Kvartalsrapport Q4 2025

47 Q4 2025 FINANCIAL INFORMATION  
Average trade net working capital as a percentage of revenues 
Definition  
Average trade net working capital as a percentage of revenues 
Average trade net working capital as a percentage of revenues is calculated as Average trade net working capital divided by T otal revenues for the 
trailing twelve months (being the total revenues recorded by ABB in the twelve months preceding the relevant balance sheet date).  
Average trade net working capital 
Average trade net working capital is calculated as the average of the opening and closing Trade net working capital for each of the four quarters during 
the trailing twelve-month period (4-quarter average). 
Trade net working capital 
Trade net working capital is the sum of (i)  trade receivables, net (comprised of trade accounts receivable net of related allowance, presented within 
Receivables, net, on the Consolidated Balance Sheets), (ii)  contract assets, and (iii) inventories, net; less (iv) accounts payable, trade, (v) contract 
liabilities and (vi) accrued expenses, operating (comprised of accruals related to customer rebates, unpaid interest and other general operating 
expenses; all of which are presented within Other current liabilities on the Consolidated Balance Sheets); and including the amounts related to these 
accounts which have been presented as either assets or liabilities held for sale.  
 
Reconciliation 
  December 31, September 30, June 30, March 31, December 31, 
 ($ in millions, unless otherwise indicated) 2025 2025 2025 2025 2024 
 Trade net working capital:      
 Trade receivables, net 6,884 6,838 6,837 6,401 6,277 
 Contract assets 1,090 1,062 1,083 992 889 
 Inventories, net 5,862 6,051 6,007 5,680 5,420 
 Accounts payable, trade (5,210) (4,936) (4,918) (4,676) (4,681) 
 Contract liabilities (3,221) (3,204) (3,109) (2,986) (2,704) 
 Accrued expenses, operating (1,346) (1,370) (1,254) (1,189) (1,234) 
 Trade net working capital in assets and liabilities held for sale  – (8) – – – 
 Trade net working capital 4,059 4,433 4,646 4,222 3,967 
       
 Average of opening and closing Trade net working capital  4,246 4,540 4,434 4,095  
       
 Average trade net working capital 4,329     
       
 Total revenues for the year ended 33,220     
 Average trade net working capital as a percentage of revenues 
(%) 
13.0%     
 
  December 31, September 30, June 30, March 31, December 31, 
 ($ in millions, unless otherwise indicated) 2024 2024 2024 2024 2023 
 Trade net working capital:      
 Trade receivables, net 6,277 6,360 6,415 6,329 6,321 
 Contract assets 889 967 868 889 885 
 Inventories, net 5,420 6,100 5,809 5,687 5,645 
 Accounts payable, trade (4,681) (4,798) (4,759) (4,673) (4,497) 
 Contract liabilities (2,704) (2,795) (2,682) (2,577) (2,559) 
 Accrued expenses, operating (1,234) (1,327) (1,228) (1,265) (1,402) 
 Trade net working capital in assets and liabilities held for sale  – 20 – – – 
 Trade net working capital 3,967 4,527 4,423 4,390 4,393 
       
 Average of opening and closing Trade net working capital  4,247 4,475 4,407 4,392  
       
 Average trade net working capital 4,380     
       
 Total revenues for the year ended 30,583     
 Average trade net working capital as a percentage of revenues 
(%) 
14.3%

===== SIDA 60 =====

48 Q4 2025 FINANCIAL INFORMATION  
Return on Capital employed (ROCE) 
In the first quarter of 2025, the Company modified its definition of Return on Capital employed (ROCE) to utilize a four -quarter average of Capital 
employed in place of a simple average of the annual period’s opening and closing Capital employed . The change to an averaging method allows for a 
comparable ratio that can be presented quarterly compared to our previous annual disclosure.  In addition, a fixed notional tax rate (subject to review for 
significant changes) is used. The new definition is provided below. 
 
