Slide 1: Half Year 2023 Results – July 27, 2023
Half Year 2023 Results – July 27, 2023 Strong performance; Revenues, Adj. EBITA and Net Income at record levels FY23 target upgraded
Slide 2: Disclaimer
Disclaimer 3 HY 2023 All forward-looking statements are Schneider Electric Business Highlights management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ 12 HY 2023 materially from those described in the forwa
Slide 3: HY 2023 Business Highlights
HY 2023 Business Highlights Peter Herweck | CEO Investor Relations – Schneider Electric | Page 3
Slide 4: Strong financial performance in H1 2023
Strong financial performance in H1 2023 Group Energy Management € 18bn Industrial Automation +15% Energy efficiency Group HY 2023 revenues, org. growth Process efficiency Adj. EBITA margin 20.7% € 14bn € 4bn Adj. EBITA margin 19.1% c.+140bps +17% +11% c.+180bps org. improvement Org. Org. org. improv
Slide 5: Half Year 2023: Generating record levels of sales, profit and cash
Half Year 2023: Generating record levels of sales, profit and cash Sales Adj. EBITA Adj. Net Income Operating Cash Flow €18bn €3.2bn €2.0bn €2.7bn +15% +29% +13% +4% organic organic Investor Relations – Schneider Electric | Page 5
Slide 6: Excited to engage with our stakeholders across the world
Excited to engage with our stakeholders across the world Across all 4 global hubs Deep-dive at our 10 R&D labs Engaged with top customers across 27 cities Interfaced with 130 key customers, partners, suppliers and alliances Interacted with #SEGreatPeople across the world Investor Relations – Schneid
Slide 7: Some notable updates from the quarter
Some notable updates from the quarter ENERGY EFFICIENCY INNOVATION DIGITIZATION SUSTAINABILITY Local and regional Innovation Summits Latest developments & innovations in our Software companies ETAP AVEVA + IEA – 8th Annual Conference Grid Software on Energy Efficiency + The Versailles 10x10 10 Actio
Slide 8: On track towards meeting full-year sustainability impact targets
On track towards meeting full-year sustainability impact targets 2021-2025 5.28 CLIMATE SSI #3 - Reduce CO2 emissions from top 1,000 suppliers' operations Enabling more than 6,000 U.S. Global sugar cooperative is franchisees to track, manage & standardizing its use of AVEVA PI iAccelerate Zero Carb
Slide 9: Delivering compelling offers to our customers across end-markets
Delivering compelling offers to our customers across end-markets To help Bayer with their sustainable Unique partnership building together a Upgrading existing water distribution and Supporting Verallia in their decarbonization development we provided a full EcoStruxure™ state-of-the-art integration
Slide 10: Our distinctive DNA is externally recognized in H1 2023
Our distinctive DNA is externally recognized in H1 2023 vs. 2022 Employee Engagement +3pts (Engagement Index) Progressing toward our 2025 target Investor Relations – Schneider Electric | Page 10
Slide 11: Digital & Electric future
DIGITAL + ELECTRIC = SUSTAINABLE Positioned on structurally growing markets supported by strong secular trends Ideally positioned to Industrial reshoring Exponential growth in data accelerated by AI capitalize on a Digital & Electric Urbanization trends in rapidly developing economies Grid resilienc
Slide 12: HY 2023 Financial Performance Highlights
HY 2023 Financial Performance Highlights Hilary Maxson | CFO Investor Relations – Schneider Electric | Page 12
Slide 13: Financial highlights – Strong performance in H1 2023
Financial highlights – Strong performance in H1 2023 Further progress on sustainable growth journey Revenues Gross Margin Adj. EBITA Margin €18bn, +15% org. 42.4%, +220bps org. 18.0%, +190bps org. Strong demand dynamic in most end-markets and Pricing carryover offsetting inflation over the cycle Str
