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ABB Ltd Positions Power Systems Division to Improve Profitability

Friday, 14 Dec 2012 01:00am EST 

ABB Ltd announced that it is positioning its Power Systems division. The strategic review, which was announced after the Company's results for the third quarter of 2012, was prompted by the fact that Power Systems division's profitability has been uneven and lower than what management expected despite important investments over the past three years. These investments include applied product development, increased production capacity and acquisition of a software company to strengthen its product portfolio. The division will focus on products, systems, services and software products with higher margins and therefore closes its EPC business (engineering, procurement and construction) in over 10 countries where project returns are not corresponding to the risks of the projects involved. To implement the new strategy, the division has undertaken changes in management and organization. The division will continue to offer customers complete solutions in projects that have a higher ABB content and a relevant risk level. The changes are expected to reduce the reported EBIT for Power Systems and ABB fourth quarter of 2012 by approximately USD 350 million, of which approximately USD 100 million in restructuring-related costs and other non-operating impairments that are not included in operating EBITDA. Costs repositioning is expected to be earned in about two and a half years. 

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-0.15 -0.73%
24 Oct 2014