
ABB Capital Markets Day 2021: Cementing Performance Culture
ABB will be hosting its Capital Markets Day today, December 7, starting 12.00 midday CET. At the event, CEO, Björn Rosengren, CFO, Timo Ihamuotila, as well as other members of the Executive Committee, will give an update on ABB’s ongoing transformation into a more profitable group with increased growth rates, its updated financial targets and its portfolio management efforts. Furthermore, they will give insights into its technologies and offerings that promote sustainable transport.
“Over the last 24 months, ABB has made solid progress in implementing its decentralized organization and improving quality of revenues. But we are still not where we want to be,” said CEO Rosengren. “Our technology leadership in electrification and automation, aligned with sustainability and the global megatrends, is at the core of ABB’s Purpose and gives us a competitive edge. Nevertheless, we need to cement a high performance and integrity culture in everything we do. Therefore, a sharpened focus on accountability, transparency and speed in 2022 will help drive growth, lift profitability and create further value for shareholders.”
Improving performance
Since the start of 2020, ABB has decentralized its organization to bring business decisions closer to the customer and successfully rolled out its new operating model called ABB Way, including the introduction of a scorecard-based performance management system. Furthermore, the Group has focused on a better quality of revenues by targeting high-growth segments (e.g. data centers, food and beverage, EV charging), growing the software portfolio, increasing revenues through distributors and enlarging the exposure to short-cycle products.
ABB has lifted its revenue growth target to 4-7% through the economic cycle, in constant currency, which is the total of 3-5% organic growth and 1-2% acquired growth. ABB also sharpened its operational EBITA margin target to be at least 15% as from 2023. These changes take into account the immediate adverse margin impacts due to the exit of the Dodge (MPT) and Turbocharging divisions. The Group had previously targeted 3-5% for revenue growth through the cycle and an operational EBITA margin in the upper half of a 13-16% range as from 2023.
CEO Rosengren added: “Order activity has remained robust this far and we anticipate a positive market momentum in the business year 2022. That said, we still have to manage the disruptions in the supply chain, which most likely will impact customer deliveries in the fourth quarter and at least the early part of next year.”
ABB is more optimistic about its revenue growth prospects not only because of its global leading businesses and its decentralized operating model but also because it will benefit from important secular trends. For example, energy efficiency is a key driver for decarbonizing the economy, including the industrial sector, while declining working age populations and rising labor costs are driving demand for automation in industrial and other sectors.
Approximately 60% of the Group’s divisions are currently in growth mode, which means they focus both on organic growth, as well as M&A opportunities that can fill technology gaps, focus on high-growth segments and open up new geographic markets.
ABB is expecting to make five or more small to mid-sized acquisitions per year. This will be funded through the Group’s “continued strong cash flow generation,” said CFO Timo Ihamuotila. He also reiterated ABB’s capital allocation priorities of funding organic growth, paying a rising sustainable dividend per share, making value-creating acquisitions and returning additional cash to shareholders via share buyback programs.
Portfolio management progress
Last year, ABB announced the exit of three divisions of which the Dodge (MPT) business has already been successfully sold in November. At today’s event, CEO Rosengren will give an update on the Group’s ongoing portfolio management efforts. This includes exiting the Turbocharging division (PA) through a spin-off to existing shareholders or a divestment and is targeted for summer 2022. The final decision will be based purely on which route creates the most value. ABB also plans to divest its Power Conversion (EL) division in the second half of 2022 as it continues to improve its business’ performance.
In addition, ABB is continuing to work towards an initial public offering of its E-mobility division (EL). The legal separation is expected to be completed during Q1 2022 and if market conditions remain favorable, a listing in Switzerland would be targeted for the first half of 2022. ABB would retain a majority shareholding in the future listed entity.
Sustainable transport
At today’s event, the four business area Presidents will present their product portfolios that enable sustainable transport, representing in total ~10% of Group order intake. ABB has been outperforming this market segment for the last five years, growing at an estimated 17% per annum and expects to continue to outgrow the market, which is estimated to show double-digit growth in the mid-term. Key product drivers will be EV charging for cars and busses, traction systems in railways, trucks and mines and green hydrogen technology in the marine sector.
