/commodity timing
differences in total revenues:
Unrealized gains and losses
on derivatives
(64)
(35)
(25)
(10)
(15)
(149)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
–
(2)
(1)
1
4
2
Unrealized foreign exchange movements
on receivables (and related assets)
33
15
14
10
13
85
Operational revenues
3,467
1,823
1,539
892
41
7,762
Income (loss) from operations
569
316
183
101
16
1,185
Acquisition-related amortization
24
8
1
19
3
55
Restructuring, related and
implementation costs
(1)
10
5
23
2
7
47
Changes in obligations related to
divested businesses
1
–
–
–
(72)
(71)
Gains and losses from sale of businesses
–
3
–
–
–
3
Acquisition- and divestment-related expenses
and integration costs
5
3
12
2
2
24
Certain other non-operational items
11
–
–
(8)
(31)
(28)
Foreign exchange/commodity timing
differences in income from operations:
Unrealized gains and losses on derivatives
(foreign exchange, commodities,
embedded derivatives)
(80)
(27)
(21)
1
(12)
(139)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
1
(1)
(2)
1
1
–
Unrealized foreign exchange movements
on receivables/payables
(and related assets/liabilities)
34
11
7
7
11
70
Operational EBITA
575
318
203
125
(75)
1,146
Operational EBITA margin (%)
16.6%
17.4%
13.2%
14.0%
n.a.
14.8%
(1) Includes impairment of certain assets.
In the three months ended December 31, 2022, Certain other non-operational items in the table above includes the following:
Three months ended December 31, 2022
Robotics &
Process
Discrete
Corporate
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
and Other
Consolidated
Certain other non-operational items:
Other income/expense relating to the
Power Grids joint venture
–
–
–
–
(10)
(10)
Regulatory, compliance and legal costs
–
–
–
–
(16)
(16)
Business transformation costs
(1)
5
–
–
–
33
38
Changes in pre-acquisition estimates
9
–
–
1
–
10
Gains and losses from sale of investments
in equity-accounted companies
–
–
–
–
(43)
(43)
Certain other fair values changes,
including asset impairments
–
–
–
8
5
13
Other non-operational items
(2)
–
–
(17)
(1)
(20)
Total
12
–
–
(8)
(32)
(28)
(1) Amounts include ABB Way process transformation costs of $33 million for the three months ended December 31, 2022.
41 Q4 2023 FINANCIAL INFORMATION
Year ended December 31, 2023
Corporate and
Robotics &
Other and
Process
Discrete
Intersegment
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
elimination
Consolidated
Total revenues
14,584
7,814
6,270
3,640
(73)
32,235
Foreign exchange/commodity timing
differences in total revenues:
Unrealized gains and losses
on derivatives
4
(33)
(20)
(1)
2
(48)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
(8)
–
(2)
–
(1)
(11)
Unrealized foreign exchange movements
on receivables (and related assets)
1
10
4
5
(2)
18
Operational revenues
14,581
7,791
6,252
3,644
(74)
32,194
Income (loss) from operations
2,800
1,390
947
446
(712)
4,871
Acquisition-related amortization
88
35
5
79
13
220
Restructuring, related and
implementation costs
(1)
76
46
3
6
88
219
Changes in obligations related to
divested businesses
1
–
–
–
(4)
(3)
Gains and losses from sale of businesses
(75)
–
(26)
–
–
(101)
Acquisition- and divestment-related expenses
and integration costs
30
17
(7)
14
20
74
Certain other non-operational items
16
6
–
(10)
153
165
Foreign exchange/commodity timing
differences in income from operations:
Unrealized gains and losses on derivatives
(foreign exchange, commodities,
embedded derivatives)
11
(21)
(13)
(1)
5
(19)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
(5)
–
(4)
–
(3)
(12)
Unrealized foreign exchange movements
on receivables/payables
(and related assets/liabilities)
(5)
2
4
2
10
13
Operational EBITA
2,937
1,475
909
536
(430)
5,427
Operational EBITA margin (%)
20.1%
18.9%
14.5%
14.7%
n.a.
