Canadian Electrical Wholesaler

 Dec 18, 2018

CEW 24 CS ABB 400

Hitachi has finalized a deal with industrial giant ABB to purchase 80% of their Power Grids division for $6.4bn. The move marks a transition for Hitachi, which will look to expand its energy solutions offerings by combining ABB’s power grids business with their digital technology division.

ABB will retain 19.9% in the deal, which values the business at $11bn.

With the deal ABB will look to restructure to boost their overall performance after losing 25% in share prices over the past year. While for Hitachi, the move will increase their ability to compete with global industry leaders like General Electric and Siemens.

Hitachi acquires 100 manufacturing sites, 200 sales sites and 36,000 employees.

Cevian Capital, a 5% stakeholder in the power grids business, attempted to purchase Power Grids in 2016, at which time ABB sought to turn around the business internally.

ABB said the divestment to Hitachi expands on an existing partnership and will turn Power Grids into a global infrastructure leader “with enhanced access to markets and financing.”

"Hitachi will combine ABB’s strength in the power grids business with our digital technology to build an energy platform that contributes to innovation the energy business,” said Hitachi President and CEO Toshiaki Higashihara, adding, “This creates further innovation for business fields such as life and industry and helps us address society’s issues and improve quality of life.” 

ABB will also return 100% of the net profits, estimated a $7.6-7.8bn to its share holders through share buybacks, or a similar method. The deal is expected to close by the first half of 2020.

ABB reduces annual run-rate costs by $500m as a result of the deal.

“ABB has been driving industrial change for more than a century as a global pioneering technology leader. As a result of our Next Level strategy, all of our businesses are today number 1 or 2 in their respective markets. To support our customers in a world of unprecedented technological change and digitalization, we must focus, simplify and shape our business for leadership. Today’s actions will create a new ABB, a leader focused in digital industries,” said ABB CEO, Ulrich Spiesshofer.

ABB will simplify its organizational structure to facilitate its four leading businesses, focusing responsibilities and increasing efficiencies.

The four business are: Electrification, Industrial Automation, Robotics & Discrete Automation and Motion. Each business will be top global leaders in their respective market. ABB’s established domain know-how, world-class engineering and technology expertise, will position the four businesses well to deliver innovative products and solutions for enhanced customer value. ABB’s addressable market is growing by 3.5-4 percent per annum, adding $140 billion in size to reach $550 billion by 2025.

“Today's announcement marks the beginning of a new chapter in ABB's history. Building on our technology and global talented employee base we will further strengthen our focus in digital industries,” said ABB Chairman, Peter Voser.

Source:

https://new.abb.com/news/detail/12473/abb-shaping-a-leader-focused-in-digital-industries

https://www.hitachi.com/New/cnews/month/2018/12/f_181217.pdf

 

SignifyThe electrical and lighting industries were shocked this week with the announcement that Signify purchased the recently renamed Cooper Lighting Solutions from Eaton.

The former Eaton Lighting division was scheduled to be spun off from Eaton via an IPO late this year / early next year.  While rumored earlier this year to be up for sale, rather than being spun off, there were no takers for the business. Although, it was reportedly considered by some.  According to Signify, discussions with Cooper Lighting, and Eaton, began a month ago. The interest could have been provoked by the Q3 slowdown in the lighting market with Signify sensing an opportunity to make an acquisition, perhaps at a discount.

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Rick McCartenBy Rick McCarten

For a long time now, many experts have been pointing out how companies should be expanding their service offerings beyond their product sales. Companies are wrapping services around their product and packaging — everything from special deliveries, warranties, repair and technical assistance to 24-hour service. This “servic-ization” helps differentiate companies from their competitors. How big is this going to get? Some reports have this trend becoming the core of our future economy.

 

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Carol McGloganBy Line Goyette

With Industry 4.0 on our doorstep, we are facing significant technological and resource changes, some of which question our industry’s core values. Artificial intelligence, the Internet of Things, digitization, transport electrification, diversity and inclusion are among the inescapable changes that will affect our industry head on, both in its best practices and its business models. We have several advantages to help us deal with the changes, including an unwavering advocate for our industry: Carol McGlogan. She is the first woman to hold the position of Electro-Federation Canada’s (EFC) President and CEO. 

