abb2023q2fininfo

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE

ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2023

Commission File Number 001-16429

ABB Ltd

(Translation of registrant’s name into English)

Affolternstrasse 44, CH-8050, Zurich, Switzerland

(Address of principal executive office)

Indicate by check mark whether

the registrant files or will file

annual reports under cover of Form

20-F or Form 40-F.

Form 20-F

☒

Form 40-F

⬜

Indicate by check mark if the registrant

is submitting the Form 6-K in paper

as permitted by Regulation S-T Rule

101(b)(1):

⬜

Note:

Regulation S-T Rule 101(b)(1) only

permits the submission in paper of

a Form 6-K if submitted solely to provide

attached annual report to security

holders.

Indication by check mark if the registrant

is submitting the Form 6-K in paper

as permitted by Regulation S-T Rule

101(b)(7):

⬜

Note:

Regulation S-T Rule 101(b)(7) only

permits the submission in paper of

a Form 6-K if submitted to furnish a

report or

other document that the registrant foreign

private issuer must furnish

and make public under the laws of the

jurisdiction in

which the registrant is incorporated, domiciled

or legally organized (the registrant’s “home country”),

or under the rules of the

home country exchange on which the registrant’s securities

are traded, as long as the report

or other document is not a press

release, is not required to be and has

not been distributed to the registrant’s security holders,

and, if discussing a material event,

has already been the subject of a Form

6-K submission or other Commission

filing on EDGAR.

Indicate by check mark whether

the registrant by furnishing the

information contained in this Form

is also thereby furnishing

the information to the Commission

pursuant to Rule 12g3-2(b) under

the Securities Exchange Act of 1934.

Yes

⬜

☒

If “Yes” is marked, indicate below the file number assigned to the

registrant in connection with Rule 12g3-2(b):

82-

This Form 6-K consists of the following:

Press release issued by ABB Ltd dated

July 20, 2023 titled “Q2

2023 results”.

Q2 2023 Financial Information.

Announcements regarding transactions

in ABB Ltd’s Securities made by the directors or the

members of the

Executive Committee.

The information provided by Item

2 above is hereby incorporated by reference

into the Registration Statements

on Form F-3 of

ABB Ltd and ABB Finance (USA) Inc.

(File Nos. 333-223907 and 333-223907-01)

and registration statements on Form

S-8

(File Nos. 333-190180, 333-181583,

333-179472, 333-171971 and

333-129271) each of which was

previously filed with the

Securities and Exchange Commission.

—

ZURICH, SWITZERLAND, JULY 20, 2023

Q2 2023 results

Comparable order growth

from a high base and

record-high Operational

EBITA

margin

●

Orders $8,667 million,

-2%; comparable

+2%

●

Revenues $8,163 million,

+13%; comparable

+17%

●

Income from operations

$1,298 million; margin 15.9%

●

Operational EBITA

$1,425 million;

margin

17.5%

●

Basic EPS $0.49; +145%

●

Cash flow from operating

activities

$760 million

KEY FIGURES

CHANGE

($ millions, unless otherwise indicated)

Q2 2023

Q2 2022

US$

Comparable

H1 2023

H1 2022

US$

Comparable

Orders

8,667

8,807

-2%

18,117

18,180

Revenues

8,163

7,251

13%

17%

16,022

14,216

13%

19%

Gross Profit

2,888

2,290

26%

5,604

4,571

23%

as % of revenues

35.4%

31.6%

+3.8 pts

35.0%

32.2%

+2.8 pts

Income from operations

1,298

587

121%

2,496

1,444

73%

Operational EBITA

1,425

1,136

25%

26%

2,702

2,133

27%

29%

as % of operational revenues

17.5%

15.5%

+2 pts

16.9%

14.9%

+2 pts

Income from continuing operations, net of tax

932

406

130%

1,997

1,049

90%

Net income attributable to ABB

906

379

139%

1,942

983

98%

Basic earnings per share ($)

0.49

0.20

145%

1.04

0.51

104%

Cash flow from operating activities

760

382

99%

1,042

(191)

n.a.

For a reconciliation of non-GAAP measures, see “supplemental

reconciliations and definitions” in the attached

Q2 2023 Financial Information.

EPS growth rates are computed using unrounded amounts.

Constant currency (not adjusted for portfolio

changes).

Amount represents total for both continuing and

discontinued operations.

—

“The positive book-to-bill ratio and new record-high Operational EBITA earnings and

margin add to our confidence about ABB's 2023 outcome allowing us to

sharpen our margin expectations.”

Björn Rosengren

, CEO

Ad hoc Announcement pursuant to Art.

53 Listing Rules of SIX Swiss Exchange

—

Q2 2023

First six months

Press Release

ABB

INTERIM

REPORT

2023

summarize the outcome

in the second quarter,

I would first

highlight the 2%

comparable order growth

which was up from

last year's already

high level,

and the positive book-to-bill.

was good to see

that the customer activity

remained robust

throughout the period.

Secondly,

the high revenue growth of

13% (17% comparable)

supported by backlog execution.

Thirdly,

the record-high achievements

on both absolute

Operational EBITA

of $1.4 billion and

Operational EBITA

margin of 17.5%, up 200

basis points from last

year, with all

four business areas

above 15%. This was supported

by a

strong price contribution

which more than offset

labor inflation

as well as some

limited cost inflation related

to commodities,

with additional support

from operational leverage

on increased

volumes in production.

And lastly,

the solid cash flow from

operating activities

of $760 million. All the while

we executed on

portfolio optimization

and continued to introduce

leading new

technology to help

our customers become

more sustainable

and resource efficient.

In my view,

the quarter is an additional

indication that we are

establishing ABB's operational

performance at a higher

level.

Order momentum was

strongest in the systems

and project-

related businesses,

driven predominantly by

the medium

voltage segment and

process-related industries.

This offset

some softening from

last year's high order

level in the short-

cycle business, mainly

evident in the residential

construction

segment and across

the board in discrete manufacturing

where

customers normalize

order patterns in the face

of shortening

delivery lead times.

In total, the book-to-bill ratio

was 1.06

driven by three out

of four business areas,

and we further

increased order backlog.

It was good to see

our cash flow from operating

activities

improve by $378

million from last year and

I expect us to

improve cash conversion

from here onwards. Over

the first six

months we have

generated just over $1 billion

in Cash flow

from operating activities,

which helps position us

well for what I

expect to be a good

cash delivery this year.

As announced earlier

in the quarter,

we experienced an IT

security incident. I am

grateful to our teams

for the handling of

the challenge and containment

of the incident, and as a

result

we have had no consequential

material financial impact

in the

quarter.

Just after the end of

the second quarter,

we successfully closed

the divestment of the

Power Conversion division at

around

$500

million. As a result,

we expect to record a non-operational

book gain estimated at

approximately

$50

million in Income from operations

in the third quarter of

2023. With this transaction,

we have completed all divisional

portfolio divestments

announced at the end

of 2020. That said,

we continuously

review the product groups

within all divisions to

optimize the portfolio.

The small acquisition

of Eve Systems is another

example of our

portfolio actions,

this time by the Smart Buildings

division in

business area Electrification.

With around 50 employees

Eve

generated approximately

$20

million in revenues in 2022.

It is a

pioneer in the new

Matter connectivity standard

which enables

smart home products

to be fully interoperable,

irrespective of

the manufacturer and

user operating system,

via Thread

wireless technology

for consumer-facing products

tailored to the

retrofit market.

I was pleased to see

Process Automation unveil

its new

revolutionary propulsion

concept initially aimed primarily

small-

to medium-sized vessels,

complementing its

current

market leading Azipod®

offering for larger vessels.

This

industry-first electric propulsion

concept ABB Dynafin™ mimics

the movements of a

whale tail for ultimate efficiency

and

emissions avoidance

as it is set to reduce propulsion

energy

consumption by up

to 22% compared to conventional

shaftlines.

The first commercial

prototype is expected

to be available in

2025.

Björn Rosengren

CEO

In the

third quarter of 2023

, we anticipate a low double

-digit

comparable revenue

growth and the Operational

EBITA margin

to be slightly up from

the 16.6% reported in

the third quarter last

year.

In full-year 2023

, despite current market uncertainty,

anticipate comparable

revenue growth to be

at least 10%

and

we expect Operational

EBITA margin to

be above 16%.

CEO summary

Outlook

ABB

INTERIM

REPORT

2023

Order intake declined

by 2% (up 2% comparable)

year-on-year,

hampered by changes

in exchange rates and in

the portfolio,

while the comparable

orders increased from last

year's high

base.

The strongest order

momentum was recorded

in the systems-

and project-related business,

linked to the medium

voltage

customer offering.

The short-cycle business softened

somewhat

from last year's high

level, impacted by

inventory adjustments

and normalizing order

patterns under the presumption

of further

shortening delivery lead

times. Two out

of four business areas

recorded single digit order

growth, with Process

Automation

declining due to portfolio

changes and Robotics

and Discrete

Automation down from

last year's level which benefited

from

pre-buys in a period

of significant component shortages.

Order intake increased

in the Americas by 5%

(6%

comparable), supported

by mid-single digit growth

in the

United States. Portfolio

changes weighed on

the

year-on-year

development in Europe

while a low comparable

growth was

recorded for a total

decline of 1% (up 1% comparable)

despite

declines in key countries

like Germany and Italy.

Asia, Middle

East and Africa declined

by 10% (1% comparable)

as the

positive development

in countries like India

and Saudi Arabia

did not quite offset

declines in other countries

such as China

with a drop of 15%

(9% comparable).

Automotive remained

broadly stable while the

general

industry and consumer-related

robotics segments declined.

In transport & infrastructure,

there were positive

developments

in marine & ports and

renewables.

In buildings there

was weakness in all three

regions in

residential-related demand

In the commercial construction

segment weakness

was noted in China and

Germany,

while

demand was solid

in the US.

Demand in the process

-related business was strong

across

the board, with particular

strength in oil & gas, and

it held up

well also for ports,

refining, petrochemicals

and the energy-

related low carbon

segments.

Revenues increased

by 13% (17% comparable)

$8,163 million and

benefitted primarily from

increased

volumes through execution

of the order backlog, combined

with a robust price

contribution in the mid-single

digit range.

These benefits more

than offset the adverse

impacts from

changes in exchange

rates and portfolio changes.

Revenues

increased in all business

areas, supported by

comparable

growth in virtually all

divisions.

Revenues by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q2 2023

Q2 2022

US$

Comparable

Europe

2,935

2,508

17%

20%

The Americas

2,815

2,397

17%

19%

Asia, Middle East

and Africa

2,413

2,346

13%

ABB Group

8,163

7,251

13%

17%

Orders by region

($ in millions,

unless otherwise

indicated)

CHANGE

Q2 2023

Q2 2022

US$

Comparable

Europe

2,931

2,958

-1%

The Americas

3,209

3,050

Asia, Middle East

and Africa

2,527

2,799

-10%

-1%

ABB Group

8,667

8,807

-2%

Growth

Change year-on-year

Orders

Revenues

Comparable

17%

-2%

-1%

Portfolio changes

-2%

-3%

Total

-2%

13%

Orders and revenues

ABB

INTERIM

REPORT

2023

Gross profit

Gross profit increased

strongly by 26%

(28% constant currency) to

$2,888 million, supported

by a significant gross

margin

improvement of

380 basis points to 35.4

%. Gross margin improved

in all business areas,

with three showing significant

increases.

Income from operations

amounted to $1,298

million and more than

doubled year-on-ye

ar, and margin

on Income from operations

reached 15.9%.

Earnings were mainly supported

by the improved

operational performance

as well as by lower adverse

impacts

from

commodity timing differences

Some additional tailwind

to the

strong year-on-year improvement

was due to last year's period

being weighed down by

non-operational items, including

approximately $250

million triggered by the

exits of a legacy project

and the Russia business.

Operational EBITA

increased by 25%

(26% constant currency)

year-on-year to $1,42

million and the margin was

up by 200 basis

points to 17.5%. A key

driver for the increased

result was the

positive price development

in all business areas,

which more than

offset labor inflation

as well as some limited

cost inflation related to

commodities. Additional

support was provided by higher

volume

output triggered by

execution of the order backlog

Selling, general

and administrative

expenses declined in

relation to revenues to

17.0%, from 18.2%

last year. Operational

EBITA in Corporate

and

Other amounted

to -$143

million, of which -$67 million

related to

the E-mobility business,

hampered by some

inventory related

provisions as well as

technology investments

triggered by a shift

back to a more focused

product strategy to secure

a continued

leading market position.

Net finance expenses

Net finance expense

was $25 million and remained

largely stable

compared with last

year.

Income tax

Income tax expense

was $349 million with an

effective tax rate of

27.2%.

Net income and earnings

per share

Net income attributable

to ABB was $906

million and more than

doubled from last year

driven by improved operational

performance

and lower non-operational

items.

This resulted in basic earnings

per

share of $0.49,

up from $0.20 last year.

Operational EBITA

($ millions)

Q2 2023

Q2 2022

Corporate and Other

E-mobility

(67)

(6)

Corporate costs, intersegment

eliminations and other

(76)

(13)

Total

(143)

(19)

Majority of which relates to underlying corporate

Earnings

ABB

INTERIM

REPORT

2023

Net working capital

amounted to $4,585 million,

increasing

year-on-year from $3,663

million and sequentially

from

$4,164 million.

The sequential increase

was driven mainly

by higher receivables

triggered by high revenue

growth and

higher inventories to

support a positive book

-to-bill ratio. Net

working capital as

a percentage of revenues

was 14.7%,

up sequentially from 13.9%

Capital expenditures

Purchases of property,

plant and equipment and

intangible

assets amounted to

$180 million.

Net debt

amounted to $4,165 million

at the end of the quarter

and decreased from $4,235

million year-on-year,

and

increased from $3,

826 million sequentially.

The sequential net

increase was mainly driven

by cash payments related

to the

dividend and the ongoing

share buyback program.

Cash flows

Cash flow from operating

activities was $760

million and

increased year-on-year

from $382 million. This

was driven by

improvements in the

Electrification and Motion

business areas

on the back of higher

earnings and a lower

build-up of net

working capital,

year-on-year,

mainly related to inventories.

Share buyback program

A share buyback program

of up to $1 billion was

launched on

April 3, 2023. During

the second quarter,

5,778,691 shares

were repurchased on

the second trading line

for approximately

$212 million. ABB’s

total number of issued

shares, including

shares held in treasury,

amounts to 1,882,002,575.

($ millions,

unless otherwise indicated)

Jun. 30

2023

Jun. 30

2022

Dec. 31

2022

Short term debt and current

maturities of long-term debt

3,849

2,830

2,535

Long-term debt

4,451

5,086

5,143

Total debt

8,300

7,916

7,678

Cash & equivalents

2,923

2,412

4,156

Restricted cash - current

Marketable securities and

short-term investments

1,193

945

725

Restricted cash - non-current

–

301

–

Cash and marketable securities

4,135

3,681

4,899

Net debt (cash)*

4,165

4,235

2,779

Net debt (cash)* to EBITDA ratio

0.8

0.7

Net debt (cash)* to Equity ratio

0.31

0.34

0.21

At Jun. 30, 2023, Jun. 30, 2022 and Dec. 31, 2022,

net debt(cash) excludes net pension

(assets)/liabilities of $(328) million $(71) million and $(276)

million, respectively.

Balance sheet & Cash flow

ABB

INTERIM

REPORT

2023

Orders and revenues

Customer activity was

yet again at a high level.

At $3,960

million,

orders increased by 1%

(3% comparable), up from

the

high base last year.

●

Order momentum was

strongest in the systems

-related

offering often linked

to the medium voltage segment

which

supported a strong

order growth in the Distribution

Solutions division.

Overall demand remained

firm in most

segments and was

particularly strong in segments

like data

centers and oil & gas.

Weakness was noted

in the buildings

segment where residential

construction declined

in all

regions.

Some weakness was recorded

in commercial

construction in China

and Germany,

while the US remained

broadly stable.

●

High order activity

in the Americas resulted

in regional

growth of 8% (8% comparable),

supported by a strong

increase in the United

States of 6% (6% comparable)

resulting in one

of the strongest quarters on

record. Orders

in Asia, Middle East

and Africa declined by 3%

(up 5%

comparable) with the

comparable demand

decline in China

more than offset by

strength in markets such as

India.

Europe declined by

4% (6% comparable) hampered

mainly

by a weak residential

construction market in

Germany.

●

Revenues improved by

9% (11% comparable)

to $3,735

million with double-digit

growth in all divisions except

Smart

Buildings and Installation

Products due mainly to the

adverse impact of residential

construction. Increased

volumes combined

with strong price development,

contributed more or

less equally to comparable

growth.

Profit

The second quarter

was an all-time-high period

for both absolute

Operational EBITA

of $787 million

and the Operational EBITA

margin of 21.1%, supported

by a significant gross margin

improvement. Profitability

improved in all but one division,

with the

strongest improvement

recorded in Distribution

Solutions which is

reaping the rewards

of order backlog execution

and structural

profitability efforts.

●

Positive price impact

more than offset labor

inflation, and the

margin was additionally

supported by a reduction

in raw materials

and freight costs,

year-on-year.

●

Higher volume output

in production supported

operational

leverage for an improved

Operational EBITA margin

Growth

Change year-on-year

Orders

Revenues

Comparable

11%

-2%

Portfolio changes

Total

—

Electrification

CHANGE

($ millions, unless otherwise indicated)

Q2 2023

Q2 2022

US$

Comparable

H1 2023

H1 2022

US$

Comparable

Orders

3,960

3,913

8,101

8,025

Order backlog

7,298

6,194

18%

19%

7,298

6,194

18%

19%

Revenues

3,735

3,414

11%

7,325

6,650

10%

14%

Operational EBITA

787

605

30%

1,464

1,117

31%

as % of operational revenues

21.1%

17.6%

+3.5 pts

20.0%

16.8%

+3.2 pts

Cash flow from operating activities

697

456

53%

1,092

543

101%

No. of employees (FTE equiv.)

51,800

50,200

ABB

INTERIM

REPORT

2023

Orders and revenues

Strong momentum in

the systems-related operations

supported the business

area order increase of 3%

(3%

comparable)

to $2,137 million, up from

the high comparable

level last year.

●

High customer activity

in the medium voltage

operations

triggered a strong order

growth in the System Drive

and

Large Motors

and Generators

divisions as well as in

the

tightly linked Service

business. This successfully

offset

softness in the more short

-cycle divisions.

●

Europe was up by

8% (4% comparable) and

the Americas

was up by 4% (1%

comparable) despite a decline

in the

United States. Asia,

Middle East and Africa

decreased by

3% (up 3% comparable)

as the slight comparable

decline in

China was more

than offset by strength

in markets such as

India.

●

Execution of the order

backlog led to very strong

revenue

growth of 22%

(22% comparable) to $1,9

81 million. Higher

volumes were the main

driver, along with

the robust price

impact triggered by

activities implemented

last year.

High

double-digit comparable

revenue growth was recorded

most divisions.

Profit

The 51% year-on-year

increase in Operational

EBITA to

$401 million, resulted

in the first ever quarter

with margin

surpassing 20% at

20.4%.

●

Earnings and margins

improved from last year

in most

divisions, including

Large Motors and Generators

that

benefitted from ongoing

focused self-help measures.

As a

result, all divisions

but one recorded double-digit

margins in the

quarter.

