ABB Group and Parent Companies Results 1997

Zürich, Switzerland, February 26, 1998 -- ABB, the international electrical engineering company, said today its 1997 results were marked by continued order growth in most emerging markets, the U.S. and parts of Europe, although the financial turbulence in Asia had some impacts in the fourth quarter. Orders for the year, restated to reflect the indefinite delay of the Bakun hydroelectric project in Malaysia, were 3 percent higher at US$ 34.8 billion.

Disregarding the costs caused by Bakun, underlying earnings were stable or higher for all industrial segments. The Group's net income of US$ 572 million reflects the US$ 866 million restructuring charge announced last October. Excluding the charge and expressed in local currencies, net income grew 4 percent.

The strength of the U.S. dollar had negative effects on the Group's results when converting local currencies into dollars, but positive effects on the parent companies' earnings per share which, excluding the restructuring charge, increased 8 percent for ABB AB to SKr 4.77, and 10 percent for ABB AG bearer shares to SFr 93.70. The ABB Board of Directors proposed a 1997 dividend of Sfr. 700 million (1996: Sfr. 650 million), an increase of Sfr. 50 million (8 percent) versus 1996.

The ABB Results in Detail

Orders and Revenues
Orders received for the ABB Group reached $34,803 million, an increase of 3 percent
(1996: $33,8841¹⁾ million). Expressed in local currencies, orders received increased by 11 percent. Large orders grew in 1997 and now represent some 28 percent of total orders received. Power Generation and Adtranz reported the strongest increases in order intake, as well as improved margin on orders. In local currencies, all segments had good order increases. Large orders included combined-cycle power plants in the U.K. and Taiwan as well as high-voltage substations and transmission lines in Mexico. Other major orders included an ethylene plant in Saudi Arabia and the modernization of a refinery in Russia. In rail transportation, major orders included multiple units for the U.K. and a light rail system in Turkey. Expressed in local currencies, orders for standard products were somewhat higher in the year with a stronger increase in the second half. The order backlog at the end of 1997 reached $31,160 million compared to $31,023 million at year-end 1996. Expressed in local currencies, the backlog increased 11 percent. Revenues amounted to $31,265 million, a decrease of 7 percent (1996: $33,767 1) million). In local currencies, revenues were 1 percent higher.

Earnings
In the fourth quarter of 1997, ABB booked the previously announced extraordinary restructuring charge of $866 million to improve the productivity and competitiveness of operations in Western countries and to speed up local expansion in emerging markets. These programs are expected to have an average pay-back period of about two years and the execution is proceeding as planned.

1) As reported in April 1997, ABB no longer includes imputed interest income on advances received from customers on construction contracts in orders received and revenues. This change reduces operating earnings after depreciation, but has no effect on income before taxes or net income. In addition, ABB has restated orders received and the order backlog for both 1996 and 1997 to reflect the indefinite delay of the Bakun hydroelectric project in Malaysia.
New: Old:
1996 as restated year-end 1997 1996 as reported yearend 1996
Orders received $33,884 million $36,349 million
Revenues $33,767 million $34,574 million

Operating earnings 2) after depreciation in 1997 amounted to $1,137 million (1996: $2,113 million). Expressed in local currencies and excluding the restructuring charge, operating earnings increased by 4 percent. Excluding the costs of $102 million associated with the Bakun project, operating earnings were at about last year's level for Power Generation and 4 percent higher than last year for Power Transmission and Distribution. Operating earnings increased by 3 percent in Industrial and Building Systems and decreased 8 percent for Financial Services. ABB's share in operating earnings after depreciation of Adtranz was a negative $111 million. In local currencies, operating earnings rose 14 percent in Power Transmission and Distribution (excluding the Bakun charge), 13 percent in Industrial and Building Systems, and remained at last year's record level in Financial Services.

Unusual items were a negative $608 million, including unusual costs of $903 million which consists mainly of the restructuring charge. Unusual income of $295 million was derived from divestitures and real estate sales.

