Slide 1: Full Year 2021 Results – February 17, 2022
Schneider Electric Full Year 2021 Results – February 17, 2022 Record year setting foundation for ongoing sustainable growth All-time high Revenues, Adj. EBITA margin and Net Income
Slide 2: Disclaimer
Disclaimer All forward-looking statements are Schneider Electric management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a detailed des
Slide 3: Agenda
04 FY 2021 Business Highlights 25 FY 2021 Financial Performance Highlights 42 Expected Trends & Financial Target 46 Q&A 49 Appendix Investor Relations – Schneider Electric | Page 3
Slide 4: FY 2021 Business Highlights
FY 2021 Business Highlights Jean-Pascal Tricoire | Chairman & CEO Investor Relations – Schneider Electric | Page 4
Slide 5: Our purpose is to empower all to make the most of our energy and resources
Our purpose is to empower all to make the most of our energy and resources, bridging progress and sustainability for all. At Schneider, we call this Life Is On. Our mission is to be your digital partner for Sustainability and Efficiency. Investor Relations – Schneider Electric | Page 5
Slide 6: Full Year 2021: Financial highlights
Full Year 2021: Financial highlights Sales Adj. EBITA Net Income Adj. EPS Operating Cash Flow €29bn €5bn €3.2bn €6.13 €4.5bn +13% 17.3% +51% +30% +22% Org. growth Adj. EBITA margin Investor Relations – Schneider Electric | Page 6
Slide 7: 2021: Setting the path for ongoing sustainable growth
2021: Setting the path for ongoing sustainable growth Record year Bolstering Raising the bar Strong with strong our software further on shareholder profitable growth portfolio Sustainability focus Reaching all-time high in 2021-2025 c.+50% TSR in 2021 - Revenue - Gross Profit - Adj. EBITA - Net Inco
Slide 8: Digital solutions for sustainability and efficiency leveraging our Unique Operating Model
Digital solutions for sustainability and efficiency leveraging our Unique Operating Model… Energy Industrial Management Automation SOFTWARE Energy Transition Industry 4.0 Electrification Digitization SUSTAINABILITY + EFFICIENCY 60% Revenue Suppliers in 50+ Investments Startups Digital Sales done thr
Slide 9: Enabling our new ambition announced in recent Capital Markets Day
… enabling our new ambition announced in recent Capital Markets Day Our growth drivers… More recurring revenues… Long term ambitions… Investor Relations – Schneider Electric | Page 9
Slide 10: Strong demand and execution in 2021
Strong demand and execution in 2021 Group Energy Management € 29bn Industrial Automation +13% Energy efficiency Group 2021 revenues, org. growth Process efficiency € 22.2bn € 6.7bn Adj. EBITA margin Adj. EBITA margin 20.3% +13.3% +10.7% 18.5% Org. Org. c.+140bps c.+90bps org. improvement org. improv
Slide 11: Exceeding pre-pandemic levels vs. 2019
Exceeding pre-pandemic levels vs. 2019 Sales Adj. EBITA Net Income +7% Org. growth vs. FY19 +19% +33% Org. growth vs. FY19 Growth vs. FY19 Investor Relations – Schneider Electric | Page 11
Slide 12: Accelerating on our strategic pillars
Accelerating on our strategic pillars More More More More Products Software Services Sustainable Strong +11% +12% +5% double-digit Organic growth Organic growth Organic growth Organic growth in FY21 vs. FY19 in FY21 vs. FY19 in FY21 vs. FY19 in FY21 vs. FY19 2021 performance: Strong growth in both E
Slide 13: 2021 innovation highlights
More Products I More Software I More Services I More Sustainable 2021 innovation highlights Data Centers Buildings Homes Industries Grids Galaxy VL EcoStruxure™ 50% more Automation Expert compact than industry average EcoStruxure™ DERMS Modular, cloud-based integration of renewables in Advanced Dist