●

Strong price contribution

more than offset cost inflation

to labor,

commodities and freight

and was the main driver

the profitability increase

from last year.

●

The backlog execution

increased volume output

in production

which improved the

fixed cost coverage.

●

A positive divisional

mix contributed to the margin

improvement, supported

by a higher share of revenues

generated in the drives

-related operations.

Growth

Change year-on-year

Orders

Revenues

Comparable

22%

-1%

Portfolio changes

Total

22%

—

Motion

CHANGE

($ millions, unless otherwise indicated)

Q2 2023

Q2 2022

US$

Comparable

H1 2023

H1 2022

US$

Comparable

Orders

2,137

2,079

4,399

4,281

Order backlog

5,322

4,568

17%

14%

5,322

4,568

17%

14%

Revenues

1,981

1,626

22%

3,921

3,198

23%

25%

Operational EBITA

401

266

51%

767

540

42%

as % of operational revenues

20.4%

16.4%

+4 pts

19.6%

16.9%

+2.7 pts

Cash flow from operating activities

320

241

33%

469

239

96%

No. of employees (FTE equiv.)

22,200

20,800

ABB

INTERIM

REPORT

2023

Orders and revenues

Customer activity remained

at a high level across the

segments, although

some hampering timing-related

effects

were noted. The project

pipeline in the market rema

ined

robust. Primarily the

spin-off of Accelleron

weighed on total

growth year-on-year,

which declined

by 8% (up 6%

comparable) to $1,669

million.

●

Market momentum

was positive across customer

segments

and especially strong

in the oil & gas segment

where the

United States stood

out on the positive side.

Good

developments were

also noted in the ports,

refining,

petrochemicals and

the energy-related low carbon

segments.

●

Both Europe and

Asia, Middle East and Africa

recorded a

positive comparable order

growth which more than

offset a

small decline in the

Americas, while total

growth was

weighed down primarily

by the portfolio change of

Accelleron.

●

All divisions contributed

strongly to the revenue

growth of 2%

(19% comparable)

to $1,553 million, with increased

volumes

being the main contributor

along with additional support

from

price.

Profit

Executing the order

backlog with a higher gross

margin supported

earnings growth of

7% from the same quarter

last year,

Operational EBITA

of $239

million. The Operational

EBITA margin

improved by 110

basis points to 15.4%,

just exceeding the previous

recent high.

●

Improved operational

performance in business

area Process

Automation helped

to more than offset

the impact of the

divestment of the

Accelleron business which supported

last

year’s margin by 190 basis

points.

●

Profitability improved

in all divisions except

for Marine & Ports

where the mix weighed

on performance due to

the absence of the

arctic marine propulsion

business. The Measurement

& Analytics

division recorded the

strongest margin improvement

to clearly

above the business

area average on the back

of good mix,

successful business segmentation

for improved transparency

and

performance actions,

including price.

Growth

Change year-on-year

Orders

Revenues

Comparable

19%

-2%

Portfolio changes

-12%

-15%

Total

-8%

—

Process Automation

CHANGE

($ millions, unless otherwise indicated)

Q2 2023

Q2 2022

US$

Comparable

H1 2023

H1 2022

US$

Comparable

Orders

1,669

1,819

-8%

3,782

3,511

29%

Order backlog

6,821

6,170

11%

17%

6,821

6,170

11%

17%

Revenues

1,553

1,529

19%

2,989

3,035

-2%

17%

Operational EBITA

239

224

444

420

as % of operational revenues

15.4%

14.3%

+1.1 pts

14.8%

13.7%

+1.1 pts

Cash flow from operating activities

188

193

-3%

300

253

19%

No. of employees (FTE equiv.)

20,600

22,200

-7%

ABB

INTERIM

REPORT

2023

Orders and revenues

Orders

declined by 23%

(22% comparable)

year-on-year,

$850 million. Consistent

with the previous quarter,

customers normalized

order patterns,

adjusting to an

environment with shorter

delivery lead times as

supply

chain constraints eased

compared with last year.

Some

inventory adjustments

among customers put additional

sequential pressure

on orders, mainly in China.

These

impacts are expected

to persist into the third

quarter.

●

Orders declined

at a double-digit rate in both divisions

the back of stable development

in the automotive

segment against declines

in the other segments,

particularly in the

machine automation and electronics

segments.

●

Customer inventory

adjustments were most prominent

Asia, Middle East and

Africa where orders declined

33%

(29%

comparable),

weighed down by a significant

decline in China.

Europe also dropped by 23

(24%

comparable) while

the Americas recorded

an increase of

4% (4% comparable),

supported by good

momentum in

Canada and Mexico.

●

Execution of the high

order backlog drove

the strong

revenue

growth of 26% (27% comparable),

with a similar

pattern in both divisions.

While higher volumes were

the

main driver for growth,

pricing also contributed

materially on

the back of last year's

implemented actions.

Profit

Operational EBITA

more than doubled

to $141 million from

last year’s low level when

earnings were impacted

by Covid-

related shut-downs

and strained supply chain

s. Improved

operational performance

supported the 710

basis points

increase in Operational

EBITA margin,

to 15.3%, the highest

level in several years

●

Operational leverage

on higher volumes

in production was

the main driver for

higher earnings and marg

in.

●

Positive impact from

earlier implemented price

actions

significantly contributed

to the improved profitability.

Pricing

more than offset

inflation in labor with additional

support

from lower input and

freight costs.

●

Both divisions recorded

margins of above 15% in the

period.

CHANGE

($ millions, unless otherwise indicated)

Q2 2023

Q2 2022

US$

Comparable

H1 2023

H1 2022

US$

Comparable

Orders

850

1,109

-23%

-22%

1,851

2,417

-23%

-21%

Order backlog

2,657

2,728

-3%

-2%

2,657

2,728

-3%

-2%

Revenues

922

732

26%

27%

1,859

1,462

27%

31%

Operational EBITA

141

135%

281

109

158%

as % of operational revenues

15.3%

8.2%

+7.1 pts

15.1%

7.4%

+7.7 pts

Cash flow from operating activities

-21%

174

544%

No. of employees (FTE equiv.)

10,900

10,800

Growth

Change year-on-year

Orders

Revenues

Comparable

-22%

27%

-1%

Portfolio changes

Total

-23%

26%

—

Robotics & Discrete Automation

ABB

INTERIM

REPORT

2023

Quarterly highlights

●

ABB is collaborating with

Lhyfe, a world pioneer

in the

production of renewable

hydrogen, and Skyborn, a

global

leader in renewable

energy, to

jointly realize and optimize

one of Europe’s

most ambitious renewable

hydrogen

projects ever,

SoutH2Port. Powered by

Skyborn’s

planned offshore

wind farm, the plant in Söderhamn,

Sweden, will produce

around 240 tons of hydrogen

per

day, equivalent

to around 1.8 million barrels

of oil per

annum. ABB will apply

critical expertise to optimize

the

integration of the hydrogen

and electricity production

across the entire ecosystem

including automation,

electrical and digital

technologies.

●

From June 17 to 25,

the Special Olympics World

Games

took place in Berlin

and for the first time in Germany

where 7,000 athletes

with diverse abilities from

more than

190 countries competed

in 26 sports with the motto

#Unbeatabletogether.

Around 150 ABB employees

volunteered to support

the athletes during the exciting

and inspiring competitions.

ABB Germany has been a

supporting partner

of the Special Olympics

at the local

and state levels games

for 23 years.

●

A pilot project between

ABB Robotics and US non-profit

organization Junglekeepers

demonstrated the role Cloud

technology can play

in making reforestation

faster, more

efficient and

scalable. ABB’s cobot

YuMi automated

planting tasks in a jungle

laboratory in the Amazon,

speeding the process

and allowing Junglekeepers’

volunteers to focus

on more impactful work.

Through ABB

RobotStudio Cloud

technology,

ABB experts simulated,

refined and deployed

the programming required

for

YuMi’s tasks

in the jungle from 12,000

kms away in

Sweden – enabling

the world’s most remote

robot.

●

ABB has won a 2023

Global Water Award

in the category

“Smart Water

Project of the Year”

for its collaboration with

Wellington Water,

the water services provider

for the

Wellington region

of New Zealand. ABB’s

state-of-the-art

instrumentation technology

and variable frequency drives

enables Wellington

Water to measure

and store data about

the water flow in real

time and delivers up to 10%

in energy

savings per month.

●

In May 2023, ABB E-mobility

and Scania successfully

undertook a first

test for the development of

a megawatt

charging system, representing

the next milestone in

the

development of an

efficient, high power

charging solution

for heavy duty vehicles.

The technology will enable

half the

charging time for heavy

duty vehicles. Developing

solution to fast charge

these commercial electric

vehicles,

which will also deliver

significant range, is a

major step

towards increasing

sales of heavy-duty vehicles

that can be

driven fossil-free.

Q2 2023

Q2 2022

CHANGE

12M ROLLING

₂

e own operations emissions,

Ktons scope 1 and 2

1,3

-28%

201

Lost Time Injury Frequency Rate (LTIFR),

frequency / 200,000 working hours

0.12

0.17

-32%

0.13

Share of females in senior management

positions, %

20.2

16.8

+3.4 pts

18.6

₂

equivalent emissions from site, energy use, SF

₆

and fleet, previous quarter

Current quarter Includes all incidents reported until

July 10, 2023

Q2 2022 emission data was restated from 88.8 to

72.6 Ktons of CO

₂

e to reflect the application of green energy

certificates retrospectively.

Q2 outcome

●

28% reduction of CO

₂

e emissions in own opera

tions

mainly driven by shifting to

green electricity in our

operations.

●

32% decrease in LTIFR

due to a decrease in incidents

absolute numbers.

●

3.4%-points increase in share of women

in senior

management,

demonstrating strong progress

towards our

target.

—

Sustainability

ABB

INTERIM

REPORT

2023

During Q2 2023

●

On April 3, ABB launch

ed its previously announced

new

share buyback program

of up to $1 billion. The

maximum

number of shares that

may be repurchased

under this new

program on any given

trading day is 762,196.

●

On April 25, ABB announced

its plans to delist its

American Depositary

Receipts (ADRs) from the

New York

Stock Exchange

(NYSE), and ultimately

to seek to

deregister its ADRs and

the underlying shares under

the

US Securities Act of 1934

(The Securities Exchange

Act).

The delisting became

effective on May

23 and the ADR

program was converted

into a sponsored Level I

ADR

program, trading on

the US over-the-counter (OTC)

market.

●

On June 7, ABB announced

that following the completion

of the cancellation of

82,742,500 of its shares,

ABB held

20,845,438 of its own

shares, which corresponds

to 1.1

percent of total share

capital and voting rights

in the

company.

This includes 4,269,700

shares purchased for

capital reduction.

ABB’s total number of

issued shares,

including shares held

in treasury,

amounts to

1,882,002,575.

After Q2 2023

●

On July 3, ABB announced

the closing of the divestment

of Power Conversion

division at around $500

million. As

a result, ABB expect

to record a non-operational

book

gain estimated at appr

oximately $50 million

in Income

from operations in the

third quarter of 2023.

With this

transaction, ABB has

completed all divisional

portfolio

divestments announced

at the end of 2020.

The demand for

ABB’s offering remained

strong in the first six

months of 2023.

Weakness in the residential

construction

market and some softening

in the short-cycle business

from last

year's high level

was offset by strong momentum

in the long-

cycle business driven

predominantly by the

medium voltage

segment and process

related industries. Orders

increased in

three out of four

business areas and remained

stable (up 6%

comparable) for

ABB at $18,11

million. Revenues supported

by strong backlog execution

amounted to $16,022 million,

up by

13% (19% comparable),

overall implying a book

-to-bill of 1.13.

Income from operations

amounted to $2,496

million, up from

$1,444 million in

the first half 2022, mostly

reflecting improved

operational performance.

Additionally, the

result in the same

period last year included

charges totalling approximately

$250

million triggered by

the exit of a legacy project

in non-core

and the decision

to exit Russian operations.

Operational EBITA

improved by 27

year-on-year to

$2,702

million and the Operational

EBITA margin increased

200

basis points to 16.9%, significantly

higher in all business

areas compared

to the same period last

year. Performance

was

driven by operating leverage

from backlog execution

as well as

benefits from successful

price management,

which more than

offset cost inflation

mainly related to labor.

Corporate and Other

Operational EBITA

amounted to

-$254

million, out of which -$95

million related to

the E-mobility business, which

was hampered

by some inventory

related provisions as

well as technology

investments triggered

by a shift back to a more

focused product

strategy to secure a

continued leading market

position.

Net finance expenses

increased $17 million

to $46 million, while

non-operational pension

credits declined by $53

million to

$15

million compared to the

same period last year,

mainly due

to higher interest rates.

Income tax expense was $468

million

with a tax rate of 19.0%,

including a net benefit from the

favorable resolution

of a prior year tax matter relating

to the

divestment of the

Power Grids business.

Net income attributable

to ABB was $1,942

million, up from

$983 million year-on

-year. Basic earnings

per share was

$1.04 more than doubling

from the same period

last year.

Significant events

First six months 2023

ABB

INTERIM

REPORT

2023

Note: comparable growth calculation includes acquisitions

and divestments with revenues of greater than

$50 million.

Represents the estimated revenues for the last fiscal

year prior to the announcement of the respective

acquisition/divestment unless otherwise stated.

Divestments

Company/unit

Closing date

Revenues, $ million

No. of employees

2023

Process Automation

UK technical engineering consultancy business

1-May

~20

160

2022

Hitachi Energy JV (Power Grids, 19.9% stake)

28-Dec

ABB Group

Q1 2022

Q2 2022

Q3 2022

Q4 2022

FY 2022

Q1 2023

Q2 2023

EBITDA, $ in million

1,067

794

906

1,384

4,151

1,389

1,494

Return on Capital Employed, %

n.a.

16.50

n.a.

Net debt/Equity

0.20

0.34

0.21

0.30

0.31

Net debt/ EBITDA 12M rolling

0.4

0.7

0.9

0.8

Net working capital, % of 12M rolling revenues

12.1%

12.8%

11.7%

11.1%

13.9%

14.7%

Earnings per share, basic, $

0.31

0.20

0.19

0.61

1.30

0.56

0.49

Earnings per share, diluted, $

0.31

0.20

0.19

0.60

1.30

0.55

0.48

Dividend per share, CHF

n.a.

0.84

n.a.

Share price at the end of period, CHF

29.12

24.57

24.90

28.06

31.37

35.18

Share price at the end of period, $

30.76

25.43

24.41

30.46

34.30

39.32

Number of employees (FTE equivalents)

104,720

106,380

106,830

105,130

106,170

108,320

No. of shares outstanding at end of period (in millions)

1,929

1,892

1,875

1,865

1,862

1,860

Data prior to October 3, 2022, has been adjusted for

the Accelleron spin-off (Source: FactSet).

Additional figures

Additional 2023 guidance

($ in millions, unless otherwise stated)

FY 2023

Net finance expenses

~(130)

from ~(150)

Effective tax rate

~21%

unchanged

Capital Expenditures

~(800)

unchanged

($ in millions, unless otherwise stated)

FY 2023

Q3 2023

Corporate and Other Operational EBITA

~(300)

~(75)

unchanged

Non-operating items

Acquisition-related amortization

~(220)

~(55)

unchanged

Restructuring and related

~(150)

~(40)

unchanged

ABB Way transformation

~(180)

~(50)

unchanged

Excludes one project estimated to a total of ~$100

million, that is ongoing in the non-core business. Exact

exit timing is difficult to assess due to legal proceedings

etc.

Excludes Operational EBITA from E-mobility business.

Includes restructuring and restructuring-related as

well as separation costs.

Includes net positive tax impact of $206 million linked

to a favorable resolution of certain prior year tax matters

in Q1 2023 but excludes the impact of acquisitions

or divestments or any

significant non-operational items.

Acquisitions

Company/unit

Closing date

Revenues, $ million

No. of employees

2023

Electrification

Eve Systems

1-Jun

~20

Motion

Siemens low voltage NEMA Motors

2-May

~60

600

2022

Motion

PowerTech Converter

business

1-Dec

~60

300

Electrification

ASKI Industrie Elektronik GmbH

3-Oct

Electrification

Numocity Technologies

Private Ltd. (majority stake)

22-Jul

Acquisitions and divestments, last twelve months

ABB

INTERIM

REPORT

2023

For additional information please contact:

Media Relations

Phone: +41 43 317

71 11

Email:

media.relations@ch.abb.com

Investor Relations

Phone: +41 43 317

71 11

Email:

investor.relations@ch.abb.com

ABB Ltd

Affolternstrasse

8050 Zurich

Switzerland

Financial calendar

2023

October 18

Q3 2023 results

November 30

Capital Markets Day

in Frosinone, Italy

This press release

includes forward-looking information

and

statements as well

as other statements concerning

the

outlook for our business,

including those in the sections

this

release titled “CEO summary,”

“Outlook,” “Earnings,”

“Balance sheet & cash

flow,” “Sustainability” and

“Significant events”.

These statements are based

on current

expectations, estimates

and projections about the

factors

that may affect

our future performance,

including global

economic conditions,

the economic conditions

of the

regions and industries

that are major markets for

ABB.

These expectations, estimates

and projections are generally

identifiable by statements

containing words such as

“anticipates,” “expects,”

“estimates,” “plans,” “targets

,”

“likely” or similar expressions.

However, there

are many

risks and uncertainties,

many of which are beyond

our

control, that could cause

our actual results to differ

materially from the

forward-looking information

and

statements

made in this press

release and which could

affect our ability

to achieve any or all of

our stated targets. Some important

factors that could cause

such differences include,

among

others, business risks

associated with the volatile

global

economic environment

and political conditions,

costs

associated with compliance

activities, market acceptance

new products and services,

changes in governmental

regulations and currency

exchange rates and such

other

factors as may be discussed

from time to time in

ABB Ltd’s

filings with the U.S. Securities

and Exchange Commission,

including its Annual

Reports on Form 20-F.

Although ABB

Ltd believes that

its expectations reflected in

any such

forward looking statement

are based upon reasonable

assumptions, it can

give no assurance that those

expectations will be

achieved.

The Q2 2023

results press release

and presentation slides

are available on the

ABB News Center at

www.abb.com/news

and on the Investor

Relations

homepage at www.abb.com/investorrelations.

A conference call and

webcast for analysts

and investors is

scheduled to begin

today at 10:00 a.m. CET.

pre-register for the conference

call or to join the

webcast, please

refer to the ABB website:

www.abb.com/investorrelations.

The recorded session

will be available after

the event on

ABB’s website.

Important notice about forward-looking information

Q2 results presentation on July 20, 2023

ABB

(ABBN: SIX Swiss

Ex) 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 ~105,000 employees

are committed to driving innovations

that accelerate industrial

transformation.

