31371716 2023-01-01 2023-12-31 31371716 2023-01-01 2023-12-31 2 31371716 2022-01-01 2022-12-31 31371716 2023-12-31 31371716 2022-12-31 31371716 2022-12-31 fsa:SharePremiumMember 31371716 2023-01-01 2023-12-31 fsa:SharePremiumMember 31371716 2023-12-31 fsa:SharePremiumMember 31371716 2022-12-31 fsa:RetainedEarningsMember 31371716 2023-01-01 2023-12-31 fsa:RetainedEarningsMember 31371716 2023-12-31 fsa:RetainedEarningsMember 31371716 2022-12-31 fsa:ProposedDividendRecognisedInEquityMember 31371716 2023-01-01 2023-12-31 fsa:ProposedDividendRecognisedInEquityMember 31371716 2023-12-31 fsa:ProposedDividendRecognisedInEquityMember 31371716 2023-01-01 2023-12-31 1 31371716 2023-01-01 2023-12-31 1 31371716 2023-01-01 2023-12-31 2 31371716 2023-01-01 2023-12-31 3 31371716 2023-01-01 2023-12-31 4 31371716 2023-01-01 2023-12-31 5 31371716 2023-01-01 2023-12-31 1 iso4217:DKK xbrli:pure ABB A/S Lautrupvang 8 DK 2750 Ballerup 31371716 Peter Lyhne Hansen Statement by Management on the annual report Today, the Board of Directors and the Executive Board have discussed and approved the annual report of ABB A/S for the financial year 1 January – 31 December 2023. The annual report has been prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2023 and of the results of the Company's operations for the financial year 1 January – 31 December 2023. Further, in our opinion, the Management's review gives a fair review of the development in the Company's operations and financial matters and the results of the Company's operations and financial position. We recommend that the annual report be approved at the annual general meeting. Ballerup Tina Balslev Frederiksen CEO Pekka Tapio Tiitinen Bjarne Tvede Owais Ahmed Peter Lyhne Hansen Tina Balslev Frederiksen To the shareholder of ABB A/S Opinion We have audited the financial statements of ABB A/S for the financial year 1 January – 31 December 2023 comprising income statement, balance sheet, statement of changes in equity and notes, including accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the Company's assets, liabilities and financial position at 31 December 2023 and of the results of the Company's operations for the financial year 1 January – 31 December 2023 in accordance with the Danish Financial Statements Act. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor's responsibilities for the audit of the financial statements" section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Management's responsibility for the financial statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control, that Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements in Denmark will always detect a material misstatement when it exists. Misstatements may arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of financial statement users made on the basis of these financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also • identify and assess the risks of material misstatement of the company financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. • conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. • evaluate the overall presentation, structure and contents of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Statement on the Management's review Management is responsible for the Management's review. Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the Management's review and, in doing so, consider whether the Management's review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement of the Management's review. Fredericia KPMG Statsautoriseret Revisionspartnerselskab 25578198 Nikolaj Møller Hansen Niklas R. Filipsen State Authorised Public Accountant State Authorised Public Accountant mne33220 mne47781 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. Principal activities ABB is a technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. The company’s solutions connect engineering know-how and software to optimize how things are manufactured, moved, powered and operated. Building on more than 130 years of excellence, ABB’s approximately 105,000 employees are committed to driving innovations that accelerate industrial transformation. ABB A/S develops, manufactures, and markets products and services for the manufacturing process and consumer goods industries, supply enterprises, the oil and gas sector, pharma sector and the infrastructure market. In 2023 ABB A/S had an average of 396 employees. Diversity in the management As of 31 December 2023, ABB A/S has a following management composition: 5 0.20 0.333 2027 62 0.145 0.25 2027 During the year, ABB A/S expanded its board by appointing a female representative who also serves as the CEO. This strategic decision aligns with our commitment to achieving gender diversity targets on the board, in accordance with 99b requirements. Board members are appointed by the parent company, which determines the overall composition. Both ABB A/S and its parent company remain dedicated to meeting established goals for board composition through the implementation of clear guidelines to promote diversity and inclusion across