31371716 2022-01-01 2022-12-31 31371716 2022-01-01 2022-12-31 2 31371716 2022-01-01 2022-12-31 1 31371716 2022-12-31 31371716 2022-01-01 2022-12-31 2 31371716 2022-01-01 2022-12-31 101 31371716 2021-01-01 2021-12-31 31371716 2021-01-01 2021-12-31 1 31371716 2021-12-31 31371716 2021-01-01 2021-12-31 2 31371716 2021-01-01 2021-12-31 101 31371716 2020-01-01 2020-12-31 31371716 2020-01-01 2020-12-31 1 31371716 2020-12-31 31371716 2020-01-01 2020-12-31 2 31371716 2020-01-01 2020-12-31 101 31371716 2019-01-01 2019-12-31 31371716 2019-01-01 2019-12-31 1 31371716 2019-12-31 31371716 2019-01-01 2019-12-31 2 31371716 2019-01-01 2019-12-31 101 31371716 2018-01-01 2018-12-31 31371716 2018-01-01 2018-12-31 1 31371716 2018-12-31 31371716 2018-01-01 2018-12-31 2 31371716 2018-01-01 2018-12-31 101 31371716 2021-12-31 fsa:SharePremiumMember 31371716 2022-01-01 2022-12-31 fsa:SharePremiumMember 31371716 2022-12-31 fsa:SharePremiumMember 31371716 2021-12-31 fsa:RetainedEarningsMember 31371716 2022-01-01 2022-12-31 fsa:RetainedEarningsMember 31371716 2022-12-31 fsa:RetainedEarningsMember 31371716 2021-12-31 fsa:ProposedDividendRecognisedInEquityMember 31371716 2022-01-01 2022-12-31 fsa:ProposedDividendRecognisedInEquityMember 31371716 2022-12-31 fsa:ProposedDividendRecognisedInEquityMember 31371716 2022-01-01 2022-12-31 1 31371716 2022-01-01 2022-12-31 1 31371716 2022-01-01 2022-12-31 2 31371716 2022-01-01 2022-12-31 3 31371716 2022-01-01 2022-12-31 4 31371716 2022-01-01 2022-12-31 5 31371716 2022-01-01 2022-12-31 1 iso4217:DKK xbrli:pure ABB A/S Meterbuen 33, DK 2740 Skovlunde 31371716 Peter Lyhne 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 2022. 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 2022 and of the results of the Company's operations for the financial year 1 January – 31 December 2022. 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. Middelfart, Tina Balslev Frederiksen CEO Pekka Tapio Tiitinen Chairman Bjarne Tvede Christian Buhl Krøis 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 2022 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 2022 and of the results of the Company's operations for the financial year 1 January – 31 December 2022 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. Independent auditor's report • 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. Copenhagen, KPMG Statsautoriseret Revisionspartnerselskab 25578198 Nikolaj Møller Hansen Niklas R. Filipsen State Authorised State Authorised mne33220 mne47781 1548000000 1758000000 1765000000 334000000 43000000 378000000 71000000 370000000 76000000 Profit from financial income andexpenses Profit from financial income andexpenses Profit from financial income andexpenses Profit from financial income andexpenses Profit from financial income andexpenses -7000000 -2000000 -4000000 0 -3000000 28000000 53000000 57000000 553000000 647000000 613000000 13000000 1000000 537000000 2000000 187000000 630000000 2000000 267000000 596000000 2000000 218000000 Non-current liabilities Non-current liabilities Non-current liabilities Non-current liabilities Non-current liabilities 40000000 30000000 39000000 50000000 40000000 329000000 330000000 357000000 0.20 0.03 0.21 0.04 0.22 0.03 0.21 0.04 0.21 0.04 Current ratio Current ratio Current ratio Current ratio Current ratio 1.49 1.61 1.63 1.91 1.67 0.30 0.35 0.34 0.41 0.36 0.21 0.24 0.12 0.22 0.27 370 364 372 393 406 * 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 2018-2019 reflect continuing operations only. Discontinuing operations in 2018-2019 encompasses ABB’s Power Grids division which was divested in 2019. 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 equity Presentation of the company 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 2022 ABB A/S had an average of 370 employees. Development in activities and financial position In 2022, 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 centers. Despite challenging circumstances both the revenue and net profit for 2022 increased in comparison to last year, and the result indicates a strong market position in a growing industry. The Company’s income statement for 2022 shows a net profit of TDKK 62.117 and the balance sheet by 31 December 2022 shows an equity of TDKK 219.954. 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 2021, however is still considered satisfactory on the basis of circumstances listed above. Specific circumstances Following ABB Group’s decision to divest ABB’s Turbocharging business, the Turbocharging division has consequently been presented as discontinued operations in the 2022 financial statements. The divestment of ABB A/S’s Turbocharging business was completed in Q1 of 2022. Uncertainties regarding recognition and measurement The annual report for ABB A/S for 2022 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. Environmental matters 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. 