The leading automation and robotics company continues progressing on its turnaround plans.
Investors can look forward to margin expansion and long-term growth at ABB
Lee Samaha (ABB): The European industrial giant (don’t worry, it has a US listing) continues its turnaround under CEO Bjorn Rosengren. Since his appointment in 2020, its operating margin has been on an upward trend, and management expects more progress in 2023.
Data by YCharts
It’s a welcome development from a company that’s flattered to deceive in the past. Moreover, it’s a sign that management will release the full value from an exciting set of businesses. They include one of the world’s leading robotics and discrete automation businesses. In addition, ABB is one of the top process automation companies in the world. Don’t underestimate the “electrification of everything” trend; it’s been one of the top performers this earnings season and promises long-term secular growth. For reference, ABB generates the bulk of its revenue and earnings from its electrification (smart buildings,smart power, electrical distribution and installation products) business, which includes a leading electric vehicle charging business.
Rosengren’s actions include a fundamental restructuring of the company's operations and active portfolio management, including selling non-core businesses, spinning off businesses, and refocusing ABB on its core businesses.
As such, if you want to play the theme of increasing investment in automation, robotics, and the electrification of everything trend, then ABB is one of the best options available.