Slide 14: Key customer successes in new innovations
More Products I More Software I More Services I More Sustainable Key customer successes in new innovations U.S. Finland France Grid-to-plug solution of Square D™ More career opportunities unlocked Green and digital SF6 Free MV switchgear Energy Center enables future- by agnostic automation platform
Slide 15: Supporting our customers amidst supply chain constraints
More Products I More Software I More Services I More Sustainable Supporting our customers amidst supply chain constraints Unique Supply Chain Model Specific Actions Agility ✓ End-to-end control tower Centralized purchasing ✓ Real-time coordination between supply Adapting to chain & operations teams
Slide 16: Digital & Software empowers users across the lifecycle
More Products I More Software I More Services I More Sustainable Digital & Software empowers users across the lifecycle Design Build Operate & Maintain Industry & Infrastructure Assets under Management +50% Connection to IoT Power YoY 6.2m Building Partnerships 100k+ registered users >550 digital of
Slide 17: Supporting our customers in their digitization journey
More Products I More Software I More Services I More Sustainable Supporting our customers in their digitization journey Leveraging experience Our expertise, combined with our technologies from Schneider’s Smart serve our customer supply chain Factory deployment Le Vaudreuil Digital transformation pr
Slide 18: Key customer success in Digital/Software
More Products I More Software I More Services I More Sustainable Key customer success in Digital/Software U.S. Turkey India China AVEVA & Schneider joint offer IGE+XAO & Schneider One integrated digital EcoStruxure™ solution to drive providing on-premise and empowered project EcoStruxure™ solution w
Slide 19: Supporting our customers in services
More Products I More Software I More Services I More Sustainable Supporting our customers in services Three pillars for Services transformation: Consult Modernize Commission Train Seamless Capex to Opex Safety Efficiency Sustainability Resilience Recycle for Unified customer approach Repair Maintain
Slide 20: Supporting our customers in decarbonization, from strategy to execution
More Products I More Software I More Services I More Sustainable Supporting our customers in decarbonization, from strategy to execution ~350M metric tons CO₂ saved & avoided Accelerating its journey to address on our Carbon neutrality roadmap climate change co-designed & implemented customers' end
Slide 21: Accelerated sustainability journey continues
More Products I More Software I More Services I More Sustainable Accelerated sustainability journey continues CLIMATE 2021-2025 SSI #3 - Reduce CO2 emissions from top 1000 suppliers’ operations by 50% 1000+ Suppliers joined The Zero Carbon Project and now ready to drastically reduce their carbon emi
Slide 22: With ambitious targets and continuous benchmarking
More Products I More Software I More Services I More Sustainable With ambitious targets and continuous benchmarking Recognition Our Pledges 2025 Carbon neutrality in our operations A List (Climate) 11 years in a row 2030 Net-zero CO2 in our operations 2040 End-to-end carbon neutral value 86/100 chai
Slide 23: Thanks to the engagement of our people
Thanks to the engagement of our people the world’s most #1 sustainable corporation 2021 +7pts vs. 2019 Flexibility at Work Policy Employee Engagement (Engagement Index) Progressing toward our 2025 target Well-being in our DNA Investor Relations – Schneider Electric | Page 23
