INTERVIEW-UPDATE 1-ABB power systems unit on track to meet goals
* Renewables, stimulus packages to boost growth, exec says
* No current need to raise ABB's $2 bln cost-saving target
* ABB not seen any cancellations of major orders
(Adds details, quotes, background)
By Katie Reid
ZURICH, June 30 (Reuters) - ABB's (ABBN.VX) power systems division is on track to meet its mid-term goals as a push to use renewable energy and government stimulus packages cushion the impact of the economic slump, the unit's head said on Tuesday.
The unit, a seller of power equipment to utilities, and oil and gas companies, is the Swiss engineering group's third largest division and accounts for 20 percent of group sales. It is aiming for average annual sales growth of 11 percent and targets an earnings before interest and tax (EBIT) margin of between 6 and 10 percent for the period 2007 to 2011.
"At this point in time, I don't see a reason to revise our mid-term growth targets for power systems. We will continue to grow as long as power remains a key focus area around the world," Peter Leupp said in a rare interview.
The division reported revenues of $6.9 billion in 2008 against $34.9 billion for the group.
ABB will give an update on the group's targets when it posts its second quarter results on July 23.
ABB, which competes with Siemens (SIEGn.DE) and Areva (CEPFi.PA), is bracing itself for a tough 2009 as well as a potentially difficult year in 2010 as demand from customers in the construction and auto industries falls. [nL5640640]
The group, which has cut jobs in such countries as Sweden, the U.S, France and Ireland, is sticking to its target to cut costs by $2 billion by 2010, Leupp told Reuters, adding that ABB has only seen the cancellation of some small orders so far.
"We believe $2 billion is currently the right amount of savings to be targeting," he said.
By 1419 GMT, shares in ABB were trading 1.6 percent down at 17.03 Swiss francs, underperforming a 1 percent drop in the Dow Jones industrial goods and services index .SXNP.
RENEWABLES BOOST Continued...
