- Preferred partner supporting global marine, energy and rail/off-highway industries towards energy-efficient propulsion and decarbonization
- Leading market position and global megatrends drive sustainable revenue growth, attractive margins and strong cash conversion
- Intention to distribute 50 to 70% of reported net income as dividends
Accelleron Industries AG (formerly ABB Turbocharging), a global leader in high-power turbochargers for mission-critical applications, will host its Capital Markets Day today, August 31, 2022, starting at 11:00 CEST in Baden. Accelleron’s CEO, Daniel Bischofberger, and his executive leadership team will guide participants through Accelleron’s leading position in its attractive end markets, the opportunities presented by the company’s key role in the transition to renewable energy, sustainable transportation solutions and key technological developments. The presentation will also cover Accelleron’s business strategy, its financial profile as well as the company’s mid-term targets.
“Our technology is supporting the decarbonization of industries that are critical to modern life,” said Daniel Bischofberger. “Heavy transportation is a sector that has been long overlooked but is key to decarbonizing the economy, and we are proud to be at the epicenter of its transformation. Our leading market position, which is based on our unmatched product and service offerings and is reflected in Accelleron’s strong financial profile, is allowing us to invest in further growth and innovation. Together, we are proud to be helping the world to move further, more efficiently and more sustainably.”
Accelleron is currently focused on medium & low-speed as well as high-speed gas applications. Its turbochargers increase power output by up to 300 percent while reducing fuel consumption and CO2 emissions by up to 10 percent. In addition, Accelleron provides vital support to its customers through its network of over 100 service stations worldwide, its comprehensive technology offering, and the rapid availability of servicing.
The growth prospects of the business are intertwined with the global energy transition, which the company expects will generate additional demand for more efficient internal combustion engines to reduce emissions in the short-term, a shift to transition fuels. Accelleron further expects this transition to cause a pivot to future technologies and paradigms, including increased demand for balancing power generation and new propulsion systems that can operate partially or completely on green fuels such as hydrogen, methanol or ammonia. Accelleron believes that its industry-leading R&D innovation capabilities and track record position it at the forefront of meeting these growing demands.
Accelleron aims to grow faster than its competitors and addressable markets, leveraging the company’s superior products and technology as well as its leading market positions and service network, while delivering attractive margins, strong cash generation and capital deployment.
The company is focused on increasing its market share in its core marine and energy markets as well as expanding, organically and inorganically, into adjacent areas where it can offer a clearly differentiated value proposition through technical leadership and its advanced service network. Targeted bolt-on acquisitions are planned to be complementary to Accelleron’s existing portfolio and will be subject to a disciplined strategic fit and value creation. To further empower its resilient service business, Accelleron aims to increase the share of lifetime service offerings, while leveraging its digital portfolio.
2022 financial outlook
Market development has been positive in the first half of 2022, and for the current financial year, Accelleron expects its revenues to grow organically by approximately 6 percent. Operational EBITA margin is expected to be approximately 24 percent and free cash flow conversion is targeted to be between 60 and 70 percent in 2022. Accelleron expects to achieve operational net income of roughly $150 million in 2022 and intends to pay its first dividend of around $75 million during the course of the first half of next year, barring any unforeseen events.
Accelleron offers a compelling investment proposition based on robust revenue growth, attractive margins and a strong cash generation profile. These characteristics translate into the following mid-term targets for Accelleron:
– Organic revenue growth1: 2–4 percent CAGR
– Operational EBITA margin: 23–26 percent
– Free cash flow conversion: 90–100 percent
– Net leverage: 0.5–1.5x
– Dividend policy: 50–70 percent of reported net income, and up to 100 percent if net leverage <1.0x
Adrian Grossenbacher, CFO of Accelleron said: “We benefit from a strong balance sheet that provides us with the financial flexibility to grow our business and seize opportunities in new and adjacent areas while at the same time continuously returning cash to our shareholders.”
Sustainability to drive further growth
Sustainability is at the core of Accelleron’s business, and will provide significant opportunities for the company as the global challenge of decarbonizing essential industries is at a turning point. Within the marine, energy and rail sectors, Accelleron’s turbochargers and associated digital solutions play a critical role in making engines more powerful and efficient, while also reducing emissions without loss of power. Today, Accelleron operates in line with ABB’s sustainability strategy, but the company is in the process of establishing its own sustainability framework and policies. Accelleron’s environmental and social targets will be linked to, and reflected in, the executive compensation.
