Chief Executive Officer, ABB
Morten Wierod on Crisis Management, Electrification & ABB’s Global Strategy
🌍 Crisis after crisis. Yet, business moves forward.
In this new episode of Fortune India: In Conversation, ABB CEO Morten Wierod shares how companies are navigating a world shaped by disruption, while doubling down on electrification ⚡ and automation 🤖.
From building resilient, local supply chains to redefining leadership in uncertain times, this conversation unpacks what it really takes to stay ahead.
▶️ Watch the full video to catch the complete conversation.
#FortuneIndia #InConversation #ABB #Leadership #MortenWierod
About Morten Wierod
Morten Wierod, CEO of ABB, discussed the company's second-quarter 2026 results during an earnings call on July 16, 2026. He reported that the quarter set new records for both orders and revenues, with good earnings growth, solid margin improvement, and strong cash flow, stating that "things progressed more or less as planned" and that the company delivered on its guidance. Wierod highlighted three recently announced acquisitions, including the Italian company Special Trasfo, which specializes in medium voltage transformers, and noted that combined they would add approximately 3.5% to ABB's 2025 revenues. He clarified that ABB is "not going back into the general power" with the Special Trasfo acquisition. Regarding the data center market segment, Wierod addressed questions about the sustainability of order intake, stating that the company sees a "very strong pipeline" and that large customers have clear capital allocation and investment plans. He noted that ABB does not take orders it cannot commit to executing on schedule. On the topic of acquisition multiples, Wierod said that at a 19.5 times multiple, the company sees synergy opportunities—primarily commercial and growth-related—that would bring the multiple into the mid-teens, and that the acquired business is "a high performing business" that will be accretive to earnings per share in the second year.
Transcript (57 segments)
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Morten Wierod0:05
I often say we've been in constant crisis management since 2019 with COVID, semiconductor crisis, wars, and tariffs. Crisis management has become the new normal. I think today we are a very focused company around electrification and automation. Those are the two technologies where we play, and the whole world is going electric and needs more automation. There is not a short-term and long-term responsibility; it's one responsibility. Our division presidents have full responsibility, almost like running a separate company.
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Interviewer1:07
Hello and welcome to yet another episode of In Conversation with Fortune India. Today we have with us a very special guest, the global CEO of ABB, Morten Wierod. Thank you for joining us. So the opening question that every global CEO needs to be asked is: How do you make sense of the business environment amidst the geopolitical strife we are seeing? What's your take on that?
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Morten Wierod1:37
I probably make more sense of the business environment than geopolitics these days. From a business point of view, I'm quite optimistic. We are able to deal with crises as a global society in a very different way than before. I often say we've been in constant crisis management since 2019 with COVID, semiconductor crisis, wars, and tariffs. Crisis management has become the new normal. The global economy outlook is pretty strong, even in this strange and sad environment, so that's the flip side.
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Interviewer2:44
And today when you look at the world, there was an era of globalization; now we talk of de-globalization, strategic resilience. How has ABB adapted to a new world where supply chains are no longer the same?
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Morten Wierod3:06
We haven't really changed that much. At ABB we have always tried to be local for local. We build manufacturing, technology, R&D, and skill sets in the main markets where we operate. In Europe, 98% of what we sell is produced in Europe. In India, we are in the high 80s and want to go above 90%. The same in China and the US. This local-for-local strategy has been a journey for many years. I lived in China from 2008 to 2012 to build those local capabilities. This has served us well during crises and especially with tariffs and currency changes. It builds resilience.
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Interviewer4:41
So is that a playbook that most multinationals should look at? Does having a strong local presence bring resilience into global operations?
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Morten Wierod5:01
Absolutely. Companies that put all their eggs in one basket struggle today. As a large multinational, we have the scale to have manufacturing in many countries. For smaller niche players, this is difficult. Some of the winners of globalization were large companies, and the winners in de-globalization are still large companies because now you need scale in many places. It's tough for smaller companies today.
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Interviewer6:07
And Martin, you have been a lifer at ABB and have seen its evolution. How would you describe ABB today as an entity?
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Morten Wierod6:21
I think today we are a very focused company around electrification and automation. The whole world is going electric and needs more automation. It's a good market. The journey of focusing the company on these areas has been reflected in our valuation and results. We have a decentralized operating model with 16 divisions, each with full product, manufacturing, and go-to-market strategy. This brings agility and speed. Collaboration is a key value.
