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12 November, 2019

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ABB ties up with Dassault and unveils new structure

04 March, 2019

ABB has formed a global software partnership with Dassault Systèmes and revealed details of its global reorganisation following its recent decision to sell its Power Grids business to Hitachi. The company’s focus will now be predominantly on the industrial sector with more than half of its almost 2018 revenues of $30bn coming from its automation, motion, robotics and discrete automation activities, which make up three of the four businesses in its new structure – the fourth being electrification.

The new partnership with Dassault will offer users in digital industries a software portfolio ranging from product lifecycle management to asset health monitoring. The partnership will combine ABB’s Ability digital platform and Dassault’s 3DExperience platform. ABB has already been using 3DExperience to model and simulate systems before delivering them to its customers.

ABB CEO Ulrich Spiesshofer describes the tie-up as a “game-changing partnership” that will transform customers’ value chains and allow them to tap into the opportunities of industrial digitalisation. “Together, we are offering an open, end-to-end digital portfolio – from digital twin to asset health – that gives our customers a competitive edge, building on our combined offering, domain expertise and global reach.”

The two companies are implementing a staged programme focusing on smart factories and robotics, process industry automation, and electrification systems for smart buildings. Under the partnership, ABB will develop advanced digital twins, allowing users to run ABB software and their operations more efficiently, flexibly and sustainably. The first joint offerings will be showcased at next month’s Hannover Fair.

Following the sell-off of Power Grids – said to be “well on track” – ABB will operate a simplified structure under a model it is calling ABB-OS, which will implemented in stages by mid-2020. From 1 April this year ABB will consist of four businesses, each said to be in global first or second position in their sectors. The annual savings from the new structure are expected to amount to around $500m by 2021.

The reconfigured ABB will have annual revenues of around $29bn and will employ about 110,000 people worldwide. The market it is addressing is growing by 3.5–4% a year and is expected to be worth $550bn by 2025.

“The new ABB will be a pioneering technology leader in digital industries, operating in attractive markets, with a unique offering of innovative solutions in electrification, automation, robotisation and digitalisation,” says Spiesshofer. “We are shaping four customer-focused, entrepreneurial businesses that are already the global #1 or #2 player in their respective markets today. With ABB Ability, we will continue to drive profitable growth, whilst managing the transformation of our ABB into a more agile, streamlined and customer-focused group.”

Each of the four businesses will have its own operations, functions, r&d and territories. They are:

ABB's new organisation is based on four businesses, all with higher margins than the Power Grids business that it is selling to Hitachi. The size of the bubbles indicate the revenues of each business.

•  The newly created Motion business, said to be the global leader in its sector which includes electric motors, generators, drives and services. In 2018, these operations delivered revenues of about $6.5bn and an EBITA margin of around 16%. The business is addressing a global market worth $80bn, which is forecast to grow at 3% a year. ABB expects its new business to expand faster than this, building on its leading local positions in drives and motors.

•  The Robotics and Discrete Automation business brings together ABB’s machine and factory automation activities (mainly B&R Automation) with its robots operations. Last year, its generated revenues of $3.6bn and with a margin of 15%. It has 11,000 employees and is claimed to be number two globally by size, and number one by growth. It is addressing a global market that is worth about $80bn and is growing at 6%. ABB expects its business to grow even faster.

•  The newly shaped Industrial Automation business (which excludes B&R) has 21,000 employees and will principally target process industry customers in a global market worth $90bn and growing at 3%. It is said to be the global number two in this sector, with a leading position in DCS (distributed control systems) and the largest installed base of more than 35 million connected devices.

•  The Electrification business, which is the biggest of the four, with 55,000 employees and 2018 revenues of around $13bn. It ships about 1.7 million products every day, from power distribution equipment to socket outlets. It is the global number two in a market worth $160bn and expanding by 3% a year.

ABB's newly created Motion business includes motors, drives, sensing and services



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