Slide 14: Strong growth in H1 2023 up +15% organic
Strong growth in H1 2023 up +15% organic Analysis of Change in Group Revenues (in €m) +10.7% -2.7% +16.7% -2.2% 17,633 Stronger USD vs. EUR more than 16,077 offset by weakening of several other currencies (incl. China, India, Egypt, Turkey, Argentina) Group +15.3% organic Mainly representing the exi
Slide 15: Double-digit growth in all business models, led by Systems
Double-digit growth in all business models, led by Systems PRODUCTS SYSTEMS SOFTWARE & SERVICES 56% of H1 revenues 26% of H1 revenues 18% of H1 revenues +10% +29% +12% H1 organic growth H1 organic growth H1 organic growth • Energy Management up double-digit, while • Growth in excess of +20% org. in
Slide 16: We continue to progress on our digital journey, digital flywheel up +21%
We continue to progress on our digital journey, digital flywheel up +21% org. in H1 SOFTWARE & DIGITAL SERVICES €1.4bn H1 2023 +12% revenues org. growth +21% org. growth Key achievements of H1 2023 • Digital innovation driving strong growth in EDGE +23% +13% FIELD connectable products CONTROL org. o
Slide 17: Backlog continued to build in H1 despite demand moderation in specific segments
Backlog continued to build in H1 despite demand moderation in specific segments Strong market demand throughout H1 2023: • Record high backlog at the end of H1 • Continued backlog creation in Q2 while sales grew +14.8% org. Q2 2023 vs Q2 20221 +15.8% +14.8% Data Center ++ Org. sales Org. sales +12.2
Slide 18: Q2 2023 Group revenues up +15% organic
Q2 2023 Group revenues up +15% organic Analysis of Change in Group Revenues (in €m) +17.5% -2.5% +21.4% -4.0% 9,140 +9.8% +11.2% Euro strengthening 8,512 against the Chinese Yuan, U.S. Dollar and Indian Rupee Mainly representing the exit from Group +14.8% org. Russia, combined with the net impact of
Slide 19: Energy Management +16% Q2 org. growth
Energy Management +16% Q2 org. growth W. Europe N. America Asia Pac. Rest of the World Split of Q2 2023 revenue by geography: 23% 37% 28% 12% North America +24% Western Europe +10% Strong double-digit growth in the U.S. and Mexico, Canada up high-single digit Double-digit growth in U.K., Germany and
Slide 20: Industrial Automation +12% Q2 org. growth
Industrial Automation +12% Q2 org. growth W. Europe N. America Asia Pac. Rest of the World Split of Q2 2023 revenue by geography: 31% 22% 32% 15% North America +8% Western Europe +16% U.S. up double-digit, Canada up high single-digit, Mexico down on high base Germany, U.K., France and Italy up doubl
Slide 21: Adj. EBITA: Margin at 18.0%, +190bps organic
Adj. EBITA: Margin at 18.0%, +190bps organic Energy Management Industrial Automation Reported Organic In €m H1 2022 H1 2023 change change Revenues 16,077 17,633 +9.7% +15.3% c.+140bps c.+180bps Org. Adj. EBITA Org. Adj. EBITA Gross Profit 6,535 7,482 +14.5% +21.8% Gross Margin (%) 40.6% 42.4% +180 b
Slide 22: Gross Margin: +220bps organic progression
Gross Margin: +220bps organic progression Gross Margin: Analysis of Change (%) +4.5 +0.3 -0.3 -0.4 -0.6 -1.7 Driven by relative growth of Systems vs. 42.4 Products, partly offset by improvements 40.6 in Systems gross margin Net price +€1,246m ‘Others’ primarily due to positive impact • Pricing on pr
Slide 23: SFC: Continued investment to support future growth
SFC: Continued investment to support future growth Analysis of Change of SFC (in €m) 218 4,308 267 62 181 3,753 49 • Others: +€234m, primarily including impact from bonus accruals & from a technical accounting change on employee share plans • Scope: -€16m, primarily associated with Russia exit Inves
Slide 24: Adjusted Net Income of €2.0bn up +13%