16.9%
(1) Includes impairment of certain assets.
In the year ended December 31, 2023, Certain other non-operational items in the table above includes the following:
Year ended December 31, 2023
Robotics &
Process
Discrete
Corporate
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
and Other
Consolidated
Certain other non-operational items:
Other income/expense relating to the
Power Grids joint venture
–
–
–
–
(36)
(36)
Business transformation costs
(1)
15
1
–
1
188
205
Changes in pre-acquisition estimates
1
–
–
–
3
4
Certain other fair values changes,
including asset impairments
2
3
–
(10)
15
10
Other non-operational items
(2)
2
–
(1)
(17)
(18)
Total
16
6
–
(10)
153
165
(1) Amounts include ABB Way process transformation costs of $188 million for the year ended December 31, 2023.
42 Q4 2023 FINANCIAL INFORMATION
Year ended December 31, 2022
Corporate and
Robotics &
Other and
Process
Discrete
Intersegment
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
elimination
Consolidated
Total revenues
13,619
6,745
6,044
3,181
(143)
29,446
Foreign exchange/commodity timing
differences in total revenues:
Unrealized gains and losses
on derivatives
(37)
(18)
25
4
(1)
(27)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
11
–
10
1
33
55
Unrealized foreign exchange movements
on receivables (and related assets)
6
4
(2)
1
(9)
–
Operational revenues
13,599
6,731
6,077
3,187
(120)
29,474
Income (loss) from operations
2,140
1,092
663
247
(805)
3,337
Acquisition-related amortization
104
31
4
78
12
229
Restructuring, related and
implementation costs
(1)
28
16
29
11
263
347
Changes in obligations related to
divested businesses
1
–
–
–
(89)
(88)
Gains and losses from sale of businesses
(1)
8
–
–
–
7
Acquisition- and divestment-related expenses
and integration costs
36
15
134
6
4
195
Certain other non-operational items
41
–
–
(8)
419
452
Foreign exchange/commodity timing
differences in income from operations:
Unrealized gains and losses on derivatives
(foreign exchange, commodities,
embedded derivatives)
(30)
(5)
6
4
(7)
(32)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
10
–
9
1
28
48
Unrealized foreign exchange movements
on receivables/payables
(and related assets/liabilities)
14
6
3
1
(9)
15
Operational EBITA
2,343
1,163
848
340
(184)
4,510
Operational EBITA margin (%)
17.2%
17.3%
14.0%
10.7%
n.a.
15.3%
(1) Includes impairment of certain assets.
In the year ended December 31, 2022, certain other non-operational items in the table above includes the following:
Year ended December 31, 2022
Robotics &
Process
Discrete
Corporate
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
and Other
Consolidated
Certain other non-operational items:
Other income/expense related to the
Power Grids joint venture
–
–
–
–
57
57
Regulatory, compliance and legal costs
–
–
–
–
317
317
Business transformation costs
20
–
–
–
132
152
Changes in pre-acquisition estimates
11
–
–
(1)
–
10
Gains and losses from sale of investments
in equity-accounted companies
–
–
–
–
(43)
(43)
Certain other fair values changes,
including asset impairments
(3)
–
–
8
(50)
(45)
Other non-operational items
14
–
–
(15)
5
4
Total
42
–
–
(8)
418
452
(1) Amounts include ABB Way process transformation costs of $131 million for the year ended December 31, 2022.
43 Q4 2023 FINANCIAL INFORMATION
Net debt
Definition
Net debt
Net debt is defined as Total debt less Cash and marketable securities.
Total debt
Total debt is the sum of Short-term debt and current maturities of long-term debt, and Long-term debt.
Cash and marketable securities
Cash and marketable securities is the sum of Cash and equivalents, Restricted cash (current and non-current) and Marketable securities and short-term
investments.
