ABB announces Next Level strategy

ABB presented its Next Level strategy and financial targets for the 2015-2020 aiming fast-tracking of sustainable value design.

The strategy focuses on ABB’s three major areas of profitable growth, persistent execution and business-oriented collaboration.

The highlighted points of the strategies announced are accelerated sustainable value creation of leading power and automation portfolio, shift in center of gravity driving profitable organic growth, strengthening competitiveness and lowering risk, improving performance through leading operating model, driving change through 1,000 day programs, future company and Executive Committee structure aligned with new strategy and undiluted global business lines as core of ABB.

In addition, Company has planned Peter Terwiesch to be appointed to Executive Committee as head of Process Automation.

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From 8 to 3 regions, will be led by experienced EC members like Frank Duggan for Asia, Middle East and Africa; Greg Scheu for Americas; Veli-Matti Reinikkala for Europe.

Moreover, David Constable, CEO of Sasol, has been nominated to Board of Directors and new targets focused on attractive shareholder returns have been announced.

The company expects operational earnings per share (EPS) growth of 10-15 percent CAGR, by delivering cash returns on investment (CROI) over the period 2015-2020.

It targets to grow revenues on a like-for-like basis on average 4-7 percent per year, faster than forecasted GDP and market growth.

ABB plans to increase its profitability now measured in operational EBITA within a bandwidth of 11-16 percent while targeting an average conversion of the annual free cash flow above 90 percent. The new financial targets take effect on Jan. 1, 2015.

The Next Level strategy will take care of activities highlighted on accelerating ABB’s organic growth drive, margin accretion and enhanced capital efficiency to deliver greater shareholder value, stated, Ulrich Spiesshofer, CEO, ABB.

ABB will continue with power and automation portfolio, which will be managed under the leadership of the five divisions. As of January 2015, its regional structure will be updated to three regions mainly for customer collaboration, shared services and the related countries.

In addition, the share buyback program announced allows shareholders to directly benefit from the continued solid cash generation of businesses.

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