Slide 24: Our strategy and execution translates in shareholder value
Our strategy and execution translates in shareholder value Total Shareholder Return SE #1 over a 3-year period* 320 Schneider 300 280 260 240 €2.90** 220 Dividend per share 200 +12% vs. 2020 180 160 140 120 Progressive Dividend** for 12th year in a row 100 80 60 40 x2.8 January- January- January- De
Slide 25: FY 2021 Financial Performance Highlights
FY 2021 Financial Performance Highlights Hilary Maxson | CFO Investor Relations – Schneider Electric | Page 25
Slide 26: FY21 Financial highlights - Record performance in Revenues and Profitability
FY21 Financial highlights - Record performance in Revenues and Profitability Setting the path for ongoing sustainable growth Revenues Gross Margin Adj. EBITA Margin €28.9bn, +12.7% org. 41.0%, -10bps org. 17.3%, +140bps org. Strong demand across end-markets and geographies Maintaining strong GM in t
Slide 27: Strong growth in 2021 up +12.7% organic, c.+7% vs. 2019
Strong growth in 2021 up +12.7% organic, c.+7% vs. 2019 Analysis of Change in Group Revenues (in €m) +3.5% -1.3% 28,905 +16.2% +12.6% +13.7% Mainly due to the strengthening of the EUR +9.9% against the USD partly 25,159 offset by the weakening EUR against the CNY Mainly comprises the FY20 acquisitio
Slide 28: Strong 2021 revenues – maintaining good growth vs. 2019
Strong 2021 revenues – maintaining good growth vs. 2019 Group +13% org. FY21 vs. FY20 Group +7% org. FY21 vs. FY19 Products Systems Software & Services 59% 23% 18% of FY21 revenues of FY21 revenues of FY21 revenues +11% -1% +7% +16% +9% +7% FY’19 FY’20 FY’21 FY’19 FY’20 FY’21 FY’19 FY’20 FY’21 Inves
Slide 29: 2021 Group revenues – exceeding 2019 levels across regions
2021 Group revenues – exceeding 2019 levels across regions Country NORTH AMERICA Country WESTERN EUROPE above/below FY’19 above/below FY’19 +7% +4% org. org. +13% +10% org. org. FY’19 FY’20 FY’21 FY’19 FY’20 FY’21 REST OF WORLD Sub-region ASIA PACIFIC Country above/below FY’19 above/below FY’19 +11%
Slide 30: Strong 2021 revenues – delivering growth on strategic pillars
Strong 2021 revenues – delivering growth on strategic pillars More Products More Software More Services More Sustainability +6% Strong +16% +8% double-digit organic organic organic organic Up +11% org. vs. 2019 Up +12% org. vs. 2019 Up +5% org. vs. 2019 vs. 2020 and vs. 2019 Investor Relations – Sch
Slide 31: Q4 2021 up +6.9% organic
Q4 2021 up +6.9% organic Analysis of Change in Group Revenues (in €m) +2.7% 7,910 +1.4% +6.4% +7.1% Mainly due to the weakening 7,126 of the EUR against the USD and CNY Mainly comprises the acquisitions of ETAP and OSIsoft by AVEVA, Group +6.9% organic partly offset by some smaller disposals Q4 2020
Slide 32: Energy Management – Q4 org. growth performance by geography
Energy Management – Q4 org. growth performance by geography W. Europe N. America Asia Pac. Rest of the World Split of Q4 2021 revenue by geography: 25% 29% 30% 16% North America +6% Western Europe +5% Mid-single-digit growth in U.S. and Mexico up strongly while Canada grew slightly Double-digit grow
Slide 33: Industrial Automation – Q4 org. growth performance by geography
Industrial Automation – Q4 org. growth performance by geography W. Europe N. America Asia Pac. Rest of the World Split of Q4 2021 revenue by geography: 26% 26% 32% 16% North America +19% Western Europe -7% Strong double-digit growth in the U.S. and Mexico while Canada contracted Up mid-single digit
Slide 34: Adj. EBITA: Record margin at 17.3%, growing +140bps org.
