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 April 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 April 18, 2024 titled “Q1 2024 results”.
2.
Q1 2024 Financial Information.
3.
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
—
“Against high comparables, our Q1 performance shows the year has started off well with
stronger than expected order momentum, record-high margin and strong cash delivery. This
makes us confident to nudge up our margin expectation for 2024.”
Björn Rosengren
, CEO
—
ZURICH, SWITZERLAND, APRIL 18, 2024
Q1 2024 results
Positive book-to-bill, record-high margin and
strong cash flow
●
1
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1
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1
1
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2
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—
Q1 2024
First three months
Press Release
Ad hoc Announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange
KEY FIGURES
CHANGE
($ millions, unless otherwise indicated)
Q1 2024
Q1 2023
US$
Comparable
1
Orders
8,974
9,450
-5%
-4%
Revenues
7,870
7,859
0%
2%
Gross Profit
2,935
2,716
8%
as % of revenues
37.3%
34.6%
+2.7 pts
Income from operations
1,217
1,198
2%
Operational EBITA
1
1,417
1,277
11%
11%
as % of operational revenues
1
17.9%
16.3%
+1.6 pts
Income from continuing operations, net of tax
914
1,065
-14%
Net income attributable to ABB
905
1,036
-13%
Basic earnings per share ($)
0.49
0.56
-12%
2
Cash flow from operating activities
726
282
157%
Free cash flow
1
551
162
240%
1
For a reconciliation of non-GAAP measures, see “supplemental reconciliations and definitions” in the attached Q1 2024 Financial Information.
2
EPS growth rates are computed using unrounded amounts.
3
Constant currency (not adjusted for portfolio changes).
ABB INTERIM REPORT
I
Q1 2024
My key take-aways from the first quarter of 2024 are the better
than expected order intake of $9 billion, positive book-to-bill of
1.14 and record-high Operational EBITA margin as well as the
free cash flow of $551 million representing a strong delivery for
a first quarter. We published our sustainability report, where a
highlight was the proof point of one of our core customer value
propositions - reduced greenhouse gas (GHG) emissions. From
products sold in 2023, and through their lifecycle, we enabled
our customers to avoid 74 megatons of GHG emissions. At the
current total of 139 megatons, we are on a good path towards
our ambition of helping customers avoid 600 megatons of CO
₂
e
emissions throughout the lifetime of products sold from 2022 to
2030.
As expected, orders declined from last year’s record-high
comparable, however the drop was limited at 5% (4%
comparable). To summarize the quarter, we see a continued
high level of customer activity in the project and systems areas,
and I am encouraged by the positive order development in
Electrification’s short-cycle businesses. So, while ABB’s total
orders declined in the first quarter, I feel even more confident
about 2024 than I did coming into the year.
It was impressive to see new record-high order intake in both
Electrification and Motion business areas. Process Automation
orders declined from the all-time-high comparable, but
remained fairly consistent with strong recent quarterly levels. At
the start of this year, we called the fourth quarter the trough for
Robotics & Discrete Automation order level. This realized, and
as expected order intake increased sequentially . However, it
declined sharply year -on-year on the back of customers
normalizing order patterns after a pre-buy period.
Revenues remained stable (up 2% comparable), with
comparable growth supported in equal parts by price and
volumes. I was pleased to see the positive gross margin
improvement of 270 basis points to 37.3 %, supported by a
positive development in all business areas. A more efficient
execution of slightly higher volumes and price contributed to the
160 basis points increase in Operational EBITA margin to the
new record-high of 17.9%. In my view this is a good sign that
there is still upside potential in ABB and we can make mid-term
improvements within the new higher margin target range
announced in November.
The strong cash flow start to the year positions us for what we
anticipate to be another good annual free cash flow delivery of
at least similar to last year’s level. Using the cash to expand
know-how and footprint through acquisitions is an important
path to creating long -term shareholder value. It was nice to see
the announced acquisition of SEAM, which would add energy
asset management and advisory services to clients across
industrial and commercial building markets to the Electrification
Service division. We have a good target pipeline, including
some deals which are slightly more sizeable than most of the
recent announcements. The share buyback program is a tool
we use to distribute residual excess cash, and we announced
another annual program of up to $1 billion which launched on
April 1. The size of the program is consistent with last year’s,
although the time frame for execution is shorter as it runs until
the end of January 2025, to align with the announcement of Q4
2024 results and 2024 dividend proposal.
During the quarter we announced my decision to retire as CEO
from ABB. I remain fully committed until the end of July when
Morten Wierod takes the reins, and thereafter I will support the
transition in an advisory role until the end of the year. I am
happy to see Morten take this step and I am confident that the
ABB Way operating model will be even further engrained in our
ways of working under his already proven leadership. While we
regret to see him go, I want to congratulate Tarak Mehta on his
new opportunity outside of ABB. Tarak has made an
outstanding contribution to the success of our company and I
wish him all the best for this next step on his journey. The
process to find new leaders to the business areas Electrification
and Motion is ongoing and Morten looks to have a full team in
place when he takes office in August.
Björn Rosengren
CEO
In the
second quarter of 2024
, we anticipate a mid-single -digit
comparable revenue growth year-on-year and the Operational
EBITA margin to be slightly higher than in the first quarter 2024.
In full-year 2024
, we expect a positive book -to-bill, comparable
revenue growth to be about 5% and the Operational EBITA
margin to be about 18%.
CEO summary
Outlook
ABB INTERIM REPORT
I
Q1 2024
The first quarter order intake of $8,974 million represents one of
the strongest quarterly levels for ABB Group, yet orders declined
by 5% (4% comparable) from last year’s record-high. Two
business areas even improved from last year’s all-time-highs
with Motion’s order growth at 2% (1% comparable) and
Electrification at a strong 6% (8% comparable). In Electrification,
the year-on-year improvement was supported by a positive
development in both the long- and short-cycle businesses. In
Process Automation the underlying market activity remained
robust, but year-on-year orders declined by 20% (20%
comparable) with growth challenged by the record-high
comparable and the timing of orders in the current quarter. In
Robotics & Discrete Automation, orders declined sharply by 30%
(30% comparable) due to the still on-going normalization of
order patterns in discrete automation and a softer robotics
market.
Orders in the Americas dropped by 3% (3% comparable) as a
positive comparable development in the United States was
offset by declines elsewhere and mainly due to the timing of
large orders. Europe declined by 8% (9% comparable) weighed
down by important markets like Germany and Italy. Asia, Middle
East and Africa declined by 4% (0% comparable) where the
strong comparable development in countries like India, Japan
and Australia offset a sharp decline in China.
In transport & infrastructure, there were positive developments in
marine, ports and rail .
Industrial areas with particularly strong development in all regions
were utilities and datacenters.
Orders in the buildings segment improved overall, due to the
combined impact from a positive development in the commercial
area driven by the United States, while the residential segment
remained stable in the US and softened slightly in other regions.
In the robotics-related segments, orders declined in the
automotive, general industry and consumer -related segments.
The machine builder segment declined as customers normalized
order patterns after earlier pre-buys.
On a very challenging comparable, orders declined in the large
process-related segments of oil & gas, pulp & paper and mining.
However, a positive development was recorded in the still less
sizeable low carbon-related areas such as nuclear, carbon capture,
hydrogen etc. The underlying market sentiment remained robust
across the board.
Revenues remained stable (up 2% comparable) and amounted to
$7,870 million. On a business area level there were variances, with
strong growth in Electrification and Process Automation, while
Motion and Robotics & Discrete Automation declined. Group
revenues were supported by execution of the strong order backlog
which more than offset weakness in parts of the short-cycle
businesses. In total, price and volume contributed in equal parts to
comparable growth.
Revenues by region
($ in millions,
unless otherwise
indicated)
CHANGE
Q1 2024
Q1 2023
US$
Comparable
Europe
2,748
2,872
-4%
-5%
The Americas
2,789
2,653
5%
7%
Asia, Middle East
and Africa
2,333
2,334
0%
5%
ABB Group
7,870
7,859
0%
2%
Orders by region
($ in millions,
unless otherwise
indicated)
CHANGE
Q1 2024
Q1 2023
US$
Comparable
Europe
3,298
3,582
-8%
-9%
The Americas
2,904
2,985
-3%
-3%
Asia, Middle East
and Africa
2,772
2,883
-4%
0%
ABB Group
8,974
9,450
-5%
-4%
Growth
Q1
Q1
Change year-on-year
Orders
Revenues
Comparable
-4%
2%
FX
0%
-1%
Portfolio changes
-1%
-1%
Total
-5%
0%
Orders and revenues
ABB INTERIM REPORT
I
Q1 2024
Gross profit
Gross profit increased by 8% (9% constant currency) to
$2,935 million, reflecting a gross margin improvement of 270 basis
points to 37.3%. Gross margin improved in all four business areas.
Income from operations
Income from operations amounted to $1,217 million and improved
by 2% year-on-year. Compared with the last year period, the
earnings improvement was supported by a strong er operational
performance partially offset by higher expenses related to the ABB
Way transformation program and adverse currency hedging
impacts. Margin on Income from operations was 15.5%, up by
30 basis points year -on-year.
Operational EBITA
Despite limited revenue growth, the Operational EBITA improved
by 11% year-on-year to $1,417 million and the margin increased
by 160 basis points to a new all-time-high of 17. 9%. Contribution
from operational leverage on slightly higher volumes, a positive
price impact and effects from continuous efficiency measures more
than offset the higher expenses related to labor costs, Research &
development (R&D) and Selling, general and administrative
(SG&A) expenses. Operational EBITA in Corporate and Other
amounted to -$1 18 million, of which -$6 4 million related to the
underlying Corporate costs. The remaining -$54 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 will
not be visible until towards the end of 2024.
Finance net
Net finance income contributed with a positive $20 million, an
improvement from last year’s expense of $21 million. The year-on-
year improvement is due to a combination of a lower net debt
position and favorable mix of interest rates between borrowings and
cash deposits.
Income tax
Income tax expense was $339 million with an effective tax rate of
27%. This is higher than last year’s rate of 10%, which was low due
to favorable resolution of a prior year tax matter relating to the
divestment of the Power Grids business.
Net income and earnings per share
Net income attributable to ABB was $905 million, representing a
reduction of 13% from last year, as the improved operational
performance this year did not offset last year’s positive benefits from
the low tax rate. This resulted in basic earnings per share of $0.49,
down from $0.56 in the last year period.
Operational EBITA
($ in millions)
Q1 2024
Q1 2023
Corporate and Other
E-mobility
(54)
(28)
Corporate costs, intersegment
eliminations and other
1
(64)
(83)
Total
(118)
(111)
1
Majority of which relates to underlying corporate
Earnings
ABB INTERIM REPORT
I
Q1 2024
Net working capital
Net working capital amounted to $3,588 million, decreasing
year-on-year from $4,164 million as higher receivables and
contract assets were more than offset by higher customer
advances, and accounts payables. Net working capital as a
percentage of revenues
1
13.9% one year ago.
Capital expenditures
Purchases of property, plant and equipment and intangible
assets amounted to $181 million.