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Interviewer7:47
Does the decentralization model also involve the business heads having strategic control over the P&L?
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Morten Wierod8:00
No, there is not a short-term and long-term responsibility; it's one responsibility. A division president has full responsibility for all strategies and runs the division almost as a separate company. But often we need to work together because customers don't care about our internal organization. They have full P&L and strategic responsibility.
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Interviewer8:43
And could you give us clarity on ABB's new operating margin and ROC targets? Will they keep moving?
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Morten Wierod9:01
Absolutely. You set a target, reach it, then set a new one. We have been doing very well. We previously aimed for 16-19% operational EBITA and reached 19% last year. Now we have upgraded the target to 18-22% operational margin for the whole company, with 18% as a floor during crises. We target 22%. When we get there, we will set new targets.
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Interviewer10:14
And for each of your business divisions? Is there a floor for each?
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Morten Wierod10:15
No, it's the floor for the company. We have different margin corridors for the three business areas. Automation: 14-18%, Motion (electric motors and drives): 18-22%, Electrification: 22-26%. Each has opportunities for improvement. I focus on the delta improvement year over year, not comparing who's best in class.
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Interviewer11:02
So how do you de-risk that delta? What is the playbook to keep volatility away?
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Morten Wierod11:13
It comes back to accountability within the divisions. We manage each of the 16 divisions individually. If one division has a problem, we address it there; we don't ask well-performing divisions to reduce anything. That accountability and speed drive performance.
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Interviewer11:57
And in your journey as CEO, what were the key learnings, especially about capital allocation? How have you warmed up to that?
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Morten Wierod12:12
I've been in the company for many years and have learned what takes longer and what takes shorter. Capital allocation is a long-term bet. I look at long-term trends and allocate capital to areas with the best growth outlook and profit pools.
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Interviewer13:08
And in terms of electrification, you're confident about the long-term trend, but we still see fossil fuel power generation. Do you think the inflection point for renewables has come?
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Morten Wierod13:37
Definitely the future is electric. Most fossil fuels are used to generate electricity. Coal and gas consumption today is the same as in 2019, meaning all new renewables have been used for energy expansion, not transition. In India, the share of renewables is higher. We need to reduce dependency on gas because it's needed for other uses. We need a better balance of the energy system.
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Interviewer13:54
Sure. So does the current geopolitical energy crisis make a stronger case for renewables?
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Morten Wierod14:15
Every country will look at building resilience. The US is self-sufficient with oil and gas. China, with no oil and gas, is ramping up renewables and nuclear. India also needs to reduce dependence. Renewables will play a big role, but also new technologies like small modular reactors. There is no one-size-fits-all solution.
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Interviewer16:31
Before we move on, I want to go back to capital allocation. One strategic move last year was the sale of the robotics division. Surprising since it seemed core to automation and AI.
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Morten Wierod17:01
We are in strong markets with electrification and automation. Robotics is a strong future market, but it has higher volatility. As a stock-listed company, we need to consider valuation. We believed the business would be valued higher outside ABB, so we planned a separate listing. Then SoftBank made a significant offer of $5.4 billion. After reviewing the business plan and offer, the board decided that selling was in the best interest of shareholders.
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Interviewer18:00
Which should have been much higher than the public listing.
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Morten Wierod18:07
You never know. Short-term, yes; long-term, we believed this was a fair valuation. We decided to sell to SoftBank, which is already strong in robotics. We believe it's a good future for robotics.
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Interviewer19:56
Okay. So now that electrification and automation are your growth drivers, how are you going to use your resources, now cash-rich with $5 billion, to accelerate growth?
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Morten Wierod20:18
The best returns come from organic growth. We are well invested in solid end markets: electrification of everything, power generation, renewable integration, and demand from industry, buildings, transportation, and data centers. Data centers are the highest growth engine, with 35% year-over-year growth since 2019, now over $5 billion in orders. But it's only 9% of revenue; 91% is not data centers. We have a good balance.
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Interviewer21:27
Now coming to AI. Everyone seems to be grasping at it, but no one knows the exact returns. How are you looking at opportunities?
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Morten Wierod21:53
The biggest opportunity for us right now is in data centers, where we can show returns. But the bigger impact is how AI changes how we operate. It affects all 110,000 employees. AI is a technology similar to the internet in the late 90s. It will impact everything we do. The easiest example is efficiency gains, like our spec reader tool that reduces quotation time from two weeks to a couple of days. That's a clear efficiency gain that also increases revenue. It's both an efficiency tool and a revenue multiplier.
