Swiss engineering company ABB Ltd.(ANN.L,ABB) Tuesday said it has lifted its revenue growth target to 4-7 percent through the economic cycle, in constant currency, which is the total of 3-5 percent organic growth and 1-2 percent acquired growth.
ABB also sharpened its operational EBITA margin target to be at least 15 percent as from 2023.
The company had previously targeted 3-5 percent for revenue growth through the cycle and an operational EBITA margin in the upper half of a 13-16 percent range as from 2023.
The changes in outlook reflects the immediate adverse margin impacts due to the exit of the Dodge and Turbocharging divisions.
ABB will be hosting its Capital Markets Day today.
At the event, CEO, Bjrn Rosengren and other Executive Committee members will give an update on ABB's ongoing transformation into a more profitable group with increased growth rates, its updated financial targets and its portfolio management efforts.
The company expects that a sharpened focus on accountability, transparency and speed in 2022 will help drive growth, and lift profitability.
Regarding the order activity, the company said it has remained robust this far and anticipates a positive market momentum in the business year 2022. Meanwhile, disruptions in the supply chain will most likely impact customer deliveries in the fourth quarter and at least the early part of next year.
ABB further said approximately 60 percent of its divisions are currently in growth mode, which means they focus both on organic growth, as well as M&A opportunities.
ABB is expecting to make five or more small to mid-sized acquisitions per year. This will be funded through its continued strong cash flow generation.
Rosengren will also give an update on the company's ongoing portfolio management efforts, including exiting the Turbocharging division through a spin-off to existing shareholders or a divestment and is targeted for summer 2022.
ABB also plans to divest its Power Conversion division in the second half of 2022 as it continues to improve its business' performance.
In addition, the company is continuing to work towards an initial public offering of its E-mobility division. The legal separation is expected to be completed during Q1 2022 and if market conditions remain favorable, a listing in Switzerland would be targeted for the first half of 2022. ABB would retain a majority shareholding in the future listed entity.
In 2022, ABB will introduce a circularity framework covering every stage of the product lifecycle in order to preserve resources.
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