Definition 
Return on Capital employed (ROCE) 
Return on Capital employed (ROCE) is calculated as Operational EBITA after tax for the trailing twelve months divided by the unrounded average of the 
opening and closing Capital employed for each of the four quarters during the trailing twelve -month period (4-quarter average). 
Capital employed 
Capital employed is calculated as the sum of Adjusted total fixed assets and Net working capital (as defined above). 
Adjusted total fixed assets 
Adjusted total fixed assets is the sum of (i)  property, plant and equipment, net, (ii) goodwill, (iii) other intangible assets, net, (iv) investments in 
equity-accounted companies, (v) operating lease right-of-use assets, and (vi) fixed assets included in assets held for sale, less (vii)  deferred tax liabilities 
recognized in certain acquisitions. 
Notional tax on Operational EBITA 
The Notional tax on Operational EBITA is computed using a  consistent notional tax rate, approximately representative of the Company’s weighted -
average global tax rate, multiplied by Operational EBITA. The notional tax rate is subject to adjustment for significant changes in the Company’s 
weighted-average global tax rate. 
 
Reconciliation 
  December 31, September 30, June 30, March 31, December 31, 
 ($ in millions, unless otherwise indicated) 2025 2025 2025 2025 2024 
 Adjusted total fixed assets:      
 Property, plant and equipment, net 4,692 4,443 4,396 4,099 3,986 
 Goodwill 9,637 9,522 9,507 9,305 8,801 
 Other intangible assets, net 1,119 1,096 1,140 1,134 999 
 Investments in equity-accounted companies 349 381 369 361 351 
 Operating lease right-of-use assets 765 754 761 765 752 
 Fixed assets included in assets held for sale – 9 – – – 
 Total fixed assets 16,562 16,205 16,173 15,664 14,889 
 Less: Deferred taxes recognized in certain acquisitions (1) (199) (210) (220) (231) (242) 
 Adjusted total fixed assets 16,363 15,995 15,953 15,433 14,647 
 Net working capital - (as defined above) 2,372 2,993 3,423 3,037 2,403 
 Capital employed 18,735 18,988 19,376 18,470 17,050 
       
 Average of opening and closing Capital employed  18,862 19,182 18,923 17,760  
       
 Operational EBITA for the year ended 6,314     
 Notional tax on Operational EBITA (1,579)     
 Operational EBITA after tax for the year ended  4,735     
       
 Average Capital employed (4 quarters) 18,682     
       
 Return on Capital Employed (ROCE) 25.3%     
(1) Amount relates to GEIS acquired in 2018, B&R acquired in 2017, Thomas & Betts acquired in 2012 and Baldor acquired in 2011.

===== SIDA 61 =====

49 Q4 2025 FINANCIAL INFORMATION  
  December 31, September 30, June 30, March 31, December 31, 
 ($ in millions, unless otherwise indicated) 2024 2024 2024 2024 2023 
 Adjusted total fixed assets:      
 Property, plant and equipment, net 3,986 4,050 3,911 3,864 3,958 
 Goodwill 8,801 8,774 8,752 8,716 8,760 
 Other intangible assets, net 999 981 1,034 1,073 1,162 
 Investments in equity-accounted companies 351 172 173 162 172 
 Operating lease right-of-use assets 752 779 772 772 798 
 Fixed assets included in assets held for sale – 176 – – – 
 Total fixed assets 14,889 14,932 14,642 14,587 14,850 
 Less: Deferred taxes recognized in certain acquisitions (1) (242) (253) (265) (281) (297) 
 Adjusted total fixed assets 14,647 14,679 14,377 14,306 14,553 
 Net working capital - (as defined above) 2,403 3,231 3,213 3,159 2,835 
 Capital employed 17,050 17,910 17,590 17,465 17,388 
       
 Average of opening and closing Capital employed  17,480 17,750 17,528 17,427  
       
 Operational EBITA for the year ended 5,572     
 Notional tax on Operational EBITA (1,393)     
 Operational EBITA after tax for the year ended  4,179     
       
 Average Capital employed (4 quarters) 17,546     
       
 Return on Capital Employed (ROCE) 23.8%     
(1) Amount relates to GEIS acquired in 2018, B&R acquired in 2017, Thomas & Betts acquired in 2012 and Baldor acquired in 2011.