Reconciliation
December 31,
($ in millions)
2023
2022
2021
Short-term debt and current maturities of long-term debt
2,607
2,535
1,384
Long-term debt
5,221
5,143
4,177
Total debt
7,828
7,678
5,561
Cash and equivalents
3,891
4,156
4,159
Restricted cash - current
18
18
30
Marketable securities and short-term investments
1,928
725
1170
Restricted cash - non-current
–
–
300
Cash and marketable securities
5,837
4,899
5,659
Net debt (cash)
1,991
2,779
(98)
Net debt/Equity ratio
Definition
Net debt/Equity ratio
Net debt/Equity ratio is defined as Net debt divided by Equity.
Equity
Equity is defined as Total stockholders’ equity.
Reconciliation
($ in millions, unless otherwise indicated)
December 31, 2023
December 31, 2022
Total stockholders' equity
14,057
13,187
Net debt (as defined above)
1,991
2,779
Net debt / Equity ratio
0.14
0.21
Net debt/EBITDA Ratio
Definition
Net debt/EBITDA
Net debt/EBITDA is defined as Net debt divided by EBITDA.
EBITDA
EBITDA is defined as Income from operations for the trailing twelve months preceding the balance sheet date before depreciation and amortization for the same
trailing twelve-month period.
Reconciliation
($ in millions, unless otherwise indicated)
December 31, 2023
December 31, 2022
Income from operations
4,871
3,337
Depreciation and Amortization
780
814
EBITDA
5,651
4,151
Net debt (as defined above)
1,991
2,779
Net debt / EBITDA
0.35
0.67
44 Q4 2023 FINANCIAL INFORMATION
Net working capital as a percentage of revenues
Definition
Net working capital as a percentage of revenues
Net working capital as a percentage of revenues is calculated as Net working capital divided by Adjusted revenues for the trailing twelve months.
Net working capital
Net working capital is the sum of (i) receivables, net, (ii) contract assets, (iii) inventories, net, and (iv) prepaid expenses; less (v) accounts payable, trade, (vi)
contract liabilities and (vii) other current liabilities (excluding primarily: (a) income taxes payable, (b) current derivative liabilities, (c) pension and other employee
benefits, (d) payables under the share buyback program, (e) liabilities related to certain other restructuring-related activities and (f) liabilities related to the
divestment of the Power Grids business); and including the amounts related to these accounts which have been presented as either assets or liabilities held for
sale but excluding any amounts included in discontinued operations .
Adjusted revenues for the trailing twelve months
Adjusted revenues for the trailing twelve months includes total revenues recorded by ABB in the twelve months preceding the relevant balance sheet date adjusted
to eliminate revenues of divested businesses and the estimated impact of annualizing revenues of certain acquisitions which were completed in the same trailing
twelve-month period.
Reconciliation
December 31,
($ in millions, unless otherwise indicated)
2023
2022
2021
Net working capital:
Receivables, net
7,446
6,858
6,551
Contract assets
1,090
954
990
Inventories, net
6,149
6,028
4,880
Prepaid expenses
235
230
206
Accounts payable, trade
(4,847)
(4,904)
(4,921)
Contract liabilities
(1)
(2,844)
(2,275)
(1,894)
Other current liabilities
(2)
(3,972)
(3,675)
(3,509)
Net working capital
3,257
3,216
2,303
Total revenues for the twelve months ended
32,235
29,446
28,945
Adjustment to annualize/eliminate revenues of certain acquisitions/divestments
(186)
(513)
(517)
Adjusted revenues for the trailing twelve months
32,049
28,933
28,428
Net working capital as a percentage of revenues (%)
10.2%
11.1%
8.1%
(1) Amount includes certain amounts relating to contract liabilities that are presented in other non-current liabilities.
(2) Amounts exclude $999 million, $648 million and $858 million at December 31, 2023, 2022 and 2021, respectively, related primarily to (a) income taxes payable, (b) current derivative
liabilities, (c) pension and other employee benefits, (d) payables under the share buyback program and (e) liabilities related to the divestment of the Power Grids business.
