ZURICH – On Thursday, Swiss industrial conglomerate ABB unveiled plans to spin off its entire robotics division, marking the company’s most significant reorganization since it sold its power grids business to Japan’s Hitachi in 2018. ABB’s robotics arm is the world’s second-largest maker of industrial robots, trailing only Japan’s FANUC Corp. It also competes with other major players like Yaskawa and Germany’s Kuka. In 2024, the division brought in $2.3 billion in revenue, accounting for 7% of ABB’s total, but recent performance has been impacted by slowing demand in the automotive industry—a key market for robotics. Last year, its profit margin was 12.1%, notably lower than ABB’s overall margin of 18.1%.

The company plans to have the robotics unit listed as an independent public company by the second quarter of 2026. Existing ABB shareholders will receive shares in the new entity through a dividend distribution. ABB CEO Morten Wierod noted that the robotics business had minimal overlap with the rest of the company and would be better positioned to grow and compete independently. “We believe a spin-off will enhance both companies' focus, improve value creation, and attract top talent through better-aligned capital and governance structures,” he said.

Investor AB, ABB’s largest stakeholder with a 14.3% holding, endorsed the move. CEO Christian Cederholm called the spin-off a strategic step that will sharpen the focus of both companies and strengthen long-term growth and profitability prospects. Bank Vontobel analyst Mark Diethelm also supported the plan, suggesting it would streamline ABB into a dedicated electrification and automation business—an outcome he viewed positively.

The announcement came alongside ABB’s strong Q1 financial results. Operational EBITA rose 13% to $1.59 billion, surpassing analyst expectations of $1.48 billion. This was aided by improved profit margins and a one-time $147 million gain from the sale of property to the city of Zurich. Quarterly sales rose 1% to $7.94 billion but fell short of the projected $8.16 billion.

Disclaimer: This image is taken from Reuters.