Net debt
Net debt
1
and decreased from $3,826 million year-on-year. The
sequential increase from $1,991 million was mainly due to the
initial dividend payment.
Cash flows
Cash flow from operating activities was $726 million,
representing a steep year-on-year increase from
$282 million. Three out of four business areas increased cash
flow from operating activities. The increase was driven by better
operational performance and a lower build-up of net working
capital year-on-year mostly linked to trade receivables and
inventories.
Share buyback program
ABB has completed its share buyback program that was
launched in April 2023. Through this buyback program, ABB
repurchased a total of 21,387,687 shares – equivalent to 1.09%
of its issued share capital at launch of the buyback program –
for a total amount of approximately $0.83 billion. A new share
buyback program of up to $1 billion was launched on April 1,
2024, and will run to 31 January, 2025. ABB’s total number of
issued shares, including shares held in treasury, amounts to
1,882,002,575.
($ in millions,
unless otherwise indicated)
Mar. 31
2024
Mar. 31
2023
Dec. 31
2023
Short term debt and current
maturities of long-term debt
1,957
3,433
2,607
Long-term debt
6,346
5,230
5,221
Total debt
8,303
8,663
7,828
Cash & equivalents
4,102
3,438
3,891
Restricted cash - current
18
19
18
Marketable securities and
short-term investments
2,097
1,380
1,928
Cash and marketable securities
6,217
4,837
5,837
Net debt (cash)*
2,086
3,826
1,991
Net debt (cash)* to EBITDA ratio
0.4
0.9
0.4
Net debt (cash)* to Equity ratio
0.16
0.30
0.14
*
At March 31, 2024, March, 31, 2023 and Dec. 31, 2023, net debt(cash) excludes net pension
(assets)/liabilities of $(189) million, $(301) million and $(191) million, respectively.
Balance sheet & Cash flow
ABB INTERIM REPORT
I
Q1 2024
Orders and revenues
The first quarter order intake of $4,392 million represents a
new record level, and increased by 6% (8% comparable)
from last year. Continued robust demand for the project and
systems businesses which this quarter was coupled with
strong year-on-year growth in the short-cycle businesses.
The book-to-bill ratio was 1.19.
●
Orders remained stable or increased in most customer
segments with particular strength in datacenters and
utilities. The overall buildings segment improved, as a
positive development in the commercial area driven by
the United States more than offset a slight weakness in
the residential segment , which was stable in the US, and
softened slightly in other regions.
●
From a geographical perspective order intake improved in
all three regions. Europe was up by 3% (2% comparable).
Growth in the Americas was 9% (11% comparable) with
the United States outpacing the region at 13% (17%
comparable). In Asia, Middle East and Africa orders
improved by 6% (11% comparable) with strong growth in
countries like India offsetting a slight drop in China of 7%
(2% comparable).
●
Revenues increased by 3% (6% comparable) to
$3,680 million with a positive development in most
divisions. Higher volumes were the main driver to
comparable growth, with the added support from slightly
increased pricing. Execution of the order backlog
combined with higher demand in the short-cycle
businesses supported the quarterly revenue generation.
Profit
Record-high Operational EBITA of $826 million and all-
time-high Operational EBITA margin of 22.4%, up by 340
basis points year-on -year.
●
Operational leverage on higher volumes and impact from
continuous improvement measures were the key drivers
to the higher margin , year-on-year.
●
A positive price impact more than offset higher salary-
related costs as well as an increase in R&D and SG&A
spend.
●
Margins improved or remained stable in all divisions.
CHANGE
($ millions, unless otherwise indicated)
Q1 2024
Q1 2023
US$
Comparable
Orders
4,392
4,141
6%
8%
Order backlog
7,389
7,101
4%
12%
Revenues
3,680
3,590
3%
6%
Operational EBITA
826
677
22%
as % of operational revenues
22.4%
19.0%
+3.4 pts
Cash flow from operating activities
547
395
38%
No. of employees (FTE equiv.)
50,700
51,130
Growth
Q1
Q1
Change year-on-year
Orders
Revenues
Comparable
8%
6%
FX
0%
0%
Portfolio changes
-2%
-3%
Total
6%
3%
—
Electrification
ABB INTERIM REPORT
I
Q1 2024
Orders and revenues
Robust customer activity in the projects- and systems-related
businesses offset some weakness in the short -cycle areas. In
total, a new all-time-high order level of $2,303 million was
achieved, representing an improvement of 2% (1%
comparable) from last year. Book-to-bill was 1.26. Some initial
encouraging sequential trading signs in the short -cycle
businesses were noted.
●
The Traction division was the engine for order growth,
including a large order of $150 million to supply complete
traction packages for 65 new six-car passenger trains for
the Queensland Train Manufacturing Program. The new
trains are to be operational in time for the Brisbane 2032
Olympics.
●
Besides the rail segment, a stronger order momentum was
noted in the process -related segments of oil & gas and
power generation including grid stabilization equipment.
Some slowness from last year’s high level was noted in
food & beverage, pulp & paper, metals and chemicals.
HVAC remained muted.
●
Orders in Asia, Middle East and Africa were up by 16% (21%
comparable), supported by the large order in Australia, while
China declined by 12% (8% comparable). The Americas
softened by 1% (4% comparable) including the decline of 4%
(6% comparable) in the United States. Europe declined by
8% (11% comparable).
●
Revenues amounted to $1,829 million and declined by 6%
(6% comparable) due to weakness in the short -cycle
businesses and parts of the backlog execution impacted by
some delivery timing changes.
Profit
Operational EBITA of $343 million declined by 6% and the
Operational EBITA margin softened by 40 basis points to 18.5%.
●
Operational leverage on the lower production volumes in the
short-cycle businesses weighed on results.
●
The positive price impact and the stringent cost focus more
than offset the adverse impacts from the higher expenses
related to salaries, R&D and SG&A, year-on-year.
Growth
Q1
Q1
Change year-on-year
Orders
Revenues
Comparable
1%
-6%
FX
0%
-1%
Portfolio changes
1%
1%
Total
2%
-6%
—
Motion
CHANGE
($ millions, unless otherwise indicated)
Q1 2024
Q1 2023
US$
Comparable
Orders
2,303
2,262
2%
1%
Order backlog
5,612
5,102
10%
11%
Revenues
1,829
1,940
-6%
-6%
Operational EBITA
343
366
-6%
as % of operational revenues
18.5%
18.9%
-0.4 pts
Cash flow from operating activities
352
149
136%
No. of employees (FTE equiv.)
22,380
21,000
ABB INTERIM REPORT
I
Q1 2024
Orders and revenues
The underlying markets remained buoyant. However, last
year’s record high comparable was strongly supported by
the timing of large orders received, and in contrast some
timing delay in orders in the current quarter were noted.
Order intake declined by 20% (20% comparable) and
amounted to $1,697 million, a level broadly similar to recent
quarters. Book-to-bill was positive at 1.06.
●
On a very challenging comparable, orders declined in the
large process-related segments oil & gas, pulp & paper
and mining. However, a positive development was
recorded for ports and in the less sizeable low carbon-
related areas such as nuclear, carbon capture, hydrogen
etc. The underlying market sentiment remained robust
across the board.
●
On execution of the high order backlog, revenues
increased strongly at 11% (12% comparable) and
amounted to $1,601 million with a positive contribution
from all divisions, supported by strong contribution from
the service business .
Profit
With support from all divisions, the Operational EBITA
margin improved by 140 basis points to the new record-
high level of 15.6% and the Operational EBITA improved by
23% to $253 million.
●
Profitability was supported by the mix in execution of the
order backlog which host s a higher gross margin, whilst
keeping SG&A expenses on a stable percentage of
revenues.
●
A slight positive price impact offset increased salary-
related expenses, year -on-year.
●
Operational EBITA margin improved in all divisions with
all now in the “teens” margin range.
CHANGE
($ millions, unless otherwise indicated)
Q1 2024
Q1 2023
US$
Comparable
Orders
1,697
2,113
-20%
-20%
Order backlog
7,343
6,893
7%
9%
Revenues
1,601
1,436
11%
12%
Operational EBITA
253
205
23%
as % of operational revenues
15.6%
14.2%
+1.4 pts
Cash flow from operating activities
229
112
104%
No. of employees (FTE equiv.)
21,340
20,500
Growth
Q1
Q1
Change year-on-year
Orders
Revenues
Comparable
-20%
12%
FX
0%
-1%
Portfolio changes
0%
0%
Total
-20%
11%
—
Process Automation
ABB INTERIM REPORT
I
Q1 2024
Orders and revenues
As anticipated, order intake improved from the fourth quarter,
with the strongest increase recorded in the Robotics division.
However, total orders declined by 30% (30% comparable)
from last year’s high comparable and amounted to $701
million.
●
Orders declined at a double-digit rate in both divisions,
although more pronounced in Machine Automation.
●
The
demand declined in all customer segments
year-on-year. The sequential pattern was encouraging and
inventory levels in the channels did seemingly align with the
current market situation towards the end of quarter.
●
Machine Automation
customers held off placing orders
while awaiting deliveries from the recent pre-buy period.
Order backlog remains high and supports deliveries into the
latter part of the summer.
●
From a geographical perspective, orders in the Americas
declined by 24% (26% comparable). The decline in Europe
was 31% (32% comparable). In Asia, Middle East and Africa
orders declined by 32% (28% comparable), hampered by
China being down by 46% (43% comparable).
●
Revenues of $864 million represented a decline of 8% (7%
comparable) from last year, including a positive price impact.
This is the combined effect of a strong increase in the Machine
Automation division executing the order backlog; and a decline in
the larger robotics division where the order backlog has
normalized and the short-cycle business was under pressure.
Profit
Operational leverage on lower volumes put pressure on the
Operational EBITA which declined by 19% to $113 million and the
Operational EBITA margin which dropped by 170 basis points year-
on-year to 13.2%.
●
A solid execution of higher volumes resulted in improved
profitability in the Machine Automation business. This was
however more than offset by lower production volumes
triggering underabsorption of fixed costs in the short -cycle
Robotics business.
●
A
positive price contribution from order backlog deliveries and
the efficiency measures activated as a response to the soft
market climate broadly offset adverse impacts from increased
labor, SG&A and R&D expenses .
CHANGE
($ millions, unless otherwise indicated)
Q1 2024
Q1 2023
US$
Comparable
Orders
701
1,001
-30%
-30%
Order backlog
1,918
2,782
-31%
-29%
Revenues
864
937
-8%
-7%
Operational EBITA
113
140
-19%
as % of operational revenues
13.2%
14.9%
-1.7 pts
Cash flow from operating activities
95
130
-27%
No. of employees (FTE equiv.)