45 Q4 2023 FINANCIAL INFORMATION
Free cash flow conversion to net income
Definition
Free cash flow conversion to net income
Free cash flow conversion to net income is calculated as free cash flow divided by Adjusted net income attributable to ABB.
Adjusted net income attributable to ABB
Adjusted net income attributable to ABB is calculated as net income attributable to ABB adjusted for: (i) impairment of goodwill, (ii) losses from extinguishment of
debt, and (iii) gains arising on the sale of the Power Conversion Division, the Hitachi Energy Joint Venture and the Power Grids business, the latter being included
in discontinued operations.
Free cash flow
Free cash flow is calculated as net cash provided by operating activities adjusted for: (i) purchases of property, plant and equipment and intangible assets and (ii)
proceeds from sales of property, plant and equipment.
Free cash flow conversion to net income
Twelve months to
($ in millions, unless otherwise indicated)
December 31, 2023
December 31, 2022
Net cash provided by operating activities – continuing operations
4,301
1,334
Adjusted for the effects of continuing operations:
Purchases of property, plant and equipment and intangible assets
(770)
(762)
Proceeds from sale of property, plant and equipment
147
127
Free cash flow from continuing operations
3,678
699
Net cash used in operating activities – discontinued operations
(11)
(47)
Free cash flow
3,667
652
Adjusted net income attributable to ABB
(1)
3,686
2,442
Free cash flow conversion to net income
99%
27%
(1) Adjusted net income attributable to ABB for the year ended December 31, 2023, is adjusted to exclude the gain on sale of the Power Conversion Division of $59 million. For the year
ended December 31, 2022, Adjusted net income attributable to ABB, is adjusted to exclude the gain on the sale of Hitachi Energy Joint Venture of $43 million and reductions to
the gain on the sale of Power Grids of $10 million .
46 Q4 2023 FINANCIAL INFORMATION
Net finance expenses
Definition
Net finance expenses is calculated as Interest and dividend income less Interest and other finance expense.
Reconciliation
Year ended December 31,
Three months ended December 31,
($ in millions)
2023
2022
2023
2022
Interest and dividend income
165
72
50
22
Interest and other finance expense
(275)
(130)
(78)
(23)
Net finance expenses
(110)
(58)
(28)
(1)
Book-to-bill ratio
Definition
Book-to-bill ratio is calculated as Orders received divided by Total revenues.
Reconciliation
Year ended December 31,
2023
2022
($ in millions, except Book-to-bill presented as a ratio)
Orders
Revenues
Book-to-bill
Orders
Revenues
Book-to-bill
Electrification
15,189
14,584
1.04
15,182
13,619
1.11
Motion
8,222
7,814
1.05
7,896
6,745
1.17
Process Automation
7,535
6,270
1.20
6,825
6,044
1.13
Robotics & Discrete Automation
3,066
3,640
0.84
4,116
3,181
1.29
Corporate and Other
(194)
(73)
n.a.
(31)
(143)
n.a.
ABB Group
33,818
32,235
1.05
33,988
29,446
1.15
Three months ended December 31,
2023
2022
($ in millions, except Book-to-bill presented as a ratio)
Orders
Revenues
Book-to-bill
Orders
Revenues
Book-to-bill
Electrification
3,395
3,698
0.92
3,385
3,498
0.97
Motion
1,937
1,946
1.00
1,649
1,845
0.89
Process Automation
1,870
1,727
1.08
1,746
1,551
1.13
Robotics & Discrete Automation
550
852
0.65
798
891
0.90
Corporate and Other
(103)
22
n.a.
42
39
n.a.
ABB Group
7,649
8,245
0.93
7,620
7,824
0.97
47 Q4 2023 FINANCIAL INFORMATION
Return on Capital employed (ROCE)
Definition
Return on Capital employed (ROCE)
Return on Capital employed is calculated as Operational EBITA after tax, divided by the average of the period’s opening and closing Capital employed, adjusted to
reflect impacts from the timing of significant acquisitions/divestments occurring during the period.
Capital employed
Capital employed is calculated as the sum of Adjusted total fixed assets and Net working capital (as defined above).
