Abb A/S

Ledelsesberetning
Financial highlights In DKK millions 2023 2022* 2021* 2020* 2019** Key figures Revenue 2.214 1.913 1.656 1.548 1.758 Gross profit 424 372 347 334 378 Operating profit 74 64 61 43 71 Profit from financial income and expenses 1 -7 -2 -4 0 Profit for the year 59 44 47 28 53 Total assets 722 727 580 553 647 Current assets 686 697 560 537 630 Investment in property, tools and equipment 11 13 1 2 2 Equity 215 220 205 187 267 Non-current liabilities 92 40 30 39 50 Current liabilities 415 467 348 329 330 Financial ratios Gross margin 19,2% 19,5% 21,0% 21,6% 21,5% Operating margin 3,3% 3,3% 3,7% 2,8% 4,0% Current ratio 165 149 161 163 191 Solvency ratio 29,8% 30,3% 35,3% 33,8% 41,3% Return on equity 27,1% 20,7% 24,0% 12,3% 21,9% Average number of full-time employees 396 370 364 372 393 * Financial highlights for 2020-2022 reflect continuing operations only. Discontinuing operations in 2020-2022 encompasses ABB’s Turbocharging division which was divested in January 2022. ** Financial highlights for 2019 reflect continuing operations only. Discontinuing operations in 2019 encompasses ABB’s Power Grids division which was divested in 2019. With reference to the accounting policies section of the annual report, the Company has made some reclassifications to individual items in the income statement with an effect of the comparative figures of gross profit in the financial highlights. The reclassifications have been corrected in the 2022 financial highlights. Financial ratios The financial ratios stated in the survey of financial highlights have been calculated as follows: Gross profit x 100Gross margin RevenueOperating profit (EBIT) x 100Operating margin RevenueCurrent assets x 100Current ratio Current liabilitiesEquity, year-end x 100Solvency ratio Total equity and liabilities, year-endProfit for the year x 100Return on equity Average equityDevelopment in activities and financial position In 2023, ABB again demonstrated its capacity for ground-breaking innovation with the launch of several new solutions that will further drive the shift to electrification and automation and contribute to a low-carbon society. There continues to be increased investments in automation, renewable energy, buildings, e-mobility and data centres. Despite challenging circumstances, the revenue for the year ended 2023 increased in comparison to last year, and the results indicate a strong market position in a growing industry. The Company’s income statement for 2023 shows a net profit of TDKK 59.030 and the balance sheet by 31 December 2023 shows an equity of TDKK 214.984. The result for the year is not in line with the outlook expectations as projected in the Management's review in the annual report for 2022, however is still considered satisfactory on the basis of circumstances listed above. Specific circumstances Throughout 2023, ABB A/S increased its provisions associated with ongoing projects to address inherent risks identified during our internal risk assessment. This strategic action demonstrates management’s commitment to achieving sustainable growth while maintaining vigilant oversight of business outcomes. Uncertainties regarding recognition and measurement The annual report for ABB A/S for 2023 does not contain material uncertainties regarding recognition and measurement. Particular risks Operating risks The company is exposed to the market and operational risks which are usual for the markets we operate in, as well as to risks associated with the company's warranty commitments. It is the opinion of management that the provisions made are sufficient to cover the company’s warranty commitments. Financial risks ABB Group has centralised the management of financial risks. The overall objectives and policies for the ABB Group’s financial risk management are outlined in a Treasury Policy. The ABB Group only hedges commercial exposures and consequently does not enter derivative transactions for trading or speculative purpose. Interest rate risk ABB A/S’ interest rate risk relates to interest bearing debt and interest-bearing assets. ABB A/S’ interest-bearing assets consist mainly of bank deposits and deposit with the ABB Group. ABB A/S’ interest rate risk is considered immaterial and is not expected to have a significant impact on ABB A/S’ results. Intellectual capital It is the company’s objective to possess the latest knowledge. To meet this end, it is crucial that the company continues to be able to recruit and retain highly qualified employees. Therefore, we continuously invest in personal and professional development. Statement on Corporate Sustainability At ABB, we have always taken a sustainable approach to business. Sustainability is a key part of our company Purpose and of the value that we create for all our stakeholders. We believe that sustainable development means progress towards a healthier and more prosperous world today and for future generations. This means balancing the needs of society, the environment, and the economy. To achieve this, we act and embed this approach to business across our value chain, creating superior value for all our stakeholders. Furthermore, a Code of Conduct has been implemented both in the Group and in Denmark; it shows our commitment to act with ethically correct behaviour and integrity in any given situation. Through our leading technologies and responsible business practices, we also contribute to the United Nations’ Sustainable Development Goals, of which ABB has always been a strong advocate. ABB A/S is part of and adheres to the principles and goals outlined in ABB Ltd.’s Sustainability Report 2023. In accordance with 99(a) of the Danish Financial Statements Act, ABB A/S follows and refers to the ABB Group's Statutory Report on Corporate Social Responsibility, which is published by the Group. The report is available at https://global.abb/group/en/sustainability Research and development activities ABB Corporate Research serves the entire company and, consequently, its scientists and engineers closely collaborate with R&D within the businesses. This partnership has provided the foundation for many of our pioneering technologies. ABB Corporate Research anchors and grows the core competencies needed to conduct research and development in power and automation products, solutions and services. With locations in seven countries, ABB Groups corporate research centres bring together an international team of highly skilled scientists. Outlook ABB A/S expects to maintain same level of activities despite challenging market terms with broad macroeconomic difficulties – including challenging supply chain and tight labour markets, with the uncertainties of among others the ongoing war in Ukraine. Revenue expectations will remain unchanged as actuals of 2023 whereas it is expected to have the profit for the year 2024 20-30 MDKK higher than 2023.