2) Until year 1996, taxes on capital and property were recorded together with income taxes under total taxes. As of 1997, the line "Taxes" in the ABB Group income statement contains only income taxes while taxes other than on income are included in other expenses. This change, following International Accounting Standards (IAS), reduces both operating earnings after depreciation (OEAD) and income before taxes, but has no effect on net income. Previous year's figures have been restated accordingly. Including the restatements for exclusion of interest on advances the comparison is:
New: Old:
1996 as restated year-end 1997 1996 as reported yearend 1996
OEAD $2,113 million $3,026 million
Income before taxes $1,901 million $2,007 million
Net income $1,233 million $1,233 million)

From a regional perspective, Sweden, Norway, Finland, the U.S., Switzerland, Italy and the U.K. were the largest contributors to the Group's operating earnings. The Americas improved earnings significantly through successful cost reduction programs, particularly in the U.S. and Brazil. A strong economy in Northern Europe and success in export markets supported good earnings in Finland and Norway, the latter benefitting especially from its worldwide oil and gas activities. The U.K. achieved higher profitability, whereas earnings in Sweden were somewhat lower. Operating earnings also declined during the year in Switzerland, Italy and Germany. Most countries in Asia showed earnings improvements, but lower results in India and some other countries reduced the total level for the region. Operations in the Middle East and Africa continued to contribute to Group earnings. Regional operating margins, based on domestic and export revenues reported in the respective region and excluding the restructuring charge, developed as follows during 1997: Europe increased margins to 7.8 percent (1996: 7.5 percent) and the Americas to 4.1 percent (1996: 3.2 percent). Lower results in some Asian countries reduced the region's margin to 4.1 percent (1996: 6.2 percent), whereas the Middle East and Africa kept its margin at a high level of 8.5 percent (1996: 9.2 percent).

Income before taxes 3) as reported totaled $853 million (1996: $1,901 million). Excluding the restructuring charge and expressed in local currencies, income before taxes decreased by 1 percent.

Income taxes 3) for the Group in 1997 amounted to $258 million (1996: $659 million). The overall tax rate decreased on a comparable basis to 30 percent (1996: 35 percent). ABB expects this level to be sustainable for the coming years. Reported net income for 1997 was $572 million (1997 excluding the restructuring charge after taxes: $1,176 million; 1996: $1,233 million).

3) See footnote 2) on page 3.

Expressed in local currencies and excluding the restructuring charge, net income for 1997 increased by 4 percent.

Reported return on capital employed4) was 12.2 percent (1996: 19.9 percent) and return on equity 10.3 percent (1996: 22.2 percent). Excluding the restructuring charge, both ratios were slightly below last year's level at 19.4 percent and 21.1 percent, respectively.

Research and Development
Increased competition and faster changes in the business environment require a much higher pace of innovation. ABB's spending in research and development in 1997 reached $2,657 million, about 8.5 percent of Group revenues (1996: $2,638 million, or 7.8 percent). Expressed in local currencies, R&D increased by 11 percent. ABB stepped up investments in high risk, high reward projects, resulting in breakthrough solutions to maintain technological leadership and faster market introduction of technology-based innovations to secure sustainable profitability for its customers.

Financial Position
At the end of 1997, the Group's net cash position (defined as cash and marketable securities minus short-, medium-, and long-term loans) was $1,564 million, an increase of $360 million compared to last year. Expressed in year-end 1996 exchange rates, the increase was $600 million. The reduction in working capital in mature markets and proceeds from divestitures compensated for the increased need for working capital in emerging markets. Net cash from operating activities more than doubled during 1997 to $1,791 million (1996: $834 million).

4) See footnote 2) on page 3.

Acquisitions during 1997 amounted to $302 million (1996: $333 million). In line with the Group's strategy to concentrate on its core businesses and find strong partners for non-core activities, ABB made divestitures in 1997 totaling $748 million (1996: $286 million). Capital expenditure for tangible fixed assets in 1997 reached $1,093 million (1996: $1,168 million).