Q2 2023 FINANCIAL INFORMATION

July 20, 2023

Q2 2023

Financial information

Q2 2023 FINANCIAL INFORMATION

—

Financial

Information

Contents

─ 07

Key Figures

08 ─

Consolidated Financial Information

(unaudited)

34 ─

Supplemental Reconciliations and Definitions

Q2 2023 FINANCIAL INFORMATION

—

Key Figures

CHANGE

($ in millions, unless otherwise indicated)

Q2 2023

Q2 2022

US$

Comparable

(1)

Orders

8,667

8,807

-2%

Order backlog (end June)

21,938

19,477

13%

14%

Revenues

8,163

7,251

13%

17%

Gross Profit

2,888

2,290

26%

as % of revenues

35.4%

31.6%

+3.8 pts

Income from operations

1,298

587

121%

Operational EBITA

(1)

1,425

1,136

25%

26%

(2)

as % of operational revenues

(1)

17.5%

15.5%

+2 pts

Income from continuing operations, net of tax

932

406

130%

Net income attributable to ABB

906

379

139%

Basic earnings per share ($)

0.49

0.20

145%

(3)

Cash flow from operating activities

(4)

760

382

99%

Cash flow from operating activities in continuing operations

759

385

97%

CHANGE

($ in millions, unless otherwise indicated)

H1 2023

H1 2022

US$

Comparable

(1)

Orders

18,117

18,180

Revenues

16,022

14,216

13%

19%

Gross Profit

5,604

4,571

23%

as % of revenues

35.0%

32.2%

+2.8 pts

Income from operations

2,496

1,444

73%

Operational EBITA

(1)

2,702

2,133

27%

29%

(2)

as % of operational revenues

(1)

16.9%

14.9%

+2 pts

Income from continuing operations, net of tax

1,997

1,049

90%

Net income attributable to ABB

1,942

983

98%

Basic earnings per share ($)

1.04

0.51

104%

(3)

Cash flow from operating activities

(4)

1,042

(191)

n.a.

Cash flow from operating activities in continuing operations

1,043

(179)

n.a.

(1)

For a reconciliation of non-GAAP measures see “

Supplemental Reconciliations and Definitions

” on page 34.

(2)

Constant currency (not adjusted for portfolio changes).

(3)

EPS growth rates are computed using unrounded amounts.

(4)

Cash flow from operating activities includes both continuing and discontinued operations.

Q2 2023 FINANCIAL INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

Q2 2023

Q2 2022

US$

Local

Comparable

Orders

ABB Group

8,667

8,807

-2%

Electrification

3,960

3,913

Motion

2,137

2,079

Process Automation

1,669

1,819

-8%

-6%

Robotics & Discrete Automation

850

1,109

-23%

-22%

Corporate and Other

264

Intersegment eliminations

(213)

(190)

Order backlog (end June)

ABB Group

21,938

19,477

13%

14%

Electrification

7,298

6,194

18%

19%

Motion

5,322

4,568

17%

16%

14%

Process Automation

6,821

6,170

11%

12%

17%

Robotics & Discrete Automation

2,657

2,728

-3%

-2%

Corporate and Other

(incl. intersegment eliminations)

(160)

(183)

Revenues

ABB Group

8,163

7,251

13%

14%

17%

Electrification

3,735

3,414

11%

Motion

1,981

1,626

22%

23%

22%

Process Automation

1,553

1,529

19%

Robotics & Discrete Automation

922

732

26%

27%

Corporate and Other

177

140

Intersegment eliminations

(205)

(190)

Income from operations

ABB Group

1,298

587

Electrification

713

474

Motion

380

231

Process Automation

270

175

Robotics & Discrete Automation

119

Corporate and Other

(incl. intersegment eliminations)

(184)

(336)

Income from operations %

ABB Group

15.9%

8.1%

Electrification

19.1%

13.9%

Motion

19.2%

14.2%

Process Automation

17.4%

11.4%

Robotics & Discrete Automation

12.9%

5.9%

Operational EBITA

ABB Group

1,425

1,136

25%

26%

Electrification

787

605

30%

33%

Motion

401

266

51%

Process Automation

239

224

Robotics & Discrete Automation

141

135%

141%

Corporate and Other

(1)

(incl. intersegment eliminations)

(143)

(19)

Operational EBITA %

ABB Group

17.5%

15.5%

Electrification

21.1%

17.6%

Motion

20.4%

16.4%

Process Automation

15.4%

14.3%

Robotics & Discrete Automation

15.3%

8.2%

Cash flow from operating activities

ABB Group

760

382

Electrification

697

456

Motion

320

241

Process Automation

188

193

Robotics & Discrete Automation

Corporate and Other

(incl. intersegment eliminations)

(490)

(561)

Discontinued operations

(3)

(1)

Corporate and Other at Q2 2023 and Q2 2022 includes losses of $67 million and $6 million, respectively, relating to E-mobility.

Q2 2023 FINANCIAL INFORMATION

CHANGE

($ in millions, unless otherwise indicated)

H1 2023

H1 2022

US$

Local

Comparable

Orders

ABB Group

18,117

18,180

Electrification

8,101

8,025

Motion

4,399

4,281

Process Automation

3,782

3,511

12%

29%

Robotics & Discrete Automation

1,851

2,417

-23%

-21%

Corporate and Other

460

382

Intersegment eliminations

(476)

(436)

Order backlog (end June)

ABB Group

21,938

19,477

13%

14%

Electrification

7,298

6,194

18%

19%

Motion

5,322

4,568

17%

16%

14%

Process Automation

6,821

6,170

11%

12%

17%

Robotics & Discrete Automation

2,657

2,728

-3%

-2%

Corporate and Other

Intersegment eliminations

(160)

(183)

Revenues

ABB Group

16,022

14,216

13%

16%

19%

Electrification

7,325

6,650

10%

14%

Motion

3,921

3,198

23%

26%

25%

Process Automation

2,989

3,035

-2%

17%

Robotics & Discrete Automation

1,859

1,462

27%

31%

Corporate and Other

346

254

Intersegment eliminations

(418)

(383)

Income from operations

ABB Group

2,496

1,444

Electrification

1,368

955

Motion

733

485

Process Automation

470

326

Robotics & Discrete Automation

234

Corporate and Other

(incl. intersegment eliminations)

(309)

(387)

Income from operations %

ABB Group

15.6%

10.2%

Electrification

18.7%

14.4%

Motion

18.7%

15.2%

Process Automation

15.7%

10.7%

Robotics & Discrete Automation

12.6%

4.4%

Operational EBITA

ABB Group

2,702

2,133

27%

29%

Electrification

1,464

1,117

31%

35%

Motion

767

540

42%

46%

Process Automation

444

420

10%

Robotics & Discrete Automation

281

109

158%

172%

Corporate and Other

(1)

(incl. intersegment eliminations)

(254)

(53)

Operational EBITA %

ABB Group

16.9%

14.9%

Electrification

20.0%

16.8%

Motion

19.6%

16.9%

Process Automation

14.8%

13.7%

Robotics & Discrete Automation

15.1%

7.4%

Cash flow from operating activities

ABB Group

1,042

(191)

Electrification

1,092

543

Motion

469

239

Process Automation

300

253

Robotics & Discrete Automation

174

Corporate and Other

(incl. intersegment eliminations)

(992)

(1,241)

Discontinued operations

(1)

(12)

(1)

Corporate and Other at H1 2023 and H1 2022 includes losses of $95 million and $8 million, respectively, relating to E-mobility.

Q2 2023 FINANCIAL INFORMATION

Operational EBITA

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

Q2 23

Q2 22

Q2 23

Q2 22

Q2 23

Q2 22

Q2 23

Q2 22

Q2 23

Q2 22

Revenues

8,163

7,251

3,735

3,414

1,981

1,626

1,553

1,529

922

732

Foreign exchange/commodity timing

differences in total revenues

(10)

(11)

(4)

–

(1)

Operational revenues

8,153

7,321

3,737

3,432

1,970

1,622

1,553

1,561

921

733

Income from operations

1,298

587

713

474

380

231

270

175

119

Acquisition-related amortization

Restructuring, related and

implementation costs

(1)

264

–

Changes in obligations related to

divested businesses

(8)

(3)

–

Gains and losses from sale of businesses

(26)

–

(26)

–

Acquisition- and divestment-related

expenses and integration costs

(2)

Certain other non-operational items

–

(1)

Foreign exchange/commodity timing

differences in income from operations

110

(7)

–

(5)

Operational EBITA

1,425

1,136

787

605

401

266

239

224

141

Operational EBITA margin (%)

17.5%

15.5%

21.1%

17.6%

20.4%

16.4%

15.4%

14.3%

15.3%

8.2%

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions, unless otherwise indicated)

H1 23

H1 22

H1 23

H1 22

H1 23

H1 22

H1 23

H1 22

H1 23

H1 22

Revenues

16,022

14,216

7,325

6,650

3,921

3,198

2,989

3,035

1,859

1,462

Foreign exchange/commodity timing

differences in total revenues

(26)

(20)

(11)

(1)

–

Operational revenues

15,996

14,283

7,305

6,658

3,910

3,197

2,999

3,066

1,859

1,468

Income from operations

2,496

1,444

1,368

955

733

485

470

326

234

Acquisition-related amortization

109

119

Restructuring, related and

implementation costs

(1)

280

–

Changes in obligations related to

divested businesses

(5)

(17)

–

Gains and losses from sale of businesses

(26)

–

(26)

–

Acquisition- and divestment-related

expenses and integration costs

109

Certain other non-operational items

–

(1)

Foreign exchange/commodity timing

differences in income from operations

–

(8)

(1)

Operational EBITA

2,702

2,133

1,464

1,117

767

540

444

420

281

109

Operational EBITA margin (%)

16.9%

14.9%

20.0%

16.8%

19.6%

16.9%

14.8%

13.7%

15.1%

7.4%

(1)

Includes impairment of certain assets.

Q2 2023 FINANCIAL INFORMATION

Depreciation and Amortization

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

Q2 23

Q2 22

Q2 23

Q2 22

Q2 23

Q2 22

Q2 23

Q2 22

Q2 23

Q2 22

Depreciation

129

136

Amortization

including total acquisition-related amortization of:

Process

Robotics & Discrete

ABB

Electrification

Motion

Automation

($ in millions)

H1 23

H1 22

H1 23

H1 22

H1 23

H1 22

H1 23

H1 22

H1 23

H1 22

Depreciation

254

272

126

129

Amortization

133

145

including total acquisition-related amortization of:

109

119

Orders received and revenues by region

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

Q2 23

Q2 22

US$

Local

parable

Q2 23

Q2 22

US$

Local

parable

Europe

2,931

2,958

-1%

2,935

2,508

17%

16%

20%

The Americas

3,209

3,050

2,815

2,397

17%

19%

of which United States

2,319

2,234

2,092

1,746

20%

21%

Asia, Middle East and Africa

2,527

2,799

-10%

-4%

-1%

2,413

2,346

13%

of which China

1,194

1,409

-15%

-10%

-9%

1,174

1,163

ABB Group

8,667

8,807

-2%

8,163

7,251

13%

14%

17%

($ in millions, unless otherwise indicated)

Orders received

CHANGE

Revenues

CHANGE

Com-

H1 23

H1 22

US$

Local

parable

H1 23

H1 22

US$

Local

parable

Europe

6,513

6,492

5,807

5,026

16%

18%

21%

The Americas

6,194

5,947

5,468

4,566

20%

22%

of which United States

4,449

4,459

4,076

3,328

22%

23%

24%

Asia, Middle East and Africa

5,410

5,741

-6%

4,747

4,624

11%

15%

of which China

2,549

2,946

-13%

-8%

-6%

2,328

2,263

10%

12%

ABB Group

18,117

18,180

16,022

14,216

13%

16%

19%

Q2 2023 FINANCIAL INFORMATION

—

Consolidated Financial Information

ABB Ltd Consolidated Income Statements (unaudited)

Six months ended

Three months ended

($ in millions, except per share data in $)

Jun. 30, 2023

Jun. 30, 2022

Jun. 30, 2023

Jun. 30, 2022

Sales of products

13,530

11,762

6,886

6,013

Sales of services and other

2,492

2,454

1,277

1,238

Total revenues

16,022

14,216

8,163

7,251

Cost of sales of products

(8,946)

(8,222)

(4,528)

(4,254)

Cost of services and other

(1,472)

(1,423)

(747)

(707)

Total cost of sales

(10,418)

(9,645)

(5,275)

(4,961)

Gross profit

5,604

4,571

2,888

2,290

Selling, general and administrative expenses

(2,727)

(2,556)

(1,388)

(1,317)

Non-order related research and development expenses

(637)

(572)

(333)

(295)

Other income (expense), net

256

131

(91)

Income from operations

2,496

1,444

1,298

587

Interest and dividend income

Interest and other finance expense

(124)

(62)

(63)

(40)

Non-operational pension (cost) credit

Income from continuing operations before taxes

2,465

1,483

1,281

599

Income tax expense

(468)

(434)

(349)

(193)

Income from continuing operations, net of

tax

1,997

1,049

932

406

Loss from discontinued operations, net of tax

(9)

(20)

(4)

(9)

Net income

1,988

1,029

928

397

Net income attributable to noncontrolling interests and

redeemable noncontrolling interests

(46)

(22)

(18)

Net income attributable to ABB

1,942

983

906

379

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

1,951

1,003

910

388

Loss from discontinued operations, net of tax

(9)

(20)

(4)

(9)

Net income

1,942

983

906

379

Basic earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

1.05

0.52

0.49

0.20

Loss from discontinued operations, net of tax

0.00

(0.01)

0.00

Net income

1.04

0.51

0.49

0.20

Diluted earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

1.04

0.52

0.49

0.20

Loss from discontinued operations, net of tax

0.00

(0.01)

0.00

Net income

1.04

0.51

0.48

0.20

Weighted-average number of shares outstanding

(in millions) used to compute:

Basic earnings per share attributable to ABB shareholders

1,861

1,922

1,862

1,909

Diluted earnings per share attributable to ABB shareholders

1,873

1,935

1,873

1,918

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Consolidated Financial Information

Q2 2023 FINANCIAL INFORMATION

—

ABB Ltd Condensed Consolidated Statements of Comprehensive

Income (unaudited)

Six months ended

Three months ended

($ in millions)

Jun. 30, 2023

Jun. 30, 2022

Jun. 30, 2023

Jun. 30, 2022

Total comprehensive income, net of

tax

1,914

708

761

131

Total comprehensive income

attributable to noncontrolling interests and

redeemable noncontrolling interests, net of tax

(43)

(26)

(13)

(3)

Total comprehensive income attributable

to ABB shareholders, net of tax

1,871

682

748

128

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Consolidated Financial Information

Q2 2023 FINANCIAL INFORMATION

—

ABB Ltd Consolidated Balance Sheets (unaudited)

($ in millions)

Jun. 30, 2023

Dec. 31, 2022

Cash and equivalents

2,923

4,156

Restricted cash

Marketable securities and short-term investments

1,193

725

Receivables, net

7,481

6,858

Contract assets

1,010

954

Inventories, net

6,448

6,028

Prepaid expenses

290

230

Other current assets

500

505

Current assets held for sale and in discontinued operations

628

Total current assets

20,492

19,570

Property, plant and equipment, net

3,923

3,911

Operating lease right-of-use assets

852

841

Investments in equity-accounted companies

154

130

Prepaid pension and other employee benefits

964

916

Intangible assets, net

1,257

1,406

Goodwill

10,420

10,511

Deferred taxes

1,320

1,396

Other non-current assets

474

467

Total assets

39,856

39,148

Accounts payable, trade

4,881

4,904

Contract liabilities

2,394

2,216

Short-term debt and current maturities of long-term debt

3,849

2,535

Current operating leases

223

220

Provisions for warranties

1,076

1,028

Other provisions

1,124

1,171

Other current liabilities

4,277

4,323

Current liabilities held for sale and in discontinued operations

207

132

Total current liabilities

18,031

16,529

Long-term debt

4,451

5,143

Non-current operating leases

652

651

Pension and other employee benefits

721

719

Deferred taxes

699

729

Other non-current liabilities

1,853

2,085

Non-current liabilities held for sale and in discontinued operations

Total liabilities

26,427

25,876

Commitments and contingencies

Redeemable noncontrolling interest

Stockholders’ equity:

Common stock, CHF 0.12 par value

(1,882 million and 1,965 million shares issued at June 30,

2023, and December 31, 2022, respectively)

163

171

Additional paid-in capital

141

Retained earnings

17,958

20,082

Accumulated other comprehensive loss

(4,627)

(4,556)

Treasury stock, at cost

(22 million and 100 million shares at June 30, 2023, and December

31, 2022, respectively)

(709)

(3,061)

Total ABB stockholders’ equity

12,796

12,777

Noncontrolling interests

544

410

Total stockholders’ equity

13,340

13,187

Total liabilities and stockholders’

equity

39,856

39,148

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Consolidated Financial Information

Q2 2023 FINANCIAL INFORMATION

—

ABB Ltd Consolidated Statements of Cash Flows (unaudited)

Six months ended

Three months ended

($ in millions)

Jun. 30, 2023

Jun. 30, 2022

Jun. 30, 2023

Jun. 30, 2022

Operating activities:

Net income

1,988

1,029

928

397

Loss from discontinued operations, net of tax

Adjustments to reconcile net income (loss) to

net cash provided by (used in) operating activities:

Depreciation and amortization

387

417

196

207

Changes in fair values of investments

(24)

(15)

(11)

Pension and other employee benefits

(12)

(83)

(13)

(37)

Deferred taxes

(148)

(32)

Loss (income) from equity-accounted companies

–

Net loss (gain) from derivatives and foreign exchange

(54)

(17)

105

Net gain from sale of property,

plant and equipment

(33)

(55)

(7)

(23)

Net loss (gain) from sale of businesses

(26)

Other

Changes in operating assets and liabilities:

Trade receivables, net

(667)

(621)

(301)

(304)

Contract assets and liabilities

252

145

Inventories, net

(450)

(1,083)

(186)

(541)

Accounts payable, trade

(2)

213

(29)

206

Accrued liabilities

(202)

(255)

122

135

Provisions, net

126

179

Income taxes payable and receivable

(86)

(52)

(66)

Other assets and liabilities, net

(56)

(130)

(91)

(49)

Net cash provided by (used in) operating activities – continuing

operations

1,043

(179)

759

385

Net cash provided by (used in) operating activities – discontinued

operations

(1)

(12)

(3)

Net cash provided by (used in) operating activities

1,042

(191)

760

382

Investing activities:

Purchases of investments

(760)

(256)

(100)

(128)

Purchases of property, plant and

equipment and intangible assets

(331)

(338)

(180)

(151)

Acquisition of businesses (net of cash acquired)

and increases in cost-

and equity-accounted companies

(135)

(179)

(116)

(34)

Proceeds from sales of investments

176

506

156

201

Proceeds from maturity of investments

138

–

138

–

Proceeds from sales of property,

plant and equipment

Proceeds from sales of businesses (net of transaction costs

and cash disposed) and cost-

and equity-accounted companies

(13)

Net cash from settlement of foreign currency derivatives

(18)

(54)

(10)

Changes in loans receivable, net

(7)

(2)

Other investing activities

(17)

(16)

Net cash used in investing activities – continuing operations

(820)

(166)

(84)

(122)

Net cash used in investing activities – discontinued

operations

(21)

(91)

(16)

(70)

Net cash used in investing activities

(841)

(257)

(100)

(192)

Financing activities:

Net changes in debt with original maturities of 90 days or less

(35)

1,191

679

(114)

Increase in debt

1,648

3,181

639

Repayment of debt

(1,128)

(1,483)

(1,092)

(1,442)

Delivery of shares

370

–

Purchase of treasury stock

(476)

(2,661)

(202)

(1,100)