One particular highlight is the growing demand for electric vehicles (EVs), whose sales are expected to exceed non-EV sales by 2035*, driven by the global electrification, decarbonization and digitalization trends. For example, the Robotics division is the second largest provider of technology for the assembling of the powertrain and battery, the car body, as well as the painting and sealing of EVs. Furthermore, ABB is the leading company for charging solutions (AC & DC) to passenger e-cars, e-buses and e-trucks, as well as rail infrastructure.
Sustainability strategy: Circularity framework rollout
At last year’s CMD, ABB unveiled its ambitious Group 2030 sustainability strategy based on three pillars of enabling a low-carbon society, preserving resources and promoting social progress. Significant steps have already been made, above all through ABB technology supporting customers in reducing their annual CO2 emissions by more than 100 megatons, which is the equivalent of 30 million combustion cars.
In 2022, ABB will introduce a circularity framework covering every stage of the product lifecycle in order to preserve resources. It will include stages: design and sourcing; production and packaging; optimizing the use phase (efficiency and lifetime); and the end-of-life phase (take back and recycling). The goal is to have 80% of ABB products, solutions and services covered by the circularity framework by 2030, with the company’s progress measured against a set of KPIs. Already today, several initiatives are in place. For example, close to 40% of ABB’s 400 sites across the world are sending zero waste to landfills.
*Source: Long-term Electric Vehicle Outlook 2021, BloombergNEF
Note to editors: The Capital Markets Day can be followed on the ABB Investor Relations website from midday to 5.00 pm CET.
ABB (ABBN: SIX Swiss Ex) is a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB’s success is driven by about 105,000 talented employees in over 100 countries. www.abb.com
Important notice about forward-looking information
This press release includes forward-looking information and statements which are based on current expectations, estimates and projections about the factors that may affect our future performance, including 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,” “believes,” “estimates,” “plans”, “targets”, “aims” 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 or anticipated transactions. Some important factors that could cause such differences include, among others, business risks associated with the COVID-19 pandemic, the volatile global economic environment and political conditions, costs associated with compliance activities, market acceptance of 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 foregoing list of factors is not exclusive and undue reliance should not be placed upon any forward-looking statements, including projections, which speak only as of the date made.
To view this piece of content from cts.businesswire.com, please give your consent at the top of this page.
View source version on businesswire.com: https://www.businesswire.com/news/home/20211206005878/en/
Contact information
ABB Ltd
Affolternstrasse 44
8050 Zurich
Switzerland
Media Relations
Phone: +41 43 317 71 11
Email: media.relations@ch.abb.com
or
Investor Relations
Phone: +41 43 317 71 11
Email: investor.relations@ch.abb.com
About Business Wire
(c) 2018 Business Wire, Inc., All rights reserved.
Business Wire, a Berkshire Hathaway company, is the global leader in multiplatform press release distribution.