Personnel
At the end of 1997, ABB employed 213,057 people compared to 214,894 at year-end 1996. The total number of employees decreased by 1 percent, also on a comparable basis adjusted for divestitures, acquisitions and new joint ventures. To assure close contact with our customers and to achieve an optimal cost structure, ABB employees were added in emerging markets, such as in the Middle East and Africa, and in various Latin American, as well as Central and Eastern European countries. ABB increased employment in most Asian countries and decreased the number of employees in Europe. Employment in Automation and Drives remained stable, whereas ABB's accelerated move into on- and offshore activities in the oil and gas industry, flexible automation and service-related activities in many sectors led to higher employment in Industrial and Building Systems. Stronger sales support for the Group is reflected in a significantly higher number of employees in the Financial Services segment. Resources dedicated to ABB sales activities increased strongly, particularly in emerging markets.

Outlook for 1998 and Beyond
Despite short-term uncertainties, Asia continues to represent a significant growth potential for ABB as continued rapid urbanization and industrialization due to high population growth is driving demand for infrastructure development. Demand for ABB systems, products and services is also expected to rise in the Middle East and Africa with their large reserves of raw materials, low installed base of generating capacity and the move towards interconnecting national and regional power grids.

In the Americas, deregulation is creating opportunities in the power sector and in other
industries such as oil and gas. Increased foreign investments in Latin America reflect growing demand in that region. With huge infrastructure needs in most Central and Eastern European countries, ABB will continue to benefit from its strong local presence. Western European economies have started to improve, with Northern Europe leading the recovery. Export and domestic demand is expected to drive increasing industrial output in major Western European countries.

The continuous investment in the global Power Generation sales network has resulted in a more efficient sales process which provides higher quality customer services and solutions. As a result of these improvements, orders for 1998 are expected to exceed the level of 1997. Following major restructuring and lower cost levels, earnings are expected to increase substantially during 1998. Due to the anticipated strengthening of the economies in Western Europe and Latin America and as a result of restructuring, orders and earnings for Power Transmission and Distribution are expected to increase in 1998. For Industrial and Building Systems, the outlook for 1998 can be characterized as cautiously optimistic. An improved business climate in Europe should contribute to higher orders and improved earnings despite an expected, although temporary, slowdown in Asia. Adtranz expects higher orders and a return to positive results in 1998, with impacts from the restructuring programs gradually taking effect. Financial Services' earnings for 1998 are expected to be on the same level as in 1997.

Reductions in working capital and positive effects from the ongoing restructuring programs are expected to compensate for the major part of the cash needed to carry out those programs. Excluding the impact of the 1997 restructuring charge and assuming that average exchange rates against the U.S. dollar in 1998 remain about the same as in 1997, net income in 1998 is expected to increase.

ABB's longer term targets are reaffirmed despite increased uncertainties in the market environment. Annual growth of at least 6 percent on average over this business cycle with a peak around the turn of the century, further considerable reduction of working capital in relation to revenues and a substantial increase of net income margin from last year's 3.8 percent (excluding the restructuring charge) to 6-7 percent remain main objectives for the Group.

Dividends
ABB's dividend policy is to pay out between 30 and 50 percent of consolidated net income for the year. The ABB Board of Directors based the dividend proposal for 1997 on the underlying earnings before the restructuring charge and consequently proposed a dividend for 1997 of Sfr. 700 million to its two parent companies, ABB AB and ABB AG, an increase of Sfr. 50 million (1996: Sfr. 650 million). Translated into dollars at the time of the decision and disregarding the restructuring charge, the dividend corresponds to 41 percent of Group net income for 1997 (1996: 36 percent).

