Electrical engineering ABB wants to become more profitable and make more active acquisitions
Zurich (awp) - The technology group ABB is raising its ambitions in terms of profitability. The growth targets remain unchanged, but efforts to make acquisitions are to be stepped up in future.
18.11.2025, 07:52
18.11.2025, 08:54
SDA
The company is now aiming for an operating profit margin (EBITA) of between 18 and 22 percent, as the company announced on Tuesday at a capital markets day. Previously, the target was 16 to 19 percent. This was formulated by Björn Rosengren, the predecessor of CEO Morten Wierod, who has been in office since August 2024.
With an EBITA margin at the upper end of the target range of 16-19% predicted for the current financial year - which was already achieved in 2024 - raising the bar comes as no surprise. Especially as Wierod has already stated that he believes a margin of over 19 percent is "possible". Analysts have also predicted an increase in the margin target.
M&A activities to be stepped up
The sales target remains unchanged. ABB wants to grow organically by 5 to 7 percent. Acquisitions should also continue to supplement sales growth by an additional 1 to 2 percent. Both targets apply on average over the economic cycle.
However, additional acquisitions are now to become an integral part of ABB's performance culture, i.e. part of the so-called "ABB Way". The focus will be on regular small and medium-sized acquisitions, while larger transactions will be added to the "normal deal flow".
Share buybacks only fourth priority
In this context, ABB also confirms its current policy on how the available cash is to be used. The funds are to be used primarily for organic growth.
The second priority is an increasing and sustainable dividend, with acquisitions following in third place. If there are any funds left over, they can be used for share buy-backs at best.
This also includes the ambition to spend 4.5 to 5 percent of turnover on research and development.
