التكنولوجيا وأخبارها بوابة الإمارات لتكنولوجيا المعلومات والإتصالات
ABB: Our Way forward
ABB will be hosting an investor webcast at 14:00 CEST today, June 10, at which CEO, Björn Rosengren, will be giving his initial impressions on the Group’s strategy since he joined the company at the beginning of the year, as well as details on his immediate priorities. Highlights will include:
– ABB-OS evolves into new operating model ABB Way
– Clear focus on decentralized business model and 18 fully
accountable divisions
– Prioritization of stability and profitability before growth
– Active portfolio management to play key role
– Combination of COVID-19 and oil price drop will lead to
challenges over the coming quarters
– Group mid-term financial targets remain in place
– Divestment of Power Grids on track to be completed end
Q2, 2020
– ABB on track to deliver $500 million ABB-OS cost savings
“After my first 100 days as CEO, I can truly say: ABB has a
good foundation to build on. Our technology and products
are well aligned to key market trends and customer needs
such as the electrification of transport, automated
manufacturing, digital solutions and increased sustainable
productivity,” said Björn Rosengren. “We will now leverage
this strong position to create superior value for our
customers, employees and shareholders. We will do this by
evolving our decentralized business model, strengthening
our performance management culture, putting stability and
profitability before growth, and driving active portfolio management.”
The company’s mid-term financial targets of a 3-6 percent
comparable revenue growth per year, an operational EBITA
margin of 13-16 percent, ~100 percent cash conversion
rate, 15-20 percent ROCE and EPS growing at a faster rate
than revenue growth, remain in place. An update on the
strategy, including long-term 2030 sustainability targets,
will be provided later this year at the Group’s Capital
Market Day in November 2020.
Currently, ABB is still facing challenging quarters ahead due
to the COVID-19 global pandemic and a drop in the oil
price. This has led to a decline in demand, for example, in
the automotive and power generation end markets, while
travel restrictions and supply chain constraints also have an
impact on business. Nevertheless, the Chinese market
continues to recover, while the transport, food & beverage
and data center sectors remain relatively resilient.
“The health and safety of all our stakeholders remains the
key priority in these difficult times, while we are also
intensifying our efforts to mitigate the crisis by increasing
our number of virtual customer visits, adjusting production
capacity to demand and managing cash tightly,” said Rosengren.
At today’s event, CFO Timo Ihamuotila will comment on
ABB’s capital allocation priorities, which remain unchanged.
The sale of the Power Grids business to Hitachi is expected
to be completed at the end of the second quarter of 2020
and ABB remains committed to a share buyback program
using net cash proceeds from the transaction. ABB is
planning to execute this in an efficient and responsible
way, taking account of the prevailing circumstances. Cash
will also be returned to shareholders in the form of rising
sustainable dividends per share and ABB aims to retain a
“single A” credit rating.
Creating superior value through new operating model ABB Way
A key element of ABB’s strategy to create superior value is
the ongoing decentralization of the business model. ABB
has successfully discontinued its longstanding matrix
organization over the last 18 months, with more
responsibility shifted to the four business areas of
Electrification, Industrial Automation, Motion and Robotics
& Discrete Automation.
Going forward, a new operating model called ABB Way will
provide a governance framework of processes and policies,
connecting the business areas and divisions to the
corporate center and uniting the Group under the ABB
brand. ABB Way is evolving from the current ABB-OS, which
is on track to deliver the targeted $500 million cost savings,
with the full run-rate benefit during 2021.
After having been successfully launched in 2016, the ABB
Ability™ digital platform will also be managed by the
business areas and no longer in the corporate center. This
will enable them to create software solutions more
efficiently and quickly. ABB Ability™ has more than 160
digital solutions, boasting top-tier software partnerships
with Microsoft, Hewlett Packard Enterprises and Ericsson, for example.
In a further step of moving operating activities even closer
to the customer, ABB will empower 18 divisions comprised
within the four business areas. More details on the
divisions, as well as updated strategies for the business
areas, will be provided at the Capital Markets Day in
November 2020. ABB will continue to report its financial
results based on the four business areas.
“We will strengthen our performance management through
a new scorecard system based on a very transparent and
standardized set of KPIs. Here, I expect our management
to focus on having a stable structure and profitability
before embarking on growth,” said Rosengren. “The
benchmark is for each of the divisions to be number one or
two in its respective market segment.”
As part of this new divisional focus, ABB will also further
strengthen its ongoing portfolio review process to ascertain
whether ultimately ABB is the best owner in terms of
strategic attractiveness, value creation potential and structural fit.
“Portfolio management will play an even more important
role going forward and we will not shy away from fixing,
exiting or growing divisions,” said Rosengren. “At the same
time, no major acquisitions are planned by ABB in the mid-term.”
As part of the ABB Way, corporate functions will focus on
financial, strategic and governance activities in the future
and have a reduced headcount of less than 1,000
employees worldwide. At the beginning of 2019, roughly
18,000 employees were still in corporate functions, the
majority of whom were then gradually transferred into the business areas.
ABB (ABBN: SIX Swiss Ex) is a leading global engineering
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 144,000 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”, “on track” 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.
The important factors that could cause such differences
include, among others, business risks associated with 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.