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 adheres to the principals and goals outlined in the ABB Group Sustainability Report. The report is available at https://sustainabilityreport.abb.com/2022/ 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. Events after the balance sheet date No events have occurred that could materially affect the assessment of the Company’s financial position. Outlook ABB A/S expects an increase in level of activities despite challenging market terms with broad disruptions in the global supply chain – including component shortages, challenging logistics and tight labour markets, with the uncertainties of among others the ongoing war in Ukraine. Revenue is expected to be 5-10% higher in 2023 compared to 2022. The profit for the year 2023 is expected to be 20-30 MDKK higher than 2022. Social responsibility 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 Furthermore, a Code of Conduct has been implemented both in the Group and in Denmark; it shows our commitment to act with ethical correct behavior and integrity in any given situation. https://sustainabilityreport.abb.com/2022/. Diversity in the management As of 31 December 2022, the board of directors consisted of four members, of which all four were male. The previous target set out in 2021 to increase the board with one woman within one year has been achieved as of 1 January 2023 where ABB A/S has appointed one additional board member making the board composition 80% male and 20% female. We continue to aim to have an equal gender representation within four years, depending on replacements in the board. With this change, the gender distribution would be aligned with 99b requirements for gender composition in the Board. The members of the board are appointed by the parent company, which determines the composition of the board. Other level of management consists of 12% female managers by year-end. The representation was 14% last year. Management has decided on a policy to increase the share of the underrepresented gender at other levels of management. The policy contains internal targets for the share of female managers and guidelines for recruiting and maintaining female managers in the company. When recruiting we aim at having one of each gender presented. In addition, we have an annual process for identification of technical and managerial talents with specific focus on female talents. As a consequence of these initiatives, the company expects the share of female managers at other levels of management to be slightly increased in the coming years. 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. 1912901000 1655681000 29096000 -1140000 8244000 6605000 1386375000 1174217000 175260000 139847000 388606000 347082000 322089000 284054000 2229000 2386000 64288000 60642000 194000 178000 7251000 2380000 57231000 58440000 12756000 11522000 44475000 46918000 17642000 852000 62117000 47770000 891000 1222000 3323000 4465000 2269000 2249000 11680000 0 18163000 7936000 12007000 11853000 12007000 11853000 30170000 19789000 5619000 6211000 60048000 45928000 31673000 16697000 9522000 16462000 106862000 85298000 478508000 402471000 90072000 40263000 7319000 7912000 0 455000 1528000 3116000 2997000 4149000 580424000 458366000 9930000 16621000 0 10998000 727386000 591072000 100000000 100000000 55954000 57837000 64000000 47000000 219954000 204837000 1475000 3009000 38882000 25332000 40357000 28341000 0 2114000 0 2114000 0 687000 16988000 22574000 24077000 10756000 70224000 56970000 241639000 168025000 504000 0 113643000 88808000 467075000 347820000 467075000 349934000 0 7960000 727386000 591072000 100000000 57837000 47000000 0 0 47000000 47000000 0 -1883000 64000000 100000000 55954000 64000000 Accounting policies The annual report of ABB A/S for 2022 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to large reporting class C entities. 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 and consumables, etc. Raw materials and consumables include expenses relating to raw materials and consumables 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. Other operating expenses Other operating expenses comprise items secondary to the company's activities. 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. Accounting policies (continued) 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 Intangible assets Acquired intangible assets comprise software and are measured at cost less accumulated amortisation and impairment losses. Acquired intangible assets are amortised on a straight-line basis over the expected useful life, however not exceeding 5 years. Gains and losses on the disposal of acquired intangible assets are determined as the difference between the selling price less costs to sell and the carrying amount at the date of disposal. Gains or losses are recognised in the income statement as other operating income or other operating expenses, respectively. 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 lives of the assets are as follows: Leasehold improvements 5 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. Impairment of fixed assets The carrying amount of intangible assets and property, tools and equipment is tested annually for evidence of impairment other than the decrease in value reflected by amortisation/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. true 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. DKK'000 2022 2021 Geographical segment information Revenue National 1.643.558 1.420.125 International 269.343 235.556 1.912.901 1.655.681 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. DKK'000 2022 2021 Other external expenses Fees to auditor appointed at the general meeting Total fees: KPMG 808 729 808 729 Specification of fees: Audit 779 676 Non-audit services 29 53 808 729 Staff costs Wages and salaries 281.386 251.730 Pensions 21.010 19.786 Other social security