The first half of the year will be more challenging than the second half, according to ABB Ltd.'s Chairperson Peter Voser.
In 2023, the world experienced an economic slowdown, but it never happened in a big way, he told NDTV Profit's Niraj Shah on the sidelines of the World Economic Forum's annual meeting in Davos. "But we are still carefully optimistic for 2024."
"If we go by the regional analysis, (the) U.S., India and Asia as a whole, except China, will grow at the normal rate, which means strong growth. While Europe will lag as they have to deal with wars and inflation," Voser said.
He underscored that China would cover up in the second half of the year as the country had some consumer consumption issues, which it needs to sort out.
"In 2023, we experienced what we call a short-cycle of products and orders that's starting to slow down. At the same time, the late cycle has seen the big projects come in. The revenue book was still quite well developed," the ABB chairperson said.
Therefore, Voser forecasted that larger projects would slow down and, most probably, the short-cycle business would come up in the third and fourth quarters.
Over the last four years, he said, ABB transformed and performed really well, including in its India business. The automation-machinery manufacturer achieved its financial targets a year earlier than expected. "Which means that we are going into an interesting period in 2024–25 with a strong balance sheet and a well-performed business," Voser said.
He underlined that it might take a few months before the multiples really come down. "In terms of interest rates, that's where I'm more conservative. I don't see that many changes in interest rates in 2024," Voser said.
He stressed the need for companies to prepare for different risks, like high interest rates and inflations. "The other side (is that) this is (a) huge opportunity. We, hopefully, can take advantage of the lower multiples," he said.
"As lower multiples mean, you can also do acquisitions and strengthen your businesses."
Watch the interview here:
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