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ABB's Accelleron sees 50%-70% dividend payout ratio

Stock Markets Aug 31, 2022 06:36
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ZURICH (Reuters) -ABB's turbocharging business Accelleron aims to distribute 50% to 70% of reported net income as dividends, and targets organic revenue growth of 2%–4% in the medium term, the Swiss engineering and technology company said on Wednesday.

Accelleron's mid-term target on free cash flow conversion is 90%–100%, and it aims for an operational EBITA margin of 23%–26%, ABB said https://new.abb.com/news/detail/94372/accelleron-capital-markets-day-turbochargers-helping-the-world-to-move-further-more-efficiently-and-more-sustainably ahead of a capital markets day.

Last month, ABB said it would spin off the business to shareholders with the aim of listing it on the SIX Swiss Stock Exchange in October as part of its strategy to focus more on electrification and industrial automation.

Accelleron's products are used in the marine, energy, rail and off-highway sectors, where they increase engine output and raise efficiency while also reducing fuel consumption.

For the current financial year, Accelleron expects revenue to grow organically by around 6%. Its operational EBITA margin was expected to be approximately 24%, the company said.

"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," it added.

ABB had been considering a sale or a spin-off of Accelleron, which generated sales of $756 million in 2021 and employs 2,300.

ABB's Accelleron sees 50%-70% dividend payout ratio
 

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