Accelleron has already made significant progress in limiting its environmental footprint, reducing its scope 1 & 2 CO2 emissions by 50 percent over the past three years. A further 60 percent reduction is planned by 2030, which is expected to be achieved via a transition to green electricity and test facilities that are expected to start using green fuels this year. At the same time, the company is in the process of quantifying its scope 3 CO2 emissions and plans to incorporate ethical and social responsibility considerations into its sustainability framework.
Spin-off subject to approval by ABB shareholders
On July 20, 2022, ABB announced its plans to spin off Accelleron and list the company on SIX Swiss Exchange, a transaction that will allow both ABB and Accelleron to focus on their respective core strategies and long-term value creation for their stakeholders. The spin-off process is subject to approval by ABB’s Extraordinary General Shareholders Meeting on September 7, 2022, with the subsequent listing planned for October 3, 2022.
Notes to Editor: A link to the Capital Markets Day presentation can be accessed on the ABB Investor Relations homepage at www.abb.com/investorrelations from 10:00am CEST. To join the event virtually, please register here.
This press release has been prepared in connection with the Accelleron’s Capital Markets Day, in the context of the contemplated spin-off of Accelleron Industries AG (“Accelleron” or the “Company”) from ABB Ltd (“ABB”) solely for informational purposes. The distribution of this press release and the distribution of the Company’s securities may be restricted by law in certain jurisdictions and persons into whose possession this document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This press release is not an offer of securities or investments for sale nor a solicitation of an offer to buy securities or investments in any jurisdiction where such offer or solicitation would be unlawful. No action has been taken that would permit an offering of the securities or possession or distribution of this press release in any jurisdiction where action for that purpose is required. Persons into whose possession this press release comes are required to inform themselves about and to observe any such restrictions.
The information contained in this announcement is for background purposes only and does not purport to be full or complete and no reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. Any investment decision in connection with securities of the Company should be made on the basis of the information contained in the prospectus in connection with the listing of Accelleron’s shares on the SIX Swiss Exchange.
This press release does not constitute or form a part of any offer of securities or solicitation to purchase or subscribe for securities in the United States. The securities may not be offered, subscribed or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements thereof. The securities of the Company have not been and will not be registered under the U.S. Securities Act and the Company does not intend to make a public offer of its securities in the United States.
Important notice about forward-looking information
This press release includes forward-looking information and statements which are based on current expectations, estimates and projections about the factors that may affect our future performance, including the economic conditions of the regions and industries that are major markets for ABB. These expectations, estimates and projections are generally identifiable by statements containing words such as “anticipates”, “expects”, “believes”, “estimates”, “plans”, “targets”, “aims” or similar expressions. However, there are risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from the forward-looking information and statements made in this press release and which could affect our ability to achieve any or all of our stated targets or anticipated transactions. Some important factors that could cause such differences include, among others, business risks associated with the COVID-19 pandemic, the volatile global economic environment and political conditions, costs associated with compliance activities, market acceptance of new products and services, changes in governmental regulations and currency exchange rates, the impact of the financial performance of Accelleron, and such other factors as may be discussed from time to time in ABB Ltd’s filings with the U.S. Securities and Exchange Commission, including its Annual Reports on Form 20-F. Although each of ABB Ltd and Accelleron Industries Ltd believes that its expectations reflected in any such forward-looking statement are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved. The foregoing list of factors is not exclusive and undue reliance should not be placed upon any forward-looking statements, including projections, which speak only as of the date made. ABB Ltd and Accelleron Industries Ltd do not undertake to update, and expressly disclaim any duty to update, any forward-looking statements, whether as a result of circumstances or events that arise after the date they are made, new information, or otherwise.
Accelleron is a global leader in turbocharging technologies and optimization solutions for 0.5 to 80+ MW engines, helping to provide sustainable, efficient and reliable power to the marine, energy, rail, and off-highway sectors. Through its innovative product offerings and research leadership, the company accelerates the decarbonization of the industries it operates in. Accelleron has an installed base of approximately 180,000 turbochargers and a network of more than 100 service stations across 50 countries worldwide. www.accelleron-industries.com
ABB (ABBN: SIX Swiss Exchange) is a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB’s success is driven by about 105,000 talented employees in over 100 countries. www.abb.com