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Interviewer23:34
AI. So it's a... Is it more of an efficiency tool rather than a revenue multiplier?
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Morten Wierod23:38
I think it's both. The earliest examples are on the cost and efficiency side, but companies that don't apply AI will die. It will drive efficiency and also revenue. The spec reader example shows both.
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Interviewer25:44
In terms of visibility, markets value companies that mention AI in earnings calls. Are you facing questions from investors about how ABB positions itself in the AI era?
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Morten Wierod26:10
Yes, mostly they are interested in our share in the data center market. Today 9% of our revenue goes to data centers. Some hyperscalers are our largest customers. But I also say 91% is not data centers; we are not a data center company, but we are well balanced.
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Interviewer26:37
Will data centers be the crown jewel for ABB?
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Morten Wierod26:43
It's an important part because it's the highest growth rate, growing almost 35% year-over-year since 2019, now over $5 billion in orders. But I also say it's only 9%, so we are serving many industries. I'm happy with the balance.
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Interviewer27:30
Where do you see the momentum now? Is it in electrification or automation? What is the holy grail for ABB in the coming years?
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Morten Wierod27:42
We see both growing well, but electrification has higher growth rate the last two years and will continue for next 3-5 years, especially with data centers and power grid development. Grid resilience is a challenge. I was in Spain on April 28 when the whole country lost electricity for 8 hours. It showed how dependent we are on electricity. Utilities are now very interested in grid automation and solutions like synchronous condensers to build inertia.
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Interviewer29:46
How aware are utilities and governments of the need for grid resilience? It comes at a cost.
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Morten Wierod30:02
It's like insurance. Most people have it because not having it is worse. Grid resilience is part of national security. We've seen wars target electrical grids. Critical infrastructure needs to be resilient.
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Interviewer30:45
And when you look at the global market, which countries are cognizant? Is India one of them?
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Morten Wierod30:57
Grid resilience in India is pretty strong, but it needs focus for the future as more renewables are added. Solar and wind lack inertia, so we need large power plants or synchronous condensers. It will be a mix of sources.
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Interviewer31:47
What has been your experience in India in conversations with private companies and the government? What are the opportunities?
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Morten Wierod32:08
I'm amazed by the massive buildout in India. The trend of infrastructure development - roads, airports, trains, tunnels - is the backbone of a more prosperous India. It creates jobs and long-term strength. ABB is contributing with more than 11,000 employees, many in key positions in software and AI supporting global operations.
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Interviewer33:58
And how are you backing up that opportunity in capital allocation? Is there a pathway for capital flows to India?
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Morten Wierod34:15
Capital is the fuel. This trip I had a groundbreaking ceremony and opened a new factory in Bangalore. We announced over $75 million in new investments this year, on top of over $200 million in the last five years. India and the US are the capital allocation winners because that's where we see the highest future demand. We invest where customers want to buy.
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Interviewer35:32
So how do you see the China vs India opportunity?
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Morten Wierod35:37
China is our second largest market, India fourth. I challenge that India should soon be third, ahead of Germany, by 2030. India's infrastructure investments and demographic profile give it a higher GDP growth outlook. We have been allocating more capital to India than to China in the last years because of the growth rate.
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Interviewer37:04
What will be the building blocks to make India the third largest market before 2030? Organic growth or M&A?
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Morten Wierod37:17
First by organic growth. That's always the best return. But we also look at M&A. ABB India is a separately listed company with a strong balance sheet. The biggest return is organic, so we focus on that, and M&A is the icing on the cake.
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Interviewer38:21
And in your journey as CEO, what is one philosophy you have learned as you rose through the ranks?
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Morten Wierod38:47
It's more than one, but simplicity and clarity are key. In a large organization, you need the messaging and direction to be very simple. Complexity doesn't impress. Also having a clear purpose: at ABB, we help customers become more productive and sustainable – leaner and cleaner. That's what we do. Speed and giving people freedom to operate are important. We break speed by giving accountability further down.
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Interviewer40:50
And has there been a role model or someone you look up to? Any advice that stuck?
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Morten Wierod41:01
I learned from many good leaders. The one I learned most from was when I started in my mid-20s. But you also learn from the don'ts. Sometimes those lessons are as valuable.
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Interviewer41:51
Thank you, Martin. It was an excellent discussion. I hope your target of India being the third largest market before 2030 fructifies soon.
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Morten Wierod42:03
Thanks. Thank you.