11,380
10,850
Growth
Q1
Q1
Change year-on-year
Orders
Revenues
Comparable
-30%
-7%
FX
0%
-1%
Portfolio changes
0%
0%
Total
-30%
-8%
—
Robotics & Discrete Automation
ABB INTERIM REPORT
I
Q1 2024
10
Events from the Quarter
●
ABB and CERN, the European Laboratory for Particle
Physics, have collaborated on a strategic research
partnership to enhance energy efficiency in cooling and
ventilation systems at CERN’s particle physics institute in
Geneva, Switzerland. Through energy efficiency audits,
they identified a 17.4% energy-saving potential across a
fleet of 800 motors. This translates to annual energy
savings of up to 31 gigawatt -hours (GWh) - enough to
power over 18,000 European households and avoid 4
kilotonnes of CO
₂
CERN’s goal of reducing cooling and ventilation energy
use by 10-15%.
●
SEV, the main electricity supplier in the Faroe Islands,
contracted ABB to enhance grid stability during the
transition to green energy. ABB is providing synchronous
condenser (SC) technology to stabilize the power grid as
fossil-fueled plants are phased out in favor of renewable
generation. The latest SC will be deployed on the island
of Borðoy where it will reinforce the local electricity supply
for around 5,000 people.
●
ABB will deliver a shore-to-ship power supply solution
allowing DEME’s diverse fleet to avoid emissions when
berthed in the port of Vlissingen, the Netherlands. The
technology supports DEME’s long-term decarbonization
strategy, providing flexibility to adapt to changing grid
capabilities. ABB will install shore power for suitably
equipped vessels calling at Vlissingen’s DEME base by
the end of 2024, as part of a government-supported
initiative stimulating the use of shore power facilities in
Dutch seaports. Connecting to shore power while at berth
is expected to become mandatory at main EU ports from
2030 under FuelEU Maritime regulations.
●
ABB Electrification’s facility in Vaasa has achieved a 1,400t
CO
2
e reduction in Scope 1 & 2 emissions since 2019. This
progress is driven by a company-wide culture of
sustainability, employee-led energy savings, and
investment in renewable energy sourcing. The teams at
ABB Vaasa have contributed over 100 energy-saving ideas,
resulting in a 20 percent reduction in consumption
(equivalent to 1,082 MWh) since 2019. Automation, smart
energy solutions, and a commitment to net zero have
played pivotal roles. ABB Vaasa, a global center for
electrical low-voltage switches and protection relays,
exemplifies empowered employees leading the way toward
sustainability.
●
In March, ABB teams across the world celebrated
International Women’s Day and Women’s History Month
with numerous events, mentor programs, panel
discussions, networking sessions and campaigns that
highlighted the importance of gender equality, whilst
promoting initiatives to foster inclusion in the workplace and
society at large.
Q1 outcome
●
28%
reduction year-on-year of CO
₂
e emissions due to a
shift to green electricity and a lower use of fossil fuels in
our operations.
●
7% decrease year-on-year in LTIFR, continuing to remain
at a low level.
●
2.5%-points increase year-on-year in the proportion of
women in senior management roles, demonstrating
strong progress towards our target .
—
Sustainability
Q1 2024
Q1 2023
CHANGE
12M ROLLING
CO
₂
e own operations emissions,
Ktons scope 1 and 2
1
35
49
-28%
143
Lost Time Injury Frequency Rate (LTIFR),
frequency / 200,000 working hours
2
0.14
0.15
-7%
0.13
Proportion of women in senior management
roles in %
21.5
19.0
+2.5 pts
20.8
1
CO
₂
₆
2
Current quarter Includes all incidents reported until April 5, 2024
ABB INTERIM REPORT
I
Q1 2024
11
During Q1 2024
●
On February 23, ABB announced that Morten Wierod will
succeed Björn Rosengren as CEO on August 1, 2024.
From August 1, 2024, until his retirement at the end of
the year, Björn Rosengren will advise and assist Morten
Wierod and the Executive Committee to ensure a
seamless transition. Morten Wierod joined ABB in 1998
and has been serving as a member of ABB's Executive
Committee since 2019, currently as President of the
Electrification Business Area and previously as President
of the Motion Business Area. The search process for the
position of President, Electrification Business Area has
been launched.
●
On March 21, the Annual General Meeting elected two
new Board members, namely Johan Forssell and Mats
Rahmström. They replace Jacob Wallenberg and Gunnar
Brock who decided not to stand for re-election.
●
On March 21, ABB announced that the Board of
Directors has approved a new share buyback program
for capital reduction purposes of up to
$1 billion. This new program launched on April 1. It will
be executed on a second trading line on the SIX Swiss
Exchange and is planned to run until January 31, 2025,
to adjust the timing of its share buyback cycle to align
with the announcement of its Q4 2024 results and 2024
dividend proposal.
●
On March 27, ABB announced that Tarak Mehta,
President Motion Business Area and Member of the
Executive Committee, has decided to leave ABB to
accept the role as CEO of another company. Tarak will
leave ABB at the end of July this year. The search
process for the position of President, Motion Business
Area has been launched.
Significant events
ABB INTERIM REPORT
I
Q1 2024
12
Divestments
Company/unit
Closing date
Revenues, $ in
millions
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
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
↓
~(50)
from ~(120)
Effective tax rate
~25%
Capital Expenditures
~(900)
($ in millions, unless otherwise stated)
FY 2024
1
Q2 2024
Corporate and Other Operational EBITA
2
~(300)
~(75)
Non-operating items
Acquisition-related amortization
~(210)
~(60)
Restructuring and related
3
~(200)
~(60)
ABB Way transformation
↑
~(200)
~(50)
from ~(180)
Additional figures
ABB Group
Q1 2023
Q2 2023
Q3 2023
Q4 2023
FY 2023
Q1 2024
EBITDA, $ in million
1,389
1,494
1,453
1,315
5,651
1,418
Return on Capital Employed, %
n.a.
n.a.
n.a.
n.a.
21.10
n.a.
Net debt/Equity
0.30
0.31
0.21
0.14
0.14
0.16
Net debt/ EBITDA 12M rolling
0.9
0.8
0.5
0.4
0.4
0.4
Net working capital, % of 12M rolling revenues
13.9%
14.7%
12.8%
10.2%
10.2%
11.2%
Earnings per share, basic, $
0.56
0.49
0.48
0.50
2.02
0.49
Earnings per share, diluted, $
0.55
0.48
0.47
0.50
2.01
0.49
Dividend per share, CHF
n.a.
n.a.
n.a.
n.a.
0.87
n.a.
Share price at the end of period, CHF
31.37
35.18
32.80
37.30
37.30
41.89
Number of employees (FTE equivalents)
106,170
108,320
107,430
107,870
107,870
108,700
No. of shares outstanding at end of period (in millions)
1,862
1,860
1,849
1,842
1,842
1,851
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
Company/unit
Closing date
Revenues, $ in
millions
1
No. of employees
2024
Process Automation
Real Tech Water
1-Feb
6
38
Robotics & Discrete Automation
Meshmind
1-Feb
<5
50
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
Acquisitions and divestments, last twelve months
ABB INTERIM REPORT
I
Q1 2024
13
For additional information please contact:
Media Relations
Phone: +41 43 317 71 11
Email:
media.relations@ch.abb.com
Investor Relations
Phone: +41 43 317 71 11
Email:
investor.relations@ch.abb.com
ABB Ltd
Affolternstrasse 44
8050 Zurich
Switzerland
Financial calendar
2024
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 Q1 2024 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
Q1 results presentation on April 18, 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 Q1 2024 FINANCIAL INFORMATION
April 18, 2024
Q1 2024
Financial information
2 Q1 2024 FINANCIAL INFORMATION
—
Financial Information
Contents
03
─ 05 Key Figures
06 ─
27 Consolidated Financial Information (unaudited)
28 ─
38 Supplemental Reconciliations and Definitions
3 Q1 2024 FINANCIAL INFORMATION
—
Key Figures
CHANGE
($ in millions, unless otherwise indicated)
Q1 2024
Q1 2023
US$
Comparable
(1)
Orders
8,974
9,450
-5%
-4%
Order backlog (end March)
22,015
21,607
2%
6%
Revenues
7,870
7,859
0%
2%
Gross Profit
2,935
2,716
8%
as % of revenues
37.3%
34.6%
+2.7 pts
Income from operations
1,217
1,198
2%
Operational EBITA
(1)
1,417
1,277
11%
11%
(2)
as % of operational revenues
(1)
17.9%
16.3%
+1.6 pts
Income from continuing operations, net of tax
914
1,065
-14%
Net income attributable to ABB
905
1,036
-13%
Basic earnings per share ($)
0.49
0.56
-12%
(3)
Cash flow from operating activities
726
282
157%
Free cash flow
(1)
551
162
240%
(1) For a reconciliation of non-GAAP measures see “
” on page 28.
(2) Constant currency (not adjusted for portfolio changes).
(3) EPS growth rates are computed using unrounded amounts.
4 Q1 2024 FINANCIAL INFORMATION
CHANGE
($ in millions, unless otherwise indicated)
Q1 2024
Q1 2023
US$
Local
Comparable
Orders
ABB Group
8,974
9,450
-5%
-5%
-4%
Electrification
4,392
4,141
6%
6%
8%
Motion
2,303
2,262
2%
2%
1%
Process Automation
1,697
2,113
-20%
-20%
-20%
Robotics & Discrete Automation
701
1,001
-30%
-30%
-30%
Corporate and Other
142
196
Intersegment eliminations
(261)
(263)
Order backlog (end March)
ABB Group
22,015
21,607
2%
4%
6%
Electrification
7,389
7,101
4%
6%
12%
Motion
5,612
5,102
10%
11%
11%
Process Automation
7,343
6,893
7%
9%
9%
Robotics & Discrete Automation
1,918
2,782
-31%
-29%
-29%
Corporate and Other
(incl. intersegment eliminations)
(247)
(271)
Revenues
ABB Group
7,870
7,859
0%
1%
2%
Electrification
3,680
3,590
3%
3%
6%
Motion
1,829
1,940
-6%
-5%
-6%
Process Automation
1,601
1,436
11%
12%
12%
Robotics & Discrete Automation
864
937
-8%
-7%
-7%
Corporate and Other
125
169
Intersegment eliminations
(229)
(213)
Income from operations
ABB Group
1,217
1,198
Electrification
769
655
Motion
301
353
Process Automation
234
200
Robotics & Discrete Automation
91
115
Corporate and Other
(incl. intersegment eliminations)
(178)
(125)
Income from operations %
ABB Group
15.5%
15.2%
Electrification
20.9%
18.2%
Motion
16.5%
18.2%
Process Automation
14.6%
13.9%
Robotics & Discrete Automation
10.5%
12.3%
Operational EBITA
ABB Group
1,417
1,277
11%
11%
Electrification
826
677
22%
23%
Motion
343
366
-6%
-6%
Process Automation
253
205
23%
23%
Robotics & Discrete Automation
113
140
-19%
-18%
Corporate and Other
(incl. intersegment eliminations)
(118)
(111)
Operational EBITA %
ABB Group
17.9%
16.3%
Electrification
22.4%
19.0%
Motion
18.5%
18.9%
Process Automation
15.6%
14.2%
Robotics & Discrete Automation
13.2%
14.9%
Cash flow from operating activities
ABB Group
726
282
Electrification
547
395
Motion
352
149
Process Automation
229
112
Robotics & Discrete Automation
95
130
Corporate and Other
(incl. intersegment eliminations)
(497)
(504)
5 Q1 2024 FINANCIAL INFORMATION
Operational EBITA
Process
Robotics & Discrete
ABB
Electrification
Motion
Automation
Automation
($ in millions, unless otherwise indicated)
Q1 24
Q1 23
Q1 24
Q1 23
Q1 24
Q1 23
Q1 24
Q1 23
Q1 24
Q1 23
Revenues
7,870
7,859
3,680
3,590
1,829
1,940
1,601
1,436
864
937
Foreign exchange/commodity timing
differences in total revenues
65
(16)
13
(22)
29
–
25
10
(5)
1
Operational revenues
7,935
7,843
3,693
3,568
1,858
1,940
1,626
1,446
859
938
Income from operations
1,217
1,198
769
655
301
353
234
200
91
115
Acquisition-related amortization
56
54
23
22
9
8
1
1
21
20
Restructuring, related and
implementation costs
(1)
26
28
10
8
8
1
7
2
–
–
Changes in obligations related to
divested businesses
–
3
–
–
–
–
–
–
–
–
Gains and losses from sale of businesses
2
–
–
–
–
–
–
–
–
–
Acquisition- and divestment-related
expenses and integration costs
19
19
10
7
–
4
–
3
2
2
Certain other non-operational items
63
(1)
3
3
3
2
–
–
1
2
Foreign exchange/commodity timing
differences in income from operations
34
(24)
11
(18)
22
(2)
11
(1)
(2)
1
Operational EBITA
1,417
1,277
826
677
343
366
253
205
113
140
Operational EBITA margin (%)
17.9%
16.3%
22.4%
19.0%
18.5%
18.9%
15.6%
14.2%
13.2%
14.9%
(1) Includes impairment of certain assets.