Proposed Changes in the ABB Board
Messrs. Bernd H. Müller-Berghoff and Claes Dahlbäck have announced their intention to resign from the ABB Group Board of Directors at the Annual General Meeting on April 2, 1998. Mr. Bernd H. Müller-Berghoff, after serving 11 years on the ABB AG (formerly BBC) and ABB Group Boards, and Mr. Claes Dahlbäck, after serving 13 years on the ABB AB (formerly ASEA) and ABB Group Boards, have decided not to stand for reelection to the ABB Group Board. The Board thanks them for their outstanding contributions to the company.

The Board intends to propose to the shareholders on April 2, 1998 to newly elect to the ABB Group Board Mr. Jürgen Dormann, CEO of Hoechst AG in Frankfurt, Germany and Mr. Agostino Rocca, President and CEO of TECHINT Group, in Buenos Aires, Argentina. Mr. Dormann will also be proposed for election to the Board of ABB AG, the Group's Swiss parent company.

Further, the following persons will be proposed for reelection to the ABB Group Board:
Percy N. Barnevik, Chairman of ABB Asea Brown Boveri Ltd
Gerhard Cromme, CEO of Fried. Krupp AG Hoesch-Krupp
Robert A. Jeker, Chairman of ABB AG, Messe Basel and Swiss Steel
Yotaro Kobayashi, Chairman and Co-CEO of Fuji Xerox Co., Ltd.
Donald H. Rumsfeld, Chairman of Gilead Sciences, Inc. and Former U.S. Secretary of Defense
Edwin Somm, Board Member of Georg Fischer and Swiss Steel
Peter D. Sutherland, Chairman and Managing Director Goldman Sachs International; Chairman of British Petroleum
Björn Svedberg, Chairman of ABB AB and Ericsson
Lodewijk C. van Wachem, Chairman Royal Dutch Petroleum

Mr. Percy N. Barnevik will be proposed for election to the Board of ABB AB, the Group's Swedish parent company. Furthermore, the ABB Group Board has declared its intention to reelect Mr. Barnevik as Chairman of the ABB Group Board and to elect Mr. Robert A. Jeker as Vice Chairman.

Mr. Thomas P. Gasser has announced his retirement as Secretary to the Board. Mr. Gasser has been a member of BBC's and ABB's management for 13 years. The Board expresses its highest appreciation for his contribution to the company.

The Board has elected Mr. Beat Hess, General Counsel of the ABB Group, as the new Secretary to the Board.

ABB Group

Consolidated Income Statement
For the year ended December 31

US$ in millions

	1997	1996
Revenues	31,265	33,767*)
Material expenses	-14,232	-15,309
Personnel expenses	-9,498	-10,254
Other expenses	-4,973	-5,338*)
Changes in work in progress and finished goods	180	255
Depreciation of fixed assets	-997	-1,044
Unusual items	-608	36
Operating Earnings after Depreciation	1,137	2,113*)
Earnings from equity accounted companies	2	6
Dividend income	10	15
Interest income	325	362
Interest expense	-616	-618
Exchange differences	-5	23
Income before Taxes	853	1,901*)
Taxes	-258	-659*)
Net Income before Minority Interests	595	1,242
Minority interests	-23	-9
Net Income	572	1,233

*) Restated as follows:

Through year-end 1996, interest on advances from customers has been included in the order intake, revenues (and consequently in operating earnings) and debited under the interest on advances caption. This practice was discontinued in 1997.

(continued on next page)


(continued from previous page)

Through year-end 1996, taxes on capital and property have been recorded together with income taxes in the "Taxes" caption of the consolidated income statement. As of 1997, the Taxes caption contains income taxes only and taxes other than on income are included in other expenses.

Prior year figures are restated accordingly.




