Financial Results

Strong start to 2019. Growth momentum continues in Q1. Revenues up +9% reported. Full Year Target reaffirmed.

• Org. growth +6%; North America up +9% org., Asia-Pacific up +7% org.
• Energy Management up +7% org., growing in all regions
• Industrial Automation up c.+4%1 org., mid/late cycle revenues growing strongly
• Good dynamic on strategic priorities: Services, Software, EcoStruxure

Jean-Pascal Tricoire, Chairman and CEO, comments:

“We start the year 2019 with a solid momentum and continued growth. We execute our strategy to provide our customers energy and automation digital solutions for efficiency and sustainability. Energy Management delivers a strong performance, benefitting from its complete power management solutions in its four end-markets. Industrial Automation grows benefiting from its balanced exposure, strong growth in process & hybrid and its integrated software portfolio while discrete markets are moderating in specific geographies. AVEVA concludes a remarkable first year and confirms the strategic rationale of the transaction. We keep pushing our strategic initiatives for more products, more software, more services and better systems as well as cross selling to our targeted segments. We are confirming our objective for 2019."

Replay of the conference call available here.

Strong performance in FY18: Group revenue of €25.7bn, growth of +7% organic and Adj. EBITA up +10% organic. Record Net Income & EPS

• FY18 Adj. EBITA €3.9bn, Margin of 15.1%, up +50 bps org.
• Record Net Income to date of €2.3bn, up +9%
• Proposed dividend at €2.35/share, up +7%
• New share buyback of €1.5bn to €2.0bn launched
• Portfolio optimization: up to €2.0bn in revenues earmarked for review
• 2019 Target: Adj. EBITA org. growth between +4% and +7% driven by +3% to +5% org. revenue growth and +20 to +50 bps org. adj. EBITA margin improvement
• 3-year margin ambition announced

Jean-Pascal Tricoire, Chairman and CEO, commented:

“2018 is another year of acceleration of our strategy execution. We provide our customers with complete solutions, cross-selling multiple technologies, more products provided through an enlarged network of partners, more services, more software, and a more targeted development of systems, which creates a solid base for growth in 2019. I am also pleased by the continued progress of our Medium Voltage business, which now sells mostly together with Low Voltage.
After years of integration, we finalized the consolidation towards our two core businesses, Energy Management – regrouping Medium Voltage, Low Voltage and Secure Power – and Industrial Automation, that our country organizations combine for our customers into full digital solutions of efficiency and sustainability.
We continue delivering every year on the profitability objectives shared in 2016. In 2018, we improve the margin of both our businesses, and deliver a new high in terms of Net Income and EPS, while building our long-term capabilities and increasing investments in R&D, Services, and Digital Capabilities. Our ambition is to keep stepping up our profitability based on productivity and cost efficiency, portfolio optimization, and focus on the most relevant value propositions.
We remain focused on optimizing the portfolio. In 2018 we strengthen our portfolio with AVEVA and IGE+XAO in software, and ASCO Power. We are also increasing the level of assets under review from €0.5bn, to c. €1.5 to €2.0bn in revenue terms, which we expect to conclude in the next three years.
Additionally, we continue to focus on generating attractive returns to our shareholders, having increased our proposed dividend by +7% and initiating a new €1.5 to €2.0bn share buyback program”.

The webcast of the management presentation is available through this link.

2017 Annual Results - February 15, 2018

• Q4 Revenues up +4.6% organic with Energy Management and Industrial Automation, growing by +4.3% and +5.6% respectively
• FY Revenues €24.7bn, up +3.2% organic with growth across regions
• Record €3.65bn FY adj. EBITA, +9% org; 14.8% margin up 90bps org.
• All time high Net Income of €2.15bn, up +23%. Record FCF at €2.25bn
• Proposed dividend at €2.20/share, up +8%

Jean-Pascal Tricoire, Chairman and CEO, commented:

“In 2017, we drive our revenues up +3.2% organic for the full year, and accelerate in Q4 at +4.6%. The continued execution of our strategy delivers a strong +90bps organic adjusted EBITA margin improvement, confirming the continuous and structural improvement of our operating margin over the past 10 quarters. 2017 is the year of a combined highest ever adjusted EBITA, Net Income and Free Cash Flow. We also improve our ROCE to 12%, by more than 1.3pts.