ABB. Additionally, the parent company has adopted UN Women’s Empowerment Principles (WEPs), underscoring its commitment to improving board governance across the ABB Group. Other management levels represent collective group of members from the company’s first and second management levels. The first management level includes the top management body and the people who are at the same organisational level as them. The second management level includes the people with personnel responsibilities who report directly to the first management level. In ABB A/S, the CEO is part of the Board of Directors and the first management level in the “other management levels”. During the year, representation in the other management levels increased from 12% to 14.5%. This upward trend reflects our management’s commitment to a policy decision aimed at enhancing gender diversity in leadership roles. Internally, we have set targets for female managers and established guidelines for their recruitment and retention. During the hiring process, we strive for gender balance. Additionally, we conduct an annual talent identification process with a specific focus on female candidates. As a result of these initiatives, we anticipate further growth in the share of female managers across other management levels over the next four years, ultimately meeting our predefined target. Data privacy In accordance with 99(d) of the Danish Financial Statements Act, ABB A/S follows and refers to the ABB Group's Statutory Annual Report, which is published by the Group. The report is available at https://global.abb/group/en/investors/annual-reporting-suite. Events after the balance sheet date No events have occurred that could materially affect the assessment of the Company’s financial position. 2213742000 1912901000 -14599000 29096000 3544000 8244000 1549698000 1386375000 229355000 191578000 423634000 372288000 345536000 305771000 3738000 2229000 74360000 64288000 4650000 194000 3577000 7251000 75433000 57231000 16403000 12756000 59030000 44475000 0 17642000 59030000 62117000 6793000 891000 4426000 3323000 6329000 2269000 7058000 11680000 24606000 18163000 12030000 12007000 36636000 30170000 5269000 5619000 53166000 60048000 23956000 31673000 15111000 9522000 97502000 106862000 445512000 478508000 43626000 90072000 18899000 7319000 6716000 0 1202000 1528000 3831000 2997000 519786000 580424000 68457000 9930000 722381000 727386000 100000000 100000000 56984000 55954000 58000000 64000000 214984000 219954000 1531000 1475000 90887000 38882000 92418000 40357000 18776000 16988000 20497000 24077000 39331000 70224000 227441000 241639000 0 504000 108934000 113643000 414979000 467075000 414979000 467075000 722381000 727386000 100000000 55954000 64000000 0 0 64000000 64000000 0 1030000 58000000 100000000 56984000 58000000 1 Accounting policies The annual report of ABB A/S for 2023 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to large reporting class C entities.With reference to the true and fair view laid down in the Danish Financial Statements Act, the Company has made some reclassifications to individual items in the income statement. The reclassifications have affected the items staff costs and other external expenses but have no impact on results before tax, results for the year or equity. Comparative figures have been restated accordingly including updates to the financial highlights. Foreign currency translation On initial recognition, transactions denominated in foreign currencies are translated at the exchange rates at the transaction date. Foreign exchange differences arising between the exchange rate at the transaction date and the rate at the date of payment are recognised in the income statement as financial income or financial expenses. Receivables and payables and other monetary items denominated in foreign currencies are translated at closing rates. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the latest financial statements is recognised in the income statement as financial income or financial expenses. Derivative financial instruments On initial recognition, derivative financial instruments are recognised in the balance sheet at cost and are subsequently measured at fair value. Positive and negative fair values of derivative financial instruments are included in other receivables and payables, respectively. Fair value adjustments of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement on an ongoing basis. Income statement Revenue Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts granted are deducted from revenue. A contract is broken down by individual transactions when the fair value of the individual sales transactions may be reliably measured, and the individual sales transactions are of separate value to the buyer. Sales transactions are deemed to be of a separate value to the buyer when the transaction is individually identifiable and usually sold individually. The contract price is broken down by the individual sales transactions in accordance with the relative current cost approach. The separate sales transactions are recognised as revenue