Adj. EBITA: Record margin at 17.3%, growing +140bps org. Energy Management Industrial Automation In €m 2020 2021 Reported Organic change change Revenues 25,159 28,905 +14.9% +12.7% c.+140bps c.+90bps Gross Profit 10,156 11,843 +16.6% +12.5% Org. Adj. EBITA Org. Adj. EBITA Gross Margin (%) 40.4% 41.0
Slide 35: Gross Margin: Strong performance despite inflationary headwinds
Gross Margin: Strong performance despite inflationary headwinds Gross Margin: Analysis of Change (%) +0.5 41.0 +0.4 -0.3 +0.1 40.4 -0.7 +0.6 • Industrial Productivity +164M€ • -161M€ headwind from freight and electronic components • Underlying Industrial Productivity +325M€ • Net Price +41M€ • Prici
Slide 36: SFC: 2021 continues to deliver on structural savings
SFC: 2021 continues to deliver on structural savings Analysis of Change of SFC (in €m) 220 -411 282 6,856 390 181 6,230 -36 Mainly impact of Investing in Group’s strategic recent acquisitions priorities to support future growth • Partial reversal of the c.€300m tactical savings delivered in 2020 • S
Slide 37: Net Income of €3.2bn
Net Income of €3.2bn M&A / integration costs, offset by gains on disposal for In €m 2020 2021 % change Cable Support, US Motion and IMServ. 2020 was mainly M&A / integration costs Adjusted EBITA 3,926 4,987 +27% Other income and expenses (210) (21) Restructuring (421) (225) Restructuring costs due t
Slide 38: Free Cash Flow at €2.8 billion – record operating cash flow
Free Cash Flow at €2.8 billion – record operating cash flow impacted by working capital requirements Analysis of debt change in €m 2020 2021 All-time high operating cash flow, up +22% as a Net debt at opening Dec 31 (3,792) (3,561) consequence of the strong performance in 2021 Operating cash flow 3,
Slide 39: Return on capital: Driving ROCE towards 15%
Return on capital: Driving ROCE towards 15% ROCE 15% Group ROCE: 13.5% (vs. 12.0% in 2020) 13.5% 14% 13% +1.5pt increase on improved profitability & capital discipline despite inventory 12% 11.8% build needed for supply chain challenges 11% Recent software deals are catalysts for 10% future sales gr
Slide 40: Capital allocation: priorities unchanged
Capital allocation: priorities unchanged 1 2 3 4 Strong Investment Continued focus Portfolio Share Grade Credit Ratings on Dividends Optimization Buyback Near-term Focus: Successful integration of Further progress Small bolt-ons or AGM proposal to raise recent acquisitions and on disposal program: o
Slide 41: Balance sheet remains strong
Balance sheet remains strong Leverage returning towards a more typical level Net Debt / Adj. EBITDA* Main impacts • Net cash payment for OSIsoft of €3.5bn in H1 1.42x • Payment of FY20 dividend for €1.5bn in H1 1.22x • FCF benefit of -€2.8bn 0.75x • Dec 2020 impacted by holding of 3rd party cash fro
Slide 42: Expected Trends & Financial Target
Expected Trends & Financial Target Jean-Pascal Tricoire | Chairman & CEO Investor Relations – Schneider Electric | Page 42
Slide 43: Expected trends in 2022
Expected trends in 2022 The Group expects to grow both its revenues and profitability in 2022, in line with the framework for sustainable growth for the medium and long-term announced in its recent Capital Markets Day. In 2022, the Group expects: • A continuation of strong and dynamic market demand,
Slide 44: 2022 Target
2022 Target The Group sets its 2022 financial target as follows: 2022 Adjusted EBITA growth of between +9% and +13% organic The target would be achieved through a combination of organic revenue growth and margin improvement, currently expected to be: • Revenue growth of +7% to +9% organic • Adjusted
Slide 45: Our medium and long term targets announced at November 30, 2021 Capital Markets Day
Our medium and long term targets as announced during November 30, 2021 Capital Markets Day Accelerating Accelerating Markets Incremental Growth Drivers Unique Operating Model Sustainable Adj. EBITA Margin Expansion Free Cash Flow Revenue Growth Financial 2022-2024 Between +5% to +8% organic, on aver