Our sales accelerate, boosted by the delivery of complete solutions of efficiency and productivity, leveraging the strength of our focused portfolio in Energy Management and Industrial Automation and the adoption of EcoStruxure as the platform of integration and collaboration. We also benefit from the launch of a high number of new products and digital services on the market. We keep working on our portfolio and reinforce our presence in Energy Management with Asco Power, strengthen in software by launching the acquisition of IGE+XAO and combining our industrial software business with AVEVA. At the same time, we finalize the disposal of DTN.

In 2018, we shall keep focusing on our strategy to grow products, services and software, accelerate the adoption of EcoStruxure and continue to capitalize on our unique integrated portfolio. With selectivity being completed, all our businesses are set to grow, and we shall keep working on maximizing the cross-selling for faster growth and leaner execution.”

2016 Annual Results – February 16, 2017

• FY Revenues €24.7bn with organic growth of -0.9% and slightly positive underlying organic growth
• Q4 underlying growth c.+1.6%, improving sequentially
• FY Adj. EBITA margin improved 40bps to 14.1%, c.+90bps before FX
• Net profit of €1.8bn, increased +24% and EPS by +26%
• Record cash generation with FCF of €2.2bn; Cash conversion 118%
• Proposed dividend at €2.04/share, up +2%

Jean-Pascal Tricoire, Chairman and CEO, commented: “In 2016, we achieve all our key financial targets, delivering slightly positive underlying growth and +90 bps improvement before FX in adjusted EBITA margin. We also accelerate the execution of our strategy, which we shared during our recent investor day. As we go into 2017, we focus on growing our partner network through the launch of many new innovative offers, developing services and software, working on margin improvement through continued selectivity on projects and keeping strong attention on cost control. Additionally, we are very excited by the potential of EcoStruxure architecture in the domains of building, power, datacenters, machines, plant and grids and by the greater value we offer our customers through this innovative offer.”

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Annual Results 2015 – February 17, 2016

• FY Revenues €26.6bn, up +6.8%, org. -1%, ~flat underlying¹
• FY Adj. EBITA +5%. Organically, FY margin ~stable, c.+50bps in H2
• Strong growth in adj. earnings per share (Adj. EPS)², up 6%
• Another record free cash flow (FCF), reaching €2bn, up 20%
• Proposed dividend³ +4%, at €2/share & €1.5bn buyback in 2015-2016
• Successful Invensys integration; Good start of Schneider is On

Jean-Pascal Tricoire, Chairman and CEO, commented: “In a challenging environment, we deliver record high revenues and profit, a stable margin in organic terms, and a strong growth in cash flow. All this demonstrates the robustness of our business model based on the largest worldwide network of partners further enhanced by our balanced exposure to both end-markets and geographies. Moreover this illustrates our capability to quickly adapt to a volatile and challenging environment. Additionally the successful Invensys integration shows our capability to drive value creation from acquisitions.

Our priorities for 2016 are margin improvement by working on our costs, growing our partner’s network through the launch of many new integrated offers, accelerating services and software, and increasing selectivity on projects focusing on our sectors of expertise.

In this context, we target organic revenue growth to be flat to down low single-digit, impacted by higher selectivity on project activities and a margin improvement of +20bps to +60bps before negative FX impact.”

