ABB expects sustained growth and increased earnings from 2007 to 2011
Zurich, Switzerland, Sept. 5, 2007 - ABB, the leading power and automation technology company, expects sustained revenue growth and increased profitability under its new mid-term strategy for 2007 to 2011.
ABB expects demand for new and upgraded power infrastructure to continue in all regions, and further industrial investments in improved productivity and energy efficiency. The company plans to maintain its current core portfolio of businesses and aims to build on its leading technology and strong market positions - especially in the fast-growing emerging economies - to increase revenues organically at almost twice the rate of market growth and three times the rate of global GDP growth over the period.
Assuming demand remains favorable, ABB expects profitability (measured as earnings before interest and taxes as a percentage of revenues) to increase by as much as five percentage points during the five-year period, compared to 2006. The improvement will be driven by economies of scale, such as strong factory loading, and further operational improvements.
As a result, the company forecasts earnings per share to grow by a compound average of 15-20 percent a year over the planning period and its return on capital employed, after tax, to exceed 30 percent by 2011.
"ABB’s market and technology leadership in highly attractive businesses provides an opportunity to achieve sustainable organic growth and increased profitability," said Fred Kindle, ABB President and CEO.
"We will continue our focus on business execution and operational excellence," Kindle said. "Initiatives to optimize our global footprint will continue to bring both cost and growth benefits. At the same time, we will look for value-creating external growth opportunities. We expect our shareholders as well as our other constituencies to directly benefit from this strategy."
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