when complying with the criteria applying to the sale of goods and services. Revenue from construction contracts Income from contract work in progress is measured by reference to the stage of completion. The value is calculated on the basis of the stage of completion at the balance sheet date and the total expected income from the contract in question. The stage of completion is calculated on the basis of the costs incurred relative to the expected total costs. Write-downs for losses are made up as the total expected loss on the contract irrespective of the stage of completion. Revenue from the sale of goods Income from the sale of goods for resale and finished goods, is recognised in revenue when the most significant rewards and risks have been passed on to the buyer and provided the income can be measured reliably and payment is expected to be received. The date at which the most significant rewards and risks are passed on is based on standardised terms of delivery based on Incoterms. Revenue from the sale of services Income from the sale of services, which include service contracts, is recognised in revenue on a straight-line basis as the services are rendered, as the services are provided in the form of an indefinite number of actions over a specified period of time. Services based on time spent are recognised in revenue as the work is performed. Changes in inventories of finished goods, work in progress and goods for resale Changes in inventories of finished goods, work in progress and goods for resale include expenses relating to changes in inventories of finished goods, work in progress and goods for resale as part of generating the year's revenue. Other operating income Other operating income comprises items secondary to the company's activities. Raw materials, consumables and goods for resale Raw materials, consumables and goods for resale include expenses relating to raw materials, consumables and goods for resale used in generating the year's revenue. Other external expenses Other external expenses include the year's expenses relating to the company's core activities, including expenses relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs Staff costs include wages and salaries, including compensated absence and pension to the company's employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. Amortisation and depreciation The item comprises amortisation/depreciation and impairment of intangible assets and property, tools and equipment. The residual value of intangible and tangible assets is determined at the time of acquisition and are reassessed every year. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised. In case of changes in the residual value, the effect on the depreciation charges is recognised prospectively as a change in accounting estimates. Financial income and expenses Financial income and expenses comprise interest income and expenses, gains and losses on securities, payables and transactions denominated in foreign currencies, amortisation of financial assets and liabilities as well as surcharges and refunds under the on-account tax scheme, etc. Tax for the year The company is covered by the Danish rules on compulsory joint taxation of the Danish subsidiaries of the ABB Group. The Danish subsidiaries of the ABB Group form part of the joint taxation from the date on which they are included in the consolidated financial statements and up to the date on which they exit the consolidation. The company, ABB A/S, is the administrative company for the joint taxation and consequently settles all corporation tax payments with the tax authorities. The current Danish corporation tax is allocated by the settlement of joint taxation contributions between the jointly taxed enterprises in proportion of their taxable income. In this relation, enterprises with tax loss carry forwards receive joint taxation contributions from enterprises that have used these losses to reduce their own taxable profits. Tax for the year comprises current tax for the year and changes in deferred tax. The tax expense relating to the profit/loss for the year is recognised in the income statement, and the tax expense relating to amounts directly recognised in equity is recognised directly in equity. Balance sheet Property, tools and equipment Property, tools and equipment is measured at cost less accumulated depreciation and impairment losses. Cost comprises the purchase price and any costs directly attributable to the acquisition until the date when the asset is available for use. The cost of self-constructed assets comprises direct and indirect costs of materials, components, sub-suppliers, and wages and salaries as well as borrowing costs relating to specific and general borrowing directly attributable to the construction of the individual asset. Interest expenses on loans to finance the production of items of property, tools and equipment, and which relate to the production period, are recognised in cost. All other borrowing costs are recognised in the income statement. Where individual components of an item of property, tools and equipment have different useful lives, they are accounted for as separate items, which are depreciated separately. The basis of depreciation, which is calculated as cost less any residual value, is depreciated on a straight-line basis over the expected useful life. The expected useful life of the assets are as follows: Leasehold improvements 3-8 years Tools and machinery 10-15 years Fixtures and fittings, tools and equipment 3-10 years The basis of depreciation is based on the residual value of the asset and is reduced by impairment losses, if any. The depreciation period and the residual value are determined at the time of acquisition and are reassessed every year. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised. In case of changes in the amortisation period or the residual value, the effect on the depreciation charges is recognised prospectively as a change in accounting estimates. Gains and losses on the disposal of items of property, tools and equipment are calculated as the difference between the selling price less costs to sell and the carrying amount at the date of disposal. The gains or losses are recognised in the income statement. Leases On initial recognition, leases for fixed assets that transfer substantially all risks and rewards incident to ownership to the Company (finance leases) are recognised in the balance sheet at the lower of fair value and the net present value of future lease payments. All other leases are operating leases. Payments relating to operating leases and other leases are recognised in the income statement over the term of the lease. The Company's total obligation relating to operating leases and other leases is disclosed as contractual obligations and contingencies, etc. Financial assets Deposits are recognised at amortised cost. Impairment of fixed assets The carrying amount of property, tools and equipment and financial assets are tested annually for evidence of impairment other than the decrease in value reflected by depreciation. Impairment tests are conducted on individual assets or groups of assets when there is evidence of impairment. Assets are written down to the lower of the carrying amount and the recoverable amount. The recoverable amount is the higher of the net selling price of an asset and its value in use. The value in use is calculated as the net present value of the expected net cash flows from the use of the asset or the group of assets and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life. Previously recognised impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. Inventories Inventories are measured at cost in accordance with the weighted average method. Where the net realisable value is lower than cost, inventories are written down to this lower value. Goods for resale and raw materials and consumables are measured at cost, comprising purchase price plus delivery costs. The cost of finished goods and work in progress includes the cost of raw materials, consumables, direct labour and production overheads. Production overheads include the indirect cost of material and labour. The net realisable value of inventories is calculated as the sales amount less costs of completion and costs necessary to make the sale and is determined taking into account marketability, obsolescence and development in expected selling price. Receivables Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Receivables in respect of which there is no objective evidence of individual impairment are assessed for objective evidence of impairment on a portfolio basis. The portfolios are primarily based on the country of domicile and credit ratings of the debtors in accordance with the Group's credit risk management policy. The objective evidence applied to portfolios is determined based on historical loss experience. Impairment losses are calculated as the difference between the carrying amount of the receivables and the net present value of the expected cash flows, including the realisable value of any collateral received. The effective interest rate for the individual receivable or portfolio is used as discount rate. Construction contracts Construction contracts are measured at the selling price of the work performed less progress billings and expected losses. The selling price is measured on the basis of the stage of completion at the balance sheet date and the projected income from the individual construction contract. The stage of completion is stated as the share of costs incurred in proportion to estimated total costs relating to the individual construction contract. When the selling price of a construction contract cannot be estimated reliably, the selling price is measured at the lower of costs incurred and net realisable value. The individual construction contract is recognised in the balance sheet as receivables or payables, respectively. Net assets comprise the total of construction contracts where the selling price of the work performed exceeds progress billings. Net liabilities comprise the total of construction contracts where progress billings exceed