Note: The exchange rates used in the above income statement are average rates for the periods shown. The average exchange rates for the Swiss Franc, Swedish Krona, German Mark and the European Currency Unit are stated below:

	Average 1997	Average 1996
US$ 1.00 = SFr	1.44	1.23
US$ 1.00 = SKr	7.61	6.71
US$ 1.00 = DM	1.72	1.50
US$ 1.00 = ECU	0.88	0.80

For 1997, changes in average exchange rates had a significant effect on reported results. The strong appreciation of the U.S. dollar against many major currencies during 1997 reduced ABB's orders received, revenues and result figures by 8 to 10 percent.


ABB Group


Consolidated Balance Sheet
As of December 31

US$ in millions

	1997	1996
ASSETS
Current Assets
Cash and marketable securities	5,790	5,553
Trade receivables	5,656	6,152
Other current receivables	4,283	4,143
Inventories	4,907	5,311
Total Current Assets	20,636	21,159
Fixed Assets
Financing receivables	1,815	1,776
Shares and participations	385	441
Intangible assets	1,981	1,953
Construction in progress	242	192
Machinery and equipment	2,479	2,746
Land and buildings	2,246	2,629
Total Fixed Assets	9,148	9,737
Total Assets	29,784	30,896
LIABILITIES AND EQUITY
Current Liabilities
Trade payables	4,566	4,457
Provisions	5,233	4,914
Other current liabilities	5,006	5,250
Short-term loans	1,715	2,526
Total Current Liabilities	16,520	17,147
	(Continued on next page)

Consolidated Balance Sheet
As of December 31

	1997	1996
(Continued from previous page)
Advances from customers	2,612	2,610
Medium- and long-term loans	2,511	1,823
Pension liabilities	1,748	2,024
Deferred taxes	790	1,070
Minority interests	320	347
Stockholders' Equity
Share capital	2,087	2,087
Restricted reserves	965	962
Other reserves and retained earnings	1,659	1,593
Net income	572	1,233
Total Stockholders' Equity	5,283	5,875
Total Liabilities and Equity	29,784	30,896

Note: The exchange rates used in the above balance sheet are year-end rates. For these rates, the Swiss Franc, Swedish Krona, German Mark and the European Currency Unit are stated below:

	Year-end 1997	Year-end 1996
US$ 1.00 = SFr	1.45	1.35
US$ 1.00 = SKr	7.90	6.89
US$ 1.00 = DM	1.79	1.55
US$ 1.00 = ECU	0.91	0.81

For 1997, changes in year-end exchange rates had a significant effect on the reported balance sheet. The strong appreciation of the U.S. dollar during 1997 reduced ABB's balance sheet by 9 percent.

ABB Group


Business Segment Figures
For the year ended December 31

US$ in millions

	Orders Received		Revenues
	1997	19962)	1997	19962)
Power Generation	10,038	9,448	8,114	9,292
Power Transmission and Distribution	8,595	8,290	7,889	8,899
Industrial and Building Systems	16,294	16,513	15,501	15,875
Adtranz 1)	2,095	1,835	1,870	1,927
Financial Services	828	479	828	479
Various Activities/Corporate	2,093	3,414	2,074	3,320
Total	39,943	39,979	36,276	39,792
Intra-Group transactions	-5,140	-6,095	-5,011	-6,025
Net Total	34,803	33,884	31,265	33,767

	Operating Earnings	after Depreciation	Number of	Employees
	1997	19963)	1997	1996
Power Generation	125	139	43,093	43,449
Power Transmission and Distribution	557	622	50,846	51,134
Industrial and Building Systems	1,066	1,035	96,887	95,084
Adtranz 1)	-111	-2	11,357	10,920
Financial Services	297	323	885	825
Various Activities/Corporate	-7974)	-4	9,989	13,482
Total	1,137	2,113	213,057	214,894

1) 50% of ABB Daimler-Benz Transportation Group
2) Restated for imputed interest on customer advances (IAC)
3) Restated for IAC and "Current taxes, other"
4) 1997 Operating Earnings including the restructuring charge




