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ZURICH (Reuters) -ABB unveiled higher sales and profitability targets on Tuesday as the Swiss engineering company expects to benefit from higher demand from rebounding economies and trends such as decarbonisation and shrinking workforces.
The maker of industrial automation and factory robots said it expects annual sales to increase 4% to 7%, up from the 3% to 5% annual growth rate it previously targeted.
In the new goals, announced ahead of its capital markets day on Tuesday, ABB said it also aimed to increase its profitability.
ABB posted a 7% decline in revenues in 2020 to $26.1 billion, and net income attributable to the group of $5.146 billion.
ABB said it was well placed to benefit from trends like the demand for increased energy efficiency, and rising labour costs and shrinking working age populations were also driving demand for industrial automation and robots.
“Our technology leadership in electrification and automation, aligned with sustainability and the global megatrends … gives us a competitive edge,” said Chief Executive Bjorn Rosengren.
ABB also raised its profit margin as measured in operational earnings before interest, tax, and amortisation (EBITA) of “at least” 15% from its previous goal of 13% to 16%. During pandemic-hit 2020, ABB posted a margin of 11.1%.
Shares were indicated up 1.36% in pre-market trading activity following the statement.
ABB also 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.
Reuters previously reported the business could be valued at around $3 billion.
CEO Rosengren said ABB had made progress implementing his plan to decentralise the company’s sprawling operations, but could still do more.
“Over the last 24 months, ABB has made solid progress in implementing its decentralised organisation and improving quality of revenues,” he said in a statement. “But we are still not where we want to be.”
The former Sandvik CEO, who took over at ABB in March 2020, has reorganised ABB into 18 smaller, more autonomous business units and cut headcount at the company’s head office.
Order activity has remained robust thus far this year, with ABB expecting positive market momentum in 2022, Rosengren said, although supply chain disruptions which have also hit many other manufacturers would remain a problem.