Dividends paid

(1,713)

(1,698)

(419)

(809)

Dividends paid to noncontrolling shareholders

(83)

(76)

(80)

(75)

Proceeds from issuance of subsidiary shares

328

–

(13)

–

Other financing activities

–

(53)

(12)

(19)

Net cash used in financing activities – continuing

operations

(1,363)

(1,229)

(1,123)

(2,920)

Net cash provided by financing activities – discontinued

operations

–

Net cash used in financing activities

(1,363)

(1,229)

(1,123)

(2,920)

Effects of exchange rate changes on cash and equivalents

and restricted cash

(42)

(76)

(37)

(80)

Adjustment for the net change in cash and equivalents and restricted

cash

in Assets held for sale

(28)

–

(15)

–

Net change in cash and equivalents and restricted cash

(1,232)

(1,753)

(515)

(2,810)

Cash and equivalents and restricted cash, beginning of period

4,174

4,489

3,457

5,546

Cash and equivalents and restricted cash, end of period

2,942

2,736

2,942

2,736

Supplementary disclosure of cash flow information:

Interest paid

108

Income taxes paid

527

638

320

298

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Consolidated Financial Information

Q2 2023 FINANCIAL INFORMATION

—

ABB Ltd Consolidated Statements of Changes in Stockholders’ Equity (unaudited)

($ in millions)

Common

stock

Additional

paid-in

capital

Retained

earnings

Accumulated

other

comprehensive

loss

Treasury

stock

Total ABB

stockholders’

equity

Non-

controlling

interests

Total

stockholders’

equity

Balance at January 1, 2022

178

22,477

(4,088)

(3,010)

15,579

378

15,957

Net income

(1)

983

1,031

Foreign currency translation

adjustments, net of tax of $1

(392)

(22)

(414)

Effect of change in fair value of

available-for-sale securities,

net of tax of $(4)

(17)

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $37

106

Change in derivative instruments

and hedges, net of tax of $2

Changes in noncontrolling interests

(2)

(13)

(15)

Dividends to

noncontrolling shareholders

–

(74)

Dividends to shareholders

(1,700)

Cancellation of treasury shares

(8)

(4)

(2,864)

2,876

–

Share-based payment arrangements

Purchase of treasury stock

(2,693)

Delivery of shares

(38)

(130)

538

370

Other

Balance at June 30, 2022

171

18,767

(4,389)

(2,290)

12,271

315

12,586

Balance at January 1, 2023

171

141

20,082

(4,556)

(3,061)

12,777

410

13,187

Net income

(1)

1,942

1,989

Foreign currency translation

adjustments, net of tax of $(2)

(76)

(3)

(79)

Effect of change in fair value of

available-for-sale securities,

net of tax of $2

Unrecognized income (expense)

related to pensions and other

postretirement plans,

net of tax of $4

(5)

Change in derivative instruments

and hedges, net of tax of $1

Issuance of subsidiary shares

170

168

338

Other changes in

noncontrolling interests

(6)

(2)

Dividends to

noncontrolling shareholders

–

(84)

Dividends to shareholders

(1,706)

Cancellation of treasury shares

(7)

(201)

(2,359)

2,567

–

Share-based payment arrangements

Purchase of treasury stock

(464)

Delivery of shares

(153)

249

Other

(3)

Balance at June 30, 2023

163

17,958

(4,627)

(709)

12,796

544

13,340

(1)

Amounts attributable to noncontrolling interests for the six months ended June 30, 2023 and 2022, exclude net losses of $2 million and $2 million, respectively, related to redeemable

noncontrolling interests, which are reported in the mezzanine equity section on the Consolidated Balance Sheets. See Note 4 for details.

Due to rounding, numbers presented may not add to the totals provided.

See Notes to the Consolidated Financial Information

Q2 2023 FINANCIAL INFORMATION

—

Notes to the Consolidated Financial Information (unaudited)

─

Note 1

The Company and basis of presentation

ABB Ltd and its subsidiaries (collectively,

the Company) together form a technology

leader in electrification and automation, enabling a more sustainable

and

resource-efficient future. The Company’s solutions connect

engineering know-how and software to optimize how things

are manufactured, moved, powered and

operated.

The Company’s Consolidated Financial Information is prepared

in accordance with United States of America generally accepted

accounting principles (U.S.

GAAP) for interim financial reporting. As such, the Consolidated

Financial Information does not include all the

information and notes required under U.S. GAAP

for

annual consolidated financial statements. Therefore, such financial

information should be read in conjunction with the audited

consolidated financial statements in

the Company’s Annual Report for the year ended December

31, 2022.

The preparation of financial information in conformity with U.S. GAAP

requires management to make assumptions and

estimates that directly affect the amounts

reported in the Consolidated Financial Information. These accounting

assumptions and estimates include:

●

estimates to determine valuation allowances for deferred tax assets

and amounts recorded for unrecognized tax benefits,

●

estimates related to credit losses expected to occur over

the remaining life of financial assets such as trade and other

receivables, loans and other

instruments,

●

estimates used to record expected costs for employee severance

in connection with restructuring programs,

●

estimates of loss contingencies associated with litigation or

threatened litigation and other claims and inquiries, environmental

damages, product

warranties, self-insurance reserves, regulatory and other proceedings,

●

assumptions and projections, principally related to future material,

labor and project-related overhead costs, used in determining the

percentage-of-

completion on projects where revenue is recognized over time,

as well as the amount of variable consideration the

Company expects to be entitled to,

●

assumptions used in the calculation of pension and postretirement

benefits and the fair value of pension plan assets,

●

assumptions used in determining inventory obsolescence and net

realizable value,

●

growth rates, discount rates and other assumptions used to determine

impairment of long-lived assets and in testing goodwill

for impairment,

●

estimates and assumptions used in determining the fair

values of assets and liabilities assumed in business

combinations, and

●

estimates and assumptions used in determining the initial fair value

of retained noncontrolling interests

and certain obligations in connection with

divestments.

The actual results and outcomes may differ from the Company’s

estimates and assumptions.

A portion of the Company’s activities (primarily long-term

construction activities) has an operating cycle that

exceeds one year. For classification

of current assets

and liabilities related to such activities, the Company elected to

use the duration of the individual contracts as

its operating cycle. Accordingly,

there are accounts

receivable, contract assets, inventories and provisions related to

these contracts which will not be realized within one

year that have been classified as current.

Basis of presentation

In the opinion of management, the unaudited Consolidated Financial

Information contains all necessary

adjustments to present fairly the financial position, results

of operations and cash flows for the reported periods. Management considers

all such adjustments to be of a normal recurring nature. The

Consolidated Financial

Information is presented in United States dollars ($)

unless otherwise stated. Due to rounding, numbers presented

in the Consolidated Financial Information may

not add to the totals provided.

Certain amounts reported in the Consolidated Financial Information for

prior periods have been reclassified to conform to the

current year’s presentation. These

changes relate primarily to the reorganization of the Company’s

operating segments (see Note 17 for details).

Q2 2023 FINANCIAL INFORMATION

─

Note 2

Recent accounting pronouncements

Applicable for current periods

Disclosure about supplier finance program obligations

In January 2023, the Company adopted an accounting standard

update which requires entities to disclose information related

to supplier finance programs. Under

the update, the Company is required to disclose annually

(i) the key terms of the program, (ii) the amount of the supplier

finance obligations outstanding and where

those obligations are presented in the balance sheet at the reporting

date, and (iii) a rollforward of the supplier finance obligation

program within the reporting

period. The Company adopted this update retrospectively for all

in-scope transactions, with the exception of the rollforward

disclosures, which will be adopted

prospectively for annual periods beginning January 1, 2024.

Apart from the additional disclosure requirements, this

update does not have a significant impact on

the Company’s consolidated financial statements.

The total outstanding supplier finance obligation included in “Accounts

payable, trade” in the Consolidated Balance Sheets

at June 30, 2023 and December 31,

2022, amounted to $457 million and $477 million, respectively.

The Company’s payment terms related to suppliers’

finance programs are not impacted by the

suppliers’ decisions to sell amounts under the arrangements

and are typically consistent with local market practices.

Facilitation of the effects of reference rate reform on financial

reporting

In January 2023, the Company adopted an accounting standard

update which provides temporary optional expedients and

exceptions to the current guidance on

contract modifications and hedge accounting to ease the financial

reporting burdens related to the expected market

transition from the London Interbank Offered

Rate (LIBOR) and other interbank offered rates to alternative

reference rates. The Company is applying this standard

update as relevant contract and hedge

accounting relationship modifications are made during the course

of the transition period ending December 31, 2024. This

update does not have a significant

impact on the Company’s consolidated financial statements.

─

Note 3

Discontinued operations and assets held for sale

Divestment of the Power Grids business

In 2020, the Company completed the divestment of its

Power Grids business to Hitachi Ltd (Hitachi).

Upon closing of the sale, the Company entered into various

transition services agreements (TSAs),

some of which continue to have services performed. Pursuant

to these TSAs, the Company and Hitachi Energy provide

each other, on a transitional basis, various

services. The services provided by the Company

primarily include finance, information technology,

human resources

and certain other administrative services. The TSAs were to

be performed for up to 3 years with the possibility

to agree on extensions on an exceptional basis

for

business-critical services which are reasonably necessary

to avoid a material adverse impact on the business. The TSA for

information technology services was

extended until mid-2025. In the six and three months ended

June 30, 2023, the Company has recognized within its continuing

operations, general and

administrative expenses incurred to perform the TSAs, offset

by $76 million and $39 million in TSA-related

income for such services that is reported in Other

income (expense), net.

In the six and three months ended June 30, 2022, the

Company has recognized within its continuing operations, general

and administrative

expenses incurred to perform the TSAs, offset by $76

million and $38 million in TSA-related income for such services

that is reported in Other income (expense),

net.

Discontinued operations

As a result of the sale of the Power Grids business, substantially

all Power Grids-related assets and liabilities have

been sold. As this divestment represented

strategic shift that would have a major effect on the Company’s

operations and financial results, the

results of operations for this business are presented

discontinued operations and the assets and liabilities are presented

as held for sale and in discontinued operations.

Certain of the business contracts in the Power

Grids business continue to be executed by subsidiaries of the Company

for the benefit/risk of Hitachi Energy.

Assets and liabilities relating to, as well as the net

financial results of, these contracts will continue to be included

in discontinued operations until they have been completed or otherwise

transferred to Hitachi

Energy. The remaining business

activities of the Power Grids business being executed

by the Company is not significant.

In addition, the Company also has retained obligations (primarily for

environmental and taxes) related to other businesses

disposed or otherwise exited that

qualified as discontinued operations at the time of their

disposal. Changes to these retained obligations are also included

in Loss from discontinued operations, net

of tax.

At June 30, 2023, the balances reported as held for sale and

in discontinued operations pertaining to the activities of the Power Grids

business and other

obligations will remain with the Company until such time as

the obligations

are settled or the activities are fully wound down

These balances amounted to

$74 million of current assets, $97 million of current liabilities

and $20 million of non-current liabilities.

Planned business divestments classified as held for sale

The Company classifies its long-lived assets or disposal

groups to be sold as held for sale in the period in which all of

the held for sale criteria are met. The

Company initially measures a long-lived asset or disposal group

that is classified as held for sale at the lower of its carrying

value or fair value less any costs

sell. Any resulting loss is recognized in the period in which

the held for sale criteria are met,

while gains are not recognized on the sale of a

long-lived asset or

disposal group until the date of sale. The Company assesses

the fair value of a long-lived asset or disposal group less any costs

to sell at each reporting period

and until the asset or disposal group is no longer classified

as held for sale.

In January 2023, the Company entered into an agreement to

divest its Power Conversion Division to AcBel Polytech

Inc. for cash proceeds of $505 million.

The

Power Conversion Division is part of the Company’s

Electrification operating segment and the divestment,

subject to regulatory approvals, is expected to be

completed in the second half of 2023.

Q2 2023 FINANCIAL INFORMATION

As this planned divestment does not qualify as a discontinued operation,

the results of operations for this business are included

in the Company’s continuing

operations for all periods presented. The assets and liabilities of

this business are shown as assets and liabilities held fo

sale in the Company’s Consolidated

Balance Sheet at June 30, 2023.

The carrying amounts of the major classes

of assets and liabilities held for sale relating to this planned divestment are

as follows:

($ in millions)

June 30, 2023

Assets

Receivables, net

Inventories, net

104

Property, plant and equipment, net

Other intangible assets, net

Goodwill

175

Other assets

Current assets held for sale

554

Liabilities

Accounts payable, trade

Other liabilities

Current liabilities held for sale

110

In the six and three months ended June 30, 2023,

Income from continuing operations before taxes

includes income of $30 million and $13 million, respectively,

from the Power Conversion Division. In the six and three months

ended June 30, 2022, Income from continuing operations before

taxes includes income of

$12 million and $11 million, respectively,

from this Division.

Subsequent events

On July 3, 2023, the Company completed the divestment of its

Power Conversion Division to AcBel Polytech Inc.

─

Note 4

Acquisitions and equity-accounted companies

Acquisition of controlling interests

Acquisitions of controlling interests were as follows:

Six months ended June 30,

Three months ended June 30,

($ in millions, except number of acquired businesses)

2023

2022

2023

2022

Purchase price for acquisitions (net of cash acquired)

(1)

114

138

113

Aggregate excess of purchase price over

fair value of net assets acquired

(2)

191

Number of acquired businesses

(1)

Excluding changes in cost- and equity-accounted companies.

(2)

Recorded as goodwill.

In the table above, the “Purchase price for acquisitions”

and “Aggregate excess of purchase price over fair value of

net assets acquired” amounts in the six months

ended June 30, 2022,

relate primarily to the acquisition of InCharge Energy,

Inc. (In-Charge).

Acquisitions of controlling interests have been accounted for

under the acquisition method and have been included in

the Company’s consolidated financial

statements since the date of acquisition.

On January 26, 2022, the Company increased its ownership in

In-Charge to a 60 percent controlling interest through

a stock purchase agreement. In-Charge

headquartered in Santa Monica, USA, and is a provider of

turn-key commercial electric vehicle charging hardware and

software solutions. The resulting cash

outflows for the Company amounted to $134

million (net of cash acquired of $4 million). The acquisition

expands the market presence of the E-mobility

operating

segment, particularly in the North American market. In connection with

the acquisition, the Company’s

pre-existing 13.2 percent ownership of In-Charge was

revalued to fair value and a gain of $32 million was recorded

in “Other income (expense),

net” in the six months ended June 30, 2022. The Company entered

into

an agreement with the remaining noncontrolling shareholders

allowing either party to put or call the remaining 40 percent

of the shares until 2027. The amount for

which either party can exercise their option is dependent on

a formula based on revenues and thus, the amount

is subject to change. As a result of this agreement,

the noncontrolling interest is classified as Redeemable noncontrolling

interest (i.e. mezzanine equity) in the Consolidated

Balance Sheets and was initially

recognized at fair value.

While the Company uses its best estimates and assumptions

as part of the purchase price allocation process

to value assets acquired and liabilities assumed

the acquisition date, the purchase price allocation for acquisitions

is preliminary for up to 12 months after the acquisition

date and is subject to refinement as more

detailed analyses are completed and additional information about

the fair values of the assets and liabilities becomes available.

Investments in equity-accounted companies

In connection with the divestment of its Power Grids business

to Hitachi in 2020 (see Note 3), the Company

initially retained a 19.9

percent interest in the business

until December 2022, when the retained investment was

sold to Hitachi. During the Company’s period of

ownership of the retained 19.9 percent interest, based

its continuing involvement with the Power Grids business, including

the membership in its governing board of directors,

the Company concluded that it had

significant influence over Hitachi Energy.

As a result, the investment was accounted for using the

equity method

through to the date of its sale.

Q2 2023 FINANCIAL INFORMATION

In the six and three months ended June 30, 2023 and 2022

the Company recorded its share of the earnings of

investees accounted for under the equity method of

accounting in Other income (expense), net, as follows:

Six months ended June 30,

Three months ended June 30,

($ in millions)

2023

2022

2023

2022

Income (loss) from equity-accounted companies, net of taxes

(7)

(10)

–

Basis difference amortization (net of deferred income tax benefit)

–

(52)

–

(15)

Income (loss) from equity-accounted companies

(7)

(62)

–

(14)

─

Note 5

Cash and equivalents, marketable securities and short-term investments

Cash and equivalents, marketable securities and short-term

investments consisted of the following:

June 30, 2023

Cash and

Marketable

Gross

equivalents

securities

unrealized

and restricted

and short-term

($ in millions)

Cost basis

gains

losses

Fair value

cash

investments

Changes in fair value

recorded in net income

Cash

1,743

Time deposits

1,541

1,199

342

Equity securities

622

638

3,906

–

3,922

2,942

980

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

225

(13)

213

225

(13)

213

–

213

Total

4,131

(13)

4,135

2,942

1,193

Of which:

Restricted cash, current

December 31, 2022

Cash and

Marketable

Gross

equivalents

securities

unrealized

and restricted

and short-term

($ in millions)

Cost basis

gains

losses

Fair value

cash

investments

Changes in fair value

recorded in net income

Cash

1,715

Time deposits

2,459

Equity securities

345

355

4,519

–

4,529

4,174

355

Changes in fair value recorded

in other comprehensive income

Debt securities available-for-sale:

U.S. government obligations

269

(15)

255

Other government obligations

Corporate

(7)

391

(22)

370

–

370

Total

4,910

(22)

4,899

4,174

725

Of which:

Restricted cash, current

Q2 2023 FINANCIAL INFORMATION

─

Note 6

Derivative financial instruments

The Company is exposed to certain currency,

commodity, interest rate and equity

risks arising from its global operating, financing and

investing activities. The

Company uses derivative instruments to reduce and manage the

economic impact of these exposures.

Currency risk

Due to the global nature of the Company’s operations, many

of its subsidiaries are exposed to currency risk

in their operating activities from entering into

transactions in currencies other than their functional currency.

To manage such

currency risks, the Company’s policies require its

subsidiaries to hedge their

foreign currency exposures from binding sales and purchase

contracts denominated in foreign currencies. For forecasted foreign currency

denominated sales of

standard products and the related foreign currency denominated purchases,

the Company’s policy is to hedge up to a maximum of

100 percent of the forecasted

foreign currency denominated exposures, depending on the

length of the forecasted exposures. Forecasted

exposures greater than 12 months are not hedged.

Forward foreign exchange contracts are the main instrument used to

protect the Company against the volatility of future cash

flows (caused by changes in

exchange rates) of contracted and forecasted sales and purchases

denominated in foreign currencies. In addition, within

its treasury operations, the Company

primarily uses foreign exchange swaps and forward foreign exchange

contracts to manage the currency and timing mismatches

arising in its liquidity management

activities.

Commodity risk

Various commodity products

are used in the Company’s manufacturing activities.

Consequently it is exposed to volatility in future cash flows

arising from changes

in commodity prices. To

manage the price risk of commodities, the Company’s

policies require that its subsidiaries hedge the commodity

price risk exposures from

binding contracts, as well as at least 50 percent (up to a maximum

of 100 percent) of the forecasted commodity exposure over

the next 12 months or longer (up to

a maximum of 18 months). Primarily swap contracts are used to

manage the associated price risks of commodities.

