A new fast charging station is due to come onto the market in Europe at the end of 2021 and help the subsidiary to achieve new growth.
(Photo: via REUTERS)
Zurich The industrial group ABB wants to list its business with charging stations for electric cars in Switzerland in the first half of 2022. This was announced by ABB boss Björn Rosengren on Tuesday at the company’s capital market day.
The legal spin-off of the E-Mobility subsidiary will be completed by the first quarter of next year. Provided that the market conditions are good, one of the market leaders for charging stations could go public as an independent company in the summer, added Rosengren.
The E-Mobility division is to accelerate the growth course with the fresh money from the investors. However, ABB wants to keep the majority in the company. The CEO has not yet commented on the possible assessment. It could be around three billion dollars, as Reuters reported, citing insiders.
In addition, Rosengren is continuing the restructuring of the group: As he announced on Tuesday, the business with converters and current transformers is also up for grabs. The electrotechnical components are always used wherever direct current has to be converted into alternating current, for example in power grids.
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For example, ABB has produced converters for the wind power industry and railways. The division was part of the electrification business unit – the only area in which the margin had recently decreased slightly.
ABB had previously put the turbocharger business up for sale because, with its focus on diesel generators, it no longer had a place in Rosengren’s green mobility strategy. In November, ABB had also sold the mechanical drive business.
Analysts see further potential
Rosengren wants to increase growth and profitability through the conversion and align the industrial group to the future topics of green mobility, electrification, automation and robotics. The ABB boss has therefore set more ambitious goals: In the medium term, the company wants to increase sales by four to seven percent per year. Until now, the company had set three to five percent per year as the target.
When it comes to profitability, too, Rosengren is setting higher standards: He wants to achieve a margin of at least 15 percent – that is at the upper end of the previously issued target corridor of 13 to 16 percent sales margin.
“The order situation remains robust and we expect positive market dynamics in the 2022 financial year,” said Rosengren. However, he put the shareholders on dampening growth: “We must continue to cope with the disruptions in the supply chain.” This will affect the business in the fourth quarter and also at the beginning of next year.
Under Rosengren, the ABB share has recently soared. Since he took office in March 2020, ABB shares have increased by almost 80 percent from around 18 Swiss francs to 33 francs. Before the outbreak of the corona crisis, the share of the industrial group was quoted at around 22 francs.
Rosengren’s strategy has already won over the stock exchange – and the realignment of the traditional Swiss company has also been well received by analysts. Mark Diethelm, analyst at Vontobel, still considers the raised margin target to be conservative. He also sees scope for higher dividends. He has therefore set 40 francs as a twelve-month price target, which corresponds to an upward potential of 20 percent.
More: ABB launches the fastest charging station for electric cars.