![]() "I don't think this is something that necessarily needs to be done over the next six months, but over time a stronger view should be taken on this." "From the outside, there are some areas, like power grids, that don't really fit for many reasons - end markets, growth drivers or margin profile," fund manager Andrea Fornoni told Reuters. "We believe the key focus for ABB is to execute on the transformation of Power Grids, continue to invest for the future and strengthen customer focus and cost efficiency," the Swedish investor said.įidelity, which has ABB as a top-10 holding in its Swiss fund, questioned the structure, adding that 2018 could bring limited growth and struggling profitability. However, ABB's biggest shareholder Investor AB supports the strategy. One top-20 investor, who asked not to be named, said that Spiesshofer is under tremendous pressure, adding: "I am quite disappointed, in a very strong economy the company is treading water, if it does not perform now, when will it ever?" ![]() "Management and board are fully aligned." "ABB has evolved significantly as we have strengthened and streamlined the business and we are making good progress against our strategic goals," a company spokesman said. Spiesshofer has quit some businesses to improve the power grids division's performance, selling high-voltage cables and exiting the engineering, procurement and construction business last year. Power Grids generated sales of $10.4 billion in 2017, accounting for 30 percent of ABB's $34.3 billion in sales.Ĭevian argued that ABB was too complex and projected that separation would produce two companies with a combined share price of 35 Swiss francs. In contrast, ABB insisted in 2016 on keeping the power grids business - which makes transformers, substations and semiconductors to transmit electricity - despite pressure from Cevian Capital, its second-largest shareholder, to spin it off. Honeywell, which makes everything from jet engines to thermostats, will also divest divisions. It also separated its wind power operations. Siemens floated its medical equipment business (SHLG.DE) as part of its drive to attract investors for businesses outside its core industrial engineering and automation operations. ![]() "So far we have seen no evidence of an underlying improvement in power grids, nor in the company as a whole," he told Reuters.Īrtisan, which describes itself as a long-term value-oriented investor, said that ABB should follow rivals Siemens (SIEGn.DE) and Honeywell International (HON.N) in streamlining. "ABB is too big, it is too complicated and the company would gain significantly by achieving more focus," said David Samra, portfolio manager at Artisan Partners, ABB's fifth-largest shareholder with a 1.6 percent stake. Concerned by weak share performance since then, investors say ABB should simplify operations ranging from industrial plugs and fittings to electric motors for ships and factories.
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