Interest rate risk

The Company has issued bonds at fixed rates. Interest rate swaps

and cross-currency interest rate swaps are used to manage

the interest rate and foreign

currency risk associated with certain debt and generally such

swaps are designated as fair value hedges. In addition, from time

to time, the Company uses

instruments such as interest rate swaps, interest rate futures,

bond futures or forward rate agreements to manage

interest rate risk arising from the Company’s

balance sheet structure but does not designate such instruments

as hedges.

Equity risk

The Company is exposed to fluctuations in the fair value of

its warrant appreciation rights (WARs)

issued under its management

incentive plan. A WAR gives its

holder the right to receive cash equal to the market price of

an equivalent listed warrant on the date of exercise.

To eliminate

such risk, the Company has

purchased cash-settled call options, indexed to the shares of the

Company, which entitle the Company

to receive amounts equivalent to its obligations

under the

outstanding WARs.

Volume of derivative activity

In general, while the Company’s primary objective in

its use of derivatives is to minimize exposures arising from

its business, certain derivatives are designated

and qualify for hedge accounting treatment while others either are

not designated or do not qualify for hedge accounting.

Foreign exchange and interest rate derivatives

The gross notional amounts of outstanding foreign exchange and

interest rate derivatives (whether designated as

hedges or not) were as follows:

Type of derivative

Total notional amounts

($ in millions)

June 30, 2023

December 31, 2022

June 30, 2022

Foreign exchange contracts

14,256

13,509

14,470

Embedded foreign exchange derivatives

1,374

933

850

Cross-currency interest rate swaps

868

855

833

Interest rate contracts

2,198

2,830

3,049

Derivative commodity contracts

The Company uses derivatives to hedge its direct or indirect exposure

to the movement in the prices of commodities which are

primarily copper, silver,

steel and

aluminum. The following table shows the notional amounts of outstanding

derivatives (whether designated as hedges or not), on

a net basis, to reflect the

Company’s requirements for these commodities:

Type of derivative

Unit

Total notional amounts

June 30, 2023

December 31, 2022

June 30, 2022

Copper swaps

metric tonnes

32,894

29,281

42,961

Silver swaps

ounces

1,726,172

2,012,213

2,844,285

Steel swaps

metric tonnes

11,158

–

Aluminum swaps

metric tonnes

5,950

6,825

7,350

Equity derivatives

At June 30, 2023, December 31, 2022, and June 30, 2022,

the Company held 3 million, 8 million and 9

million cash-settled call options indexed to ABB Ltd shares

(conversion ratio 5:1) with a total fair value of $12 million, $15

million and $12 million, respectively.

Cash flow hedges

As noted above, the Company mainly uses forward foreign exchange

contracts to manage the foreign exchange risk

of its operations, commodity swaps to

manage its commodity risks and cash-settled call options to

hedge its WAR liabilities. The Company applies

cash flow hedge accounting in only limited cases.

these cases, the effective portion of the changes in their

fair value is recorded in “Accumulated other comprehensive

loss” and subsequently reclassified into

earnings in the same line item and in the same period as

the underlying hedged transaction affects

earnings. For the six and three months ended June 30,

2023

and 2022,

there were no significant amounts recorded for

cash flow hedge accounting activities.

Fair value hedges

To reduce its interest

rate exposure arising primarily from its debt issuance activities,

the Company uses interest rate swaps and cross

-currency interest rate

swaps. Where such instruments are designated as fair value

hedges, the changes in the fair value of these instruments,

as well as the changes in the fair value of

the risk component of the underlying debt being hedged, are recorded

as offsetting gains and losses in “Interest

and other finance expense”.

Q2 2023 FINANCIAL INFORMATION

The effect of derivative instruments, designated and qualifying

as fair value hedges, on the Consolidated Income

Statements was as follows:

Six months ended June 30,

Three months ended June 30,

($ in millions)

2023

2022

2023

2022

Gains (losses) recognized in Interest and other finance expense:

Interest rate contracts

Designated as fair value hedges

(55)

(26)

Hedged item

(18)

(8)

Cross-currency interest rate swaps

Designated as fair value hedges

(10)

(94)

(49)

Hedged item

–

(2)

Derivatives not designated in hedge relationships

Derivative instruments that are not designated as hedges or do not

qualify as either cash flow or fair value hedges

are economic hedges used for risk management

purposes. Gains and losses from changes in the fair values

of such derivatives are recognized in the same line in the

income statement as the economically

hedged transaction.

Furthermore, under certain circumstances, the Company

is required to split and account separately for foreign currency

derivatives that are embedded within

certain binding sales or purchase contracts denominated

in a currency other than the functional currency of the subsidiary

and the counterparty.

The gains (losses) recognized in the Consolidated Income

Statements on derivatives not designated in hedging relationships

were as follows:

Type of derivative not

Gains (losses) recognized in income

designated as a hedge

Six months ended June 30,

Three months ended June 30,

($ in millions)

Location

2023

2022

2023

2022

Foreign exchange contracts

Total revenues

(119)

(6)

(123)

Total cost of sales

(12)

(11)

SG&A expenses

(1)

Non-order related research

and development

(1)

–

Interest and other finance expense

(62)

(54)

(104)

(76)

Embedded foreign exchange

Total revenues

contracts

Total cost of sales

(1)

(2)

–

(3)

Commodity contracts

Total cost of sales

(15)

(51)

(26)

(86)

Other

Interest and other finance expense

Total

(26)

(160)

(101)

(224)

(1)

SG&A expenses represent

“Selling, general and

administrative expenses”.

The fair values of derivatives included in the Consolidated Balance

Sheets were as follows:

June 30, 2023

Derivative assets

Derivative liabilities

Current in

Non-current in

Current in

Non-current in

“Other current

“Other non-current

“Other current

“Other non-current

($ in millions)

assets”

liabilities”

Derivatives designated as hedging instruments:

Foreign exchange contracts

–

Interest rate contracts

–

Cross-currency interest rate swaps

–

282

Cash-settled call options

–

Total

–

284

Derivatives not designated as hedging instruments:

Foreign exchange contracts

145

122

Commodity contracts

–

Interest rate contracts

–

Other equity contracts

–

Embedded foreign exchange derivatives

Total

197

155

Total fair value

209

204

309

Q2 2023 FINANCIAL INFORMATION

December 31, 2022

Derivative assets

Derivative liabilities

Current in

Non-current in

Current in

Non-current in

“Other current

“Other non-current

“Other current

“Other non-current

($ in millions)

assets”

liabilities”

Derivatives designated as hedging instruments:

Foreign exchange contracts

–

Interest rate contracts

–

Cross-currency interest rate swaps

–

288

Cash-settled call options

–

Total

–

349

Derivatives not designated as hedging instruments:

Foreign exchange contracts

140

Commodity contracts

–

Interest rate contracts

–

Embedded foreign exchange derivatives

Total

169

112

Total fair value

184

121

367

Close-out netting agreements provide for the termination, valuation

and net settlement of some or all outstanding transactions

between two counterparties on the

occurrence of one or more pre-defined trigger events.

Although the Company is party to close-out netting agreements

with most derivative counterparties, the fair values in the

tables above and in the Consolidated

Balance Sheets at June 30, 2023, and December 31, 2022, have

been presented on a gross basis.

The Company’s netting agreements and other similar arrangements

allow net settlements under certain conditions.

At June 30, 2023, and December 31, 2022,

information related to these offsetting arrangements was as

follows:

($ in millions)

June 30, 2023

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net asset

similar arrangement

assets

in case of default

received

exposure

Derivatives

198

(103)

–

Total

198

(103)

–

($ in millions)

June 30, 2023

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net liability

similar arrangement

liabilities

in case of default

pledged

exposure

Derivatives

495

(103)

–

392

Total

495

(103)

–

392

($ in millions)

December 31, 2022

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net asset

similar arrangement

assets

in case of default

received

exposure

Derivatives

194

(96)

–

Total

194

(96)

–

($ in millions)

December 31, 2022

Gross amount

Derivative liabilities

Cash

Non-cash

Type of agreement or

of recognized

eligible for set-off

collateral

Net liability

similar arrangement

liabilities

in case of default

pledged

exposure

Derivatives

458

(96)

–

362

Total

458

(96)

–

362

Q2 2023 FINANCIAL INFORMATION

─

Note 7

Fair values

The Company uses fair value measurement principles to record certain

financial assets and liabilities on a recurring basis

and, when necessary,

to record certain

non-financial assets at fair value on a non-recurring basis,

as well as to determine fair value disclosures for certain financial

instruments carried at amortized cost

in the financial statements. Financial assets and liabilities recorded

at fair value on a recurring basis include foreign currency,

commodity and interest rate

derivatives, as well as cash-settled call options and available

-for-sale securities.

Non-financial assets recorded at fair value on a non-recurring

basis include

long-lived assets that are reduced to their estimated fair value

due to impairments.

Fair value is the price that would be received when selling an

asset or paid to transfer a liability in an orderly

transaction between market participants at the

measurement date. In determining fair value, the Company

uses various valuation techniques including the market

approach (using observable market data for

identical or similar assets and liabilities), the income approach (discounted

cash flow models) and the cost approach (using costs

a market participant would incur

to develop a comparable asset). Inputs used to determine the fair

value of assets and liabilities are defined by a three-level

hierarchy, depending on the natur

those inputs. The Company has categorized its financial assets

and liabilities and non-financial assets measured at

fair value within this hierarchy based on

whether the inputs to the valuation technique are observable or unobservable.

An observable input is based on market data obtained from

independent sources,

while an unobservable input reflects the Company’s

assumptions about market data.

The levels of the fair value hierarchy are as follows:

Level 1:

Valuation inputs consist

of quoted prices in an active market for identical

assets or liabilities (observable quoted prices). Assets

and liabilities valued

using Level 1 inputs include exchange

‑

traded equity securities, listed derivatives

which are actively traded such as commodity futures, interest rate

futures and certain actively traded debt securities.

Level 2:

Valuation inputs consist

of observable inputs (other than Level 1 inputs)

such as actively quoted prices for similar assets, quoted prices in

inactive

markets and inputs other than quoted prices such

as interest rate yield curves, credit spreads, or inputs derived from

other observable data by

interpolation, correlation, regression or other means. The adjustments

applied to quoted prices or the inputs used in valuation

models may be both

observable and unobservable. In these cases, the fair value measurement

is classified as Level 2 unless the unobservable portion

of the adjustment or

the unobservable input to the valuation model is significant, in

which case the fair value measurement would be

classified as Level 3. Assets and

liabilities valued or disclosed using Level 2 inputs include investments

in certain funds, certain debt securities that are not actively traded,

interest rate

swaps, cross-currency interest rate swaps, commodity

swaps, cash-settled call options, forward foreign exchange

contracts, foreign exchange swaps and

forward rate agreements, time deposits, as well as financing receivables

and debt.

Level 3:

Valuation inputs are based on

the Company’s assumptions of relevant market

data (unobservable input).

Whenever quoted prices involve bid-ask spreads, the Company

ordinarily determines fair values based on mid-market

quotes. However, for the purpose of

determining the fair value of cash-settled call options serving

as hedges of the Company’s management incentive

plan, bid prices are used.

When determining fair values based on quoted prices

in an active market, the Company considers if the

level of transaction activity for the financial instrument

has

significantly decreased or would not be considered orderly.

In such cases, the resulting changes in valuation

techniques would be disclosed. If the market

considered disorderly or if quoted prices are not available, the Company

is required to use another valuation technique, such

as an income approach.

Recurring fair value measures

The fair values of financial assets and liabilities measured at

fair value on a recurring basis were as follows:

June 30, 2023

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

Securities in “Marketable securities and short-term investments”:

Equity securities

–

638

–

638

Debt securities—U.S. government obligations

213

–

213

Derivative assets—current in “Other current assets”

–

209

–

209

Derivative assets—non-current in “Other non-current assets”

–

Total

213

882

–

1,095

Liabilities

Derivative liabilities—current in “Other current liabilities”

–

204

–

204

Derivative liabilities—non-current in “Other non-current liabilities”

–

309

–

309

Total

–

513

–

513

Q2 2023 FINANCIAL INFORMATION

December 31, 2022

($ in millions)

Level 1

Level 2

Level 3

Total fair value

Assets

Securities in “Marketable securities and short-term investments”:

Equity securities

–

355

–

355

Debt securities—U.S. government obligations

255

–

255

Debt securities—European government obligations

–

Debt securities—Corporate

–

Derivative assets—current in “Other current assets”

–

184

–

184

Derivative assets—non-current in “Other non-current assets”

–

Total

255

681

–

936

Liabilities

Derivative liabilities—current in “Other current liabilities”

–

121

–

121

Derivative liabilities—non-current in “Other non-current liabilities”

–

367

–

367

Total

–

488

–

488

The Company uses the following methods and assumptions in

estimating fair values of financial assets

and liabilities measured at fair value on a recurring basis:

●

Securities in “Marketable securities and short-term investments”:

If quoted market prices in active markets for identical assets

are available, these are

considered Level 1 inputs; however,

when markets are not active, these inputs are

considered Level 2. If such quoted market prices are not

available,

fair value is determined using market prices for similar assets

or present value techniques, applying an appropriate

risk-free interest rate adjusted for

non-performance risk. The inputs used in present value techniques

are observable and fall into the Level 2 category.

●

Derivatives

: The fair values of derivative instruments are determined using

quoted prices of identical instruments from an

active market, if available

(Level 1 inputs). If quoted prices are not available, price quotes

for similar instruments, appropriately adjusted, or present value

techniques, based on

available market data, or option pricing models are used. Cash-settled

call options hedging the Company’s WAR

liability are valued based on bid prices

of the equivalent listed warrant. The fair values obtained using price

quotes for similar instruments or valuation techniques

represent a Level 2 input

unless significant unobservable inputs are used.

Non-recurring fair value measures

There were no significant non-recurring fair value measurements

during the six and three months ended June 30, 2023

and 2022.

Disclosure about financial instruments carried on a cost

basis

The fair values of financial instruments carried on a cost

basis were as follows:

June 30, 2023

($ in millions)

Carrying value

Level 1

Level 2

Level 3

Total fair value

Assets

Cash and equivalents (excluding securities with original

maturities up to 3 months):

Cash

1,724

–

1,724

Time deposits

1,199

–

1,199

–

1,199

Restricted cash

–

Marketable securities and short-term investments

(excluding securities):

Time deposits

342

–

342

–

342

Liabilities

Short-term debt and current maturities of long-term debt

(excluding finance lease obligations)

3,821

2,412

1,409

–

3,821

Long-term debt (excluding finance lease obligations)

4,316

4,222

–

4,238

December 31, 2022

($ in millions)

Carrying value

Level 1

Level 2

Level 3

Total fair value

Assets

Cash and equivalents (excluding securities with original

maturities up to 3 months):

Cash

1,697

–

1,697

Time deposits

2,459

–

2,459

–

2,459

Restricted cash

–

Liabilities

Short-term debt and current maturities of long-term debt

(excluding finance lease obligations)

2,500

1,068

1,432

–

2,500

Long-term debt (excluding finance lease obligations)

4,976

4,813

–

4,843

Q2 2023 FINANCIAL INFORMATION

The Company uses the following methods and assumptions in

estimating fair values of financial instruments carried

on a cost basis:

●

Cash and equivalents (excluding securities with original maturities

up to 3 months), Restricted cash, and Marketable

securities and short-term

investments (excluding securities):

The carrying amounts approximate the fair

values as the items are short-term in nature or,

for cash held in banks,

are equal to the deposit amount.

●

Short-term debt and current maturities of long-term debt (excluding

finance lease obligations):

Short-term debt includes commercial paper,

bank

borrowings and overdrafts. The carrying amounts of short-term debt

and current maturities of long-term debt, excluding finance

lease obligations,

approximate their fair values.

●

Long-term debt (excluding finance lease obligations):

Fair values of bonds are determined using quoted market

prices (Level 1 inputs), if available. For

bonds without available quoted market prices and other long-term

debt, the fair values are determined using a discounted cash flow

methodology

based upon borrowing rates of similar debt instruments and reflecting

appropriate adjustments for non-performance risk

(Level 2 inputs).

─

Note 8

Contract assets and liabilities

The following table provides information about Contract assets

and Contract liabilities:

($ in millions)

June 30, 2023

December 31, 2022

June 30, 2022

Contract assets

1,010

954

965

Contract liabilities

2,394

2,216

2,141

Contract assets primarily relate to the Company’s right to receive

consideration for work completed but for which no invoice

has been issued at the reporting date.

Contract assets are transferred to receivables when rights

to receive payment become unconditional. Management expects

that the majority of the amounts will be

collected within one year of the respective balance sheet date.

Contract liabilities primarily relate to up-front advances received on

orders from customers as well as amounts invoiced

to customers in excess of revenues

recognized predominantly on long-term projects. Contract liabilities

are reduced as work is performed and as revenues are reco

gnized.

The significant changes in the Contract assets and Contract liabilities

balances were as follows:

Six months ended June 30,

2023

2022

Contract

($ in millions)

assets

liabilities

assets

liabilities

Revenue recognized, which was included in the Contract liabilities

balance at Jan 1, 2023/2022

(966)

(763)

Additions to Contract liabilities - excluding amounts recognized as

revenue during the period

1,102

Receivables recognized that were included in the Contract

assets balance at Jan 1, 2023/2022

(465)

(423)

The Company considers its order backlog to represent its

unsatisfied performance obligations. At June 30, 2023, the Company

had unsatisfied performance

obligations totaling $21,938 million and, of this amount, the

Company expects to fulfill approximately 51 percent

of the obligations in 2023, approximately 36

percent of the obligations in 2024 and the balance thereafter.

Q2 2023 FINANCIAL INFORMATION

─

Note 9

Debt

The Company’s total debt at June 30, 2023, and December

31, 2022, amounted to $8,300 million and $7,678 million,

respectively.

Short-term debt and current maturities of long-term debt

The Company’s “Short-term debt and current maturities of

long-term debt” consisted of the following:

($ in millions)

June 30, 2023

December 31, 2022

Short-term debt

1,434

1,448

Current maturities of long-term debt

2,415

1,087

Total

3,849

2,535

Short-term debt primarily represented issued commercial paper and

short-term bank borrowings from various banks.

At June 30, 2023,

and December 31, 2022,

$1,352 million and $1,383 million,

respectively, was outstanding

under the $2 billion Euro-commercial paper program. No

amount was outstanding under the

$2 billion commercial paper program in the United States

at June 30, 2023,

or at December 31, 2022.

In May 2023, the Company repaid on maturity its EUR 700

million 0.625% Instruments, equivalent to $772

million on date of repayment.

Long-term debt

The Company’s long-term debt at June 30, 2023, and

December 31, 2022, amounted to $4,451 million

and $5,143 million, respectively.