1 Adjusted for negative impact from change of fiscal year closing in Invensys and the ramping down of the China nuclear project, the estimated full year impact is about €40m and €66m respectively

Annual Results 2014 – February 19, 2015

• Solid execution delivered full year targets
• Q4 revenues up 13%, +2.5% organically
• Full year revenues up +6.6%, +1.4% organically
• Gross margin up and Net income +3%, c. +11% at constant FX
• Invensys integration well on track

Jean-Pascal Tricoire, Chairman and CEO, commented: "We achieve our targets while facing a turbulent environment in 2014. Our revenues grow 7%, 1.4 % organically and margin expands by 0.4pt at constant FX, on current scope. While early cycle businesses drive revenues up, IT returns to growth and Infrastructure shows signs of improvement at the end of the year. Our balanced geographic footprint also proves to be a key strength as new economies and mature countries supplement each other's growth over the year.

Invensys integration is well on track. Invensys revenues are up 2% organically. Adjusted EBITA margin expands by 5.5 pts reaching 14.8% and cash generation is strong. All this contributes to double digit EPS accretion for the Group. Invensys confirms its complementarities and synergies with our Industry business thanks to the integration of automation and power, the development of hybrid solutions, and the construction of a strong industrial software portfolio.

2014 marks the end of our “Connect” company program which is another step in building a cohesive, resilient and efficient Schneider Electric. We achieve strong service growth and deliver high supply chain efficiency. Additionally, we strengthen our technology portfolio and enhance capabilities in software, targeted segments and key geographies.

For 2015, we see continued growth in North America, signs of stabilization in Western Europe and a mixed picture in new economies. In this context, the Group targets low single digit organic growth revenues and an adjusted EBITA margin in the range of 14% to 14.5%, assuming no negative currency impact on margin.”

Annual Results 2013 – February 20, 2014

• Solid results with growth in all key financial metrics
• Revenue of €23.6 bn, up 0.4% like-for like
• Adjusted EBITA margin up 0.3 pt on organic basis
• Net profit up +4% to €1.9 bn
• Record Free Cash Flow of €2.2 bn, up 5%

Jean-Pascal Tricoire, Chairman and CEO, said: “We delivered solid results in a challenging environment in 2013. We grew 3% outside Western Europe, expanded our margin by 0.3 point at constant currencies and scope and achieved record free cash flow. This reflects the strength of our business model and our capability to adapt to a volatile environment.

We also filled a major technology gap in our portfolio with the acquisition of Invensys, which further enhances our capability to integrate power, automation and software to deliver complete efficiency solutions to our customers. In parallel, the full control of Electroshield – TM Samara reinforces our presence in key end-markets and steps up our footprint in Russia.

We shall now focus on integration of these businesses, capitalize on our technology innovation in products and solutions and optimize efficiency across the company. We see significant opportunities for growth and improving the return of our investment. 

Looking into 2014, we see a rather positive economy in North America and China, initial signs of stabilization in Western Europe, while uncertainty remains in several new economies. On this basis, we expect low single-digit organic growth in revenue and 0.4 to 0.8 point improvement in the adjusted EBITA margin, excluding currency impacts, from the 2013 proforma level of ~14.0% including Invensys.”

Annual Results 2012 – February 21, 2013

• Record high earnings and cash generation in mixed markets
• Adjusted EBITA up 10% at €3.5 billion, or 14.7% of sales
• EPS grew 11%, at €3.73 on adjusted basis(1)
• Record free cash flow of €2.1 billion and dividend of €1.87
• Connect delivered solid results in line with 2014 ambition

Jean-Pascal Tricoire, President and CEO, said: “In 2012, we delivered 7% growth in sales, double-digit
increase in earnings per share and record free cash flow in mixed markets. This illustrates once again the strength of our business model, the solid execution of the Connect company program, and the disciplined integration of our acquisitions. This strong performance allows us to propose a 10% increase in dividend to €1.87 per share this year. 

Our effort to improve the solutions performance is paying off and we continue to grow our strong new economies platform. Together with what we have achieved in product and software innovation, tailored supply chain and organization efficiency, we have laid a solid base for our long term growth and profit.

For 2013, in an economic environment that remains mixed, we target a low-single digit organic growth in sales and a stable to slightly up adjusted EBITA margin.”