ABB raises sales, profitability targets

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ABB raises sales, profitability targets

ZURICH Reuters - ABB unveiled higher sales and profitability targets on Tuesday, as the Swiss engineering company said it expected to benefit from higher demand from rebounding economies as well as plugging into trends like decarbonisation and shrinking workforces.

The maker of industrial automation and factory robots said it expects annual sales to increase by 4% to 7%, up from the 3% to 5% annual growth rate it previously targeted.

ABB said that it was aiming to increase its profitability ahead of its capital markets day on Tuesday.

The profit margin is going to be measured in operating earnings before interest, tax, and amortization EBITA of at least 15% from 2023 onwards.

ABB posted a margin of 11.1% during the Pandemic-hit 2020 and 13% to 16% before it aimed for a margin of 13% to 16%.

ABB, whose competitors include Germany's Siemens and France's Schneider Electric, said it would float its E-mobility electric vehicle charging business, with an initial public offering planned for Switzerland in the first half of 2022.

The business, which is benefitting from a global boom in battery-powered vehicles, could be valued at around $3 billion, according to a report by Reuters.

Chief Executive Bjorn Rosengren said that ABB had made progress in the implementation of his plan to decentralise the company's sprawling operations, but the company could still do more.

Rosengren said ABB has made good progress over the last 24 months in implementing its decentralization organization and improving quality of revenues. We are still not where we want to be. In March 2020, the former Sandvik CEO, who took over at ABB, has reorganized ABB into 18 smaller, more autonomous business units and cut headcount at the company's head office.

ABB expects positive market momentum in 2022, and order activity has remained strong this year, Rosengren said, although supply chain disruptions that have also hit many other manufacturers would remain a problem.