Morningstar | ABB is well placed across discrete and process automation.
ABB’s power grids and robotics and motion divisions are better positioned now to capture share in their respective markets than they have been in recent years. The power grids division, which contributes roughly 24% of group EBIT before intersegment eliminations, faces a changing market, requiring software and equipment that can manage dynamic power supply. Although ABB’s product portfolio has led innovation in this area, its internal sales and structures were predicated on previous market dynamics. The division is amid a retooling of its salesforce towards representatives who can better address utility customers’ needs with regard to dynamic power allocation. This has involved retraining some existing salespeople but also hiring new ones with consultant backgrounds. In 2017, ABB announced the acquisition of B&R, a top-five global supplier of critical discrete automation components, including programmable logic controllers, or PLCs, previously missing from ABB’s product portfolio. This deal enables ABB to offer a complete discrete automation offering, as the PLCs, which include microprocessors, control the equipment and are present in most discrete automation setups. Because ABB is also the number-two robotic arm supplier globally, we believe this deal puts it at a competitive advantage relative to suppliers such as Rockwell Automation and Siemens that do not manufacture robotic arms.ABB specializes in power and automation technologies. Co. provides a broad range of products, systems, solutions and services that are designed to boost industrial productivity, increase power grid reliability, and enhance energy efficiency. Co.'s automation businesses serve a full range of industries with process optimization, control, measurement and protection applications. Co.'s power businesses focus on power transmission, distribution and power-plant automation, and support electric, gas and water utilities, as well as industrial and commercial customers.
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