Outstanding bonds (including maturities within the next 12 months)

were as follows:

June 30, 2023

December 31, 2022

(in millions)

Nominal outstanding

Carrying value

(1)

Nominal outstanding

Carrying value

(1)

Bonds:

0.625% EUR Instruments, due 2023

EUR

700

742

0% CHF Bonds, due 2023

CHF

275

305

CHF

275

298

0.625% EUR Instruments, due 2024

EUR

700

739

EUR

700

720

Floating Rate EUR Instruments, due 2024

EUR

500

544

EUR

500

536

0.75% EUR Instruments, due 2024

EUR

750

788

EUR

750

769

0.3% CHF Bonds, due 2024

CHF

280

310

CHF

280

303

2.1% CHF Bonds, due 2025

CHF

150

166

CHF

150

162

3.25% EUR Instruments, due 2027

EUR

500

539

0.75% CHF Bonds, due 2027

CHF

425

470

CHF

425

460

3.8% USD Notes, due 2028

(2)

USD

383

382

USD

383

381

1.0% CHF Bonds, due 2029

CHF

170

188

CHF

170

184

0% EUR Instruments, due 2030

EUR

800

691

EUR

800

677

2.375% CHF Bonds, due 2030

CHF

150

166

CHF

150

162

3.375% EUR Instruments, due 2031

EUR

750

801

4.375% USD Notes, due 2042

(2)

USD

609

590

USD

609

590

Total

6,679

5,984

(1)

USD carrying values include unamortized debt issuance costs, bond discounts or premiums, as well as adjustments for fair value hedge accounting, where appropriate.

(2)

Prior to completing a cash tender offer in November 2020, the original principal amount outstanding,

on each of the 3.8% USD Notes,

due 2028,

and the 4.375% USD Notes,

due

2042, was USD 750 million.

In January 2023, the Company issued the following EUR Instruments:

(i) EUR 500 million of 3.25 percent Instruments,

due 2027, and (ii) EUR 750 million of

3.375 percent Instruments, due 2031, both paying interest

annually in arrears. The aggregate net proceeds

of these EUR Instruments, after discount and fees,

amounted to EUR 1,235 million (equivalent to approximately

$1,338 million on date of issuance).

Q2 2023 FINANCIAL INFORMATION

─

Note 10

Commitments and contingencies

Contingencies—Regulatory, Compliance

and Legal

Regulatory

Based on findings during an internal investigation, the Company

self-reported to the SEC and the DoJ, in the United

States, to the Special Investigating Unit (SIU)

and the National Prosecuting Authority (NPA)

in South Africa as well as to various authorities in other countries

potential suspect payments and other compliance

concerns in connection with some of the Company’s dealings

with Eskom and related persons. Many of those parties

have expressed an interest in, or

commenced an investigation into, these matters and the Company is

cooperating fully with them. The Company paid $104

million to Eskom in December 2020 as

part of a full and final settlement with Eskom and the Special Investigating

Unit relating to improper payments and other compliance

issues associated with the

Controls and Instrumentation Contract, and its Variation

Orders for Units 1 and 2 at Kusile. The Company

made a provision of approximately $325 million which

was recorded in Other income (expense), net, during the third

quarter of 2022. In December 2022, the Company settled

with the SEC and DOJ as well as the

authorities in South Africa and Switzerland. The matter is still pending

with the authorities in Germany,

but the Company does not believe that it will

need to record

any additional provisions for this matter.

General

The Company is aware of proceedings, or the threat of proceedings,

against it and others in respect of private claims

by customers and other third parties with

regard to certain actual or alleged anticompetitive practices.

Also, the Company is subject to other claims and legal proceedings,

as well as investigations carried

out by various law enforcement authorities. With respect to the above-mentioned

claims, regulatory matters, and any related proceedings,

the Company will bear

the related costs, including costs necessary to resolve

them.

Liabilities recognized

At June 30, 2023, and December 31, 2022, the Company

had aggregate liabilities of $95 million and $86 million, respectively,

included in “Other provisions” and

“Other non

‑

current liabilities”, for the above regulatory,

compliance and legal contingencies, and none of the individual

liabilities recognized was significant. As it is

not possible to make an informed judgment on, or reasonably predict,

the outcome of certain matters and as it is not possible,

based on information currently

available to management, to estimate the maximum potential

liability on other matters, there could be adverse outcomes beyond

the amounts accrued.

Guarantees

General

The following table provides quantitative data regarding the Company’s

third-party guarantees.

The maximum potential payments represent a “worst

-case

scenario”, and do not reflect management’s expected

outcomes.

Maximum potential payments

($ in millions)

June 30, 2023

December 31, 2022

Performance guarantees

3,546

4,300

Financial guarantees

Total

(1)

3,640

4,396

(1)

Maximum potential payments include amounts in both continuing and discontinued operations.

The carrying amount of liabilities recorded in the Consolidated

Balance Sheets reflects the Company’s best estimate of

future payments, which it may incur as

part

of fulfilling its guarantee obligations. In respect of the above guarantees,

the carrying amounts of liabilities at June 30, 2023, and

December 31, 2022, were not

significant.

The Company is party to various guarantees providing financial

or performance assurances to certain third parties. These guarantees,

which have various

maturities up to 2035, mainly consist of performance guarantees

whereby (i) the Company guarantees

the performance of a third party’s product or service

according to the terms of a contract and (ii) as member

of a consortium/joint-venture that includes third parties, the

Company guarantees not only its own

performance but also

the work of third parties. Such guarantees may

include guarantees that a project will be completed within a specified

time. If the third party

does not fulfill the obligation, the Company will compensate the

guaranteed party in cash or in kind. The original

maturity dates for the majority of these

performance guarantees range from one to ten years.

In conjunction with the divestment of the high-voltage cable

and cables accessories businesses, the Company has

entered into various performance guarantees

with other parties with respect to certain liabilities of the

divested business. At both June 30, 2023, and December 31,

2022, the maximum potential payable under

these guarantees amounts to $843 million, respectively,

and these guarantees have various original maturities ranging

from five to ten years.

The Company retained obligations for financial, performance

and indemnification guarantees related to the sale of the

Power Grids business (see Note 3 for

details). The performance and financial guarantees have been

indemnified by Hitachi Ltd. These guarantees, which

have various maturities up to 2035, primarily

consist of bank guarantees, standby letters of credit, business

performance guarantees and other trade-related

guarantees, the majority of which have original

maturity dates ranging from one to ten years. The maximum amount

payable under these guarantees at June 30, 2023,

and December 31, 2022, is approximately

$2.3 billion and $3.0 billion, respectively.

Commercial commitments

In addition, in the normal course of bidding for and executing certain

projects, the Company has entered into standby

letters of credit, bid/performance bonds

and

surety bonds (collectively “performance bonds”) with various

financial institutions. Customers can draw on such

performance bonds in the event that the Company

does not fulfill its contractual obligations. The Company

would then have an obligation to reimburse the financial institution for

amounts paid under the performance

bonds. At June 30, 2023, and December 31, 2022, respectively,

the total outstanding performance bonds aggregated

to $3.0 billion and $2.9 billion.

There have

been no significant amounts reimbursed to financial institutions

under these types of arrangements in the six and three

months

ended June 30, 2023 and 2022.

Q2 2023 FINANCIAL INFORMATION

Product and order-related contingencies

The Company calculates its provision for product warranties

based on historical claims experience and specific review

of certain contracts. The reconciliation of the

“Provisions for warranties”, including guarantees of product performance,

was as follows:

($ in millions)

2023

2022

Balance at January 1,

1,028

1,005

Claims paid in cash or in kind

(85)

(82)

Net increase in provision for changes in estimates, warranties

issued and warranties expired

136

103

Exchange rate differences

(3)

(54)

Balance at June 30,

1,076

972

─

Note 11

Income taxes

In calculating income tax expense, the Company uses an estimate

of the annual effective tax rate based upon the

facts and circumstances known at each

interim

period. On a quarterly basis, the actual effective tax

rate is adjusted, as appropriate, based upon changed facts

and circumstances, if any,

as compared to those

forecasted at the beginning of the year and each interim period

thereafter.

The effective tax rate of 19.0 percent in the six months ended

June 30, 2023, was lower than the effective tax

rate of 29.3 percent in the six months ended June

30, 2022, primarily due to a net benefit realized on a favorable

resolution of an uncertain tax position. In February

2023, on completion of a tax audit, the Company

obtained resolution of the uncertain tax position for which an

amount was recorded within Other non-current liabilities as

of December 31, 2022. In the six months

ended June 30, 2023, the Company released the provision of

$206 million, due to the resolution of this matter,

which resulted in an increase of $0.11

in earnings

per share (basic and diluted) for the six months ended June

30, 2023.

─

Note 12

Employee benefits

The Company operates defined benefit pension plans, defined contribution

pension plans, and termination indemnity

plans, in accordance with local regulations

and practices. At June 30, 2023, the Company’s most significant

defined benefit pension plans are in Switzerland as well

as in Germany, the United

Kingdom, and

the United States. These plans cover a large portion of the Company’s

employees and provide benefits to employees

in the event of death, disability,

retirement, or

termination of employment. Certain of these plans are multi-employer

plans. The Company also operates other postretirement benefit plans

including

postretirement health care benefits and other employee-related

benefits for active employees including long-service

award plans. The measurement date used for

the Company’s employee benefit plans is December

31. The funding policies of the Company’s plans

are consistent with the local government and tax

requirements.

Net periodic benefit cost of the Company’s defined benefit

pension and other postretirement benefit plans consisted of

the following:

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Six months ended June 30,

2023

2022

2023

2022

2023

2022

Operational pension cost:

Service cost

–

Operational pension cost

–

Non-operational pension cost (credit):

Interest cost

Expected return on plan assets

(63)

(58)

(74)

(77)

–

Amortization of prior service cost (credit)

(4)

(1)

Amortization of net actuarial loss

–

(2)

Non-operational pension cost (credit)

(43)

(61)

(5)

(2)

Net periodic benefit cost (credit)

(24)

(34)

(2)

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Three months ended June 30,

2023

2022

2023

2022

2023

2022

Operational pension cost:

Service cost

–

Operational pension cost

–

Non-operational pension cost (credit):

Interest cost

–

Expected return on plan assets

(30)

(28)

(35)

(36)

–

Amortization of prior service cost (credit)

(4)

(2)

(1)

–

Amortization of net actuarial loss

–

(1)

(2)

Non-operational pension cost (credit)

(22)

(30)

(1)

(2)

(1)

Net periodic benefit cost (credit)

(12)

(17)

(2)

(1)

The components of net periodic benefit cost other than the service

cost component are included in the line “Non-operational

pension cost (credit)” in the income

statement.

Q2 2023 FINANCIAL INFORMATION

Employer contributions were as follows:

($ in millions)

Defined pension benefits

Other postretirement

Switzerland

International

benefits

Six months ended June 30,

2023

2022

2023

2022

2023

2022

Total contributions

to defined benefit pension and

Other postretirement

Switzerland

International

benefits

Three months ended June 30,

2023

2022

2023

2022

2023

2022

Total contributions

to defined benefit pension and

other postretirement benefit plans

The Company expects to make contributions totaling approximately

$95 million and $34 million to its defined pension plans

and other postretirement benefit plans,

respectively, for the full year 2023.

─

Note 13

Stockholder's equity

At the Annual General Meeting of Shareholders (AGM) on March

23, 2023, shareholders approved the proposal of the

Board of Directors to distribute 0.84

Swiss

francs per share to shareholders. The declared dividend amounted

to $1,706 million, with the Company disburs

ing a portion in March and the remaining amounts

in April.

In March 2023, the Company completed the share buyback

program that was launched in April 2022. This program was executed

on a second trading line on the

SIX Swiss Exchange. Through this program, the Company purchased

a total of 67 million shares for approximately $2.0

billion, of which 8 million shares were

purchased in the first quarter of 2023 (resulting in an

increase in Treasury stock of $253 million

Also in March 2023, the Company announced a new share buyback

program of up to $1 billion. This program, which was

launched in April 2023, is being executed

on a second trading line on the SIX Swiss Exchange and is planned

to run until the Company’s 2024 AGM. Through

this program, the Company purchased, from

the program’s launch in April 2023 to June 30, 2023, 6

million shares, resulting in an increase in Treasury

stock of $212 million.

In the second quarter of 2023, the Company cancelled 83

million shares which had been purchased under its share

buyback program. This resulted in a decrease

in Treasury stock of $2,567

million and a corresponding total decrease in Capital

stock, Additional paid-in capital and Retained earnings.

During the first quarter of 2023, the Company delivered, out

of treasury stock, approximately 5 million shares

in connection with its Management Incentive Plan.

In February 2023, the Company obtained funding through

a private placement of shares in its ABB E-Mobility subsidiary,

ABB E-mobility Holding Ltd

(ABB E-Mobility),

receiving gross proceeds of 325 million Swiss francs

(approximately $351 million) and reducing the Company’s

ownership in ABB E-Mobility from

92 percent to 81 percent. This resulted in an increase

in Additional paid-in capital of $170

million.

Q2 2023 FINANCIAL INFORMATION

─

Note 14

Earnings per share

Basic earnings per share is calculated by dividing income by the

weighted-average number of shares outstanding during

the period. Diluted earnings per share is

calculated by dividing income by the weighted-average number

of shares outstanding during the period, assuming that

all potentially dilutive securities were

exercised, if dilutive. Potentially dilutive securities comprise outstanding

written call options, and outstanding options and

shares granted subject to certain

conditions under the Company’s share-based payment arrangements.

Basic earnings per share

Six months ended June 30,

Three months ended June 30,

($ in millions, except per share data in $)

2023

2022

2023

2022

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

1,951

1,003

910

388

Loss from discontinued operations, net of tax

(9)

(20)

(4)

(9)

Net income

1,942

983

906

379

Weighted-average number of shares outstanding

(in millions)

1,861

1,922

1,862

1,909

Basic earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

1.05

0.52

0.49

0.20

Loss from discontinued operations, net of tax

0.00

(0.01)

0.00

Net income

1.04

0.51

0.49

0.20

Diluted earnings per share

Six months ended June 30,

Three months ended June 30,

($ in millions, except per share data in $)

2023

2022

2023

2022

Amounts attributable to ABB shareholders:

Income from continuing operations, net of tax

1,951

1,003

910

388

Loss from discontinued operations, net of tax

(9)

(20)

(4)

(9)

Net income

1,942

983

906

379

Weighted-average number of shares outstanding (in millions)

1,861

1,922

1,862

1,909

Effect of dilutive securities:

Call options and shares

Adjusted weighted-average number of shares outstanding

(in millions)

1,873

1,935

1,873

1,918

Diluted earnings per share attributable to ABB shareholders:

Income from continuing operations, net of tax

1.04

0.52

0.49

0.20

Loss from discontinued operations, net of tax

0.00

(0.01)

0.00

Net income

1.04

0.51

0.48

0.20

Q2 2023 FINANCIAL INFORMATION

─

Note 15

Reclassifications out of accumulated other comprehensive loss

The following table shows changes in “Accumulated other comprehensive

loss” (OCI) attributable to ABB, by component, net

of tax:

Unrealized gains

Pension and

Foreign currency

(losses) on

other

Derivative

translation

available-for-sale

postretirement

instruments

($ in millions)

adjustments

securities

plan adjustments

and hedges

Total OCI

Balance at January 1, 2022

(2,993)

(1,089)

(8)

(4,088)

Other comprehensive (loss) income:

Other comprehensive (loss) income

before reclassifications

(419)

(17)

(12)

(357)

Amounts reclassified from OCI

–

Total other comprehensive (loss)

income

(414)

(17)

106

(323)

Less:

Amounts attributable to

noncontrolling interests and

redeemable noncontrolling interests

(22)

–

(22)

Balance at June 30, 2022

(3,385)

(15)

(983)

(6)

(4,389)

Unrealized gains

Pension and

Foreign currency

(losses) on

other

Derivative

translation

available-for-sale

postretirement

instruments

($ in millions)

adjustments

securities

plan adjustments

and hedges

Total OCI

Balance at January 1, 2023

(3,691)

(19)

(838)

(8)

(4,556)

Other comprehensive (loss) income:

Other comprehensive (loss) income

before reclassifications

(79)

(13)

(1)

(91)

Amounts reclassified from OCI

–

Total other comprehensive (loss)

income

(79)

(5)

(74)

Less:

Amounts attributable to

noncontrolling interests and

redeemable noncontrolling interests

(3)

Balance at June 30, 2023

(3,767)

(12)

(843)

(5)

(4,627)

The amounts reclassified out of OCI

for the six and three months ended June

30, 2023 and 2022, were not significant.

Q2 2023 FINANCIAL INFORMATION

─

Note 16

Restructuring and related expenses

Other restructuring-related activities

In the six and three months ended June 30, 2023 and 2022,

the Company executed various other restructuring

-related activities and incurred the following

expenses:

Six months ended June 30,

Three months ended June 30,

($ in millions)

2023

2022

2023

2022

Employee severance costs

Estimated contract settlement, loss order and other costs

202

195

Inventory and long-lived asset impairments

–

Total

250

231

Expenses associated with these activities are recorded in the following

line items in the Consolidated Income Statements:

Six months ended June 30,

Three months ended June 30,

($ in millions)

2023

2022

2023

2022

Total cost of sales

Selling, general and administrative expenses

Non-order related research and development expenses

–

(1)

Other income (expense), net

212

201

Total

250

231

During the second quarter of 2022, the Company completed a

plan to fully exit its full train retrofit business by

transferring the remaining contracts to a third party.

The Company recorded $195 million of restructuring expenses

in connection with this business exit primarily for contract

settlement costs. Prior to exiting this

business, the business was reported as part of the Company’s

non-core business activities within Corporate and Other.

At June 30, 2023 and December 31, 2022,

$193 million and $198 million, respectively,

was recorded for other restructuring-related liabilities and

is included

primarily in Other provisions.

─

Note 17

Operating segment data

The Chief Operating Decision Maker (CODM) is the Chief

Executive Officer. The CODM

allocates resources to and assesses the performance of

each operating

segment using the information outlined below. The

Company is organized into the following segments, based

on products and services: Electrification, Motion,

Process Automation and Robotics & Discrete Automation. The remain

ing operations of the Company are included in Corporate and

Other.

Effective January 1, 2023, the E-mobility Division

is no longer managed within the Electrification segment

and has become a separate operating segment. This

new segment does not currently meet any of the size thresholds

to be considered a reportable segment and as such is presented

within Corporate and Other.

The

segment information for the six and three months ended June

30, 2023 and 2022, and at December 31, 2022,

has been recast to reflect this change.

A description of the types of products and services

provided by each reportable segment is as follows:

●

Electrification:

manufactures and sells electrical products and solutions

which are designed to provide safe, smart and sustainable

electrical flow from

the substation to the socket. The portfolio of increasingly digital and

connected solutions includes renewable power

solutions, modular substation

packages, distribution automation products, switchboard and panelboards,

switchgear, UPS solutions, circuit breakers,

measuring and sensing devices,

control products, wiring accessories, enclosures and cabling

systems and intelligent home and building solutions,

designed to integrate and automate

lighting, heating, ventilation, security and data communication

networks.

The products and services are delivered through

six operating Divisions:

Distribution Solutions, Smart Power, Smart

Buildings, Installation Products,

Power Conversion and Service.

●

Motion:

designs, manufactures, and sells drives, motors, generators

and traction converters that are driving the low-carbon future

for industries, cities,

infrastructure and transportation. These products, digital technology

and related services enable industrial customers to increase

energy efficiency,

improve safety and reliability, and achieve

precise control of their processes. Building on over 130

years of cumulative experience in electric

powertrains, Motion combines domain expertise and technology

to deliver the optimum solution for a wide range of

applications in all industrial

segments. In addition, Motion, along with its partners,

has a leading global service presence. These products

and services are delivered through seven

operating Divisions: Large Motors and Generators, IEC LV

Motors, NEMA Motors, Drive Products, System Drives,

Service and Traction.

