ABB Reorganizes Sep 6, 2005

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Automation technology group ABB, based in Zurich, Switzerland, today announced new mid-term targets for the five-year period from 2005 to 2009. It outlined a strategy that it said emphasized improved business execution and a broader approach to value creation. This includes focus on growth, operating margin, use of capital, and cash generation.

To support the strategy, ABB will revamp its organizational structure as of January 1, 2006, removing a layer of management. The two core divisions will be divided into five business units. A new executive committee-level position will drive the integration of the regional organization.

"This is an evolution of our strategy, not a revolution," said ABB President and CEO Fred Kindle. "We remain focused on our core power and automation businesses. The strategy involves a balanced approach to value creation by widening our focus beyond growth to higher margins, greater return on capital, and cash generation. Above all, the emphasis will be on better execution to deliver results more consistently and reliably.

"ABB today is in a strong position and we can look forward to sustainable and profitable growth," Kindle added. "The targets and actions we are announcing today are designed to build on our strength and secure our competitive success over the next five years and beyond."

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