03. Increasing growth rates

Increasing revenue growth supported by three drivers

The higher growth ambitions are supported by our reshaped business portfolio, working in the ABB Way operating model and accelerating sustainability drivers.

Reshaped portfolio

To be part of ABB, the businesses need to be aligned with the ABB purpose - enable a more sustainable and resource-efficient future through technology leadership in electrification and automation.

Our internal mantra of “improving quality of revenues” has triggered significant actions over the last few years to adjust our business portfolio to support growth, but also with the aim to reduce risk and volatility in our earnings. This includes a significant shift away from high-voltage large project business, while increasing the share of revenues derived from the relatively more short-cycle business in both low and medium voltage.

Improving quality of revenues

Working in ABB Way operating model

Since 2020 and the implementation and ABB Way operating model, the divisions have transitioned through the strategic mandates of stability and profitability before growth. Divisions are accountable for both organic and acquired growth. 

Transition of strategic mandates towards growth through the ABB Way operating model

Each of the approximately 20 divisions is fully accountable for both organic and acquired growth and the investments required to maintain or achieve a No. 1-2 market position. Needs are different between divisions, and with the operating decisions taken closer to customers, we believe decision making is both faster and with higher market accuracy.

Continued focus on Research & Development

At the same time, we aim to have a high pace of acquisitions of 5-10 small to mid-size bolt-on deals per year. The responsibility to build the pipeline of potential targets has been transferred to the divisions and each management team is responsible for adding technology and footprint necessary to hold a number 1-2 market position. Acquisitions can be made in all divisions in order to fill eventual gaps in technology, however only divisions with pure growth mandate are active in consolidating the market.

Divisions accountable for acquisition strategy

Accelerating sustainability drivers

ABB holds a future proof market position, exposed to segments with strong secular trends. As a technology leader in electrification and automation, ABB is at the core of accelerating the energy transition. Every day, we empower customers across the globe to optimize, electrify and decarbonize their operations.

There are multiple drivers for the sustainability factors supporting demand in the markets to which ABB is exposed. Increasing and tightening regulations – by country, region and global – targeting common global carbon reduction targets.

Rising cost of carbon will be tool increasingly used to drive corporate actions towards a net-zero emissions world. Unless corporates comply, it may eventually impact cost of operations.

Sustainable and flexible operations is increasingly becoming a license to play, and in focus by several stakeholders, including customers, employees, and shareholders.

Well positioned in a changing world

The ABB customer offering is relevant for hard to abate industries which will need to decarbonize in order for the world to meet its common net zero targets. Every day, we empower customers across the globe to optimize, electrify and decarbonize their operations.

ABB purpose aligned with secular trends