Adjusted total fixed assets
Adjusted total fixed assets is the sum of (i) property, plant and equipment, net, (ii) goodwill, (iii) other intangible assets, net, (iv) investments in equity-accounted
companies, and (v) operating lease right-of-use assets, less (vi) deferred tax liabilities recognized in certain acquisitions.
Notional tax on Operational EBITA
The Notional tax on Operational EBITA is computed using the adjusted group effective tax rate multiplied by Operational EBITA.
Adjusted Group effective tax rate
The Adjusted Group effective tax rate is computed by dividing an adjusted income tax expense by an adjusted pre-tax income. Certain amounts recorded in
income before taxes and the related income tax expense (primarily due to gains and losses from sale of businesses and in 2022, regulatory penalties in connection
with the Kusile project) are removed from the reported amounts when computing these adjusted amounts. Certain other amounts recorded in income tax expense
are also excluded from the computation to determine the Adjusted Group effective tax rate.
Reconciliation
December 31,
($ in millions, unless otherwise indicated)
2023
2022
2021
Adjusted total fixed assets:
Property, plant and equipment, net
4,142
3,911
4,045
Goodwill
10,561
10,511
10,482
Other intangible assets, net
1,223
1,406
1,561
Investments in equity-accounted companies
187
130
1,670
Operating lease right-of-use assets
893
841
895
Total fixed assets
17,006
16,799
18,653
Less: Deferred taxes recognized in certain acquisitions
(1)
(297)
(358)
(417)
Adjusted total fixed assets
16,709
16,441
18,236
Net working capital - (as defined above)
3,257
3,216
2,303
Capital employed
19,966
19,657
20,539
Average Capital employed:
Capital employed at the end of the previous year
19,657
20,539
21,976
Capital employed at the end of the current year
19,966
19,657
20,539
19,812
20,098
21,258
Adjusted for timing of acquisitions/divestments
–
948
224
Average Capital employed
19,812
21,046
21,482
Operational EBITA for the year ended
5,427
4,510
4,122
Notional tax on Operational EBITA
(1,248)
(1,037)
(929)
Operational EBITA after tax
4,179
3,473
3,193
Return on Capital employed (ROCE)
21.1%
16.5%
14.9%
(1) Amount relates to GEIS acquired in 2018, B&R acquired in 2017, Thomas & Betts acquired in 2012 and Baldor acquired in 2011.
48 Q4 2023 FINANCIAL INFORMATION
—
ABB Ltd
Corporate Communications
P.O. Box 8131
8050 Zurich
Switzerland
Tel: +41 (0)43 317 71
11
www.abb.com
—
ZURICH, SWITZERLAND, JANUARY 31, 2024
Changes to composition of ABB Board
of Directors
•
members
•
Annual General Meeting
ABB today announced that the Board of Directors will propose Johan Forssell and Mats Rahmström as new
members for election at the company’s Annual General Meeting (AGM) on March 21, 2024. They will replace
Jacob Wallenberg and Gunnar Brock who have decided not to stand for re-election. Jacob Wallenberg has
been Vice-Chairman of the Board of Directors since 2015 and a non-executive member since 1999. He is a
member of the Governance and Nomination Committee. Gunnar Brock joined ABB’s board in 2018 and is a
member of the Finance, Audit and Compliance Committee.
“On behalf of ABB and our entire Board of Directors I would like to thank Jacob for his significant contribution to
ABB’s success as a leader in electrification and automation over the past almost 25 years. At the same time
our thanks also go to Gunnar who has played an important role serving on our board over the past six years. I
wish both of them well for their future endeavors. We are looking forward to welcoming both Johan and Mats.
With their experience as seasoned senior leaders with particular focus on industrial companies and
decentralized operating models they will perfectly complement the competencies of our board,” said ABB
Chairman Peter Voser.
