Energy

ABB Capital Markets Day 2023: Key Takeaways for Smart Buildings

ABB hosted its Capital Markets Day 2023 at ABB Electrification’s circuit breaker production facility in Frosinone, Italy on 30th November 2023. This Research Note focuses on the Swiss conglomerate’s perspective on its Smart Buildings division within the Electrification business. Key takeaways are highlighted across its digital offerings, energy efficiency solutions and M&A strategy. The Smart Buildings division, one of 5 business units of the $13.6 billion Electrification segment of ABB, reported 2022 revenues in the range of $2,750 to $3,250 million. The division is primarily focused on electrical distribution products such as wiring accessories and miniature breakers and claims to be #1-2 in distribution enclosures and DIN-rail products. The secondary focus of the division is on home and building automation solutions. ABB views its Smart Buildings division as a high-growth segment with a focus on expanding its portfolio for commercial buildings through innovation with digital building management systems and bolt-on acquisitions. ABB Digital Solutions 8% […]

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ABB hosted its Capital Markets Day 2023 at ABB Electrification’s circuit breaker production facility in Frosinone, Italy on 30th November 2023. This Research Note focuses on the Swiss conglomerate’s perspective on its Smart Buildings division within the Electrification business. Key takeaways are highlighted across its digital offerings, energy efficiency solutions and M&A strategy.

The Smart Buildings division, one of 5 business units of the $13.6 billion Electrification segment of ABB, reported 2022 revenues in the range of $2,750 to $3,250 million. The division is primarily focused on electrical distribution products such as wiring accessories and miniature breakers and claims to be #1-2 in distribution enclosures and DIN-rail products.

The secondary focus of the division is on home and building automation solutions. ABB views its Smart Buildings division as a high-growth segment with a focus on expanding its portfolio for commercial buildings through innovation with digital building management systems and bolt-on acquisitions.

ABB Digital Solutions

8% of ABB’s technologies are concerned with digitally enabled building energy management solutions and electrical and automation systems for data centers. These digital solutions for buildings equate to around $2,356 million revenues.

ABB Capital Markets Day Sustainability Presentation 2023
Capital Markets Day Sustainability Presentation, 30 November 2023

Energy Efficiency for Buildings

ABB Ability Building Analyzer has been developed in collaboration with Canadian startup, Brainbox AI, in which ABB has invested in a minority stake. The strategic partnership allows their Building and Home Automation Systems unit to supplement its existing portfolio of digital offerings with BrainBox AI's solution.

With BrainBox AI’s technology, buildings can benefit from up to a 20-40% decrease in their carbon footprint as well as a reduction in heating, ventilation, and air conditioning (HVAC) energy costs of up to 25%.

ABB Capital Markets Day Electrification Business Presentation
Capital Markets Day Electrification Business Presentation, 30 November 2023

M&A

Building Automation is one of six high-growth areas identified for M&A in the Electrification business. Three acquisitions have been completed in the Smart Buildings division in recent years:

Cylon Controls, a second-tier building automation vendor in March 2020, covered in our previous article. The acquisition of the Irish firm, with approximately 100 employees, ramped up ABB’s mid-market commercial building solutions business.

ASKI Energy in 2022, covered in our previous 2023 report. The Austrian firm providing an energy management platform and control hardware is used in more than 11,000 sites. At the time of the acquisition, ASKI had 16 employees and around $2 million in 2021 revenues.

Eve Systems in June 2023. Headquartered in Munich, Germany, Eve Systems has developed smart home products, based on Matter and Thread, the new interoperating standard and wireless connectivity technology. The company’s extended complementary range of consumer-facing products tailored to the retrofit market strengthens ABB’s smart home technology portfolio. Eve Systems has around 50 employees and 2022 revenues of $20 million.

ABB Capital Markets Day Group Presentation
ABB Capital Markets Day Group Presentation, 30 November 2023

ABB has higher ambitions for inorganic growth driven by the divisions in 2024, aiming to acquire 5-10 small to mid-size bolt-on acquisitions per year.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

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