Depreciation and Amortization
Process
Robotics & Discrete
ABB
Electrification
Motion
Automation
Automation
($ in millions)
Q1 24
Q1 23
Q1 24
Q1 23
Q1 24
Q1 23
Q1 24
Q1 23
Q1 24
Q1 23
Depreciation
133
125
66
62
28
26
12
11
15
14
Amortization
68
66
28
27
10
10
2
2
22
20
including total acquisition-related amortization of:
56
54
23
22
9
8
1
1
21
20
Orders received and revenues by region
($ in millions, unless otherwise indicated)
Orders received
CHANGE
Revenues
CHANGE
Com-
Com-
Q1 24
Q1 23
US$
Local
parable
Q1 24
Q1 23
US$
Local
parable
Europe
3,298
3,582
-8%
-9%
-9%
2,748
2,872
-4%
-6%
-5%
The Americas
2,904
2,985
-3%
-3%
-3%
2,789
2,653
5%
5%
7%
of which United States
2,139
2,130
0%
0%
2%
2,110
1,984
6%
6%
10%
Asia, Middle East and Africa
2,772
2,883
-4%
0%
0%
2,333
2,334
0%
5%
5%
of which China
1,050
1,355
-23%
-19%
-18%
998
1,155
-14%
-9%
-9%
ABB Group
8,974
9,450
-5%
-5%
-4%
7,870
7,859
0%
1%
2%
6 Q1 2024 FINANCIAL INFORMATION
—
Consolidated Financial Information
ABB Ltd Consolidated Income Statements (unaudited)
Three months ended
($ in millions, except per share data in $)
Mar. 31, 2024
Mar. 31, 2023
Sales of products
6,503
6,644
Sales of services and other
1,367
1,215
Total revenues
7,870
7,859
Cost of sales of products
(4,145)
(4,418)
Cost of services and other
(790)
(725)
Total cost of sales
(4,935)
(5,143)
Gross profit
2,935
2,716
Selling, general and administrative expenses
(1,381)
(1,339)
Non-order related research and development expenses
(363)
(304)
Other income (expense), net
26
125
Income from operations
1,217
1,198
Interest and dividend income
57
40
Interest and other finance expense
(37)
(61)
Non-operational pension (cost) credit
16
7
Income from continuing operations before taxes
1,253
1,184
Income tax expense
(339)
(119)
Income from continuing operations, net of tax
914
1,065
Loss from discontinued operations, net of tax
(1)
(5)
Net income
913
1,060
Net income attributable to noncontrolling interests and redeemable noncontrolling interests
(8)
(24)
Net income attributable to ABB
905
1,036
Amounts attributable to ABB shareholders:
Income from continuing operations, net of tax
906
1,041
Loss from discontinued operations, net of tax
(1)
(5)
Net income
905
1,036
Basic earnings per share attributable to ABB shareholders:
Income from continuing operations, net of tax
0.49
0.56
Loss from discontinued operations, net of tax
–
–
Net income
0.49
0.56
Diluted earnings per share attributable to ABB shareholders:
Income from continuing operations, net of tax
0.49
0.56
Loss from discontinued operations, net of tax
–
–
Net income
0.49
0.55
Weighted-average number of shares outstanding (in millions) used to compute:
Basic earnings per share attributable to ABB shareholders
1,839
1,861
Diluted earnings per share attributable to ABB shareholders
1,852
1,874
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
7 Q1 2024 FINANCIAL INFORMATION
—
ABB Ltd Condensed Consolidated Statements of Comprehensive
Income (unaudited)
Three months ended
($ in millions)
Mar. 31, 2024
Mar. 31, 2023
Total comprehensive income, net of tax
1,063
1,153
Total comprehensive (income) loss attributable to noncontrolling interests and
redeemable noncontrolling interests, net of tax
8
(30)
Total comprehensive income attributable to ABB shareholders, net of tax
1,071
1,123
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
8 Q1 2024 FINANCIAL INFORMATION
—
ABB Ltd Consolidated Balance Sheets (unaudited)
($ in millions)
Mar. 31, 2024
Dec. 31, 2023
Cash and equivalents
4,102
3,891
Restricted cash
18
18
Marketable securities and short-term investments
2,097
1,928
Receivables, net
7,385
7,446
Contract assets
1,135
1,090
Inventories, net
6,170
6,149
Prepaid expenses
314
235
Other current assets
563
520
Total current assets
21,784
21,277
Property, plant and equipment, net
4,047
4,142
Operating lease right-of-use assets
863
893
Investments in equity-accounted companies
178
187
Prepaid pension and other employee benefits
755
780
Intangible assets, net
1,128
1,223
Goodwill
10,494
10,561
Deferred taxes
1,375
1,381
Other non-current assets
488
496
Total assets
41,112
40,940
Accounts payable, trade
5,018
4,847
Contract liabilities
2,866
2,844
Short-term debt and current maturities of long-term debt
1,957
2,607
Current operating leases
242
249
Provisions for warranties
1,191
1,210
Dividends payable to shareholders
857
–
Other provisions
1,056
1,201
Other current liabilities
4,595
5,046
Total current liabilities
17,782
18,004
Long-term debt
6,346
5,221
Non-current operating leases
642
666
Pension and other employee benefits
668
686
Deferred taxes
664
669
Other non-current liabilities
1,539
1,548
Total liabilities
27,641
26,794
Commitments and contingencies
Redeemable noncontrolling interest
89
89
Stockholders’ equity:
Common stock, CHF 0.12 par value
(1,882 million shares issued at March 31, 2024, and December 31, 2023)
163
163
Additional paid-in capital
9
7
Retained earnings
18,622
19,724
Accumulated other comprehensive loss
(4,904)
(5,070)
Treasury stock, at cost
(31 million and 40 million shares at March 31, 2024, and December 31, 2023, respectively)
(1,150)
(1,414)
Total ABB stockholders’ equity
12,740
13,410
Noncontrolling interests
642
647
Total stockholders’ equity
13,382
14,057
Total liabilities and stockholders’ equity
41,112
40,940
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
9 Q1 2024 FINANCIAL INFORMATION
—
ABB Ltd Consolidated Statements of Cash Flows (unaudited)
Three months ended
($ in millions)
Mar. 31, 2024
Mar. 31, 2023
Operating activities:
Net income
913
1,060
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
201
191
Changes in fair values of investments
(13)
(13)
Pension and other employee benefits
(13)
1
Deferred taxes
(6)
25
Loss from equity-accounted companies
5
7
Net gain from derivatives and foreign exchange
(8)
(37)
Net gain from sale of property, plant and equipment
(5)
(26)
Net loss (gain) from sale of businesses
2
–
Other
27
27
Changes in operating assets and liabilities:
Trade receivables, net
(33)
(362)
Contract assets and liabilities
38
10
Inventories, net
(205)
(264)
Accounts payable, trade
82
22
Accrued liabilities
(473)
(324)
Provisions, net
37
42
Income taxes payable and receivable
122
(115)
Other assets and liabilities, net
55
38
Net cash provided by operating activities
726
282
Investing activities:
Purchases of investments
(877)
(660)
Purchases of property, plant and equipment and intangible assets
(181)
(151)
Acquisition of businesses (net of cash acquired) and increases in cost- and equity-accounted companies
(30)
(19)
Proceeds from sales of investments
727
20
Proceeds from sales of property, plant and equipment
6
31
Proceeds from sales of businesses (net of transaction costs and cash disposed) and cost- and
equity-accounted companies
(8)
(5)
Net cash from settlement of foreign currency derivatives
31
36
Changes in loans receivable, net
1
8
Other investing activities
–
(1)
Net cash used in investing activities
(331)
(741)
Financing activities:
Net changes in debt with original maturities of 90 days or less
(20)
(714)
Increase in debt
1,358
1,633
Repayment of debt
(565)
(36)
Delivery of shares
390
95
Purchase of treasury stock
(291)
(274)
Dividends paid
(919)
(1,294)
Dividends paid to noncontrolling shareholders
–
(3)
Proceeds from issuance of subsidiary shares
–
341
Other financing activities
(3)
12
Net cash used in financing activities
(50)
(240)
Effects of exchange rate changes on cash and equivalents and restricted cash
(134)
(5)
Adjustment for the net change in cash and equivalents and restricted cash in Assets held for sale
–
(13)
Net change in cash and equivalents and restricted cash
211
(717)
Cash and equivalents and restricted cash, beginning of period
3,909
4,174
Cash and equivalents and restricted cash, end of period
4,120
3,457
Supplementary disclosure of cash flow information:
Interest paid
94
48
Income taxes paid
228
207
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
10 Q1 2024 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, 2023
171
141
20,082
(4,556)
(3,061)
12,777
410
13,187
Net income
(1)
1,036
1,036
25
1,061
Foreign currency translation
adjustments, net of tax of $(1)
79
79
6
85
Effect of change in fair value of
available-for-sale securities,
net of tax of $1
5
5
5
Unrecognized income (expense)
related to pensions and other
postretirement plans,
net of tax of $1
–
–
–
Change in derivative instruments
and hedges, net of tax of $0
3
3
3
Issuance of subsidiary shares
170
170
168
338
Other changes in
noncontrolling interests
–
(1)
(1)
Dividends to
noncontrolling shareholders
–
(5)
(5)
Dividends to shareholders
(1,706)
(1,706)
(1,706)
Share-based payment arrangements
22
22
1
23
Purchase of treasury stock
(253)
(253)
(253)
Delivery of shares
(53)
148
95
95
Other
(2)
(2)
(2)
Balance at March 31, 2023
171
279
19,411
(4,469)
(3,165)
12,227
604
12,831
Balance at January 1, 2024
163
7
19,724
(5,070)
(1,414)
13,410
647
14,057
Net income
(1)
905
905
9
914
Foreign currency translation
adjustments, net of tax of $3
131
131
(16)
115
Effect of change in fair value of
available-for-sale securities,
net of tax of $0
(1)
(1)
(1)
Unrecognized income (expense)
related to pensions and other
postretirement plans,
net of tax of $16
33
33
33
Change in derivative instruments
and hedges, net of tax of $0
3
3
3
Changes in noncontrolling interests
(1)
(30)
(31)
1
(30)
Dividends to
noncontrolling shareholders
–
(1)
(1)
Dividends to shareholders
(1,804)
(1,804)
(1,804)
Share-based payment arrangements
20
20
1
21
Purchase of treasury stock
(314)
(314)
(314)
Delivery of shares
(14)
(174)
578
390
390
Other
(3)
(3)
2
(1)
Balance at March 31, 2024
163
9
18,622
(4,904)
(1,150)
12,740
642
13,382
(1)
Amounts attributable to noncontrolling interests for the three months ended March 31, 2024 and 2023, exclude net losses of $1 million and $1 million, respectively, related to
redeemable noncontrolling interests, which are reported in the mezzanine equity section on the Consolidated Balance Sheets.