Q2 2023 FINANCIAL INFORMATION

●

Process Automation:

offers a broad range of industry-specific,

integrated automation, electrification and digital solutions,

as well as lifecycle services for

the process,

hybrid and marine industries. The product portfolio includes

control technologies, industrial software, advanced

analytics, sensing and

measurement technology, and marine

propulsion systems. In addition,

Process Automation offers a comprehensive range

of services,

from repair to

advanced digital capabilities such as remote monitoring, preventive

maintenance, asset performance management, emission

monitoring and

cybersecurity.

The products, systems and services are currently delivered through four operating

Divisions: Energy Industries, Process Industries,

Marine & Ports and Measurement & Analytics as well as,

prior to its spin-off in October 2022, the Turbocharging

Division (Accelleron).

●

Robotics & Discrete Automation:

delivers its products, solutions and services

through two operating Divisions: Robotics and Machine Automation.

Robotics includes industrial robots, autonomous mobile robotics,

software, robotic solutions, field services, spare parts, and

digital services. Machine

Automation specializes in solutions based on its programmable

logic controllers (PLC), industrial PCs (IPC), servo

motion, transport systems and

machine vision.

Both Divisions offer engineering and simulation software

as well as a comprehensive range of digital solutions.

Corporate and Other:

includes headquarter costs,

the Company’s corporate real estate activities, Corporate Treas

ury Operations, the E-mobility operating

segment, historical operating activities of certain divested businesses

and other non-core operating activities.

The primary measure of profitability on which the operating segments

are evaluated is Operational EBITA, which

represents income from operations excluding:

●

amortization expense on intangibles arising upon acquisition (acquisition

-related amortization),

●

restructuring, related and implementation costs,

●

changes in the amount recorded for obligations related to divested

businesses occurring after the divestment date (changes

in obligations related to

divested businesses),

●

gains and losses from sale of businesses (including fair value adjustment

on assets and liabilities held for sale),

●

acquisition- and divestment-related expenses and integration costs,

●

certain other non-operational items, as well as

●

foreign exchange/commodity timing differences in income

from operations consisting of: (a) unrealized gains

and losses on derivatives (foreign

exchange, commodities, embedded derivatives), (b) realized

gains and losses on derivatives where the underlying hedged

transaction has not yet been

realized, and (c) unrealized foreign exchange movements on receivables/payables

(and related assets/liabilities).

Certain other non-operational items generally includes certain regulatory,

compliance and legal costs, other income/expense relating

to the Power Grids joint

venture, certain asset write downs/impairments and certain

other fair value changes, changes in estimates relating to opening

balance sheets of acquired

businesses (changes in pre-acquisition estimates), as well as

other items which are determined by management on

a case-by-case basis.

The CODM primarily reviews the results of each segment on

a basis that is before the elimination of profits

made on inventory sales between segments. Segment

results below are presented before these eliminations, with a total deduction

for intersegment profits to arrive at the Company’s

consolidated Operational EBITA.

Intersegment sales and transfers are accounted for as if the sales

and transfers were to third parties, at current

market prices.

The following tables present disaggregated segment revenues from

contracts with customers, Operational EBITA,

and the reconciliations of consolidated

Operational EBITA to Income from co

ntinuing operations before taxes for the six

and three months ended June 30, 2023 and 2022, as well as

total assets at

June 30, 2023, and December 31, 2022.

Six months ended June 30, 2023

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

2,328

1,289

1,081

956

153

5,807

The Americas

2,932

1,267

868

272

129

5,468

of which: United States

2,179

1,061

550

175

111

4,076

Asia, Middle East and Africa

1,948

1,117

1,027

623

4,747

of which: China

917

581

339

475

2,329

7,208

3,673

2,976

1,851

314

16,022

Product type

Products

6,762

3,169

1,743

1,576

280

13,530

Services and other

446

504

1,233

275

2,492

7,208

3,673

2,976

1,851

314

16,022

Third-party revenues

7,208

3,673

2,976

1,851

314

16,022

Intersegment revenues

117

248

(386)

–

Total revenues

(1)

7,325

3,921

2,989

1,859

(72)

16,022

Q2 2023 FINANCIAL INFORMATION

Six months ended June 30, 2022

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

2,120

953

1,131

712

110

5,026

The Americas

2,445

1,029

767

238

4,566

of which: United States

1,789

853

460

166

3,328

Asia, Middle East and Africa

1,967

995

1,119

509

4,624

of which: China

992

565

309

382

2,263

6,532

2,977

3,017

1,459

231

14,216

Product type

Products

6,124

2,552

1,642

1,230

214

11,762

Services and other

408

425

1,375

229

2,454

6,532

2,977

3,017

1,459

231

14,216

Third-party revenues

6,532

2,977

3,017

1,459

231

14,216

Intersegment revenues

118

221

(360)

–

Total revenues

(1)

6,650

3,198

3,035

1,462

(129)

14,216

Three months ended June 30, 2023

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,166

651

562

482

2,935

The Americas

1,525

635

447

136

2,815

of which: United States

1,136

528

286

2,092

Asia, Middle East and Africa

991

568

538

299

2,413

of which: China

460

300

177

227

1,174

3,682

1,854

1,547

917

163

8,163

Product type

Products

3,456

1,586

916

785

143

6,886

Services and other

226

268

631

132

1,277

3,682

1,854

1,547

917

163

8,163

Third-party revenues

3,682

1,854

1,547

917

163

8,163

Intersegment revenues

127

(191)

–

Total revenues

(1)

3,735

1,981

1,553

922

(28)

8,163

Three months ended June 30, 2022

Robotics &

Process

Discrete

Corporate

($ in millions)

Electrification

Motion

Automation

and Other

Total

Geographical markets

Europe

1,058

487

546

358

2,508

The Americas

1,281

537

399

130

2,397

of which: United States

940

446

239

1,746

Asia, Middle East and Africa

1,016

496

573

242

2,346

of which: China

535

278

159

185

1,163

3,355

1,520

1,518

730

128

7,251

Product type

Products

3,143

1,304

829

618

119

6,013

Services and other

212

216

689

112

1,238

3,355

1,520

1,518

730

128

7,251

Third-party revenues

3,355

1,520

1,518

730

128

7,251

Intersegment revenues

106

(178)

–

Total revenues

(1)

3,414

1,626

1,529

732

(50)

7,251

(1)

Due to rounding, numbers presented may not add to the totals provided.

Q2 2023 FINANCIAL INFORMATION

Six months ended

Three months ended

June 30,

($ in millions)

2023

2022

2023

2022

Operational EBITA:

Electrification

1,464

1,117

787

605

Motion

767

540

401

266

Process Automation

444

420

239

224

Robotics & Discrete Automation

281

109

141

Corporate and Other

‒

E-mobility

(95)

(8)

(67)

(6)

‒ Corporate costs, Intersegment elimination and other

(159)

(45)

(76)

(13)

Total

2,702

2,133

1,425

1,136

Acquisition-related amortization

(109)

(119)

(55)

(59)

Restructuring, related and implementation costs

(1)

(41)

(280)

(13)

(264)

Changes in obligations related to divested businesses

Gains and losses from sale of businesses

(4)

Acquisition- and divestment-related expenses and integration

costs

(45)

(109)

(26)

(50)

Foreign exchange/commodity timing differences in

income from operations:

Unrealized gains and losses on derivatives (foreign exchange,

commodities, embedded derivatives)

(10)

(100)

(32)

(118)

Realized gains and losses on derivatives where the underlying hedged

transaction has not yet been realized

(6)

(35)

(1)

(33)

Unrealized foreign exchange movements on receivables/payables (and

related assets/liabilities)

Certain other non-operational items:

Other income/expense relating to the Power Grids joint venture

(37)

(2)

Regulatory, compliance and legal costs

–

(4)

–

(5)

Business transformation costs

(2)

(82)

(66)

(48)

(40)

Changes in pre-acquisition estimates

(4)

Certain other fair value changes, including asset impairments

–

Other non-operational items

(27)

(3)

(20)

Income from operations

2,496

1,444

1,298

587

Interest and dividend income

Interest and other finance expense

(124)

(62)

(63)

(40)

Non-operational pension (cost) credit

Income from continuing operations before taxes

2,465

1,483

1,281

599

(1)

Includes impairment of certain assets.

(2)

Amount includes ABB Way process transformation costs of $71 million and $64 million for six months ended June 30, 2023 and 2022, respectively, and $41 million and $39 million for

the three months ended June 30, 2023 and 2022, respectively.

Total assets

(1)

($ in millions)

June 30, 2023

December 31, 2022

Electrification

13,300

12,500

Motion

7,043

6,565

Process Automation

4,761

4,598

Robotics & Discrete Automation

4,931

4,901

Corporate and Other

(2)

9,821

10,584

Consolidated

39,856

39,148

(1)

Total assets are after intersegment eliminations and therefore reflect third-party assets only.

(2)

At June 30, 2023, and December 31, 2022, respectively, Corporate and Other includes $74 million and $96 million of assets in the Power Grids business which is reported as

discontinued operations (see Note 3).

Q2 2023 FINANCIAL INFORMATION

—

Supplemental Reconciliations

and Definitions

The following reconciliations and definitions include measures

which ABB uses to supplement its Consolidated

Financial Information (unaudited) which is

prepared in accordance with United

States generally accepted accounting principles (U.S. GAAP). Certain

of these financial measures are, or may

be,

considered non-GAAP financial measures as defined in the

rules of the U.S. Securities and Exchange

Commission (SEC).

While ABB’s management believes that

the non-GAAP financial measures herein are useful

in evaluating ABB’s operating results,

this information should

be considered as supplemental in nature

and not as a substitute for the related financial information

prepared in accordance with U.S.

GAAP. Therefore

these measures should not be viewed in

isolation but considered together with the

Consolidated Financial Information (unaudited) prepared in accordance

with U.S. GAAP as of and for

the six and three months ended June

30, 2023.

Comparable growth rates

Growth rates for certain key figures may be presented and discussed

on a “comparable” basis. The comparable growth rate measures growth

on a constant

currency basis. Since we are a global company,

the comparability of our operating results reported

in U.S. dollars is affected by foreign currency

exchange rate

fluctuations. We calculate the impacts from foreign currency

fluctuations by translating the current-year periods’ reported key

figures into U.S. dollar amounts using

the exchange rates in effect for the comparable periods

in the previous year.

Comparable growth rates are also adjusted for changes

in our business portfolio. Adjustments to our business

portfolio occur due to acquisitions, divestments,

by exiting specific business activities or customer markets. The adjustment

for portfolio changes is calculated as follows: where

the results of any business

acquired or divested have not been consolidated and reported for the

entire duration of both the current and comparable

periods, the reported key figures of such

business are adjusted to exclude the relevant key figures

of any corresponding quarters which are not comparable when

computing the comparable growth rate.

Certain portfolio

changes which do not qualify as divestments under

U.S. GAAP have been treated in a similar manner to

divestments. Changes in our portfolio

where we have exited certain business activities or customer markets

are adjusted as if the relevant business

was divested in the period when the decision to

cease business activities was taken. We do not adjust

for portfolio changes where the relevant business

has annualized revenues of less than $50 million.

The following tables provide reconciliations of reported growth rates

of certain key figures to their respective comparable growth

rate.

Comparable growth rate reconciliation by Business Area

Q2 2023 compared to Q2 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

11%

Motion

-1%

22%

-1%

22%

Process Automation

-8%

12%

15%

19%

Robotics & Discrete Automation

-23%

-22%

26%

27%

ABB Group

-2%

13%

17%

H1 2023 compared to H1 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

10%

14%

Motion

-1%

23%

-1%

25%

Process Automation

17%

29%

-2%

15%

17%

Robotics & Discrete Automation

-23%

-21%

27%

31%

ABB Group

13%

19%

Q2 2023 FINANCIAL INFORMATION

Regional comparable growth rate reconciliation

Regional comparable growth rate reconciliation for ABB Group

- Quarter

Q2 2023 compared to Q2 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-1%

17%

-1%

20%

The Americas

17%

19%

of which: United States

20%

21%

Asia, Middle East and Africa

-10%

-1%

13%

of which: China

-15%

-9%

ABB Group

-2%

13%

17%

Regional comparable growth rate reconciliation by Business

Area - Quarter

Q2 2023 compared to Q2 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-4%

-2%

-6%

-1%

The Americas

19%

of which: United States

21%

Asia, Middle East and Africa

-3%

-2%

of which: China

-9%

-3%

-14%

-10%

Electrification

11%

Q2 2023 compared to Q2 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-2%

31%

-2%

-1%

28%

The Americas

-1%

-2%

20%

-3%

17%

of which: United States

-1%

-2%

-3%

20%

-3%

17%

Asia, Middle East and Africa

-3%

14%

22%

of which: China

-6%

-1%

14%

Motion

-1%

22%

-1%

22%

Q2 2023 compared to Q2 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-6%

13%

10%

17%

20%

The Americas

-8%

-1%

12%

24%

of which: United States

-2%

19%

16%

35%

Asia, Middle East and Africa

-10%

15%

-7%

15%

13%

of which: China

-6%

14%

12%

11%

21%

38%

Process Automation

-8%

12%

15%

19%

Q2 2023 compared to Q2 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-23%

-1%

-24%

35%

-2%

33%

The Americas

-1%

of which: United States

-16%

-15%

-9%

Asia, Middle East and Africa

-33%

-29%

23%

29%

of which: China

-41%

-37%

23%

30%

Robotics & Discrete Automation

-23%

-22%

26%

27%

Q2 2023 FINANCIAL INFORMATION

Regional comparable growth rate reconciliation for ABB Group

– Year to date

H1 2023 compared to H1 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

16%

21%

The Americas

20%

22%

of which: United States

22%

24%

Asia, Middle East and Africa

-6%

15%

of which: China

-13%

-6%

12%

ABB Group

13%

19%

Regional comparable growth rate reconciliation by Business

Area – Year to date

H1 2023 compared to H1 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-2%

11%

The Americas

20%

of which: United States

22%

Asia, Middle East and Africa

10%

-1%

of which: China

-10%

-4%

-8%

-2%

Electrification

10%

14%

H1 2023 compared to H1 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-1%

31%

-1%

32%

The Americas

-1%

24%

-1%

23%

of which: United States

-1%

25%

-1%

24%

Asia, Middle East and Africa

-1%

13%

22%

of which: China

-7%

-1%

12%

Motion

-1%

23%

-1%

25%

H1 2023 compared to H1 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

18%

20%

45%

-4%

16%

15%

The Americas

12%

20%

13%

27%

of which: United States

-5%

12%

20%

17%

37%

Asia, Middle East and Africa

-2%

18%

21%

-8%

15%

12%

of which: China

20%

32%

21%

37%

Process Automation

17%

29%

-2%

15%

17%

H1 2023 compared to H1 2022

Order growth rate

Revenue growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Region

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Europe

-22%

-20%

35%

37%

The Americas

-8%

-1%

-9%

16%

-1%

15%

of which: United States

-20%

Asia, Middle East and Africa

-31%

-26%

22%

31%

of which: China

-35%

-31%

24%

33%

Robotics & Discrete Automation

-23%

-21%

27%

31%

Q2 2023 FINANCIAL INFORMATION

Order backlog growth rate reconciliation

June 30, 2023 compared to June 30, 2022

US$

Foreign

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

Electrification

18%

19%

Motion

17%

-1%

-2%

14%

Process Automation

11%

17%

Robotics & Discrete Automation

-3%

-2%

ABB Group

13%

14%

Other growth rate reconciliations

Q2 2023 compared to Q2 2022

Service orders growth rate

Services revenues growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

10%

Motion

10%

13%

24%

27%

Process Automation

-16%

20%

-8%

25%

18%

Robotics & Discrete Automation

18%

ABB Group

-6%

11%

14%

19%

H1 2023 compared to H1 2022

Service orders growth rate

Services revenues growth rate

US$

Foreign

US$

Foreign

(as

exchange

Portfolio

(as

exchange

Portfolio

Business Area

reported)

impact

changes

Comparable

reported)

impact

changes

Comparable

Electrification

10%

13%

Motion

12%

18%

24%

Process Automation

-16%

22%

-10%

25%

18%

Robotics & Discrete Automation

12%

20%

23%

ABB Group

-6%

12%

10%

14%

19%

Q2 2023 FINANCIAL INFORMATION

Operational EBITA as

% of operational revenues (Operational EBITA margin)

Definition

Operational EBITA margin

Operational EBITA margin is Operational

EBITA as a percentage of

operational revenues.

Operational EBITA

Operational earnings before interest, taxes and acquisition-related

amortization (Operational EBITA)

represents Income from operations excluding:

●

acquisition-related amortization (as defined below),

●

restructuring, related and implementation costs,

●

changes in the amount recorded for obligations related to divested

businesses occurring after the divestment date (changes

in obligations related to

divested businesses),

●

gains and losses from sale of businesses (including fair value adjustment

on assets and liabilities held for sale),

●

acquisition- and divestment-related expenses and integration costs,

●

certain other non-operational items, as well as

●

foreign exchange/commodity timing differences in income

from operations consisting of: (a) unrealized gains

and losses on derivatives (foreign

exchange, commodities, embedded derivatives), (b) realized

gains and losses on derivatives where the underlying hedged

transaction has not yet been

realized, and (c) unrealized foreign exchange movements on receivables/payables

(and related assets/liabilities).

Certain other non-operational items generally includes certain regulatory,

compliance and legal costs, other income/expense relating

to the Power Grids joint

venture, certain asset

write downs/impairments and certain other fair

value changes, changes in estimates relating to opening balance

sheets of acquired

businesses (changes in pre-acquisition estimates), as well as

other items which are determined by management on

a case-by-case basis.

Operational EBITA is our measure of

segment profit but is also used by management to evaluate

the profitability of the Company

as a whole.

Acquisition-related amortization

Amortization expense on intangibles arising upon acquisitions.

Restructuring, related and implementation costs

Restructuring, related and implementation costs consists

of restructuring and other related expenses, as well as internal and external

costs relating to the

implementation of group-wide restructuring programs.

Operational revenues

The Company presents operational revenues solely for the purpose

of allowing the computation of Operational EBITA

margin. Operational revenues are Total

revenues adjusted for foreign exchange/commodity timing differences

in total revenues of: (i) unrealized gains and losses

on derivatives, (ii) realized gains and

losses on derivatives where the underlying hedged transaction

has not yet been realized, and (iii) unrealized foreign

exchange movements on receivables (and

related assets). Operational revenues are not intended to be an

alternative measure to Total

revenues, which represent our revenues measured

in accordance

with U.S. GAAP.

Reconciliation

The following tables provide reconciliations of consolidated Operational

EBITA to Net Income and Operational

EBITA Margin by business.

