Ad hoc Announcement pursuant to Art. 53 Listing Rules of SIX Swiss Exchange

Zurich, Switzerland, July 18, 2024

Q2 2024 results

Solid demand; record-high Operational EBITA margin

• Orders $8,435 million, -3%; comparable1 0%
• Revenues $8,239 million, +1%; comparable1 +4%
• Income from operations $1,376 million; margin 16.7%
• Operational EBITA1 $1,564 million; margin1 19.0%
• Basic EPS $0.59; +22%2
• Cash flow from operating activities $1,067 million; +40%

“In the second quarter, demand was solid and the Operational EBITA margin reached the all-time-high level of 19%. I am confident that ABB will continue to deliver long-term shareholder value in line with its targets as Morten Wierod takes over as CEO next month.”

Björn Rosengren, CEO

CEO summary

The second quarter was, in my view, another proof point that the operational changes from the introduction of the ABB Way in 2020 are making ABB a sustainably well-running company. We reached a new record-high Operational EBITA margin, good cash flow and we announced a somewhat more sizeable acquisition. Overall, I am pleased with the outcome.

Comparable orders remained on par with last year’s high level, supported by strong improvements in both the Electrification and Process Automation business areas. This was however offset by weakness primarily in the Machine Automation and E-mobility businesses, as well as by a softening from a fairly challenging comparable in the Motion business area. We saw short-cycle orders improve, hence turning a corner after several quarters of decline. In the project- and systems-related businesses we see a continued solid underlying customer activity with an intact robust project pipeline.

Revenues amounted to the high level of $8.2 billion, yet we still managed to deliver a positive book-to-bill of 1.02. With the first half of this year at 1.08 and the currently expected overall solid market environment, we feel confident in reaching a positive book-to-bill for 2024. Operational EBITA margin was 19.0%, supported by both higher volumes and positive price impacts, with the Corporate line items also contributing positively on aggregate.

Free cash flow of $918 million improved from last year and the run-rate of $1.5 billion in the first half of the year leaves us in a good position to deliver on our annual ambition to be at least at a similar level as last year.

Enabling a low-carbon society is at the core of ABB’s business, and we are pleased that our scope 1, 2 and 3 targets for 2030 and 2050 were approved by the Science Based Target initiative (SBTi), in accordance with the Paris Agreement. We are committed to reduce our scope 1 and 2 emissions by 80 percent by 2030 and 100 percent by 2050. With our new scope 3 target of reducing absolute emissions by 25% from a 2022 baseline, we will increase our engagement with our value chain partners on decarbonization whilst providing products and solutions to our customers to enable them to scale-up renewables, increase energy efficiency, electrify processes and reduce emissions.

One example of how we drive R&D towards energy efficient solutions, is the newly launched OmniCore control platform which enables robots to operate up to 25% faster and consume up to 20% less energy compared with the previous version. OmniCore enables management of motion, sensors and application equipment in a unique, single control architecture – one platform, and one language that integrates our complete range of leading hardware and software.

As an extension of our R&D activities we invest in minority stakes in technology start-ups, which later may be fully integrated into the ABB family. For example, during the quarter we invested in two clean technology start-ups – Ndustrial and GridBeyond – offering AI powered solutions for real time optimized energy consumption for accelerated decarbonization as well as optimized distributed energy resources and industrial loads.

It was very good to see the Electrification business area announcing a somewhat more sizeable acquisition. When the deal closes, the Smart Buildings division will expand its portfolio with the acquisition of Siemens’ Wiring Accessories business in China, which generated more than $150 million in revenues in 2023. The acquisition will broaden our market reach and complement the regional customer offering to a full range of safe and reliable smart buildings technology.

Both myself and Morten – who soon assumes the role of ABB CEO – are thrilled about the internal appointments of Giampiero Frisio as the new President of the Electrification Business Area and Brandon Spencer as the new President of the Motion Business Area. Both are proven leaders with strong ABB Way leadership track records, driving profitable growth in two of our largest Divisions.

I am very proud of having been a part of ABB. Above all I feel privileged to have gotten to know the people – a very capable and committed team with a passion for business. Leveraging the ABB Way operating model has contributed to bringing our financial performance towards a best-in-class level, and fully integrating ABB sustainability as part of our core customer proposition as well as driving our own operations to being part of a low carbon industrial solution. When Morten takes over as CEO from next month, he will bring his vast experience of our leading technology and his customer understanding from his 25+ years in the ABB commercial front lines. I am confident that he will challenge the team to further refine the ABB Way for profitable and sustainable growth. As I retire from ABB, I wish all future success for the team.

Björn Rosengren

CEO

Outlook

In the third quarter of 2024, we anticipate a sequentially higher growth rate in comparable revenues and the Operational EBITA margin be around 18.5%, or slightly below.

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%.

The complete press release including the appendices is available at www.abb.com/news

ABB is a technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. The company’s solutions connect engineering know-how and software to optimize how things are manufactured, moved, powered and operated. Building on over 140 years of excellence, ABB’s more than 105,000 employees are committed to driving innovations that accelerate industrial transformation.