Subscribe to releases from Business Wire
Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Business Wire
H.I.G. Capital Announces the Sale of DGS S.p.A.11.6.2024 12:00:00 CEST | Press release
H.I.G. Capital (“H.I.G.”), a leading global alternative investment firm with $62 billion of capital under management, is pleased to announce that an affiliate has signed a definitive agreement to sell its portfolio company, DGS S.p.A. (“DGS” or the “Group”), a leading firm in the Italian Information Technology market, to DGS Co-Founders and management team in partnership with ICG, a global alternative asset manager. Since its inception in 1997, DGShas supported blue-chip customers in the design, integration, and maintenance of complex IT systems, with a specialization in digital transformation and cybersecurity services. The Group currently has over 1,900 employees, revenues of approximately €300 million, and maintains a group of highly loyal clientele. During H.I.G.’s ownership, DGS has tripled in size and consolidated its position as a leading Italian firm in cybersecurity services and digital transformation. DGS offers its clients sophisticated and proprietary digital transformation
Evertas Names Nick Selby Head of European Underwriting11.6.2024 12:00:00 CEST | Press release
Evertas, the world’s first crypto insurance company, has named Nick Selby as its new Head of European Underwriting. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240611141887/en/ Nick Selby, Executive Vice President and Head of European Underwriting at Evertas (Photo: Business Wire) Selby, an accomplished information and physical security professional, brings two decades of expertise in public and private sector information security, physical security, and complex incident handling, as well as seven years of experience leading teams securing billions of dollars in cryptoassets. Previously, his roles included VP of the Software Assurance Practice at Trail of Bits, Chief Security Officer at Paxos Trust Company, and Director of Cyber Intelligence and Investigations at the NYPD Intelligence Bureau. “Nick is an extremely valuable addition to our European team,” said Evertas CEO and Co-Founder J. Gdanski. “His public and private
Owlet utvider globalt fotavtrykk med lanseringen av medisinsk-sertifisert Dream Sock™ i Storbritannia og over hele Europa11.6.2024 11:00:00 CEST | Pressemelding
Owlet, Inc. («Owlet» or the «Company») (NYSE:OWLT), pioneren innen smart spedbarnsovervåking, kunngjør i dag den britiske og europeiske lanseringen av Dream Sock. Dette er en smart babymonitor med levende helseavlesninger og varsler for friske spedbarn mellom 0-18 måneder og 2,5-13,6 kg. Dette innovative medisinske utstyret gir foreldre helse og viktig informasjon i sanntid, noe som gir uovertruffen trygghet. Denne pressemeldingen inneholder multimedia. Se hele pressemeldingen her: https://www.businesswire.com/news/home/20240611820341/no/ (Photo: Business Wire) «Vi er svært stolte over å lansere Dream Sock til omsorgspersoner over hele Storbritannia og Europa og gi millioner av foreldre mer trygghet mens babyen sover,» sa Kurt Workman, Owlets administrerende direktør og medgründer. «Dream Sock er nå et globalt produkt som er anerkjent som medisinsk nøyaktig og trygt, etter å ha gjennomgått regulatoriske autorisasjoner og sertifiseringer innenfor flere geografier. I dag er misjonen vår
V-Nova Surpasses 1000 Patent Milestone in Media Technology Innovation11.6.2024 10:00:00 CEST | Press release
V-Nova, a leading provider of data compression solutions, video compression technology, XR technology, AI acceleration and parallel processing for a multitude of industries including media and entertainment, today announced its milestone achievement of 1000 active technology patents. This accomplishment underscores V-Nova’s dedication to research and development and its commitment to protecting its intellectual property globally. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240611724561/en/ V-Nova’s patent portfolio spans more than 50 different jurisdictions. Including over 400 patents in Europe, over 200 in the Americas, over 100 in the United States specifically, and over 200 in Asia. V-Nova forged new directions in data processing to enhance digital experiences, maximize efficiency, reduce costs, and increase sustainability. The company leads the way with key international data compression standards for the video indust
Alipay+ Reveals Top Scorer Trophy Design for UEFA EURO 2024™11.6.2024 09:24:00 CEST | Press release
Alipay+, a suite of cross-border mobile payment and digitalization technology solutions operated by Ant International and an Official Partner of UEFA EURO 2024™, today revealed the trophy that will be awarded to the most prolific marksman at the UEFA EURO 2024™ finale on July 14 in Berlin, Germany. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240610328619/en/ The UEFA Top Scorer Trophy presented by Alipay+ is unveiled for UEFA EURO 2024™ (Photo: Business Wire) Sculpted in the shape of the Chinese character “支” (pronounced zhi, and meaning payment as well as support), the trophy reflects Alipay+’s dedication to supporting consumers to enjoy seamless payment and a broad choice of deals using their preferred payment methods while traveling abroad. The character also resembles the fleeting moment of a barefooted striker poised to shoot, evoking the original beauty and power of football – a game that united people across the wo