ABB Looks at Exiting Three Divisions Amid Portfolio Review

By Mauro Orru

ABB Ltd. said Thursday that it is exploring options to exit three divisions representing about $1.75 billion of combined annual revenue.

The Swiss engineering company said the three divisions earmarked for exit are turbocharging, mechanical power transmission and power conversion.

"All three divisions are high-quality businesses, with operational EBITA margins above the group's target margin corridor. In this process, we will seek the best value-accretive solution for ABB and those businesses and not put ourselves under time pressure," Chief Executive Bjorn Rosengren said.

As part of its mid-term goals, ABB is targeting an operational earnings before interest, taxes and amortization margin between 13% and 16%, aiming for the upper half of the range from 2023.

ABB is targeting annual average revenue growth between 3% and 5%, excluding foreign exchange effects and some acquisitions and divestments.

"The COVID-19 pandemic still weighs on the near-term outlook, but the long-term market trends of electrification, automation, digitalization and energy efficiency remain intact," Mr. Rosengren said.

ABB said it would step up research and development and investments to around 5% of revenue per year to expand its digital offering. The company is also targeting carbon neutrality in its own operations by 2030, while helping customers reduce their annual CO2 emissions by more than 100 megatonnes.

Write to Mauro Orru at [e-mail]; @MauroOrru94

(END) Dow Jones Newswires

November 19, 2020 02:13 ET (07:13 GMT)

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