Peter Terwiesch, ABB

Peter Terwiesch, ABB

I have been traveling again. This time at the MIMOSA members meeting in Houston. More to come on that later. Suffice to say right now that the standards for interoperability of data have come a long way in the past 10 years or so.

If my posts have slowed over the past few weeks, blame it on soccer. Every year that I’ve been a referee assignor, the work of keeping up with game changes and finding referees seems to get harder. I’m probably working six hours a day on that. Only four more weeks to go.

Here’s the latest manufacturing supplier news.

ABB launches Next Level strategy

ABB presented its Next Level strategy and financial targets on Sept. 9 for the 2015-2020 period aimed at accelerating sustainable value creation. The strategy is building on ABB’s three focus areas of profitable growth, relentless execution and business-led collaboration.

This is interesting in light of my recent speculations about ABB following yet another divestiture. This is an aggressive plan, but I note the continued weakness in the power systems market.

Here are the highlights:

  • Accelerated sustainable value creation of leading power and automation portfolio
  • Shift in center of gravity driving profitable organic growth, strengthening competitiveness and lowering risk
  • Improving performance through leading operating model
  • Driving change through 1,000 day programs
  • Future company and Executive Committee structure aligned with new strategy
  • Undiluted global business lines as core of ABB
  • Peter Terwiesch (photo) appointed to Executive Committee as head of Process Automation
  • Market focused, streamlined regional structure
  • From 8 to 3 regions, led by experienced EC members: Frank Duggan for Asia, Middle East and Africa; Greg Scheu for Americas; Veli-Matti Reinikkala for Europe
  • David Constable, CEO of Sasol, nominated to Board of Directors
  • New targets focused on attractive shareholder returns
  • Shareholders participate in strong cash generation through $4 billion share buyback

In the next period, the company will drive profitable growth by shifting its center of gravity toward high-growth end markets, enhancing competitiveness and lowering risk in business models.

“Our Next Level strategy will focus on actions centered on accelerating ABB’s organic growth momentum, margin accretion as well as enhanced capital efficiency to deliver greater shareholder value,” ABB CEO Ulrich Spiesshofer said. “We are shifting our center of gravity towards higher growth segments while enhancing competitiveness and lowering risk particularly in our Power Systems division. We are increasing the customer focus of our organization by streamlining it for greater agility and speed. We will drive change with focused 1,000 day programs to ensure a successful implementation.”

In line with its Next Level strategy, the company is aligning its Executive Committee (EC) structure. Peter Terwiesch, currently head of ABB in Central Europe and Germany, has been appointed EC member responsible for the Process Automation division. The three newly created regions will be led by experienced EC members – Frank Duggan (Asia, Middle East and Africa), Greg Scheu (Americas) and Veli-Matti Reinikkala (Europe).

 

ABB Next Level – 2020 targets
Revenue growth 4-7%
Operational EBITA % 11-16%
Operational EPS growth CAGR 10-15%
Free cash flow (FCF) conversion to net income >90%
CROI % Mid-teens

 

Operational EBITA % 2015-2020 divisional targets
Discrete Automation and Motion 14-19%
Low Voltage Products 15-19%
Process Automation 11-15%
Power Products 12-16%
Power Systems 7-11%

End of an era

 

Nematron Corp. was a pioneer of industrial PCs and PC-based control. When that whole technology area came crashing down, I totally lost track of it. Well, the final closure was announced this week.

Comark LLC, a portfolio company of JMC Capital Partners has acquired the assets of Ann Arbor-based Nematron. Headquartered in Medfield MA, Comark is a manufacturer of ruggedized industrial displays, integrated computers, workstations and kiosks that are used in a broad range of industrial and commercial applications.

“Nematron has been an innovator in panel mounted industrial computer and operator interface devices for over 30 years and has thousands of systems installed worldwide. Nematron continues to develop innovative new solutions that set the industry standard,” said G. Lawrence Bero, a Partner at JMC.

“We continue to expand our presence in the industrial and building automation sector. The addition of Nematron will broaden our product line and distribution channels,” said Steve Schott, Chief Executive Officer of Comark. “Nematron’s state of the art HMC, industrial and panel PC product line is a great addition to our growing product portfolio. We look forward to working with the Nematron team to successfully integrate the Nematron business into Comark.”

Another end of an era

The Square D Co. has been headquartered in Palatine, IL for a long time, recently at a beautiful campus. It was acquired by Schneider Electric, but managed to survive as the leading brand in the US of the Schneider portfolio with the Schneider HQ there. That office is not closing, but it will no longer house the executive team.

Well, no more. In an interesting move, Schneider, which bought and then submerged Modicon, has built a new US headquarters near the home of that PLC innovator, Andover, MA.

The moved is couched in the usual phrases of getting closer to customers and making the company more innovative. I have seen worse reasons for a corporate location move.

Here’s the announcement lightly edited. (I wonder if the company’s PR people have set the record for the most company mentions in one sentence. I left them in so that you remember who the company is. That is a common strategy—to mention the company’s name as much as possible. Most editors pare it down in interests of space.)

Schneider Electric, a global specialist in energy management, announced Sept. 10 the grand opening of its new North American research and development (R&D) center in Andover, MA. The Boston One Campus will also serve as the company’s new North America headquarters and is built to house approximately 750 employees across all disciplines of Schneider Electric’s business segments. Laurent Vernerey, President and CEO of Schneider Electric’s North America Operations, will relocate to the new headquarters as part of the company’s mission to drive innovation and efficiency in North America.

Designed to create an environment that encourages collaboration with customers, R&D engineers and employees, the new campus was also built with the company’s vision of sustainable design and energy efficiency. The Boston One Campus incorporates approximately $8 million of Schneider Electric’s own products and solutions and is expected to achieve about a 30 percent operating cost reduction in its first year. The facility is U.S. Green Building Council LEED Silver certified and leverages Schneider Electric’s SmartStruxure solution – a fully integrated building management system; APC by Schneider Electric EcoAisle and EcoBreeze data center cooling systems, data denter and server uninterruptible power supplies (UPS); Schneider Electric Altivar variable speed for HVAC control; a variety of ultra-efficient luminaires from Juno Lighting Group by Schneider Electric; intelligent IP security management systems from Pelco by Schneider Electric; and much more.

The Boston One Campus is made up of more than 240,000 square feet across two buildings. Boston One is also equipped with 53,000 square feet of engineering laboratory space that includes customer accessible, cross-discipline technology integration laboratories known as StruxureLabs, where Schneider Electric engineers test and validate products that go into real-world customer deployments.

 

 

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