Adjusted Net Income of €2.0bn up +13% In €m H1 2022 H1 2023 % change H1 2023 impacted by a gain on disposal of VinZero Adjusted EBITA 2,782 3,174 +14% partially offset by M&A / Integration costs. H1 2022 included impairment charges associated with Russia exit Other operating income and expenses (304
Slide 25: Record H1 operating cash flow at €2.7 billion
Record H1 operating cash flow at €2.7 billion – FCF impacted by working capital requirements All-time high operating cash flow for an H1, up +4% as a consequence of the record profitability in the first half Analysis of debt change in €m H1 2022 H1 2023 Net debt at opening Dec 31 (7,127) (11,225) Go
Slide 26: Balance sheet remains strong
Balance sheet remains strong Net Debt / Adj. EBITDA1 Main impacts in H1 2023 • Cash payment of €4.6bn to purchase minority shares in 1.76x AVEVA (shown as a purchase commitment at 31 Dec.) 1.62x 1.46x • Payment of €1.8bn to fulfill FY22 dividend • Re-start of share buyback program: €41m completed in
Slide 27: Expected Trends & Financial Target
Expected Trends & Financial Target Peter Herweck | CEO Investor Relations – Schneider Electric | Page 27
Slide 28: Expected trends in coming months
Expected trends in coming months Demand environment Geographical trends • U.S. expected to contribute strongly to growth through a combination of • A continuation of strong and dynamic market demand, supported strong demand, industrial reshoring and backlog execution by secular trends of electrifica
Slide 29: 2023 Target upgraded
2023 Target upgraded The Group upgrades its 2023 financial target as follows: 2023 Adjusted EBITA growth of between +18% and +23% organic (previously between +16% and +21% organic) The target would be achieved through a combination of organic revenue growth and margin improvement, currently expected
Slide 30: Q&A
Q&A Investor Relations – Schneider Electric | Page 30
Slide 31: Investor Relations ready to engage
Investor Relations ready to engage 27 July 2023 Half Year Results Investor Relations contacts 6 September Morgan Stanley Industrial CEOs Unplugged Conference (UK) 13 September Kepler Cheuvreux Autumn conference (Paris) Amit Bhalla – amit.bhalla@se.com 26 October Q3 2023 Revenues Graham Phillips – gr
Slide 32: Appendix
Appendix Investor Relations – Schneider Electric | Page 32
Slide 33: 2023 additional notes
2023 additional notes Foreign Exchange impact: Based on current rates, the FX impact on FY 2023 revenues is estimated to be between -€1.4 billion to -€1.5 billion. The FX impact at current rates on adjusted EBITA margin for FY 2023 could be around -80bps Scope: Around -€800 million on 2023 revenues
Slide 34: Adj. EBITA +29% org. due to strong gross margin performance
Adj. EBITA +29% org. due to strong gross margin performance primarily offsetting inflation and investment in support function costs Analysis of Change of Adjusted EBITA (in €m) 1,246 45 -54 -67 -620 -185 -455 482 3,174 2,782 H1 2022 Volume Net price1 Productivity Mix R&D & SFC Forex Scope & H1 2023
Slide 35: Q2 2023 Results
2023 Q1 Q2 Q3 Q4 Target Q2 2023 Results Score1 5.28 6.00 6 long-term commitments Baseline Q2 2023 2025 Target CLIMATE 1. Grow Schneider Impact revenues*2 70% 80% 73% 2. Help our customers save and avoid millions of tonnes of CO2 emissions3 263M 481M 800M 3. Reduce CO2 emissions from top 1,000 suppli
Slide 36: Adjusted Net Income calculation
Adjusted Net Income calculation In €m H1 2022 H1 2023 Adjusted EBITA 2,782 3,174 Amortization of purchase accounting intangibles (206) (196) Financial Costs (103) (207) Income tax with impact from adjusted items1 (670) (694) Equity investment & Minority Interests - (35) Adjusted Net Income (Group sh
Slide 37: Life Is On | Schneider
Lifels On | Schneider GeElectric