Due to rounding, numbers presented may not add to the totals provided.
See Notes to the Consolidated Financial Information
11 Q1 2024 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, 2023.
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.
Change in accounting policy
Effective January 1, 2024, the Company changed the presentation of discontinued operations in its statement of cas h flows to an alternate allowable
policy. As a result, the total cash flows for operating, investing and financing activities from discontinued operations are no longer shown separately but
instead all cash flows in discontinued operations are presented within each line item as appropriate in the statement of cash flows. As this presentation
change represents a change in accounting policy, all prior periods presented have been reclassified to conform to the current period presentation and
there was no material impact for the three months ended March 31, 2023.
12 Q1 2024 FINANCIAL INFORMATION
─
Note 2
Recent accounting pronouncements
Applicable for current periods
Improvements to reportable segment disclosures
In January 2024, the Company adopted an accounting standard update 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 a quarterly frequency. The
update will be applied retrospectively for all periods presented in the Company’s annual consolidated financial statements and then commencing from the first
quarter of 2025, in its interim consolidated financial information. Other than these additional disclosures, this update does not have a significant impact on the
Company’s consolidated financial statements.
Applicable for future periods
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
Cash and equivalents, marketable securities and short-term investments
Cash and equivalents, marketable securities and short-term investments consisted of the following:
March 31, 2024
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
1,789
1,789
1,789
Time deposits
2,817
2,817
2,331
486
Equity securities
1,391
37
1,428
1,428
5,997
37
–
6,034
4,120
1,914
Changes in fair value recorded
in other comprehensive income
Debt securities available-for-sale:
U.S. government obligations
190
2
(9)
183
183
190
2
(9)
183
–
183
Total
6,187
39
(9)
6,217
4,120
2,097
Of which:
Restricted cash, current
18
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
13 Q1 2024 FINANCIAL INFORMATION
─
Note 4
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 accou nting.
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)
March 31, 2024
December 31, 2023
March 31, 2023
Foreign exchange contracts
14,331
12,335
13,273
Embedded foreign exchange derivatives
1,106
1,137
1,104
Cross-currency interest rate swaps
863
886
870
Interest rate contracts
3,075
1,606
2,963
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
March 31, 2024
December 31, 2023
March 31, 2023
Copper swaps
metric tonnes
38,116
35,015
27,920
Silver swaps
ounces
2,689,981
2,359,363
2,392,353
Steel swaps
metric tonnes
10,251
10,206
6,804
Aluminum swaps
metric tonnes
5,875
5,900
6,750
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 three months ended March 31, 2024 and 2023, 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:
Three months ended March 31,
($ in millions)
2024
2023
Gains (losses) recognized in Interest and other finance expense:
Interest rate contracts
Designated as fair value hedges
13
10
Hedged item
(14)
(10)
Cross-currency interest rate swaps
Designated as fair value hedges
(3)
(11)
Hedged item
3
2
14 Q1 2024 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
Three months ended March 31,
($ in millions)
Location
2024
2023
Foreign exchange contracts
Total revenues
(168)
11
Total cost of sales
47
(1)
SG&A expenses
(1)
13
6
Non-order related research and development
(2)
–
Interest and other finance expense
247
42
Embedded foreign exchange contracts
Total revenues
18
7
Total cost of sales
(4)
(1)
Commodity contracts
Total cost of sales
9
11
Other
Interest and other finance expense
(2)
–
Total
158
75
(1) SG&A expenses represent “Selling, general and administrative expenses”.
The fair values of derivatives included in the Consolidated Balance Sheets were as follows:
March 31, 2024
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
–
–
2
–
Interest rate contracts
–
–
4
3
Cross-currency interest rate swaps
–
–
–
256
Other
7
–
–
–
Total
7
–
6
259
Derivatives not designated as hedging instruments:
Foreign exchange contracts
179
19
97
13
Commodity contracts
17
–
1
–
Interest rate contracts
–
–
–
–
Embedded foreign exchange derivatives
24
5
11
1
Other
–
3
–
–
Total
220
27
109
14
Total fair value
227
27
115
273
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
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.
15 Q1 2024 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 March 31, 2024, and December 31, 2023, have been presented on a gross basis.
The Company’s netting agreements and other similar arrangements allow net settlements under certain conditions. At March 31, 2024, and December 31, 2023,
information related to these offsetting arrangements was as follows:
($ in millions)
March 31, 2024
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
225
(71)
–
–
154
Total
225
(71)
–
–
154
($ in millions)
March 31, 2024
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
376
(71)
–
–
305
Total
376
(71)
–
–
305
($ in millions)
December 31, 2023
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
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
Net liability
similar arrangement
liabilities
pledged
pledged
exposure
Derivatives
445
(111)
–
–
334
Total
445
(111)
–
–
334
16 Q1 2024 FINANCIAL INFORMATION
─
Note 5
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. 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:
March 31, 2024
($ in millions)
Level 1
Level 2
Level 3
Total fair value
Assets
Securities in “Marketable securities and short-term investments”:
Equity securities
–
1,428
–
1,428
Debt securities—U.S. government obligations
183
–
–
183
Derivative assets—current in “Other current assets”
–
227
–
227
Derivative assets—non-current in “Other non-current assets”
–
27
–
27
Total
183
1,682
–
1,865
Liabilities
Derivative liabilities—current in “Other current liabilities”
–
115
–
115
Derivative liabilities—non-current in “Other non-current liabilities”
–
273
–
273
Total
–
388
–
388
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
17 Q1 2024 FINANCIAL INFORMATION
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 three months ended March 31, 2024 and 2023.
Disclosure about financial instruments carried on a cost basis
The fair values of financial instruments carried on a cost basis were as follows:
March 31, 2024
($ 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
1,771
1,771
–
–
1,771
Time deposits
2,331
–
2,331
–
2,331
Restricted cash
18
18
–
–
18
Marketable securities and short-term investments
(excluding securities):
Time deposits
486
–
486
–
486
Liabilities
Short-term debt and current maturities of long-term debt
(excluding finance lease obligations)
1,927
1,890
37
–
1,927
Long-term debt (excluding finance lease obligations)
6,192
6,211
8
–
6,219
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
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.
●
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).
18 Q1 2024 FINANCIAL INFORMATION
─
Note 6
Contract assets and liabilities
The following table provides information about Contract assets and Contract liabilities:
($ in millions)
March 31, 2024
December 31, 2023
March 31, 2023
Contract assets
1,135
1,090
1,009
Contract liabilities
2,866
2,844
2,339
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:
Three months ended March 31,
2024
2023
Contract
Contract
Contract
Contract
($ in millions)
assets
liabilities
assets
liabilities
Revenue recognized, which was included in the Contract liabilities balance at Jan 1, 2024/2023
(724)
(651)
Additions to Contract liabilities - excluding amounts recognized as revenue during the period
819
707
Receivables recognized that were included in the Contract assets balance at Jan 1, 2024/2023
(408)
(325)
The Company considers its order backlog to represent its unsatisfied performance obligations. At March 31, 2024, the Company had unsatisfied performance
obligations totaling $22,015 million and, of this amount, the Company expects to fulfill approximately 61 percent of the obligations in 2024, approximately
23 percent of the obligations in 2025 and the balance thereafter.
─
Note 7
Supplier finance programs
The Company has several supplier finance programs, all with similar characteristics, with various financial institutions acting as paying agent. These programs
allow qualifying suppliers access to bank facilities which permit earlier payment at a cost to the supplier. 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.
Outstanding supplier finance obligations are included in “Accounts payable, trade” in the Consolidated Balance Sheets and are reported as operating or investing
(if capitalized) activities in the Consolidated Statement of Cash Flows when paid. At March 31, 2024, and December 31, 2023, the total obligation outstanding
under supplier finance programs amounted to $442 million and $415 million, respectively.
19 Q1 2024 FINANCIAL INFORMATION
─
Note 8
Debt
The Company’s total debt at March 31, 2024, and December 31, 2023, amounted to $8,303 million and $7,828 million, respectively.
Short-term debt and current maturities of long-term debt
The Company’s “Short-term debt and current maturities of long-term debt” consisted of the following:
($ in millions)
March 31, 2024
December 31, 2023
Short-term debt
50
87
Current maturities of long-term debt
1,907
2,520
Total
1,957
2,607
Short-term debt primarily represented short-term bank borrowings from various banks.
In March 2024, the Company repaid at maturity its EUR 500 million Floating Rate Instruments, equivalent to $539 million on date of repayment.
Long-term debt
The Company’s long-term debt at March 31, 2024, and December 31, 2023, amounted to $6,346 million and $5,221 million, respectively.