ABB Group


Regional Figures
For the year ended December 31

US$ in millions

	Revenues 1)		Employees
	1997	19962)	1997	1996
Europe	17,099	19,215	139,528	140,447
The Americas	6,374	5,994	31,647	31,303
Asia	5,427	6,304	30,912	32,262
Middle East and Africa	2,365	2,254	10,970	10,882
Total	31,265	33,767	213,057	214,894

1) Revenues from third-party customers in each region
2) Restated for imputed interest on customer advances (IAC)

Parent Companies' Financial Results

ABB AB (Sweden) and ABB AG (Switzerland) are the two sole owners in equal parts of ABB Asea Brown Boveri Ltd, Zurich (Switzerland), which is the holding company of the ABB Group with approximately 1,000 companies around the world. The two parent companies each provide a transparent vehicle for investing in ABB as virtually all of their income and stockholders' equity comes from their respective 50-percent shares of the ABB Group income and equity. For a full report on the development of the ABB Group, please refer to the first part of this Press Release.

ABB companies throughout the world report their income and financial position in local currencies, which are then translated to U.S. dollars to establish the ABB Group's consolidated accounts. In order to compute the income of the two parent companies, ABB AB (Sweden) and ABB AG (Switzerland), their 50-percent shares of ABB Group income are translated from U.S. dollars to Swedish Krona (SKr) and Swiss Francs (SFr), respectively.



ABB AB (Sweden) and associated company

ABB AB´s share of ABB Group's earnings before taxes and after minority interests for 1997 was $ 409 million (1996:¹$ 939 million), a decrease of 56 percent. The decrease is mainly due to the $ 866 million extraordinary restructuring charge taken by teh ABB Group in 1997. The average US$ exchange rate increased 13 percent from SKr 6.71/US$ during 1996 to SKr 7.61/US$ in 1997. The year-end exchange rate was up 15 percent from SKr 6.89/US$ at the close of 1996 to SKr 7.90/US$ at December 31, 1997. After exchange rate changes, ABB AB's share of earnings before taxes and after minority interests from the ABB Group decreased from SKr 6,304 million in 1996¹⁾ to SKr 3,116 million in 1997. ABB AB's income before taxes, including associated company, amounted to SKr 3,114 million (1996¹⁾ 6,312 million) in 1997. After taxes of SKr 940 million (1996¹⁾:2,168 million), net income amounted to SKr2,174 million (1996: 4,144 million) for the year.

Net income per share amounted to SKr 2.32 in 1997 (1996²⁾: 4.42). Excluding ABB AB's portion of the restructuring charge, net income per share increased 8 percent to SKr. 4.77.

ABB AB, parent company
For fiscal year 1997, ABB AB will receive a dividend of SFr 350 million from ABB Asea Brown Boveri Ltd. In order for ABB Group's 1997 profits to be made available to ABB AB shareholders in the spring of 1998, the amount in SKr of 1,920 million was anticipated in the parent company's 1997 financial statements.

Administrative and personnel expenses decreased from SKr 18 million in 1996 to SKr 11 million in 1997, and interest net decreased from SKr 26 million to SKr 9 million. Net income amounted to SKr 1,925 million (1996: 1,660 million) for the year.

The Board of Directores of ABB AB has proposed a dividend of SKr 2.10 per share (1996; 1.75²⁾), totaling SKr 1,970 million (1996: 1,641 million).

1) 1996 restated to reflect changes in ABB Group accounts concerning "Current taxes, other."
2) Adjusted for the 10:1 stock split of the ABB AB shares in April 1997.



ABB AB
Income Statements
For the year ended December 31
Swedish Krona in millions

	ABB AB and	associated company 1	ABB AB and	parent company
	1997	19962	1997	1996
Administrative expenses	-11	-13	-11	-13
Personnel expenses	-	-5	-	-5
Share in ABB Group earnings before	3,116	6,304	-	-
Dividend income 3	-	-	1,927	1,652
Interest income	9	27	9	27
Interest expense	0	-1	0	-1
Income before taxes	3,114	6,312	1,925	1,660
Taxes	-940	-2,168	-	0
Net income	2,174	4,144	1,925	1,660

1 ABB AB´s share in the ABB Group results recognized according to the equity method.
2 1996 restated to reflect changes in ABB Group accounts concerning "Current taxes, other".
3 of which anticipated in 1997 SKr 1,920 million and in 1996 SKr 1,645 million.