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CEW IDEAL Nationals 400

The IDEAL Nationals are underway with an 18 member Canadian Team supported by the IDEAL Industries Canada crew. This year over 55,000 electrical contractors and electricians competed worldwide so this is the cream of the crop competing here in Orlando .

The 2019 IDEAL National Championship is a highly charged, no-holds barred competition to determine the best electrician in North America and includes teams from China, Australia and Mexico.

To make it to Orlando, contractors have to qualify first and numerous qualifying events were held throughout Canada.

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GDP Rose 0.1 PercentReal gross domestic product edged up 0.1% in August, following no change in July. Goods-producing industries were up 0.2% after two months of declines, led by a rebound in manufacturing, while services-producing industries edged up 0.1%. Overall, there were gains in 14 out of 20 industrial sectors.

On a three-month rolling average basis, real gross domestic product rose 0.5% in August, compared with a 0.8% increase in July.

 

 

 

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Changing Scene

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ImarkDuring the recently held IMARK Canada 2019 meeting in Niagara Falls, executives from 14 of the leading manufacturers in the Canadian electrical and lighting industry participated in the IMARK Canada Product Stampede on September 13th.

Select manufacturer executives had precisely five minutes to present a key product with superior growth potential to the members of IMARK Canada. Distributor member executives then rated each supplier based on the quality of the presentation and the perceived sales potential of the product being demonstrated.

 

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OmnicableOmniCable would like to thank the electrical distributors and industry partners who attended OmniCable Toronto’s open house on October 23, 2019. OmniCable opened its Toronto branch back in April 2019. Toronto is OmniCable’s first branch outside of the United States. The Toronto facility, which is approximately 50,000 square feet, is OmniCable’s 13th branch and services electrical distributors throughout Canada.

During the open house, attendees toured the facility, met OmniCable Canada and US teams, enjoyed light refreshments, and walked away with giveaways.

 

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Ilsco and Adanac SalesILSCO Canada has announced the appointment of Adanac Sales as agency of representation for the ILSCO brand in the province of British Columbia.

This partnership exemplifies ILSCO’s dedication to collaborate with companies that share ILSCO’s commitment to providing excellent products and service to the electrical industry in British Columbia.

 

 

 

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ABBTotal orders -1%1, order backlog +3%

  • Steady revenues and book-to-bill2
  • Operational EBITA margin2 11.7%, +20 basis points; impacted 70 basis points by stranded costs
  • Income from continuing operations, net of tax $422 million, -1%
  • Net income $515 million, -15%
  • Operational EPS2 $0.33, -7%3
  • Cash flow from operating activities $670 million, +19%, solid cash delivery expected for the full year
  • Björn Rosengren appointed Chief Executive Officer, effective March 1, 2020

 

 

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Peers & Profiles

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Stephanie MedeirosBy Blake Marchand

For Stephanie Medeiros, this is an exciting time for Canada’s electric vehicle industry because it is approaching a tipping point. “One or two percent of vehicles in Canada are electric, but you’re going to see this change rapidly. There are different factors that come with that, but to make it a reality you need to have a charging infrastructure in place. One of the factors involved with that is establishing standards for charging, as well as settling on a uniform method for charging — ultimately, constructing a landscape that closely resembles that of internal combustion.”

 

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City Electric Supply - Jon LlewellynJon Llewellyn is the Branch Manager City Electric Supply’s Nanaimo, BC location. “I've worn many hats within this great organization,” Llewellyn told Canadian Electrical Wholesaler. Beginning as a Van Driver, Jon worked his way through several different positions at City Electric Supply after a 10-year career in the trades as a Drywaller. Starting as a driver, Llewellyn would move into the warehouse, and on into Inside Sales, which would turn into an Account Manager position before he would land in his current role as Branch Manager. The ability to learn on the job is an essential skill in an evolving industry, particularly one that is heavily technical. Something Llewellyn has certainly embraced.

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Looking Back

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