ABB to spin off lucrative e-mobility division
13 December 2021
Swiss engineering company ABB has unveiled plans to float its e-mobility charging business, planning an initial public offering (IPO) for Switzerland in the first half of 2022. The company announced the news at its market day, where it also revealed higher sales and profitability targets.
The company expects to benefit from higher demand caused by rebounding economies and decarbonisation efforts. It said key product drivers will be electrically-chargeable vehicle (EV) charging for cars and busses, traction systems in railways, trucks and mines and green hydrogen technology in the marine sector.
ABB has been working on decentralising its organisation since the beginning of 2020 to improve performance. The legal separation of its e-mobility division is expected to be completed during the first quarter of 2022 and it is planning to list the business ‘if market conditions remain favourable.’
Once listed, ABB plans to hold a majority stake in the spun-off entity. Reuters previously reported the business could reach a market valuation of around $3 billion (€2.7 billion). ABB entered the electromobility market in 2010 and has since sold more than 460,000 EV chargers in more than 88 markets. Its e-mobility unit employs around 850 staff, with the division reporting revenues of $220 million in 2020.
‘Over the last 24 months, ABB has made solid progress in implementing its decentralised organisation and improving quality of revenues. But we are still not where we want to be,’ said ABB CEO Björn Rosengren.
‘Our technology leadership in electrification and automation, aligned with sustainability and the global megatrends, is at the core of ABB’s Purpose and gives us a competitive edge. Nevertheless, we need to cement a high performance and integrity culture in everything we do,’ he added.
ABB emphasised the growing demand for EVs, with its e-mobility business benefitting from the global electrification boom. Its unit provides fast-chargers for electrified cars and buses.
This year, the Swiss tech company launched the world’s fastest charger, called Terra 360, which is capable of fully charging an EV in less than 15 minutes. This correlates to 100km of range in less than three minutes, making it an attractive device to customers worried about charging times. The company said it is the only unit on the market designed to charge up to four vehicles at the same time.
ABB also recently partnered with Italian startup Italvolt, which is building one of the largest gigafactories in Europe. The collaboration will open up other pathways as the companies aim to explore how automation, electrification and digitalisation solutions could fast-track production processes for battery manufacturing.
At its market day, ABB provided further updates on its portfolio management. Apart from spinning off its e-mobility division, the company also plans to exit its turbocharging division through a spin-off to existing shareholders or a divestment, targeted for summer 2022.
ABB also said its sustainable transport product portfolio now represents 10% of the group’s order intake. It outperformed this market segment for the last five years, growing at 17% per annum. The company expects further growth in this segment, which is estimated to show double-digit increases in the mid-term. Looking at its sustainability strategy, the Swiss tech company announced it will introduce a ‘circularity framework’ in 2022, with the objective to have 80% of ABB products covered by this at the end of the decade.