===== SIDA 62 =====

50 Q4 2025 FINANCIAL INFORMATION  
Free cash flow 
Definition 
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 . 
 
Reconciliation 
  Year ended December 31, Three months ended December 31, 
 ($ in millions, unless otherwise indicated) 2025 2024 2025 2024 
 Net cash provided by operating activities – continuing operations 5,250 4,442 1,988 1,505 
 Adjusted for the effects of continuing operations:      
 Purchases of property, plant and equipment and intangible assets  (1,001) (799) (409) (271) 
 Proceeds from sale of property, plant and equipment  194 107 18 41 
 Free cash flow  – continuing operations 4,443 3,750 1,597 1,275 
 Net cash provided by operating activities – discontinued operations 219 233 (39) 32 
 Adjusted for the effects of discontinued operations:      
 Purchases of property, plant and equipment and intangible assets  (98) (46) (42) (12) 
 Proceeds from sale of property, plant and equipment  2 – 1 – 
 Free cash flow – discontinued operations 123 187 (80) 20 
 Free cash flow 4,566 3,937 1,517 1,295 
 
 
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.  
Adjusted net income 
Adjusted net income is calculated as Net income adjusted for  gains or losses arising on sale of certain businesses  and certain other significant items 
within net income which are also excluded /  adjusted for when calculating operating cashflows . 
 
Reconciliation 
  Year ended December 31, 
 ($ in millions, unless otherwise indicated) 2025 2024 
 Free cash flow (as defined above) 4,566 3,937 
 Adjusted net income(1) 4,757 3,966 
 Free cash flow conversion to net income 96% 99% 
(1) Adjusted net income for the year ended December 31, 2025, is adjusted to exclude $53 million of gains arising on sale of certain investments and intangibles assets, and 
adjustments to the gain on sale of Power Grids of $13 million. Adjusted net income for the year ended December 31, 2024, is adjusted to exclude the fair value adjustment 
of $88 million on assets and liabilities held for sale related to In-Charge and the net gain on the sale of a business within the Electrification business area of $64 million. In 
addition, 2024 includes adjustments to the gain on sale of Power Grids of $10 million.

===== SIDA 63 =====

51 Q4 2025 FINANCIAL INFORMATION  
Net finance income (expense) 
Definition  
Net finance income (expense) is calculated as Interest and dividend income less Interest and other finance expense.  
Reconciliation 
  Year ended December 31, Three months ended December 31, 
 ($ in millions) 2025 2024 2025 2024 
 Interest and dividend income 203 206 61 60 
 Interest and other finance expense (86) (74) (13) (4) 
 Net finance income  117 132 48 56 
 
 
 
Book-to-bill ratio 
Definition  
Book-to-bill ratio is calculated as Orders received divided by Total revenues. 
Reconciliation 
  Year ended December 31, 
  2025 2024 
 ($ in millions, except Book-to-bill presented as a ratio) Orders Revenues Book-to-bill Orders Revenues Book-to-bill 
 Electrification 18,757 17,357 1.08 16,422 15,448 1.06 
 Motion 8,619 8,247 1.05 7,989 7,787 1.03 
 Automation 9,928 8,084 1.23 7,485 7,692 0.97 
 Corporate and Other (incl. intersegment eliminations) (539) (468) n.a. (414) (344) n.a. 
 ABB Group 36,765 33,220 1.11 31,482 30,583 1.03 
        
 
  Three months ended December 31, 
  2025 2024 
 ($ in millions, except Book-to-bill presented as a ratio) Orders Revenues Book-to-bill Orders Revenues Book-to-bill 
 Electrification 5,323 4,702 1.13 3,908 4,046 0.97 
 Motion 2,189 2,260 0.97 1,866 2,038 0.92 
 Automation 2,817 2,243 1.26 1,893 1,967 0.96 
 Corporate and Other (incl. intersegment eliminations) (13) (153) n.a. (74) (55) n.a. 
 ABB Group 10,316 9,052 1.14 7,593 7,996 0.95

===== SIDA 64 =====

ABB Ltd 
Corporate Communications 
P.O. Box 8131 
8050 Zurich  
Switzerland  
Tel: +41 (0)43 317 71 11 
 
www.abb.com