Reconciliation of consolidated Operational EBITA

to Net Income

Six months ended June 30,

Three months ended June 30,

($ in millions)

2023

2022

2023

2022

Operational EBITA

2,702

2,133

1,425

1,136

Acquisition-related amortization

(109)

(119)

(55)

(59)

Restructuring, related and implementation costs

(1)

(41)

(280)

(13)

(264)

Changes in obligations related to divested businesses

Gains and losses from sale of businesses

(4)

Acquisition- and divestment-related expenses and integration

costs

(45)

(109)

(26)

(50)

Certain other non-operational items

(40)

(99)

(41)

(65)

Foreign exchange/commodity timing differences in

income from operations

(2)

(95)

(26)

(110)

Income from operations

2,496

1,444

1,298

587

Interest and dividend income

Interest and other finance expense

(124)

(62)

(63)

(40)

Non-operational pension (cost) credit

Income from continuing operations before taxes

2,465

1,483

1,281

599

Income tax expense

(468)

(434)

(349)

(193)

Income from continuing operations, net of

tax

1,997

1,049

932

406

Loss from discontinued operations, net of tax

(9)

(20)

(4)

(9)

Net income

1,988

1,029

928

397

(1)

Includes impairment of certain assets.

Q2 2023 FINANCIAL INFORMATION

Reconciliation of Operational EBITA

margin by business

Three months ended June 30, 2023

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

3,735

1,981

1,553

922

(28)

8,163

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(9)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(4)

–

(2)

(1)

Unrealized foreign exchange movements

on receivables (and related assets)

–

(2)

(8)

(7)

(6)

(23)

Operational revenues

3,737

1,970

1,553

921

(28)

8,153

Income (loss) from operations

713

380

270

119

(184)

1,298

Acquisition-related amortization

Restructuring, related and

implementation costs

(1)

–

Changes in obligations related to

divested businesses

–

(9)

(8)

Gains and losses from sale of businesses

–

(26)

–

(26)

Acquisition- and divestment-related expenses

and integration costs

(2)

Certain other non-operational items

–

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(8)

–

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(2)

–

(2)

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

–

(3)

(4)

(7)

Operational EBITA

787

401

239

141

(143)

1,425

Operational EBITA margin (%)

21.1%

20.4%

15.4%

15.3%

n.a.

17.5%

(1)

Includes impairment of certain assets.

In the three months ended June 30, 2023, Certain other

non-operational items in the table above includes the following:

Three months ended June 30, 2023

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Other income/expense relating to the

Power Grids joint venture

–

(7)

Business transformation costs

(1)

–

Changes in pre-acquisition estimates

–

Certain other fair values changes,

including asset impairments

–

(7)

Other non-operational items

–

Total

–

(1)

Amounts

include ABB Way process transformation costs of $41 million for the three months ended June 30, 2023.

Q2 2023 FINANCIAL INFORMATION

Three months ended June 30, 2022

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

3,414

1,626

1,529

732

(50)

7,251

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(1)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

Unrealized foreign exchange movements

on receivables (and related assets)

(18)

(4)

(10)

(8)

(13)

(53)

Operational revenues

3,432

1,622

1,561

733

(27)

7,321

Income (loss) from operations

474

231

175

(336)

587

Acquisition-related amortization

Restructuring, related and

implementation costs

(1)

–

254

264

Changes in obligations related to

divested businesses

–

(3)

Gains and losses from sale of businesses

–

Acquisition- and divestment-related expenses

and integration costs

(1)

Certain other non-operational items

–

(1)

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

118

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(1)

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(13)

(3)

(7)

(5)

(13)

(41)

Operational EBITA

605

266

224

(19)

1,136

Operational EBITA margin (%)

17.6%

16.4%

14.3%

8.2%

n.a.

15.5%

(1)

Includes impairment of certain assets.

In the three months ended June 30, 2022, Certain other

non-operational items in the table above includes the following:

Three months ended June 30, 2022

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Other income/expense relating to the

Power Grids joint venture

–

Regulatory, compliance and legal costs

–

Business transformation costs

(1)

–

Changes in pre-acquisition estimates

–

(2)

–

(2)

Other non-operational items

–

Total

–

(1)

Amounts

include ABB Way process transformation costs of $39 million for the three months ended June 30, 2022.

Q2 2023 FINANCIAL INFORMATION

Six months ended June 30, 2023

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

7,325

3,921

2,989

1,859

(72)

16,022

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

(8)

(5)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(5)

–

Unrealized foreign exchange movements

on receivables (and related assets)

(7)

(6)

(12)

(8)

(9)

(42)

Operational revenues

7,305

3,910

2,999

1,859

(77)

15,996

Income (loss) from operations

1,368

733

470

234

(309)

2,496

Acquisition-related amortization

109

Restructuring, related and

implementation costs

(1)

–

Changes in obligations related to

divested businesses

–

(6)

(5)

Gains and losses from sale of businesses

–

(26)

–

(26)

Acquisition- and divestment-related expenses

and integration costs

Certain other non-operational items

–

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

(10)

(7)

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(2)

–

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(3)

(5)

(14)

Operational EBITA

1,464

767

444

281

(254)

2,702

Operational EBITA margin (%)

20.0%

19.6%

14.8%

15.1%

n.a.

16.9%

(1)

Includes impairment of certain assets.

In the six months ended June 30, 2023, Certain other non-operational

items in the table above includes the following:

Six months ended June 30, 2023

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Other income/expense relating to the

Power Grids joint venture

–

(20)

Business transformation costs

(1)

–

Changes in pre-acquisition estimates

–

Certain other fair values changes,

including asset impairments

–

(9)

(6)

Other non-operational items

(2)

–

(20)

Total

–

(1)

Amounts

include ABB Way process transformation costs of $71 million for the six months ended June 30, 2023.

Q2 2023 FINANCIAL INFORMATION

Six months ended June 30, 2022

Corporate and

Robotics &

Other and

Process

Discrete

Intersegment

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

elimination

Consolidated

Total revenues

6,650

3,198

3,035

1,462

(129)

14,216

Foreign exchange/commodity timing

differences in total revenues:

Unrealized gains and losses

on derivatives

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

–

Unrealized foreign exchange movements

on receivables (and related assets)

(18)

(6)

(7)

(5)

(15)

(51)

Operational revenues

6,658

3,197

3,066

1,468

(106)

14,283

Income (loss) from operations

955

485

326

(387)

1,444

Acquisition-related amortization

119

Restructuring, related and

implementation costs

(1)

254

280

Changes in obligations related to

divested businesses

–

(17)

Gains and losses from sale of businesses

–

Acquisition- and divestment-related expenses

and integration costs

109

Certain other non-operational items

–

(1)

Foreign exchange/commodity timing

differences in income from operations:

Unrealized gains and losses on derivatives

(foreign exchange, commodities,

embedded derivatives)

100

Realized gains and losses on derivatives

where the underlying hedged

transaction has not yet been realized

(1)

Unrealized foreign exchange movements

on receivables/payables

(and related assets/liabilities)

(14)

(3)

(4)

(15)

(40)

Operational EBITA

1,117

540

420

109

(53)

2,133

Operational EBITA margin (%)

16.8%

16.9%

13.7%

7.4%

n.a.

14.9%

(1)

Includes impairment of certain assets.

In the six months ended June 30, 2022, certain other non

-operational items in the table above includes the following:

Six months ended June 30, 2022

Robotics &

Process

Discrete

Corporate

($ in millions, unless otherwise indicated)

Electrification

Motion

Automation

and Other

Consolidated

Certain other non-operational items:

Other income/expense related to the

Power Grids joint venture

–

Regulatory, compliance and legal costs

–

Business transformation costs

–

Changes in pre-acquisition estimates

–

(2)

–

(1)

Certain other fair values changes,

including asset impairments

–

(34)

Other non-operational items

–

Total

–

(1)

Amounts

include ABB Way process transformation costs of $64 million for the six months ended June 30, 2022.

Q2 2023 FINANCIAL INFORMATION

Net debt

Definition

Net debt

Net debt is defined as Total

debt less Cash and marketable securities.

Total debt

Total debt is the sum

of Short-term debt and current maturities of long-term

debt, and Long-term debt.

Cash and marketable securities

Cash and marketable securities is the sum of Cash and equivalents,

Restricted cash (current and non-current)

and Marketable securities and short-term

investments.

Reconciliation

($ in millions)

June 30, 2023

December 31, 2022

Short-term debt and current maturities of long-term debt

3,849

2,535

Long-term debt

4,451

5,143

Total debt

8,300

7,678

Cash and equivalents

2,923

4,156

Restricted cash - current

Marketable securities and short-term investments

1,193

725

Cash and marketable securities

4,135

4,899

Net debt

4,165

2,779

Net debt/Equity ratio

Definition

Net debt/Equity ratio

Net debt/Equity ratio is defined as Net debt divided by Equity.

Equity

Equity is defined as Total

stockholders’ equity.

Reconciliation

($ in millions, unless otherwise indicated)

June 30, 2023

December 31, 2022

Total stockholders'

equity

13,340

13,187

Net debt (as defined above)

4,165

2,779

Net debt / Equity ratio

0.31

0.21

Net debt/EBITDA ratio

Definition

Net debt/EBITDA ratio

Net debt/EBITDA ratio is defined as Net debt divided by

EBITDA.

EBITDA

EBITDA is defined as Income from operations for the trailing

twelve months preceding the balance sheet date before depreciati

on and amortization for the same

trailing twelve-month period.

Reconciliation

($ in millions, unless otherwise indicated)

June 30, 2023

June 30, 2022

Income from operations for the three months ended:

September 30, 2022 / 2021

708

852

December 31, 2022 / 2021

1,185

2,975

March 31, 2023 / 2022

1,198

857

June 30, 2023 / 2022

1,298

587

Depreciation and Amortization for the three months

ended:

September 30, 2022 / 2021

198

220

December 31, 2022 / 2021

199

216

March 31, 2023 / 2022

191

210

June 30, 2023 / 2022

196

207

EBITDA

5,173

6,124

Net debt (as defined above)

4,165

4,235

Net debt / EBITDA

0.8

0.7

Q2 2023 FINANCIAL INFORMATION

Net working capital as a percentage of revenues

Definition

Net working capital as a percentage of revenues

Net working capital as a percentage of revenues is calculated

as Net working capital divided by Adjusted revenues for the

trailing twelve months.

Net working capital

Net working capital is the sum of (i) receivables, net, (ii) contract

assets, (iii) inventories, net, and (iv) prepaid expenses; less

(v) accounts payable, trade, (vi)

contract liabilities (including non-current amounts)

and (vii) other current liabilities (excluding primarily:

(a) income taxes payable, (b) current derivative liabilities,

(c)

pension and other employee benefits, (d) payables under the share

buyback program, (e) liabilities related to certain other restructuring

-related activities and

(f) liabilities related to the divestment of the Power Grids business

); and including the amounts related to these accounts which have been

presented as either

assets or liabilities held for sale but excluding any amounts included

in discontinued operations.

Adjusted revenues for the trailing twelve months

Adjusted revenues for the trailing twelve months includes total revenues

recorded by ABB in the twelve months preceding the relevant

balance sheet date adjusted

to eliminate revenues of divested businesses and the estimated

impact of annualizing revenues of certain acquisitions

which were completed in the same trailing

twelve-month period.

Reconciliation

($ in millions, unless otherwise indicated)

June 30, 2023

June 30, 2022

Net working capital:

Receivables, net

7,481

6,960

Contract assets

1,010

965

Inventories, net

6,448

5,595

Prepaid expenses

290

262

Accounts payable, trade

(4,881)

(4,805)

Contract liabilities

(2,394)

(2,141)

Other current liabilities

(1)

(3,506)

(3,173)

Net working capital in assets and liabilities held for sale

137

–

Net working capital

4,585

3,663

Total revenues for the three months

ended:

September 30, 2022 / 2021

7,406

7,028

December 31, 2022 / 2021

7,824

7,567

March 31, 2023 / 2022

7,859

6,965

June 30, 2023 / 2022

8,163

7,251

Adjustment to annualize/eliminate revenues of certain acquisitions/divestments

(162)

(213)

Adjusted revenues for the trailing twelve months

31,090

28,598

Net working capital as a percentage of revenues (%)

14.7%

12.8%

(1)

Amounts exclude $771 million and $1,104 million at June 30, 2023 and 2022, respectively, related primarily to (a) income taxes payable, (b) current derivative liabilities, (c) pension

and other employee benefits, (d) payables under the share buyback program, (e) liabilities related to certain restructuring-related activities and (f) liabilities related to the divestment of

the Power Grids business.

Q2 2023 FINANCIAL INFORMATION

Free cash flow conversion to net income

Definition

Free cash flow conversion to net income

Free cash flow conversion to net income is calculated as free cash

flow divided by Adjusted net income attributable to

ABB.

Adjusted net income attributable to ABB

Adjusted net income attributable to ABB is calculated as net income

attributable to ABB adjusted for: (i) impairment of

goodwill, (ii) losses from extinguishment of

debt, and (iii) gains arising on the sale of both the Hitachi

Energy Joint Venture and Power

Grids business, the latter being included in discontinued operations.

Free cash flow

Free cash flow is calculated as net cash provided by operating activities

adjusted for: (i) purchases of property,

plant and equipment and intangible assets,

and (ii)

proceeds from sales of property,

plant and equipment.

Free cash flow for the trailing twelve months

Free cash flow for the trailing twelve months includes free cash flow

recorded by ABB in the twelve months preceding

the relevant balance sheet date.

Net income for the trailing twelve months

Net income for the trailing twelve months includes net income

recorded by ABB (as adjusted) in the twelve months

preceding the relevant balance sheet date.

Free cash flow conversion to net income

Twelve months to

($ in millions, unless otherwise indicated)

June 30, 2023

December 31, 2022

Net cash provided by operating activities – continuing

operations

2,555

1,334

Adjusted for the effects of continuing operations:

Purchases of property, plant and

equipment and intangible assets

(755)

(762)

Proceeds from sale of property, plant and

equipment

118

127

Free cash flow from continuing operations

1,918

699

Net cash used in operating activities – discontinued operations

(35)

(47)

Free cash flow

1,883

652

Adjusted net income attributable to ABB

(1)

3,392

2,442

Free cash flow conversion to net income

56%

27%

(1)

Adjusted net income attributable to ABB for the year ended December 31, 2022, is adjusted to exclude the gain on the sale of Hitachi Energy Joint Venture of $43 million and

reductions to the gain on the sale of Power Grids of $10 million.

Reconciliation of the trailing twelve months to

June 30, 2023

Continuing operations

Discontinued

operations

($ in millions)

Net cash provided by

continuing operating

activities

Purchases of

property, plant and

equipment and

intangible assets

Proceeds

from sale of property,

plant and equipment

Net cash provided

by (used in)

discontinued

operating activities

Adjusted net income

attributable to ABB

(1)

Q3 2022

793

(165)

(2)

362

Q4 2022

720

(259)

(33)

1,088

Q1 2023

283

(151)

(1)

1,036

Q2 2023

759

(180)

906

Total for the trailing twelve

months to June 30, 2023

2,555

(755)

118

(35)

3,392

(1)

Adjusted net income attributable to ABB for Q3 and Q4 2022, is adjusted to exclude reductions

to the gain on the sale of Power Grids of $2 million and $(1) million,

respectively.

addition, Q4 2022 is also adjusted to exclude the gain on the sale of Hitachi Energy Joint Venture of $43 million.

Q2 2023 FINANCIAL INFORMATION

Net finance expenses

Definition

Net finance expenses is calculated as Interest and dividend income

less Interest and other finance expense.

Reconciliation

Six months ended June 30,

Three months ended June 30,

($ in millions)

2023

2022

2023

2022

Interest and dividend income

Interest and other finance expense

(124)

(62)

(63)

(40)

Net finance expenses

(46)

(29)

(25)

(20)

Book-to-bill ratio

Definition

Book-to-bill ratio is calculated as Orders received divided by Total

revenues.

Reconciliation

Six months ended June 30,

2023

2022

($ in millions, except Book-to-bill presented as a ratio)

Orders

Revenues

Book-to-bill

Orders

Revenues

Book-to-bill

Electrification

8,101

7,325

1.11

8,025

6,650

1.21

Motion

4,399

3,921

1.12

4,281

3,198

1.34

Process Automation

3,782

2,989

1.27

3,511

3,035

1.16

Robotics & Discrete Automation

1,851

1,859

1.00

2,417

1,462

1.65

Corporate and Other

(incl. intersegment eliminations)

(16)

(72)

n.a.

(54)

(129)

n.a.

ABB Group

18,117

16,022

1.13

18,180

14,216

1.28

Three months ended June 30,

2023

2022

($ in millions, except Book-to-bill presented as a ratio)

Orders

Revenues

Book-to-bill

Orders

Revenues

Book-to-bill

Electrification

3,960

3,735

1.06

3,913

3,414

1.15

Motion

2,137

1,981

1.08

2,079

1,626

1.28

Process Automation

1,669

1,553

1.07

1,819

1,529

1.19

Robotics & Discrete Automation

850

922

0.92

1,109

732

1.52

Corporate and Other

(incl. intersegment eliminations)

(28)

n.a.

(113)

(50)

n.a.

ABB Group

8,667

8,163

1.06

8,807

7,251

1.21

Q2 2023 FINANCIAL INFORMATION

—

ABB Ltd

Corporate Communications

P.O. Box

8131

8050

Zurich

Switzerland

Tel:

+41 (0)43

317 71

www.abb.com

April 1 — June 30, 2023

ABB Ltd announces that the following

members of the Executive Committee

or Board of Directors of ABB

have purchased,

sold or been granted ABB’s registered shares, call options

and warrant appreciation rights (“WARs”), in the following amounts:

Name

Date

Type of Instrument

Received*

Purchased

Sold

Price / Instrument

Peter Terwiesch

May 15, 2023

41’205

CHF

32.96

Timo Ihamuotila

May 15, 2023

44’644

CHF

32.08

Gunnar Brock

May 08, 2023

2’048

CHF

32.22

David Constable

May 08, 2023

1’988

CHF

32.22

Frederico Curado

May 08, 2023

4’130

CHF

32.22

Lars Förberg

May 08, 2023

4’945

CHF

32.22

Jennifer Xin-Zhe Li

May 08, 2023

2’018

CHF

32.22

Geraldine Matchett

May 08, 2023

2’683

CHF

32.22

David Meline

May 08, 2023

2’485

CHF

32.22

Peter Voser

May 08, 2023

18’607

CHF

32.22

Jacob Wallenberg

May 08, 2023

2’796

CHF

32.22

Tarak Mehta

May 03, 2023

22’131

CHF

32.17

Tarak Mehta

April 28, 2023

27’869

CHF

31.86

Sami Atiya

April 27, 2023

81’205

CHF

32.25

Tarak Mehta

April 27, 2023

91’357

CHF

32.25

Peter Terwiesch

April 27, 2023

81’205

CHF

32.25

Morten Wierod

April 27, 2023

76’130

CHF

32.25

Timo Ihamuotila

April 27, 2023

57’610

CHF

32.25

Björn Rosengren

April 27, 2023

154’635

CHF

32.25

Sami Atiya

April 26, 2023

71’678

CHF

31.82

Key:

* Received instruments were delivered

as part of the ABB Ltd Director’s or

Executive Committee Member’s

compensation or as compensation

for foregone

benefits

SIGNATURES

Pursuant to the requirements of the Securities

Exchange Act of 1934, the registrant

has duly caused this report to be signed

its behalf by the undersigned, thereunto duly

authorized.

ABB LTD

Date: July 20, 2023.

By:

/s/ Ann-Sofie Nordh

Name:

Ann-Sofie Nordh

Title:

Group Senior Vice President and

Head of Investor Relations

Date: July 20, 2023.

By:

/s/ Richard A. Brown

Name:

Richard A. Brown

Title:

Group Senior Vice President and

Chief Counsel Corporate & Finance