Schneider Electric hosts a Capital Markets Day for investors and financial
Key messages from Schneider Electric Capital Markets Day:
* Positioned on key secular growth trends with an integrated portfolio driving
cross-selling; operating through a unique multi-hub model together with an
unparalleled partner network
* Reaffirming medium-term ambition, with a path to improve the Adjusted EBITA
margin by c. +200 basis points by 2021, which is not the end of the margin
* Preparing for further increase in organic financial performance for the
longer term, beyond the 2021 ambition; plan for future investments and its
* AVEVA integration and joint go-to-market strategy on track
* Ambition for Software and Services to represent 20% of Group revenues in the
Rueil-Malmaison (France), June 26, 2019 - Schneider Electric is hosting a
meeting today with investors and financial analysts where Jean-Pascal Tricoire,
Chairman and CEO, Emmanuel Babeau, Deputy CEO and CFO, and members of the
company's management team will highlight the Group's strategy and execution
The day will start with presentations at the Company's headquarters in
Rueil-Malmaison, where Mr Tricoire and Mr Babeau will detail the strategic and
financial direction of the Group. This will be followed by an in-depth
presentation for each of the two synergetic businesses - Energy Management and
Industrial Automation. To conclude the morning, there will be a presentation on
the opportunities and ambitions of the Group in relation to Services, and a
panel discussion highlighting the benefits to customers of the Group's regional
Attendees will then visit 'Le Vaudreuil', an example of one of the company's
award-winning Smart Factories, where the company's portfolio for industrial
end-markets, as well as the company's innovations, solutions and connected
offerings for Smart Manufacturing will be showcased.
Company strategy and positioning
Jean-Pascal Tricoire, Chairman and CEO, will present on how Schneider Electric
has positioned itself on two megatrends of Energy Transition and Industry 4.0
that are set to drive significant investment across industries in future years.
In an increasingly electric and digital world, the Group's unique positioning,
providing Energy and Automation digital solutions for efficiency and
sustainability, enables significant benefits for customers in its four end
markets: Buildings, Data Centers, Industry and Infrastructure. After a period
of portfolio building and subsequent integration, the Group focuses on
execution of its strategic priorities of more products, more software, more
services and better systems; further scaling its digital offers, and continuing
to improve efficiency.
The company will expand upon the triple integration it offers for greater
efficiency to customers:
1. Integration of Energy and Automation
2. Integration from end-point to cloud, enabled by EcoStruxure
3. Integrated software throughout the lifecycle
The company will demonstrate how it is prepared for an increasingly multi-local
world, leveraging integration across its sales organization, global supply
chain, digital offers and marketing, while keeping a broad geographic balance
on multiple levels. The company operates an open community and ecosystem, both
through its large network of partners, and through Schneider Electric
This integrated, multi-hub, open and sustainable approach enables Schneider
Electric to deliver consistently strong operational performance, and attractive
returns for shareholders.
Emmanuel Babeau, Deputy CEO and CFO will present an update on the key drivers
which have contributed to consistent, sustainable and strong financial
performance in the past three years, and that will continue to drive
performance in the coming years. He will also share the Group's clear and
disciplined capital allocation policy, and its focus to deliver attractive
returns for shareholders.
The Group reaffirms its target for 2019 and its through-cycle objective of +3%
to +6% organic growth in revenues, on average.
Medium Term ambition (2019 - 2021)
A path towards 17% which is not the end of the margin journey
The Group reaffirms its ambition to expand the Adjusted EBITA margin as
outlined during the 2018 Full Year results:
"Over the next 3 years, the Group will continue to focus on profitability
levers within its control, with an aim to improve its adj. EBITA margin by c.
+200 basis points (at constant FX), assuming no major change to the current
This underlying improvement would be achieved through a combination of organic
growth, organizational simplification & efficiency and continued productivity.
The Group targets c. EUR1.1 billion of industrial productivity over this
timeframe. Portfolio optimization is expected to contribute a few tens of basis
points towards the margin ambition.
Preparing the next steps for further increase in organic financial
The Group today shares its vision to prepare for superior financial performance
in the long-term. This entails an increase in targeted investment in the coming
years on key drivers which will enhance long- term organic top line growth and
drive margin improvement beyond the c. +200 bps ambition post 2021.
As a consequence, Schneider Electric plans to increase investment over the next
4 to 5 years on core drivers of performance:
- R&D and innovation
- Sales force size and skills on priorities
- Marketing and communication
This new investment will have to be neutral at the margin level and therefore
financed by increased productivity on 'non-Productive' SFC (including back and
middle office, global functions), resulting in:
- Targeted yearly productivity to increase from 2018 levels
- Total redeployment could represent up to 10% of total SFC over the next
4 to 5 years
The cash investment for this additional effort is expected to bring the average
annual restructuring cost over the next 4 years to a level between EUR200
million to EUR250 million.
In case of an economic downturn over the period the extra productivity
generated could also be used to increase margin.
Peter Herweck, EVP Industrial Automation, will present on the positioning and
clear strategy behind developing the business as a full-liner in automation,
covering process, hybrid and discrete. He will also share the market
opportunities going forward. Peter will be joined by Craig Hayman, CEO of
AVEVA, to explain how the Group's offers are further enhanced by its leading
software capabilities through AVEVA, and the go-to-market model being deployed
by the two companies for the benefit of customers. The presentation will
include a live demonstration of the integrated offer of power, automation and
Philippe Delorme, EVP Energy Management, will showcase how the business is
building the future to deliver long term growth in an all electric and digital
world, by leveraging innovation, digital, cross-selling, segment focus and
efficiency. The value proposition will be reinforced by direct testimony from a
customer from the healthcare segment.
Frederic Abbal, EVP Services, will detail the Group's ambition and strategy to
grow Services revenue at twice the average of the Group, contributing to
Services and Software in total reaching 20% of Group revenues in the
A panel discussion with three of the Group's regional Operations leaders;
Barbara Frei (Europe), Christel Heydemann (France) and Aamir Paul (USA), will
explain how Schneider Electric's operating structure offers benefits to
customers and drives cross-selling.
The Capital Markets Day presentations will be available at www.se.com after the
event and there will be a live webcast of the formal presentations. A recording
of the webcast will be made available after the conclusion of the event.
2019 Half Year results will be presented on July 25, 2019.
About Schneider Electric
At Schneider, we believe access to energy and digital is a basic human right.
We empower all to do more with less, ensuring Life Is On everywhere, for
everyone, at every moment.
We provide energy and automation digital solutions for efficiency and
sustainability. We combine world-leading energy technologies, real-time
automation, software and services into integrated solutions for Homes,
Buildings, Data Centers, Infrastructure and Industries.
We are committed to unleash the infinite possibilities of an open, global,
innovative community that is passionate with our Meaningful Purpose, Inclusive
and Empowered values.
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