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Sales slip in ABB`s global automation operation

01 March, 2001

Sales from ABB`s global automation operation fell by 9% last year to $7.46bn, while orders received dropped 4% to $7.8bn. Nevertheless earnings before tax for the automation business rose by 19% in 2000 to $486m, the biggest increase for any of ABB`s business sectors.

Revealing these figures last month, ABB`s new president and chief executive Jörgen Centerman blamed the negative sales and order figures on the strengthening of the dollar, several small divestments, and a low order backlog in the systems business. Automation remains ABB`s largest single sector, accounting for 31% of its income and 29% of its orders.

Centerman explained the thinking behind ABB`s plan to reorganise itself along customer rather than product lines. He revealed that ABB`s top 200 customers account for 30% of its sales, yet 180 of them buy from just one of ABB`s 28 business areas. At present, ABB captures just 8% of the 200 top customers` spending. "That`s a massive 92% to go after," Centerman remarked. Raising the share to 12% would yield $4bn in extra orders, he added.

The aim of the reorganisation - which Centerman stressed is not a "restructuring" - is for ABB to act as a single partner "rather than multiple, uncoordinated sales teams".

Another driving factor is the influence of the Internet. Centerman suggests that the biggest impact of the Net will be to take the world "from mass marketing to mass customisation". The Internet, he says, "allows you to go to a one-to-one relationship with your clients".

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