Business Wire

ABB Capital Markets Day 2021: Cementing Performance Culture

Share

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.

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

For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.

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

Specifica Validates Best-in-Class Status for in vitro Antibody Discovery Platform in Two Key Peer Reviewed Publications29.1.2022 02:00:00 EET | Press release

Specifica, a privately held antibody engineering company focused on innovative in vitro antibody library and discovery tools, announced the publication of two peer-reviewed articles describing its Generation 3 Antibody Discovery Platform1,2. Antibodies are the fastest growing class of therapeutics, representing nine of the top twenty best-selling drugs3. The global antibody therapy market is projected to grow from $178.50 billion in 2021 to $451.89 billion in 2028 at a CAGR of 14.1%4. Traditionally, therapeutic antibodies have been generated by harvesting immune responses, either from in-bred or transgenic mice, or from immune human subjects. Although there has been a long-standing interest in using in vitro antibody library approaches that avoid the use of animals, there have been two main concerns with antibodies from in vitro libraries: binding affinities tend to be lower, and poor developability characteristics are common, complicating their development as successful drugs. As desc

ADVA Optical Networking SE: Acorn HoldCo, Inc. reaches minimum acceptance threshold for its public exchange offer to all shareholders of ADVA Optical Networking SE29.1.2022 01:45:00 EET | Press release

ADTRAN, Inc. today announced that by the end of the acceptance period on January 26, 2022, 24:00 hours (local time Frankfurt am Main), the voluntary public takeover offer of Acorn HoldCo, Inc. (“Bidder”) to all shareholders of ADVA Optical Networking SE (“ADVA“) has been accepted for more than 60% of all ADVA shares entitled to voting rights and existing as of October 31, 2021. The minimum acceptance threshold has therefore been reached. The final result as at the end of the acceptance period is expected to be published on January 31, 2022. ADTRAN, Inc. and ADVA have thus reached yet another important milestone for the merger of the two companies and have come closer to their goal of creating a leading company in the field of optical transmission technology for enterprise, access and wide-area networks. The consummation of the public exchange offer continues to be subject to closing conditions not yet fulfilled, especially foreign direct investment approval in Germany. ADVA shareholder

causaLens Raises $45m Series A to Scale Human-centered AI That Understands Cause-and-effect28.1.2022 17:46:00 EET | Press release

causaLens, the London deep tech company delivering the future of AI, has raised a $45m Series A round. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220126005888/en/ The causaLens co-founders, Dr. Maksim Sipos, CTO, on the left, and Dr. Darko Matovski, CEO, on the right. (Photo: Business Wire) causaLens is the pioneer of Causal AI - the only AI technology quantifying cause-and-effect relationships to reason alongside humans in a manner that is trustworthy, explainable, and fair. Causal AI represents a giant leap ahead of current correlation-based AI technologies, which blindly extrapolate historical data and are unable to ask counterfactual questions — the ‘what ifs’ at the core of human imagination and creativity. causaLens’s no-code platform delivers far more accurate and reliable results, and allows humans and machines to work together for the first time. It is trusted by decision makers across finance, industry, technol

Monrol Signing Agreement to License its GMP Grade Lu-177 n.c.a Production Technology to Curium28.1.2022 15:47:00 EET | Press release

Eczacıbaşı-Monrol Nuclear Products Co. (Monrol) has today announced it has signed an agreement with Curium Netherlands B.V (Curium) to license its GMP grade medical radioisotope, no-carrier-added 177Lu (n.c.a. 177Lu) cutting-edge production technology LuMagic®. This agreement will enable transfer of relevant equipment and supply from Monrol to Curium. Monrol is one of the few producers of Lutetium-177 n.c.a worldwide, having uninterrupted worldwide supply capabilities. Monrol Lu-177 n.c.a production process is an exclusive processing technology having cleaner and safer production method with stable isotope enrichment capability. Curium planning to manufacture the product Lu-177 n.c.a in its Petten production facility, Netherlands. This licence is offering significant opportunities both for Curium; one of the world’s largest nuclear medicine companies and Monrol; a company which develops, manufactures, and distributes world-class radiopharmaceutical products, radioisotopes to improve qu

CHMP issues positive opinion to expand Jardiance (empagliflozin) indication based on unprecedented benefit in adult heart failure patients with preserved ejection fraction28.1.2022 15:26:00 EET | Press release

The Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has granted a positive opinion recommending Jardiance® (empagliflozin) for the treatment of adults with symptomatic chronic heart failure, Boehringer Ingelheim and Eli Lilly and Company announced today.1 Empagliflozin was previously approved for the treatment of adults with symptomatic chronic heart failure with reduced ejection fraction (HFrEF).4 If approved, the positive opinion would expand this indication to be applicable for adults across the full spectrum of left ventricular ejection fraction (LVEF), including preserved ejection fraction (HFpEF). This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220127005861/en/ “For the very first time, we now have a treatment that will improve clinical results across the full spectrum of heart failure patients – regardless of ejection fraction,” said Professor Stefan Anker, Heart Failure Car

Schlumberger DELFI Digital Platform Selected by Northern Lights JV for CO2 Project28.1.2022 15:00:00 EET | Press release

Schlumberger will deploy the DELFI* cognitive E&P environment on the Norwegian CO2 project by the Northern Lights Joint Venture (NL), to streamline subsurface workflows and longer-term modeling and surveillance of CO2 sequestration. NL was established to develop the world’s first open-source CO2 transport and storage infrastructure, providing accelerated decarbonization opportunities for European industries, with an ambition to store up to 5 million tonnes of CO2 per year based on market demand. For CO2 transportation and storage, Schlumberger digital solutions are used for subsurface characterization and dynamic reservoir simulation, which are key to understanding storage site capacity and the potential for injecting and containing fluids. They are also used for development planning, operations, appraisals, and monitoring purposes. “Northern Lights has recognized the huge potential of Schlumberger’s digital technology to fast-track decision making and de-risk CO2 transportation and st

Pixis Appoints Neel Pandya as the CEO for Europe Business, in Addition to APAC28.1.2022 14:28:00 EET | Press release

Pixis (formerly known as Pyxis One), a leading provider of contextual codeless AI infrastructure for complete marketing optimization, today appointed Neel Pandya as the Chief Executive Officer of its operations in Europe, in addition to his responsibilities of leading the APAC business. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220128005166/en/ Neel Pandya joined Pixis as the CEO of APAC in its Bengaluru office after exiting L'Oréal. (Photo: Business Wire) Neel joined Pixis in its Bengaluru office in July 2021 as the CEO of APAC, bringing immense change and progress to the way Pixis operates, and greatly streamlining expansions in the APAC region. Under his leadership, Pixis witnessed a 185% growth in revenue in the APAC region, with India independently recording a 150% of growth. Over the last 7 months, in addition to greatly stabilizing customer churn Neel has also been instrumental in adding close to 30 new enterpris

In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.

Visit our pressroom