ABB LTD 
ZURICH (Reuters) - Switzerland's ABB (>> ABB Ltd.) cut its revenue growth target on Wednesday and said it was accelerating a $1 billion (0.65 billion pounds) cost-savings programme as the company grapples with low oil prices and a slowdown in China.
ABB, which makes everything from factory robots to power transformers, said it was now targeting average annual growth in revenue of 3 percent to 6 percent until 2020, trimming a prior goal of 4 percent to 7 percent.
It will also speed up a restructuring programme which aims to save $1 billion annually by the end of 2017. The steps are expected to cost $1.2 billion, with half of those costs to be booked in the fourth quarter.
ABB Chief Executive Ulrich Spiesshofer is facing pressure to boost performance from a new activist investor, Sweden's Cevian, which has accumulated a stake of more than 5 percent.
His efforts have been complicated by the slowdown in China, ABB's second-biggest market, and a precipitous fall in oil prices that has dented the company's sales to customers in the upstream oil and gas sector.
"Global GDP, the oil price and emerging markets that will be lower are the key drivers, said Spiesshofer.
"China is a really difficult environment at the moment."
ABB is seeking to narrow its profitability gap to what Spiesshofer calls "best in class peers" -- rivals like General Electric which on Tuesday won approval from regulators to buy France-based Alstom's power business.
Last year, ABB's profitability margin narrowed, while GE’s industrial businesses increased their own.
The shares rose 1 percent to 18.74 francs by 0810 GMT, in line with the broader Swiss Market Index.
"The reduction of ABB’s growth targets isn’t a surprise and
will hardly have an effect on the share price," wrote Oskar Schenker, an analyst at J. Safra Sarasin in Zurich, adding that restructuring charges may however trigger downward revisions for this year's earnings.
"LISTENING MODE"
Cevian generally invests in companies in which it sees the potential to double the value of its investment within three to seven years. Since June, when Cevian announced its stake, the shares have lost about 11 percent of their value.
Spiesshofer said on Wednesday that Cevian was in "listening mode," indicating the investor has not so far actively demanded dramatic changes.
As part of the restructuring, ABB will combine its power systems and power products units into one division -- giving it four divisions instead of five.
The new Power Grid division will have $12.6 billion revenue, about a third of the company's annual total, and move ABB closer to its customers as they will just be dealing with one unit, Spiesshofer said.
There has been speculation that ABB could split off its automation businesses but Spiesshofer said the company plans no major divestments.
The company is, however, continuing to review its portfolio, including strategic scrutiny of the new Power Grids division announced on Wednesday, for possible smaller disposals that have characterized Spiesshofer's tenure as CEO since 2013.
"There's nothing major in the pipeline at the moment," he said, adding the company is once again considering acquisitions after a pause in 2014. "We have a strong balance sheet. The team is ready."
(Reporting by John Miller; Editing by Edwina Gibbs and Keith Weir)
By John Miller
