* Aims for operational EBITA margin corridor of 11-16 pct
* Sees sales growth of 4-7 percent annually in 2015-2020
* To buy back $4 billion of shares
* Shares up 2.4 pct, highest send end of April (Adds details, new CEO comment, updates shares)
By Caroline Copley
LONDON, Sept 9 (Reuters) - Swiss engineering group ABB said it would buy back $4 billion of shares, offering a sweetener to investors after a series of problems at its power systems unit and in the face of sluggish global growth.
Presenting his new strategy one year after taking the helm, Chief Executive Ulrich Spiesshofer also trimmed the Zurich-based firm's medium-term sales and profit forecasts to reflect the fact slower economic growth has crimped capital spending.
Spiesshofer spent his first 12 months scrutinising ABB's businesses, which range from industrial robots to power grid transformers, and selling off divisions considered to be outside the company's main areas of expertise.
The share buyback will run over two years and funnels some of the fruits of Spiesshofer's portfolio "pruning" back to investors, who have been unsettled by a series of charges related to delays to offshore wind farm projects.
"At the moment, I feel very strongly that it's the right decision to return the cash to shareholders and not embark on additional large scale acquisitions," Spiesshofer told a media briefing ahead of ABB's capital markets day in London.
Analysts described the new targets as realistic and welcomed the buyback, which helped send ABB shares to their highest level since the end of April.
ABB has raised more than $1 billion from the sale of five businesses over the past year and had $888 million in cash from operations at the end of June.
German peer Siemens, which has also been beset by problems in its power business, started a 4 billion euro ($5.2 billion) share buyback in May.
ABB shares have lagged peers and the Swiss blue-chip index this year. By 1052 GMT, ABB was up 2.4 percent, outperforming the European industrial goods and sector.
The stock trades at 16.5 times forward earnings - a premium to Siemens' 13.5 times and Schneider Electric's 16.1 times, according to Thomson Reuters data.
The Swiss company is banking on higher demand for its products as rising wage costs make labour-saving technologies such as robots more attractive and governments replace aging power networks.
But in recent years the company has grappled with slower-than-expected economic growth, which prompted customers to delay big-ticket capital spending and led the firm to cut its sales growth target to 4-5 percent for this year in February.
It said on Tuesday it expected sales to grow 4-7 percent per year on a like-for-like basis during 2015 to 2020, faster than global economic growth forecasts, but below its previous mid-term goal for annual sales growth of 5.5 to 8.5 percent.
It is now aiming for core profit (EBITA) margins of 11 to 16 percent over the same period. ABB's previous target was for EBITDA margins of 13-19 percent for 2011-2015, equivalent to 11 to 17 percent when adjusted for the new earnings definition.
The company said approximately three quarters of the buyback programme would be used to reduce share capital, while the remainder would be used to support employee share programmes.
ABB announced steps designed to strengthen collaboration between its five business units. It said it would reorganise its regional structure to focus on three large regions: Asia, Europe, and Middle East and Africa.
Spiesshofer said ABB would focus on high-growth markets such as sub-Saharan Africa, parts of South East Asia and Latin America.
The Swiss group is also looking to expand its service and software offering to help increase market share. It aims to increase its share of revenue by 1 percentage point annually.
ABB said it expected earnings per share (EPS) growth at a compound annual growth rate of 10 to 15 percent and to deliver attractive cash returns on investment (CROI) in the mid-teens. The new financial targets will take effect from Jan. 1. (1 US dollar = 0.7760 euro) (Editing by David Clarke)