the selling price. Costs arising from sales work and contracting are recognised in the income statement as incurred. Prepayments Prepayments recognised under "Current assets" comprise expenses incurred concerning subsequent financial years. Equity Dividend Dividend expected to be distributed for the financial year is presented as a separate line item under "Equity". Income tax and deferred tax Current tax payables and receivables are recognised in the balance sheet as tax computed on the taxable income for the year, adjusted for tax on prior-year taxable income and tax paid on account. Deferred tax is measured using the balance sheet liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. However, deferred tax is not recognised on temporary differences relating to goodwill which is not deductible for tax purposes or on office premises and other items where temporary differences arise at the date of acquisition without affecting neither the profit/loss for the year nor the taxable income. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on management's intended use of the asset or settlement of the liability, respectively. Deferred tax is measured according to the tax rules and at the tax rates applicable in the respective countries at the balance sheet date when the deferred tax is expected to crystallise as current tax. Provisions Provisions comprise anticipated costs related to warranty commitments, restructuring, etc. Provisions are recognised when, as a result of past events, the Company has a legal or a constructive obligation and it is probable that there may be an outflow of resources embodying economic benefits to settle the obligation. Provisions are measured at net realisable value. If the obligation is expected to be settled far into the future, the obligation is measured at fair value. When it is probable that total costs will exceed total income from a construction contract, the total projected loss on the work is recognised as a provision. Warranty commitments include expenses for remedial action in respect of the contract work within the warranty period of 1-5 years. Provisions for warranty commitments are measured at net realisable value and recognised based on past experience. Liabilities Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. On subsequent recognition, financial liabilities are measured at amortised cost, corresponding to the capitalised value, using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan. Other liabilities are measured at amortised cost, which usually corresponds to nominal value. Segment information Information is disclosed by geographical markets. The segment information is in line with the Company's accounting policies, risks and internal financial management. Omission of a cash flow statement With reference to section 86(4) of the Danish Financial Statements Act, no cash flow statement has been prepared. The Company's cash flows are reflected in the consolidated cash flow statement for the higher-ranking parent company ABB Ltd., Zürich, Switzerland. 2 Geographical segment information Revenue National 1.930.050 1.643.558 International 283.692 269.343 2.213.742 1.912.901 With reference to section 96(1) of the Danish Financial Statements Acts, the revenue is not split into further segments. With only few competitors in some of the segments ABB A/S acts in, management asses that the company’s competitors will benefit from knowing the turnover within the individual segments and the development thereof. Management asses that the revenue distribution on segments will cause significant damage to the Company. 3 Other external expenses Fees to auditors appointed at the annual general meeting Total fees: KPMG 746 808 746 808 Specification of fees: Audit 716 779 Non-audit services 30 29 746 808 4 Staff costs Wages and salaries 315.022 281.386 Pensions 26.380 21.010 Social security costs 4.134 3.375 345.536 305.771 396 370 No fee has been paid to the Board of Directors for their roles as members of the Board of Directors. By reference to section 98b(3), (ii) of the Danish Financial Statement Act, remuneration to Management is not disclosed. 5 Depreciation Property, tools and equipment 3.738 2.229 3.738 2.229 11 Property, tools and equipment Fixtures Property, and tools and Leasehold fittings, equipment improve-Tools and tools and under DKK'000 ments machinery equipment construction Total Cost at 1 January 2023 11.696 21.185 12.492 11.680 57.053 Additions 0 0 0 11.172 11.172 Transferred 6.551 2.714 6.529 -15.794 0 Disposals -5.320 -4.704 -5.830 0 -15.854 Cost at 31 December 2023 12.927 19.195 13.191 7.058 52.371 Depreciation and impairment losses at 1 January 2023 -10.805 -17.862 -10.223 0 -38.890 Depreciation -361 -1.234 -2.143 0 -3.738 Reversed depreciation on assets sold 5.032 4.327 5.504 0 14.863 Depreciation and impairment losses at 31 December 2023 -6.134 -14.769 -6.862 0 -27.765 Carrying amount at 31 December 2023 6.793 4.426 6.329 7.058 24.606 6 Financial income Interest Income, group enterprises 4.533 0 Other interest income 117 194 4.650 194 7 Financial expenses Interest