Outstanding bonds (including maturities within the next 12 months) were as follows:
March 31, 2024
December 31, 2023
(in millions)
Nominal outstanding
(1)
Nominal outstanding
(1)
Bonds:
Floating Rate EUR Instruments, due 2024
EUR
500
$
554
0.625% EUR Instruments, due 2024
EUR
700
$
755
EUR
700
$
768
0.75% EUR Instruments, due 2024
EUR
750
$
805
EUR
750
$
819
0.3% CHF Bonds, due 2024
CHF
280
$
309
CHF
280
$
335
2.1% CHF Bonds, due 2025
CHF
150
$
165
CHF
150
$
179
1.965% CHF Bonds, due 2026
CHF
325
$
358
CHF
325
$
387
3.25% EUR Instruments, due 2027
EUR
500
$
536
EUR
500
$
551
0.75% CHF Bonds, due 2027
CHF
425
$
468
CHF
425
$
507
3.8% USD Notes, due 2028
(2)
USD
383
$
382
USD
383
$
382
1.9775% CHF Bonds, due 2028
CHF
150
$
165
CHF
150
$
179
3.125% EUR Instruments, due 2029
EUR
500
$
536
1.0% CHF Bonds, due 2029
CHF
170
$
188
CHF
170
$
203
0% EUR Instruments, due 2030
EUR
800
$
723
EUR
800
$
749
2.375% CHF Bonds, due 2030
CHF
150
$
165
CHF
150
$
178
3.375% EUR Instruments, due 2031
EUR
750
$
797
EUR
750
$
818
2.1125% CHF Bonds, due 2033
CHF
275
$
303
CHF
275
$
327
3.375% EUR Instruments, due 2034
EUR
750
$
802
4.375% USD Notes, due 2042
(2)
USD
609
$
591
USD
609
$
591
Total
$
8,048
$
7,527
(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 2024, the Company issued the following EUR Instruments: (i) EUR 500 million of 3.125 percent Instruments, due 2029, and (ii) EUR 750 million of
3.375 percent Instruments, 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).
Subsequent events
On April 2, 2024, the Company repaid at maturity its EUR 700 million 0.625% EUR Instruments, equivalent to $752 million on date of repayment.
20 Q1 2024 FINANCIAL INFORMATION
─
Note 9
Commitments and contingencies
Contingencies—Regulatory, Compliance and Legal
Regulatory
Based on findings during an internal investigation, the Company self-reported to the Securities Exchange Commission (SEC) and the Department of Justice (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. In March 2024, the Company settled its final pending matter with the authorities in
Germany. 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 March 31, 2024, and December 31, 2023, the Company had aggregate liabilities of $92 million and $101 million, respectively, included in Other provisions and
Other non
‑
current liabilities, for the above regulatory, compliance and legal contingencies, and none of the individual liabilities recognized was significant. As it is
not possible to make an informed judgment on, or reasonably predict, the outcome of certain matters and as it is not possible, based on information currently
available to management, to estimate the maximum potential liability on other matters, there could be adverse outcomes beyond the amounts accrued.
Guarantees
General
The following table provides quantitative data regarding the Company’s third-party guarantees. The maximum potential payments represent a “worst-case
scenario”, and do not reflect management’s expected outcomes.
Maximum potential payments
($ in millions)
March 31, 2024
December 31, 2023
Performance guarantees
3,370
3,451
Financial guarantees
93
94
Total
(1)
3,463
3,545
(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 March 31, 2024, and December 31, 2023, 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 March 31, 2024, and December 31, 2023, the maximum potential payable under
these guarantees amounts to $843 million and $874 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 its former Power Grids business (reported as discontinued operations prior
to its sale to Hitachi Ltd in 2020), which at both March 31, 2024, and December 31, 2023, have been fully indemnified by Hitachi Ltd. These guarantees, having
various maturities up to 2032, primarily consist of bank guarantees, standby letters of credit, business performance guarante es 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 both March 31, 2024,
and December 31, 2023, was approximately $2.2 billion.
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 March 31, 2024, and December 31, 2023, the total outstanding performance bonds aggregated to $3.2 billion and $3 .1 billion, respectively. There have
been no significant amounts reimbursed to financial institutions under these types of arrangements in the three months ended March 31, 2024 and 2023.
21 Q1 2024 FINANCIAL INFORMATION
Product and order-related contingencies
The Company calculates its provision for product warranties based on historical claims experience and specific review of certain contracts. The reconciliation of the
Provisions for warranties, including guarantees of product performance, was as follows:
($ in millions)
2024
2023
Balance at January 1,
1,210
1,028
Claims paid in cash or in kind
(37)
(40)
Net increase in provision for changes in estimates, warranties issued and warranties expired
55
65
Exchange rate differences
(37)
7
Balance at March 31,
1,191
1,060
─
Note 10
Income taxes
In calculating income tax expense, the Company uses an estimate of the annual effective tax rate based upon the facts and circumstances known at each interim
period. On a quarterly basis, the actual effective tax rate is adjusted, as appropriate, based upon changed facts and circumstances, if any, as compared to those
forecasted at the beginning of the year and each interim period thereafter.
The effective tax rate of 27.1 percent in the three months ended March 31, 2024, was higher than the effective tax rate of 10.1 percent in the three months ended
March 31, 2023, primarily due to a net benefit of $206 million realized on a favorable resolution of an uncertain tax position in the three months ended March 31,
2023. The release of the corresponding provision resulted in an increase of $0.11 in earnings per share (basic and diluted) for the three months ended March 31,
2023.
─
Note 11
Employee benefits
The Company operates defined benefit pension plans, defined contribution pension plans, and termination indemnity plans, in accordance with local regulations
and practices. At March 31, 2024, the Company’s most significant defined benefit pension plans are in Switzerland as well as in Germany, the United Kingdom,
and the United States. These plans cover a large portion of the Company’s employees and provide benefits to employees in the event of death, disability,
retirement, or termination of employment. Certain of these plans are multi-employer plans. The Company also operates other postretirement benefit plans including
postretirement health care benefits and other employee-related benefits for active employees including long-service award plans. The postretirement benefit plans
are not significant. The measurement date used for the Company’s employee benefit plans is December 31. The funding policies of the Company’s plans are
consistent with the local government and tax requirements.
Net periodic benefit cost of the Company’s defined benefit pension plans consisted of the following:
($ in millions)
Defined pension benefits
Switzerland
International
Three months ended March 31,
2024
2023
2024
2023
Operational pension cost:
Service cost
11
9
8
8
Operational pension cost
11
9
8
8
Non-operational pension cost (credit):
Interest cost
9
12
39
40
Expected return on plan assets
(31)
(33)
(43)
(39)
Amortization of prior service cost (credit)
(2)
–
(1)
–
Amortization of net actuarial loss
–
–
13
13
Non-operational pension cost (credit)
(24)
(21)
8
14
Net periodic benefit cost (credit)
(13)
(12)
16
22
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
Consolidated Income Statements.
Employer contributions were as follows:
($ in millions)
Defined pension benefits
Switzerland
International
Three months ended March 31,
2024
2023
2024
2023
Total contributions to defined benefit pension plans
13
2
11
11
The Company expects to make contributions totaling approximately $87 million to its defined pension plans for the full year 2024.
22 Q1 2024 FINANCIAL INFORMATION
─
Note 12
Stockholder's equity
At the Annual General Meeting of Shareholders (AGM) on March 21, 2024, shareholders approved the proposal of the Board of Directors to distribute 0.87 Swiss
francs per share to shareholders. The declared dividend amounted to $1,804 million, with the Company disburs ing a portion in March and the remaining amounts
scheduled to be paid in the second quarter of 2024.
In March 2024, the Company completed the share buyback program that was launched in April 2023. This program was executed on a second trading line on the
SIX Swiss Exchange. Through this program, the Company purchased a total of 21 million shares for approximately $0.8 billion, of which 4 million shares were
purchased in the first quarter of 2024 (resulting in an increase in Treasury stock of $187 million ).
Also in March 2024, the Company announced a new share buyback program of up to $1 billion. This program, which was launched in April 2024, is being executed
on a second trading line on the SIX Swiss Exchange and is planned to run until January 2025.
During the first quarter of 2024, the Company delivered, out of treasury stock, approximately 16 million shares in connection with its Management Incentive Plan.
─
Note 13
Earnings per share
Basic earnings per share is calculated by dividing income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is
calculated by dividing income by the weighted-average number of shares outstanding during the period, assuming that all potentially dilutive securities were
exercised, if dilutive. Potentially dilutive securities comprise outstanding written call options, and outstanding options and shares granted subject to certain
conditions under the Company’s share-based payment arrangements.
Basic earnings per share
Three months ended March 31,
($ in millions, except per share data in $)
2024
2023
Amounts attributable to ABB shareholders:
Income from continuing operations, net of tax
906
1,041
Loss from discontinued operations, net of tax
(1)
(5)
Net income
905
1,036
Weighted-average number of shares outstanding (in millions)
1,839
1,861
Basic earnings per share attributable to ABB shareholders:
Income from continuing operations, net of tax
0.49
0.56
Loss from discontinued operations, net of tax
–
–
Net income
0.49
0.56
Diluted earnings per share
Three months ended March 31,
($ in millions, except per share data in $)
2024
2023
Amounts attributable to ABB shareholders:
Income from continuing operations, net of tax
906
1,041
Loss from discontinued operations, net of tax
(1)
(5)
Net income
905
1,036
Weighted-average number of shares outstanding (in millions)
1,839
1,861
Effect of dilutive securities:
Call options and shares
13
13
Adjusted weighted-average number of shares outstanding (in millions)
1,852
1,874
Diluted earnings per share attributable to ABB shareholders:
Income from continuing operations, net of tax
0.49
0.56
Loss from discontinued operations, net of tax
–
–
Net income
0.49
0.55
23 Q1 2024 FINANCIAL INFORMATION
─
Note 14
Reclassifications out of accumulated other comprehensive loss
The following table shows changes in “Accumulated other comprehensive loss” (OCI) attributable to ABB, by component, net of tax:
Unrealized gains
Pension and
Foreign currency
(losses) on
other
Derivative
translation
available-for-sale
postretirement
instruments
($ in millions)
adjustments
securities
plan adjustments
and hedges
Total OCI
Balance at January 1, 2023
(3,691)
(19)
(838)
(8)
(4,556)
Other comprehensive (loss) income:
Other comprehensive (loss) income
before reclassifications
85
4
(8)
2
83
Amounts reclassified from OCI
–
1
8
1
10
Total other comprehensive (loss) income
85
5
–
3
93
Less:
Amounts attributable to
noncontrolling interests and
redeemable noncontrolling interests
6
–
–
–
6
Balance at March 31, 2023
(3,612)
(14)
(838)
(5)
(4,469)
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, 2024
(3,977)
(8)
(1,075)
(10)
(5,070)
Other comprehensive (loss) income:
Other comprehensive (loss) income
before reclassifications
115
(1)
27
–
141
Amounts reclassified from OCI
–
–
6
3
9
Total other comprehensive (loss) income
115
(1)
33
3
150
Less:
Amounts attributable to
noncontrolling interests and
redeemable noncontrolling interests
(16)
–
–
–
(16)
Balance at March 31, 2024
(3,846)
(9)
(1,042)
(7)
(4,904)
The amounts reclassified out of OCI for the three months ended March 31, 2024 and 2023, were not significant.
24 Q1 2024 FINANCIAL INFORMATION
─
Note 15
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.
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 currently delivered through five
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.
●
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 delivered through four operating Divisions: Energy Industries, Process Industries, Marine &
Ports and Measurement & Analytics.
●
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:
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, 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 three months ended March 31, 2024 and 2023, as well as total assets at March 31,
2024, and December 31, 2023.
