Bid & Tender
ABB Launches Strategy for Core Divisions for Growth

Date : Oct 12, 2016

ABB has launched Stage 3 of its Next Level strategy to unlock value for customers and shareholders with a focus on four focused, market-leading, entrepreneurial divisions.

 

The core elements of also include: continuing to transform the Power Grids division under ABB’s ownership; realising ABB’s full digital potential; accelerating momentum in operational excellence; and strengthening ABB’s brand, the company said.

 

ABB CEO Ulrich Spiesshofer said: “Over the last two years, ABB has become faster, leaner and more efficient. We have continuously improved margins and further strengthened our cash generation. In Stage 3 of our Next Level strategy, we are building on our successful transformation momentum and strengthening our position as a pioneering technology leader and global digital champion. With our four simplified, market-leading, entrepreneurial businesses, combined with “ABB Ability”, we address customers’ needs in the Energy and Fourth Industrial Revolutions in a more focused and agile way.”

 

Peter Voser, chairman of ABB’s Board of Directors, said: “The successful execution of our Next Level strategy to date has led to significantly improved operational and financial performance and a more externally focused, simpler ABB. The entire board worked with the management and external advisors on all elements of Stage 3, which will unlock value for customers and all shareholders while ensuring the company’s long-term success. The continued transformation of our Power Grids division under ABB’s management is the best of all carefully assessed options for shareholders. We firmly support the management team and the action plan presented today.”

 

ABB is shaping and focusing its divisional structure into four market-leading divisions: Electrification Products, Robotics and Motion, Industrial Automation and Power Grids, effective January 1, 2017. The divisions will be empowered as entrepreneurial units within ABB, reflected in an enhancement of its performance and compensation model focusing on individual accountability and responsibility.

 

They benefit from sales collaboration orchestrated by regions and countries as well as from the group-wide digital offering; ABB’s leading G&A structure and costs; common supply chain management; and corporate research centers. ABB will continue to strengthen its divisions through active portfolio management. This includes pursuing strategic additions, transforming business models and pruning non-core businesses.

 

“Entrepreneurial spirit is the base for our future operating model,” said Spiesshofer. “Our four market-leading businesses, led by empowered entrepreneurs, will drive sustainable value creation, supported by regions and Group oxygen such as ABB Ability and our leading G&A cost level.”

 

Following a comprehensive strategic portfolio review, the Board and Executive Committee of ABB have concluded that the transformation of Power Grids under ABB ownership will unlock maximum shareholder value compared to other ownership options such as sale, IPO, spin-off or joint venture.

 

The division, which is #1 globally, will take advantage of the Energy and Fourth Industrial Revolutions. These are creating significant demand for Power Grids’ products, systems, software and services, and support the portfolio shift towards digitalization.

 

To realize the full potential of the division and continue the ongoing transformation, “Power Up,” a massive programme covering key aspects of the business, was introduced today. It will drive growth and enhance earnings accretion by focusing on core operational strengths and high growth segments as well as digitally enabled services and software.

 

ABB is a hidden digital champion today. It is ideally positioned to win in the digital space with new and existing end-to-end digital solutions that build on the intelligent cloud and close the loop with connected devices. ABB will use its profound knowledge of its customers’ domains to plan, build and operate a unique digital offering which will deliver true operational differentiation for customers, the company said.

 

The newly launched ABB Ability offering combines ABB’s portfolio of digital solutions and services across all customer segments, cementing the group’s leading position in the Fourth Industrial Revolution and support the competiveness of ABB’s four entrepreneurial divisions.