__________________________________________________________________
The Annual General Meeting of ABB AB will be held in the Aros Congress Center, Munkgatan 7, Västerås, Sweden at 10:00 a.m., Thursday, April 2, 1998. The ABB Group and Parent Companies Annual Report 1997 will be published on March 6, 1998. The Annual Report will be available at the following address: ABB Investor Relations, P.O. Box 8131, CH-8050 Zurich, Switzerland and ABB Support, Avd. Pos/Poc, S-721 83 Västerås, Sweden.



ABB AB
Balance Sheets1
As of December 31
Swedish Krona in millions

	ABB AB and	associated company2	ABB AB,	parent company
	1997	1996	1997	1996
ASSETS
Fixed Assets
Tangible Assets
Machinery and equipment	-	0	-	0
Financial Assets
Shares and participations	20,868	20,239	8,985	8,985
Financing receivables	1	5	1	5
Total Fixed Assets	20,869	20,244	8,986	8,990
Current Assets
Current Receivables
Other current receivables	3	3	3	3
Receivables for anticipated dividend	-	-	1,920	1, 645
Cash and marketable securities	186	176	186	176
Total Current Assets	189	179	2,109	1,824
Total Assets	21,058	20,423	11,095	10,814
EQUITY AND LIABILITIES
Equity
Restricted Equity
Share capital	4,690	4,690	4,690	4,690
Restricted reserves	3,201	3,201	3,201	3,201
Equity method reserve	9,714	7,125	-	-
Unrestricted Equity
Retained earnings	1,274	1,253	1,274	1,253
Net income	2,174	4,144	1,925	1,660
Total Stockholders´ Equity	21,053	20,413	11,090	10,804
Provisions for pensions	-	0	-	0
Medium- and long-term loans	1	5	1	5
Current Liabilities
Short-term loans	3	3	3	3
Other current liabilities	0	1	0	1
Accrued expenses	1	1	1	1
Total Current Liabilities	4	5	4	5
Total Equity and Liabilities	21,058	20,423	11,095	10,814

1 Changed format due to the 1997 Swedish Annual Report Act.
2 ABB AB´s investment in the ABB Group accounted according to equity method




ABB AG (Switzerland) and associated company

ABB AG´s share of ABB Group's earnings before taxes and after minority interests for 1997 was $ 409 million
(1996¹⁾:$939 million), a decrease of 56 percent. The decrease is mainly due to the $ 866 million extraordinary restructuring charge taken by the ABB Group in 1997. The average US$ exchange rate was up 17 percent from SFr 1.23/US$ during 1996 to SFr 1.44/US$ in 1997. The year-end exchange rate was up 7 percent from SFr 1.35/US$ at the close of 1996 to SFr 1.45/US$ at December 31, 1997. After exchange rate changes, ABB AG´s share of earnings before taxes and after minority interests from the ABB Group decreased from SFr 1,156 million in 1996¹⁾ to SFr 590 million in 1997. ABB AG's own contribution to results before taxes from cash management activities amounted to SFr 25 million. This is below the SFr 30 million in 1996 due to the repayment of SFr 463 million to shareholders on July 10, 1997. ABB AG´s income before taxes, including associated company, amounted to SFr 615 million (1996¹⁾ 1,186 million) in 1997. After taxes of SFr 183 million (1996¹⁾: 403 million), net income amounted to SFr 432 million (1996: 783 million) for the year.