costs 3.375 3.169 Other staff costs 16.318 9.369 322.089 284.054 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. DKK'000 2022 2021 Amortisation and depreciation Intangible assets 0 112 Property, tools and equipment 2.229 2.274 2.229 2.386 DKK'000 2022 2021 Financial expenses Interest expenses, group enterprises 4.833 766 Other interest expenses 2.418 1.614 7.251 2.380 Tax for the year Current tax for the year 14.678 11.596 Adjustment of the deferred tax charge for the year -1.534 1.661 Prior-year adjustments -388 -1.735 12.756 11.522 Discontinuing operations Starting in 2021, ABB has reported the Turbocharging business as discontinued operations. ABB Turbocharging is a technology and market leader in the manufacture and maintenance of turbochargers for 500 kW to 80+ MW diesel and gas engines. In Denmark the business provides services for turbochargers through an ABB-owned Service Station. 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 2022* 2021 Income statement for discontinuing operations Revenue 13.433 28.003 Changes in inventories of finished goods, work in progress and goods for resale 1.500 808 Gains on the sale of business 20.262 0 Raw materials, consumables and goods for resale -11.575 -19.682 Other external expenses -419 -2.283 Gross profit 23.201 6.846 Staff costs -578 -5.639 Depreciation -5 -115 Profit before tax 22.618 1.092 Tax for the year -4.976 -240 Profit for the year from discontinuing operations 17.642 852 * 1 January - 31 January Notes DKK'000 2022 2021 Discontinuing operations (continued) Balance Sheet for discontinuing operations Fixed assets 0 172 Inventories 0 2.127 Trade receivables 0 6.970 Construction contracts 0 1.225 Receivables from group enterprises 0 504 Total assets for discontinuing operations 0 10.998 Other provisions 0 205 Trade payables 0 190 Payables to group enterprises 0 6.498 Income taxes 0 240 Other payables 0 827 Total liabilities for discontinuing operations 0 7.960 -1883000 770000 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 2022 12.121 26.788 13.648 0 52.557 Additions 0 0 0 12.706 12.706 Transferred 0 114 912 -1.026 0 Disposals -425 -5.717 -2.068 0 -8.210 Cost at 31 December 2022 11.696 21.185 12.492 11.680 57.053 Depreciation and impairment losses at 1 January 2022 -10.899 -22.323 -11.399 0 -44.621 Depreciation -267 -1.086 -876 0 -2.229 Disposals 361 5.547 2.052 0 7.960 Depreciation and impairment losses at 31 December 2022 -10.805 -17.862 -10.223 0 -38.890 Carrying amount at 31 December 2022 891 3.323 2.269 11.680 18.163 Financial assets DKK'000 Deposits Cost at 1 January 2022 11.853 Additions 154 Cost at 31 December 2022 12.007 Carrying amount at 31 December 2022 12.007 DKK'000 2022 2021 Construction contracts Selling price of work performed 270.985 136.569 Advance payment and progress billings -197.901 -118.880 73.084 17.689 recognised as follows: Construction contracts (assets) 90.072 40.263 Construction contracts (liabilities) -16.988 -22.574 73.084 17.689 Prepayments Prepayments recognised as assets include expenses incurred concerning subsequent financial years. Deferred tax Deferred tax at 1 January 3.009 1.348 Deferred tax adjustment for the year -1.534 1.661 Deferred tax at 31 December 1.475 3.009 The deferred tax charge relates to: Fixed assets 318 474 Property, tools and equipment 378 224 Current assets 8.023 5.365 Provisions -7.244 -3.054 1.475 3.009 DKK'000 2022 2021 Other provisions Warranty provisions 12.882 10.169 Provision for loss-making orders 7.311 3.545 Other provisions* 18.689 11.618 38.882 25.332 * Other provisions include work-due provisions, refurbishment provisions etc. Other provisions at 1 January 25.332 34.387 Used during the year -13.731 -17.221 Provision for the year 27.281 8.166 Other provisions at 31 December 38.882 25.332 Other provisions are expected to mature within: 0-1 year 26.984 11.858 1-5 years 11.898 9.521 > 5 years 0 3.953 38.882 25.332 Non-current liabilities other than provisions Non-current liabilities other than provisions can be specified as follows: Vacancy provisions: 0-1 year 0 687 1-5 years 0 2.114 Total non-current liabilities other than provisions 0 2.801 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.’ DKK'000 2022 2021 Operating lease liabilities The total payments in the remaining term of the leases are: Leasehold 83.718 99.676 Cars 12.439 16.270 Total operating lease liabilities 96.157 115.946 Which is attributed to: Continuing operations 96.157 115.174 Discontinuing operations 0 772 96.157 115.946 Of which falls due for payment after 5 years: Continuing operations 45.897 51.454 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 2022 Related party transactions Sale of goods and services to group companies 39.877 Purchase of goods and services from group companies 1.334.288 Dividend paid out to parent entity 47.000 Interest expenses to group companies are disclosed in note 6 to the financial statements. Payables and receivables to/from group companies are disclosed in the balance sheet. Profit from the sale of business to group enterprise is disclosed in note 8, Discontinuing operations. 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 2022-01-01 2022-12-31 2021-01-01 2021-12-31 2023-05-16 Reporting class C, large enterprise 2023-05-16 25578198 KPMG P/S Dampfærgevej 28 2100 København Ø Opinion Basis for Opinion 2023-05-16 25578198 KPMG Statsautoriseret Revisionspartnerselskab