25 Q1 2024 FINANCIAL INFORMATION
Three months ended March 31, 2024
Robotics &
Process
Discrete
Corporate
($ in millions)
Electrification
Motion
Automation
Automation
and Other
Total
Geographical markets
Europe
1,154
488
555
490
61
2,748
The Americas
1,529
630
447
140
43
2,789
of which: United States
1,186
516
285
85
38
2,110
Asia, Middle East and Africa
936
558
593
231
15
2,333
of which: China
415
256
165
157
5
998
3,619
1,676
1,595
861
119
7,870
Product type
Products
3,380
1,395
911
711
106
6,503
Services and other
239
281
684
150
13
1,367
3,619
1,676
1,595
861
119
7,870
Third-party revenues
3,619
1,676
1,595
861
119
7,870
Intersegment revenues
61
153
6
3
(223)
–
Total revenues
(1)
3,680
1,829
1,601
864
(104)
7,870
Three months ended March 31, 2023
Robotics &
Process
Discrete
Corporate
($ in millions)
Electrification
Motion
Automation
Automation
and Other
Total
Geographical markets
Europe
1,162
638
519
474
79
2,872
The Americas
1,407
632
421
136
57
2,653
of which: United States
1,043
533
264
91
53
1,984
Asia, Middle East and Africa
957
549
489
324
15
2,334
of which: China
457
281
162
248
7
1,155
3,526
1,819
1,429
934
151
7,859
Product type
Products
3,306
1,583
827
791
137
6,644
Services and other
220
236
602
143
14
1,215
3,526
1,819
1,429
934
151
7,859
Third-party revenues
3,526
1,819
1,429
934
151
7,859
Intersegment revenues
64
121
7
3
(195)
–
Total revenues
(1)
3,590
1,940
1,436
937
(44)
7,859
(1) Due to rounding, numbers presented may not add to the totals provided.
26 Q1 2024 FINANCIAL INFORMATION
Three months ended
March 31,
($ in millions)
2024
2023
Operational EBITA:
Electrification
826
677
Motion
343
366
Process Automation
253
205
Robotics & Discrete Automation
113
140
Corporate and Other
‒
E-mobility
(54)
(28)
‒ Corporate costs, intersegment eliminations and other
(64)
(83)
Total
1,417
1,277
Acquisition-related amortization
(56)
(54)
Restructuring, related and implementation costs
(1)
(26)
(28)
Changes in obligations related to divested businesses
–
(3)
Gains and losses from sale of businesses
(2)
–
Acquisition- and divestment-related expenses and integration costs
(19)
(19)
Foreign exchange/commodity timing differences in income from operations:
Unrealized gains and losses on derivatives (foreign exchange, commodities, embedded derivatives)
(77)
22
Realized gains and losses on derivatives where the underlying hedged transaction has not yet been realized
1
(5)
Unrealized foreign exchange movements on receivables/payables (and related assets/liabilities)
42
7
Certain other non-operational items:
Other income/expense relating to the Power Grids joint venture
8
13
Regulatory, compliance and legal costs
(3)
–
Business transformation costs
(2)
(50)
(34)
Certain other fair value changes, including asset impairments
(14)
(1)
Other non-operational items
(4)
23
Income from operations
1,217
1,198
Interest and dividend income
57
40
Interest and other finance expense
(37)
(61)
Non-operational pension (cost) credit
16
7
Income from continuing operations before taxes
1,253
1,184
(1) Includes impairment of certain assets.
(2) Amount includes ABB Way process transformation costs of $46 million and $30 million for the three months ended March 31, 2024 and 2023, respectively.
Total assets
(1)
($ in millions)
March 31, 2024
December 31, 2023
Electrification
12,837
12,668
Motion
6,947
7,016
Process Automation
4,952
4,971
Robotics & Discrete Automation
4,982
5,047
Corporate and Other
11,394
11,238
Consolidated
41,112
40,940
(1) Total assets are after intersegment eliminations and therefore reflect third -party assets only.
27 Q1 2024 FINANCIAL INFORMATION
28 Q1 2024 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 three months ended March 31, 2024.
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 $50 million.
The following tables provide reconciliations of reported growth rates of certain key figures to their respective comparable growth rate.
Comparable growth rate reconciliation by Business Area
Q1 2024 compared to Q1 2023
Order growth rate
Revenue growth rate
US$
Foreign
US$
Foreign
(as
exchange
Portfolio
(as
exchange
Portfolio
Business Area
reported)
impact
changes
Comparable
reported)
impact
changes
Comparable
Electrification
6%
0%
2%
8%
3%
0%
3%
6%
Motion
2%
0%
-1%
1%
-6%
1%
-1%
-6%
Process Automation
-20%
0%
0%
-20%
11%
1%
0%
12%
Robotics & Discrete Automation
-30%
0%
0%
-30%
-8%
1%
0%
-7%
ABB Group
-5%
0%
1%
-4%
0%
1%
1%
2%
29 Q1 2024 FINANCIAL INFORMATION
Regional comparable growth rate reconciliation
Regional comparable growth rate reconciliation for ABB Group - Quarter
Q1 2024 compared to Q1 2023
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
-8%
-1%
0%
-9%
-4%
-2%
1%
-5%
The Americas
-3%
0%
0%
-3%
5%
0%
2%
7%
of which: United States
0%
0%
2%
2%
6%
0%
4%
10%
Asia, Middle East and Africa
-4%
4%
0%
0%
0%
5%
0%
5%
of which: China
-23%
4%
1%
-18%
-14%
5%
0%
-9%
ABB Group
-5%
0%
1%
-4%
0%
1%
1%
2%
Regional comparable growth rate reconciliation by Business Area - Quarter
Q1 2024 compared to Q1 2023
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%
0%
2%
-2%
-1%
1%
-2%
The Americas
9%
-1%
3%
11%
9%
-1%
7%
15%
of which: United States
13%
0%
4%
17%
14%
0%
9%
23%
Asia, Middle East and Africa
6%
4%
1%
11%
-1%
5%
1%
5%
of which: China
-7%
4%
1%
-2%
-9%
4%
1%
-4%
Electrification
6%
0%
2%
8%
3%
0%
3%
6%
Q1 2024 compared to Q1 2023
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
-8%
-3%
0%
-11%
-20%
-2%
0%
-22%
The Americas
-1%
0%
-3%
-4%
0%
0%
-4%
-4%
of which: United States
-4%
1%
-3%
-6%
-3%
0%
-3%
-6%
Asia, Middle East and Africa
16%
5%
0%
21%
5%
6%
0%
11%
of which: China
-12%
4%
0%
-8%
-9%
4%
0%
-5%
Motion
2%
0%
-1%
1%
-6%
1%
-1%
-6%
Q1 2024 compared to Q1 2023
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
-10%
0%
0%
-10%
7%
-1%
0%
6%
The Americas
-26%
0%
0%
-26%
6%
0%
0%
6%
of which: United States
-13%
0%
0%
-13%
8%
0%
0%
8%
Asia, Middle East and Africa
-27%
2%
0%
-25%
21%
5%
0%
26%
of which: China
-37%
3%
0%
-34%
2%
5%
0%
7%
Process Automation
-20%
0%
0%
-20%
11%
1%
0%
12%
Q1 2024 compared to Q1 2023
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
-31%
-1%
0%
-32%
4%
-2%
0%
2%
The Americas
-24%
-2%
0%
-26%
2%
-1%
0%
1%
of which: United States
-34%
0%
0%
-34%
-7%
0%
0%
-7%
Asia, Middle East and Africa
-32%
4%
0%
-28%
-29%
4%
0%
-25%
of which: China
-46%
3%
0%
-43%
-37%
3%
0%
-34%
Robotics & Discrete Automation
-30%
0%
0%
-30%
-8%
1%
0%
-7%
30 Q1 2024 FINANCIAL INFORMATION
Order backlog growth rate reconciliation
March 31, 2024 compared to March 31, 2023
US$
Foreign
(as
exchange
Portfolio
Business Area
reported)
impact
changes
Comparable
Electrification
4%
2%
6%
12%
Motion
10%
1%
0%
11%
Process Automation
7%
2%
0%
9%
Robotics & Discrete Automation
-31%
2%
0%
-29%
ABB Group
2%
2%
2%
6%
Other growth rate reconciliations
Q1 2024 compared to Q1 2023
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
17%
1%
0%
18%
9%
0%
0%
9%
Motion
4%
1%
0%
5%
19%
4%
0%
23%
Process Automation
3%
0%
0%
3%
14%
0%
0%
14%
Robotics & Discrete Automation
1%
-1%
0%
0%
4%
1%
0%
5%
ABB Group
6%
0%
0%
6%
12%
2%
0%
14%
31 Q1 2024 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, 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
Three months ended March 31,
($ in millions)
2024
2023
Operational EBITA
1,417
1,277
Acquisition-related amortization
(56)
(54)
Restructuring, related and implementation costs
(1)
(26)
(28)
Changes in obligations related to divested businesses
–
(3)
Gains and losses from sale of businesses
(2)
–
Acquisition- and divestment-related expenses and integration costs
(19)
(19)
Certain other non-operational items
(63)
1
Foreign exchange/commodity timing differences in income from operations
(34)
24
Income from operations
1,217
1,198
Interest and dividend income
57
40
Interest and other finance expense
(37)
(61)
Non-operational pension (cost) credit
16
7
Income from continuing operations before taxes
1,253
1,184
Income tax expense
(339)
(119)
Income from continuing operations, net of tax
914
1,065
Loss from discontinued operations, net of tax
(1)
(5)
Net income
913
1,060
(1) Includes impairment of certain assets.
32 Q1 2024 FINANCIAL INFORMATION
Reconciliation of Operational EBITA margin by business
Three months ended March 31, 2024
Corporate and
Robotics &
Other and
Process
Discrete
Intersegment
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
elimination
Consolidated
Total revenues
3,680
1,829
1,601
864
(104)
7,870
Foreign exchange/commodity timing
differences in total revenues:
Unrealized gains and losses
on derivatives
47
46
44
6
5
148
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
(3)
–
2
–
–
(1)
Unrealized foreign exchange movements
on receivables (and related assets)
(31)
(17)
(21)
(11)
(2)
(82)
Operational revenues
3,693
1,858
1,626
859
(101)
7,935
Income (loss) from operations
769
301
234
91
(178)
1,217
Acquisition-related amortization
23
9
1
21
2
56
Restructuring, related and
implementation costs
(1)
10
8
7
–
1
26
Gains and losses from sale of businesses
–
–
–
–
2
2
Acquisition- and divestment-related expenses
and integration costs
10
–
–
2
7
19
Certain other non-operational items
3
3
–
1
56
63
Foreign exchange/commodity timing
differences in income from operations:
Unrealized gains and losses on derivatives
(foreign exchange, commodities,
embedded derivatives)
22
33
22
4
(4)
77
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
(1)
–
1
–
(1)
(1)
Unrealized foreign exchange movements
on receivables/payables
(and related assets/liabilities)
(10)
(11)
(12)
(6)
(3)
(42)
Operational EBITA
826
343
253
113
(118)
1,417
Operational EBITA margin (%)
22.4%
18.5%
15.6%
13.2%
n.a.