Slide 46: Q&A
Q&A Investor Relations – Schneider Electric | Page 46
Slide 47: Investor Relations ready to engage
Investor Relations ready to engage Proposing quarterly interaction 17 February FY Results with investors showcasing 17 March Bank of America Merrill Lynch Global Industrial Conference specific businesses, 23 & 24 March J.P. Morgan Global ESG Conference geographies or functions 27 April Q1 2022 Reven
Slide 48: Investor Relations contacts
Investor Relations contacts Amit Bhalla – amit.bhalla@se.com Graham Phillips – graham.phillips@se.com Alban de Beaulaincourt – alban.de-beaulaincourt@se.com Andrew Gamwell – andrew.gamwell@se.com To schedule an interaction with Schneider Electric, please contact lorna.scrimshaw@se.com Investor Relat
Slide 49: Appendix
Appendix Investor Relations – Schneider Electric | Page 49
Slide 50: 2022 additional notes
2022 additional notes Foreign Exchange impact: Based on current rates, the FX impact on FY 2022 revenues is estimated to be between +€500 million to +€600 million. The FX impact at current rates on adjusted EBITA margin for FY 2022 could be around +10bps Scope: Around +€150 million on 2022 revenues
Slide 51: Positive evolution of demand trends in Q4 vs. pre-pandemic levels
Positive evolution of demand trends in Q4 vs. pre-pandemic levels Q4’21 vs Q4’19 Data Center ++ Machine Solutions / OEM ++ Residential Buildings ++ CPG ++ MMM + Utilities ++ Oil & Gas + Transportation ++ WWW - Based on non-GAAP orders in selected segments Investor Relations – Schneider Electric | Pa
Slide 52: Q4 Business performance highlights by end-markets
Q4 Business performance highlights by end-markets Energy Industrial Management Automation End Markets Buildings Data Center Infrastructure Industry Residential remains a strong growth Data Center & Network saw good sales Broad portfolio of offers well oriented as Grid Discrete automation grew across
Slide 53: Q4 Group revenue: Up in all regions, though impacted by supply chain pressure
Q4 Group revenue: Up in all regions, though impacted by supply chain pressure NORTH AMERICA 28% +7% WESTERN EUROPE 25% +2% United States Canada Mexico France Germany United Kingdom REST OF WORLD 16% +13% Spain Italy Nordics ASIA PACIFIC 31% +8% Russia South America Middle East Africa % GROUP SALES O
Slide 54: Adj. EBITA + 23% org. due to higher volumes, productivity and mix
Adj. EBITA + 23% org. due to higher volumes, productivity and mix Analysis of Change of Adjusted EBITA (in €m) 108 -71 -359 164 1,039 41 179 4,987 -40 3,926 FY 2020 Volume Net price1 Productivity Mix R&D & SFC Forex Scope & FY 2021 Production others Labor infl. 1. Price on products and raw material
Slide 55: Schneider Sustainability Impact scorecard
2021 Q1 Q2 Q3 Q4 Target Score1 3.92 3.75 Q4 2021 results Baseline Q4 2021 2025 Target 1 Grow Schneider Impact revenues*2 70% 71% 80% CLIMATE 2 Help our customers save and avoid millions of tonnes of CO2 emissions3 263M 347M 800M 3 Reduce CO2 emissions from top 1,000 suppliers' operations 0% 1% 50% R
Slide 56: Adjusted Net Income calculation
Adjusted Net Income calculation In €m FY2020 FY2021 Adjusted EBITA 3,926 4,987 Amortization of purchase accounting intangibles (207) (389) Financial Costs (278) (176) Income tax with impact from adjusted items (781) (1,028) Equity investment & Minority Interests (46) 15 Adjusted Net Income (Group sh
Slide 57: ROCE calculation
ROCE calculation ROCE Calculation 2021 P&L items Reported EBITA1 (1) 4,627 Restructuring costs (2) -225 Other operating income & expenses (3) -21 = Adjusted EBITA (4) = (1) - (2) - (3) 4,873 x Effective tax rate of the period2 (5) 23.2% = After - tax Adjusted EBITA (A) = (4) x (1-(5)) 3,742 2021 202
Slide 58: Life Is On | Schneider Electric
Lifels On | Schneider GeElectric