expenses, group enterprises 3.408 4.833 Other interest expenses 169 2.418 3.577 7.251 8 Tax for the year Current tax for the year 17.836 14.678 Adjustment of the deferred tax charge for the year 56 -1.534 Prior-year adjustments -1.489 -388 16.403 12.756 9 Discontinuing operations In 2021, ABB reported the Turbocharging business as discontinued operations. The divestment of the Danish Turbocharging business took place on 1 February 2022. The transfer of assets and liabilities was carried out at market value, and the profit related to sale of goodwill, of TDKK 20.262, has been registered as gains on the sale of business in the discontinuing operations in 2022. The sale of the business was to an ABB owned entity and hence the transaction is considered a related party transaction. DKK'000 2023 2022* Income statement for discontinuing operations Revenue 0 13.433 Changes in inventories of finished goods, work in progress and goods for resale 0 1.500 Gains on the sale of business 0 20.262 Raw materials, consumables and goods for resale 0 -11.575 Other external expenses 0 -419 Gross profit 0 23.201 Staff costs 0 -578 Depreciation 0 -5 Profit before tax 0 22.618 Tax for the year 0 -4.976 Profit for the year from discontinuing operations 0 17.642 * 1 January - 31 January 1030000 -1883000 12 Financial assets DKK'000 Deposits Cost at 1 January 2023 12.007 Additions 1.647 Disposals -1.624 Cost at 31 December 2023 12.030 Carrying amount at 31 December 2023 12.030 13 Construction contracts Selling price of work performed 386.430 270.985 Advance payment and progress billings -361.580 -197.901 24.850 73.084 recognised as follows: Construction contracts (assets) 43.626 90.072 Construction contracts (liabilities) -18.776 -16.988 24.850 73.084 14 Prepayments Prepayments recognised as assets include expenses incurred concerning subsequent financial years. 15 Deferred tax Deferred tax at 1 January 1.475 3.009 Deferred tax adjustment for the year 56 -1.534 Deferred tax at 31 December 1.531 1.475 The deferred tax charge relates to: Fixed assets 130 318 Property, tools and equipment 318 378 Current assets 11.782 8.023 Provisions -10.699 -7.244 1.531 1.475 16 Other provisions Warranty provisions 17.016 12.882 Provision for work due 18.982 5.920 Provision for asset retirement obligation 7.000 0 Provision for loss-making orders 47.872 7.311 Other provisions 17 12.769 90.887 38.882 Other provisions at 1 January 38.882 25.332 Used during the year -10.094 -13.731 Provision for the year 62.099 27.281 Other provisions at 31 December 90.887 38.882 During the year 2023, the Company has increased provision for loss-making orders by TDKK 40.561 to cover the inherent risks related to the ongoing projects. Other provisions are expected to mature within: 0-1 year 85.858 26.984 1-5 years 5.029 11.898 90.887 38.882 17 Contractual obligations and contingencies, etc. Contingent liabilities ABB A/S is party to a few pending legal actions. In Management's opinion, the outcome of these legal actions will not affect the Company's financial position apart from what has already been recognised in the financial statements. ABB A/S is jointly taxed with other Danish group companies. As a group company, the company has unlimited and joint liability with other group companies for Danish corporation taxes and withholding taxes on dividends, interest and royalties within the joint taxation unit. 18 Related party disclosures ABB A/S' related parties comprise the following: Parties exercising control ABB Asea Brown Boveri Ltd., Affolternstrasse 44, CH-8050 Zürich, Switzerland. ABB Asea Brown Boveri Ltd. holds 100 % of the contributed capital in the Company. ABB A/S is part of the consolidated financial statements of ABB Ltd., Affolternstrasse 44, CH-8050 Zürich, Switzerland, which is both the smallest and largest group, which prepares consolidated financial statements, in which ABB A/S is included as a subsidiary. The consolidated financial statements of ABB Ltd. can be obtained by contacting the company at the above address. DKK'000 2023 Related party transactions Sale of goods and services to group companies 60.162 Purchase of goods and services from group companies 1.532.948 Dividend paid out to parent entity 64.000 Interest income and expenses from/to group companies are disclosed in note 6 and 7 to the financial statements. Payables and receivables to/from group companies are disclosed in the balance sheet.No remuneration has been paid to the Board of Directors for their roles as members of the Board of Directors. By reference to section 98b(3), (ii) of the Danish Financial Statement Act, remuneration to management is not disclosed. Besides distribution of dividend, no other transactions were carried out with the shareholder during the year. Annual report Auditor's report on audited financial statements ParsePort XBRL Converter 2023-01-01 2023-12-31 2022-01-01 2022-12-31 2024-05-21 Reporting class C, large enterprise 2024-05-21 25578198 KPMG P/S Dampfærgevej 28 2100 København Ø Opinion Basis for Opinion 2024-05-21 25578198 KPMG Statsautoriseret Revisionspartnerselskab