Robust Q1 Performance Driven by Strategic Portfolio Optimization

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

• Order intake reached $9,213 million, reflecting a 3% year-over-year increase (5% on a comparable basis)
• Revenue totaled $7,935 million, up 1% annually (3% comparable growth)
• Operating income amounted to $1,567 million with a 19.7% margin
• Operational EBITA reached $1,597 million, maintaining a 20.2% margin¹
• Basic EPS rose to $0.60, representing 22% growth³
• Operating cash flow generated $684 million, down 6% year-on-year

ABB commenced 2025 with a solid performance, achieving improvements across most income statement categories and sustaining strong cash flow generation. While reaffirming our 2025 guidance, we recognize growing macroeconomic uncertainties. Strategic portfolio management, including the Robotics business spin-off initiative, positions us to unlock additional value.

Morten Wierod, CEO

CEO summary

Favorable market conditions during Q1 2025 supported a 3% order growth (5% comparable). Although revenue growth slightly underperformed projections at 1% (3% comparable), we maintained an Operational EBITA margin of 20.2%. All business segments exceeded initial forecasts with particularly strong Q1 closing performance. A real estate transaction contributed approximately 170 basis points to profitability through capital gains. The $652 million free cash flow¹ marks a positive trajectory toward surpassing 2024’s $3.9 billion annual performance. These results demonstrate our operational effectiveness.

Order backlog expanded through sustained book-to-bill ratio of 1.16. Three business segments reported year-on-year order growth, while Motion declined from its historically high 2024 baseline. Machine Automation division indicates normalization of customer inventory levels, with residual adjustments expected in Q2. Sequential business activity remained stable, though extended decision-making cycles emerged late in the quarter due to trade tariff uncertainties.

Our annual sustainability report highlights significant progress toward environmental targets. 2024 closed with 78% CO₂e reduction against 2019 baselines, nearing the 2030 80% objective. Customer emissions avoidance reached 66 megatons through product lifecycle optimization. Workplace safety metrics improved further with LTIFR at 0.15, underscoring our zero-harm commitment.

Addressing global trade uncertainties, we prioritize controllable factors to protect market position and profitability. Our localized production strategy mitigates tariff impacts, with 75-80% US sales coverage through domestic manufacturing supplemented by tariff exemptions. Enhanced local presence in Europe and China strengthens resilience. Strategic investments in US low-voltage electrification facilities ($120M announced) build on over $500M in prior three-year investments, aligning with long-term energy transition demands.

Portfolio optimization continues with Smart Building’s acquisition of Siemens’ Wiring Accessories business in China. This strategic move adds comprehensive product offerings and a nationwide distribution network spanning 230 cities. The $150M+ 2024 revenue contributor enhances margin profiles through operational synergies.

Preparations have commenced for the strategic separation of ABB Robotics as an independent public entity, targeted for Q2 2026. As global market leader with $2.3B 2024 revenues, Robotics will benefit from peer-specific valuation metrics. Limited operational synergies with remaining ABB divisions justify structural separation to maximize value creation. This timing optimizes strategic positioning for both entities as ABB completes its operational transformation through the ABB Way implementation. Robotics’ proven financial resilience, recent $500M+ global hub investments, and innovation milestones including Omnicore platform launch and AMR/VSLAM acquisitions position it for independent growth. The spin-off enables focused governance and tailored capital allocation strategies for both organizations.

Post-spin-off, ABB will operate three business units with enhanced technological alignment. Former Robotics & Discrete Automation components will integrate into Process Automation, unlocking synergies in hybrid industry software solutions and control systems.

Outlook

For the second quarter of 2025, projected comparable revenue growth in the mid-single-digit range with Operational EBITA margin maintaining near Q2 2024’s 19.0% level, despite rising macroeconomic uncertainties. Anticipated business improvements should counteract 30 basis point favorable non-recurring items from Corporate & Other in Q2 2024.

Full-year 2025 guidance maintains expectations for positive book-to-bill ratio, mid-single-digit comparable revenue growth, and year-over-year Operational EBITA margin expansion, while accounting for evolving global economic conditions.

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