ZURICH (Reuters) - Switzerland’s ABB Ltd (ABBN.S) has hired a former Siemens (SIEGn.DE) executive to run a division that makes robots, motors and generators and whose profit margins have shrunk for five straight quarters amid sluggish demand for its products.
ABB named Sami Atiya as head of the Discrete Automation and Motion Division and moved its former boss Pekka Tiitinen to head the country’s operations in his native Finland, the engineering company said in a statement on Monday.
Atiya worked at Germany’s Siemens for 18 years and had run its Mobility and Logistics division since 2011 before leaving the company last December.
The automation unit which Atiya will lead has seen its operating margin on earnings before interest, taxes and amortisation decline to about 13 percent from more than 18 percent as demand for its motors and drives slumped and as U.S. and Chinese customers ordered fewer robotic products.
ABB says the division makes motors, generators, drives, power electronics and robotics which provide power, motion and control for a wide range of automation applications, including for wind generators and increasingly solar power.
Sustained low oil and gas prices have particularly hurt demand for automation solutions. Tiitinen has responded with a wave of job cuts, including at factories in Finland.
A margin turnaround will hinge on a recovery in energy customers’ businesses, analysts said.
“They have been reducing production capacity for more than half a year, but an increase in volume is likely to take longer, given that so much of the division’s business is related to process industries such as oil and gas,” said Richard Frei, a Zuercher Kantonalbank analyst.
The shares fell 1.9 percent to 19.67 francs at 1015 GMT, their lowest level since April and trimming ABB’s gain on the exchange in Zurich this year to 9.6 percent.
ABB highlighted Atiya’s experience in restructuring as well as a doctorate in robotics, sensors and data processing as key reasons for his hiring.
“Sami Atiya has tremendous experience in leading industrial portfolios across a wide range of markets and geographies as well as a proven track record of delivering strong results in growth, restructuring and integration situations,” the company said.
Reporting by John Miller; Editing by Michael Shields and Alexander Smith