ZURICH (Reuters) – ABB Chief Executive Ulrich Spiesshofer has quit the Swiss engineering group in a surprise move for a company which is in the midst of a strategic overhaul to focus more on digital industries.
FILE PHOTO: Ulrich Spiesshofer addresses ABB’s annual news conference in Zurich, Switzerland February 28, 2019. REUTERS/Arnd Wiegmann/File Photo
Chairman Peter Voser will take charge at ABB, which is selling its Power Grids business to Japan’s Hitachi in an $11 billion deal and seeking to become more of an industrial automation company.
Spiesshofer agreed with the board to step down from the post he has held for the last five and half years and a search has begun for a successor, ABB said, without giving any reason for the departure.
During his tenure Spiesshofer positioned ABB toward more profitable areas like industrial automation and robotics, buying companies like Austria’s Bernecker & Rainer and General Electric’s industrial solutions business.
But Spiesshofer’s exit follows the apparent lack of investor enthusiasm for the former management consultant whose overhauls failed to revitalize ABB’s shares, which gained 4 percent in early trade on news of his departure to touch a six-month high.
ABB’s stock has lost 6.5 percent since Spiesshofer took over in September 2013, trailing rivals like Germany’s Siemens which have gained nearly 19 percent in the same time.
Patience appears to have worn thin when major strategy u-turns like the decision to offload Power Grids to Hitachi last December failed to boost the stock, which has languished well below the 35 franc level Spiesshofer promised to reach.
Investor AB, ABB’s largest shareholder, said the time was ripe for a change of leadership.
“Investor AB fully supports the ABB board and management’s new strategic direction with a simplified and decentralized organizational structure and full focus on delivering customer value and needs for digitalization, electrification, automation and robotics,” an Investor spokeswoman said by email.
“We support the board’s decision that now is the right time for a new person at the helm in order to speed up the execution of the new strategy and deliver on the key financial targets,” she added.
Cevian Capital, ABB’s second-largest shareholder with a 5.3 percent stake, said: “We support the strategic direction of ABB, and have full confidence in Peter Voser and the management team to continue implementing the transformation of ABB.”
ABB has also been dogged by problems with its internal financial controls, which led to reduced bonuses for some executive committee members.
ABB said its revenue increased by 4 percent on a comparable basis during the first quarter, although net income dropped 6 percent as profitability fell due to the integration of the low-margin General Electric Industrial Solutions business.
Voser, the former Royal Dutch Shell CEO who was ABB’s chief financial officer from 2002 to 2004, said he would continue to make ABB more of an industrial automation company.
“To achieve our key financial targets, we will proceed with the divestment of ABB’s Power Grids business as planned, simplify the organizational structure of the group and deliver cost savings,” Voser said.
Reporting by John Revill; Editing by David Holmes