ABB AG´s net income per Bearer share amounted to SFr 46.70 in 1997 (1996: 85.40) and SFr 9.34 (1996: 17.08) per Registered share. Excluding ABB AG´s part of the restructuring charge, net income per share increased 10 percent to SFr. 93.70 per Bearer share.

ABB AG, parent company
The dividend from ABB AG´s shareholding in ABB Asea Brown Boveri Ltd amounted to SFr 325 million in 1997 (1996: SFr 260 million). Interest income and income on securities totaled SFr 30 million (1996: 46 million). Interest income and income on securities divided by average cash and marketable securities of SFr 650 million amounts to a return of 4.6 percent. Total expenditures decreased to SFr 15 million (1996: 27 million). Net income increased 21 percent from the previous year. The proposed capital reduction via lowering of the nominal share value was approved at the annual general meeting on April 3, 1997. This led to a repayment of SFr 50 per bearer share and SFr 10 per registered share. A total of SFr 463 million was paid back to the shareholders on July 10, 1997.

For fiscal year 1997, ABB AG will receive a dividend of SFr 350 million from ABB Asea Brown Boveri Ltd. The Board of Directors proposes that the dividend to shareholders be increased to SFr 40 gross per bearer share (1996: 38) and SFr 8.00 gross per registered share (1996: 7.60), a total of SFr 370 million (1996: 349).


1) 1996 restated to reflect changes in ABB Group accounts concerning "Current taxes, other."


ABB AG
Income Statements
For the year ended December 31
Swiss Francs in millions

	ABB AG and associated company 1		ABB AG, parent company
	1997	19962	1997	1996
Share in ABB Group earnings before
taxes and after minority interests	590	1,156	-	-
Dividend income	-	-	325	260
Other operating income	5	6	5	6
Administrative expenses	-4	-12	-4	-12
Interest income	30	46	30	46
Interest expense	-6	-10	-6	-10
Income before taxes	615	1,186	350	290
Taxes	-183 3	-403 3	-5	-5
Net income	432	783	345	285

1 ABB AG's share in the ABB Group results recognized according to the equity method.
2 1996 restated to reflect changes in ABB Group accounts concerning "Current taxes, other."
3 Contains share in ABB Group taxes.

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The 1998 Annual General Meeting of ABB AG will be held on Thursday, April 2, 1998, at 3.30 p.m. in the "Tagerhard" sports center in Wettingen (near Zurich). The ABB Group and Parent Companies Annual Report 1997 will be published on March 6, 1998. The Annual Report will be available at the following address: ABB Investor Relations, P.O. Box 8131, CH-8050 Zurich, Switzerland and ABB AG, P.O. Box, CH-5401 Baden, Switzerland.



ABB AG
Balance Sheets
As of December 31
Swiss Francs in millions

	ABB AG and associated company1		ABB AG,parent company
	1997	1996	1997	1996
Assets
Current Assets
Cash and marketable securities	450	921	450	921
Other current receivables	13	18	13	18
Total Current Assets	463	939	463	939
Fixed Assets
Financing receivables	6	153	6	153
Shares and participations	3,839	3,975	2,363	2,363
Intangible assets	0	0	0	0
Land and buildings	0	0	0	0
Total Fixed Assets	3,845	4,128	2,369	2,516
Total Assets	4,308	5,067	2,832	3,455
Liabilities and equity
Current Liabilities
Accrued expenses	2	3	2	3
Other current liabilities	16	22	16	22
Total Current Liabilities	18	25	18	25
Medium- and long-term loans	150	402	150	402
Stockholders' Equity
Share capital	463	925	463	925
Reserved shares	0	-8	0	-8
Restricted reserves	3,087	2,718	1,698	1,604
Retained earnings	158	222	158	222
Net income	432	783	345	285
Total Stockholders' Equity	4,140	4,640	2,664	3,028
Total Liabilities and Equity	4,308	5,067	2,832	3,455

1 ABB AG's investment in the ABB Group accounted according to the equity method.
(End)