March 29, 2018 / 11:44 AM / a month ago

ABB on the hunt for acquisitions in artificial intelligence

ZURICH (Reuters) - Swiss engineering company ABB (ABBN.S) is considering acquisitions to increase its capabilities in artificial intelligence, Chief Executive Ulrich Spiesshofer said on Thursday.

Chief Executive Ulrich Spiesshofer of Swiss power technology and automation group ABB gestures as he addresses the company's annual shareholder meeting in Zurich, Switzerland, March 29, 2018. REUTERS/Arnd Wiegmann

“We will continually further expand the portfolio of ABB,” he said, speaking on the sidelines of the company’s annual general meeting in Zurich.

This would include investment in organic growth in artificial intelligence (AI), and partnerships with other companies to accelerate areas such as linking AI to industrial robots.

ABB, whose products also include charging stations for electric cars and massive converters for continent-spanning transmission systems, would also invest selectively in start-up companies, Spiesshofer said.

He was speaking after ABB gave a slightly more upbeat assessment about the development of its markets for 2018, saying conditions had brightened.

The company has navigated a tough couple of years with plummeting demand from its oil, gas and mining customers and has rejected calls from an activist investor to spin off its power grids business.

During this time ABB has simplified its structure into four divisions, sold off fringe businesses and exited operations in the low margin and risky engineering and construction area.

“If you take our end markets, in the last couple of years there has been a massive contraction in the process industries and uncertainty in some other markets,” Spiesshofer told reporters after the AGM.

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“2018 is really the first year where we see none of our market segments contracting, they are either stable or growing. That means the world is starting into 2018 with a positive sentiment.”

Late cycle businesses - such as machinery for the oil and gas industry - were also stabilizing, he added, with the company seeing “early activities” on operating expenditure and service orders from oil, gas and mining companies.

“We see increasing discussion for future projects. So altogether the late cycle will...stop getting worse in 2018 and towards the end of the year we expect the market to get a little better,” Spiesshofer said, although current global trade tensions could have a dampening effect on overall investment sentiment.

U.S. President Donald Trump earlier this month pushed ahead with the imposition of metal tariffs, though he later announced exemptions for some countries, sparking concerns of trade war. Trump last week signed a presidential memorandum targeting up to $60 billion in Chinese goods with tariffs.

After ABB’s overhaul, Chairman Peter Voser said now was the time for the company to deliver.

“We have outlined the strategy, we have worked on the portfolio both in and out, so the scene is set,” he told reporters.

    “We have finished, from an operational point of view, the restructuring programs. It is now about execution of the strategy; it is delivery time.”

    Reporting by John Revill, editing by John Miller and Adrian Croft

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