17.9%
(1) Includes impairment of certain assets.
In the three months ended March 31, 2024, Certain other non -operational items in the table above includes the following:
Three months ended March 31, 2024
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
–
–
–
–
(8)
(8)
Regulatory, compliance and legal costs
–
–
–
–
3
3
Business transformation costs
(1)
2
1
–
1
46
50
Certain other fair values changes,
including asset impairments
1
2
–
–
11
14
Other non-operational items
–
–
–
–
4
4
Total
3
3
–
1
56
63
(1) Amounts include ABB Way process transformation costs of $46 million for the three months ended March 31, 2024.
33 Q1 2024 FINANCIAL INFORMATION
Three months ended March 31, 2023
Corporate and
Robotics &
Other and
Process
Discrete
Intersegment
($ in millions, unless otherwise indicated)
Electrification
Motion
Automation
Automation
elimination
Consolidated
Total revenues
3,590
1,940
1,436
937
(44)
7,859
Foreign exchange/commodity timing
differences in total revenues:
Unrealized gains and losses
on derivatives
(14)
4
13
2
(4)
1
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
(1)
–
1
–
2
2
Unrealized foreign exchange movements
on receivables (and related assets)
(7)
(4)
(4)
(1)
(3)
(19)
Operational revenues
3,568
1,940
1,446
938
(49)
7,843
Income (loss) from operations
655
353
200
115
(125)
1,198
Acquisition-related amortization
22
8
1
20
3
54
Restructuring, related and
implementation costs
(1)
8
1
2
–
17
28
Changes in obligations related to
divested businesses
–
–
–
–
3
3
Acquisition- and divestment-related expenses
and integration costs
7
4
3
2
3
19
Certain other non-operational items
3
2
–
2
(8)
(1)
Foreign exchange/commodity timing
differences in income from operations:
Unrealized gains and losses on derivatives
(foreign exchange, commodities,
embedded derivatives)
(15)
–
(2)
2
(7)
(22)
Realized gains and losses on derivatives
where the underlying hedged
transaction has not yet been realized
–
–
2
–
3
5
Unrealized foreign exchange movements
on receivables/payables
(and related assets/liabilities)
(3)
(2)
(1)
(1)
–
(7)
Operational EBITA
677
366
205
140
(111)
1,277
Operational EBITA margin (%)
19.0%
18.9%
14.2%
14.9%
n.a.
16.3%
(1) Includes impairment of certain assets.
In the three months ended March 31, 2023, Certain other non -operational items in the table above includes the following:
Three months ended March 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
–
–
–
–
(13)
(13)
Certain other fair values changes,
including asset impairments
1
1
–
1
(2)
1
Business transformation costs
(1)
4
–
–
1
29
34
Other non-operational items
(2)
1
–
–
(22)
(23)
Total
3
2
–
2
(8)
(1)
(1) Amounts include ABB Way process transformation costs of $30 million for the three months ended March 31, 2023.
34 Q1 2024 FINANCIAL INFORMATION
Net debt
Definition
Net debt
Net debt is defined as Total debt less Cash and marketable securities.
Total debt
Total debt is the sum of Short-term debt and current maturities of long-term debt, and Long-term debt.
Cash and marketable securities
Cash and marketable securities is the sum of Cash and equivalents, Restricted cash and Marketable securities and short-term investments.
Reconciliation
($ in millions)
March 31, 2024
December 31, 2023
Short-term debt and current maturities of long-term debt
1,957
2,607
Long-term debt
6,346
5,221
Total debt
8,303
7,828
Cash and equivalents
4,102
3,891
Restricted cash
18
18
Marketable securities and short-term investments
2,097
1,928
Cash and marketable securities
6,217
5,837
Net debt
2,086
1,991
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)
March 31, 2024
December 31, 2023
Total stockholders' equity
13,382
14,057
Net debt (as defined above)
2,086
1,991
Net debt / Equity ratio
0.16
0.14
Net debt/EBITDA ratio
Definition
Net debt/EBITDA ratio
Net debt/EBITDA ratio 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)
March 31, 2024
March 31, 2023
Income from operations for the three months ended:
June 30, 2023 / 2022
1,298
587
September 30, 2023 / 2022
1,259
708
December 31, 2023 / 2022
1,116
1,185
March 31, 2024 / 2023
1,217
1,198
Depreciation and Amortization for the three months ended:
June 30, 2023 / 2022
196
207
September 30, 2023 / 2022
194
198
December 31, 2023 / 2022
199
199
March 31, 2024 / 2023
201
191
EBITDA
5,680
4,473
Net debt (as defined above)
2,086
3,826
Net debt / EBITDA
0.4
0.9
35 Q1 2024 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 and (e) liabilities related to certain other restructuring-related activities); and including the amounts related
to these accounts which have been presented as either assets or liabilities held for sale.
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
($ in millions, unless otherwise indicated)
March 31, 2024
March 31, 2023
Net working capital:
Receivables, net
7,385
7,174
Contract assets
1,135
1,009
Inventories, net
6,170
6,269
Prepaid expenses
314
304
Accounts payable, trade
(5,018)
(4,945)
Contract liabilities
(2,866)
(2,339)
Other current liabilities
(1)
(3,532)
(3,444)
Net working capital in assets and liabilities held for sale
–
136
Net working capital
3,588
4,164
Total revenues for the three months ended:
June 30, 2023 / 2022
8,163
7,251
September 30, 2023 / 2022
7,968
7,406
December 31, 2023 / 2022
8,245
7,824
March 31, 2024 / 2023
7,870
7,859
Adjustment to annualize/eliminate revenues of certain acquisitions/divestments
(106)
(340)
Adjusted revenues for the trailing twelve months
32,140
30,000
Net working capital as a percentage of revenues (%)
11.2%
13.9%
(1)
(c) pension and other employee benefits, (d) payables under the share buyback program and (e) liabilities related to certain restructuring-related activities.
36 Q1 2024 FINANCIAL INFORMATION
Free cash flow
Definition
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.
Reconciliation
Three months ended March 31,
($ in millions, unless otherwise indicated)
2024
2023
Net cash provided by operating activities
726
282
Adjusted for the effects of operations:
Purchases of property, plant and equipment and intangible assets
(181)
(151)
Proceeds from sale of property, plant and equipment
6
31
Free cash flow
551
162
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 gains or losses arising on sale of certain businesses and
certain other significant items within net income which are also excluded / adjusted for when calculating operating cashflows.
Free cash flow for the trailing twelve months
Free cash flow for the trailing twelve months includes free cash flow recorded by ABB in the twelve months preceding the relevant balance sheet date.
Net income for the trailing twelve months
Net income for the trailing twelve months includes net income recorded by ABB (as adjusted) in the twelve months preceding the relevant balance sheet date.
Reconciliation
Trailing twelve months to
($ in millions, unless otherwise indicated)
March 31, 2024
December 31, 2023
Net cash provided by operating activities
4,734
4,290
Adjusted for the effects of operations:
Purchases of property, plant and equipment and intangible assets
(800)
(770)
Proceeds from sale of property, plant and equipment
122
147
Free cash flow
4,056
3,667
Adjusted net income attributable to ABB
(1)
3,555
3,686
Free cash flow conversion to net income
114%
99%
(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 $59 million.
Reconciliation of the trailing twelve months to March 31, 2024
($ in millions)
Net cash provided by
operating activities
Purchases of
property, plant and
equipment and
intangible assets
Proceeds
from sale of property,
plant and equipment
Adjusted net income
attributable to ABB
(1)
Q2 2023
760
(180)
26
906
Q3 2023
1,351
(175)
10
829
Q4 2023
1,897
(264)
80
915
Q1 2024
726
(181)
6
905
Total for the trailing twelve
months to March 31, 2024
4,734
(800)
122
3,555
(1) Adjusted net income attributable to ABB for Q3 2023, is adjusted to exclude the gain on sale of the Power Conversion Division of $53 million. In Q4 2023, an additional
$6 million was adjusted for the gain on sale of the Power Conversion Division.
37 Q1 2024 FINANCIAL INFORMATION
Net finance income (expense)
Definition
Net finance income (expense) is calculated as Interest and dividend income less Interest and other finance expense.
Reconciliation
Three months ended March 31,
($ in millions)
2024
2023
Interest and dividend income
57
40
Interest and other finance expense
(37)
(61)
Net finance income (expense)
20
(21)
Book-to-bill ratio
Definition
Book-to-bill ratio is calculated as Orders received divided by Total revenues.
Reconciliation
Three months ended March 31,
2024
2023
($ in millions, except Book-to-bill presented as a ratio)
Orders
Revenues
Book-to-bill
Orders
Revenues
Book-to-bill
Electrification
4,392
3,680
1.19
4,141
3,590
1.15
Motion
2,303
1,829
1.26
2,262
1,940
1.17
Process Automation
1,697
1,601
1.06
2,113
1,436
1.47
Robotics & Discrete Automation
701
864
0.81
1,001
937
1.07
Corporate and Other
(119)
(104)
n.a.
(67)
(44)
n.a.
ABB Group
8,974
7,870
1.14
9,450
7,859
1.20
38 Q1 2024 FINANCIAL INFORMATION
Free cash flow for past periods
Effective January 1, 2024, the Company changed the presentation of discontinued operations in its statement of cash flows to an alternate allowable policy. As a
result, the total cash flows for operating, investing and financing activities within discontinued operations are no longer shown separately but instead all cash flows
in discontinued operations are presented within each line item as appropriate in the statement of cash flows. As this presentation change represents a change in
accounting policy, all prior periods presented have been reclassified to conform to the current period presentation.
The table below presents the reconciliation of Free cash flow as defined on page 36 for 2023 and 2022 by quarter, restated to reflect this change in presentation.
Reconciliation:
($ in millions)
Net cash provided by
(used in) operating
activities
Purchases of
property, plant and
equipment and
intangible assets
Proceeds
from sale of property,
plant and equipment
Free cash flow
For the three months ended:
March 31, 2022
(573)
(187)
35
(725)
June 30, 2022
382
(151)
31
262
September 30, 2022
791
(165)
19
645
December 31, 2022
687
(259)
42
470
March 31, 2023
282
(151)
31
162
June 30, 2023
760
(180)
26
606
September 30, 2023
1,351
(175)
10
1,186
December 31, 2023
1,897
(264)
80
1,713
39 Q1 2024 FINANCIAL INFORMATION
—
ABB Ltd
Corporate Communications
P.O. Box 8131
8050 Zurich
Switzerland
Tel: +41 (0)43 317 71
11
www.abb.com
January 1 — March 31, 2024
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
Timo Ihamuotila
February 05, 2024
Share
27,000
CHF
37.37
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: April 18, 2024.
By:
/s/ Ann-Sofie Nordh
Name:
Ann-Sofie Nordh
Title:
Group Senior Vice President and
Head of Investor Relations
Date: April 18, 2024.
By:
/s/ Natalia Shehadeh
Name:
Natalia Shehadeh
Title:
Chief Integrity Officer, Interim General
Counsel and Corporate Secretary