Johan Forssell has been President and CEO of Investor since 2015 and joined the company in 1995. He has
decided to step down from his current position as of May 2024 and will in future be assigned to Investor as an
industrial advisor with a particular focus on board assignments in industrial companies. He currently serves on
the boards of Atlas Copco AB, Epiroc, Wärtsilä and EQT. Johan Forssell was born in 1971 and is a Swedish
citizen.
Mats Rahmström has been President and CEO of Atlas Copco Group since 2017 and joined the company in
1988. He has decided to step down from his current position as of April 2024 to focus on board work and
industrial advisory roles going forward. He is currently chairman of the board of Piab AB, board member of
Wärtsilä and member of The Royal Swedish Academy of Engineering Sciences. Mats Rahmström was born in
1965 and is a Swedish citizen.
The board members standing for re-election are: Peter Voser, David Constable, Frederico Fleury Curado, Lars
Förberg, Denise C. Johnson, Jennifer Xin-Zhe Li, Geraldine Matchett and David Meline. ABB will publish its
invitation to the 2024 AGM on February 23, 2024. Further details on ABB’s current Board of Directors can be
found here (https://global.abb/group/en/about/corporate-governance/board-of-directors).
1/2
ABB
is a technology leader in electrification and automation, enabling a more sustainable and resource-
efficient future. The company’s solutions connect engineering know-how and software to optimize how things
are manufactured, moved, powered and operated. Building on more than 140 years of excellence, ABB’s
~105,000 employees are committed to driving innovations that accelerate industrial transformation.
www.abb.com
—
For more information please contact:
Media Relations
Phone: +41 43 317 71 11
Email: [email protected]
Investor Relations
Phone: +41 43 317 71 11
Email: [email protected]
ABB Ltd
Affolternstrasse 44
8050 Zurich
Switzerland
CHANGES TO COMPOSITION OF ABB BOARD OF DIRECTORS
2/2
October 1 — December 31, 2023
ABB Ltd announces that the following members of the Executive Committee or Board of Directors of ABB have purchased,
sold or been granted ABB’s registered shares, call options and warrant appreciation rights (“WARs”), in the following amounts:
Name
Date
Type of Instrument
Received*
Purchased
Sold
Price / Instrument
Peter Voser
December 14, 2023
Share
39’000
CHF
37.29
Peter Voser
December 14, 2023
Share
11’000
CHF
37.23
Peter Terwiesch
December 11, 2023
Share
30’360
CHF
36.71
Björn Rosengren
November 15, 2023
Share
360
CHF
27.99
Karin Lepasoon
November 15, 2023
Share
360
CHF
27.99
Morten Wierod
November 15, 2023
Share
360
CHF
27.99
Peter Terwiesch
November 15, 2023
Share
360
CHF
27.99
Tarak Mehta
November 15, 2023
Share
360
CHF
27.99
Gunnar Brock
November 01, 2023
Share
1’924
CHF
32.81
David Constable
November 01, 2023
Share
1’866
CHF
32.81
Frederico Curado
November 01, 2023
Share
3’876
CHF
32.81
Lars Förberg
November 01, 2023
Share
4’628
CHF
32.81
Denise Johnson
November 01, 2023
Share
3’929
CHF
32.81
Jennifer Xin-Zhe Li
November 01, 2023
Share
1’890
CHF
32.81
Geraldine Matchett
November 01, 2023
Share
2’376
CHF
32.81
David Meline
November 01, 2023
Share
2’332
CHF
32.81
Peter Voser
November 01, 2023
Share
17’462
CHF
32.81
Jacob Wallenberg
November 01, 2023
Share
2’624
CHF
32.81
Key:
* Received instruments were delivered as part of the ABB Ltd Director’s or Executive Committee Member’s compensation or as compensation for foregone
benefits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ABB LTD
Date: February 1, 2024.
By:
/s/ Ann-Sofie Nordh
Name:
Ann-Sofie Nordh
Title:
Group Senior Vice President and
Head of Investor Relations
Date: February 1, 2024.
By:
/s/ Richard A. Brown
Name:
Richard A. Brown
Title:
Group Senior Vice President and
Chief Counsel Corporate & Finance