Schneider Electric Se · EURONEXT:SU
Schneider Electric — Q3 2019 Earnings Presentation
32 slides from Schneider Electric's earnings presentation, 2019
Slide 1: Good growth in Q3 2019, Revenues up +4.2% reported, +3.1% organic
Good growth in Q3 2019, Revenues up +4.2% reported, +3.1% organic despite macro uncertainty Full year target reaffirmed © 2019 Schneider Electric, All Rights Reserved
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 Q3 2019 Business Highlights 12 Q3 2019 Business Performance 20 Full Year 2019 Target - Reaffirmed 24 Appendix Investor Relations - Schneider Electric Page 3
Slide 4: Q3 2019 Business Highlights
Appendix Q3 2019 Business Highlights Photos: J.Deloy – SE Design Lab
Slide 5: Our unique positioning: Energy and automation digital solutions
Our unique positioning: Energy and automation digital solutions for efficiency and sustainability Energy Industrial Energy Management Automation Industry Transition 4.0 significant customer benefits… Energy efficiency Productivity Reliability and Safety Sustainability Up to Up to Up to Aiming at ~65
Slide 6: Good organic growth in Q3 despite uncertain macroeconomic environment
Good organic growth in Q3 despite uncertain macroeconomic environment €6.6bn, +3.1% Group Q3 2019 revenues org. Energy Management Industrial Automation Energy efficiency Process efficiency +3.9% € 5.1 1.5 billion € billion +0.4% Q3 org. sales Q3 org. sales growth growth 2019 target reaffirmed Invest
Slide 7: Continuing to deliver on our strategic priorities
Continuing to deliver on our strategic priorities Revenue More Products More Services +3.1% +2% +8% Organic growth Organic growth Organic growth More Software More EcoStruxure Better Systems Up double-digit Above Group average Sustained focus on Organic growth Organic growth 2.6m AuM +45% YoY margin
Slide 8: Selection of customer successes driven by EcoStruxure
Selection of customer successes driven by EcoStruxure BUILDINGS DATA CENTER INFRASTRUCTURE INDUSTRY Sodexo APAC House TAS Avenue2 motorway Rainwater Management Singapore France Netherlands Solutions USA • 20% reduction in energy use • Software for effective management • Tunnel control system that •
Slide 9: Innovation summits and customer events in Q3
Multiple Q3 Eventscustomer engagements Innovation summitsin/ Q3 Aveva world summit Ask DK > Elizabeth de Castro #SEInnovation Innovation Summit Barcelona Innovation Summit Cairo Discover more • Over 2,400 external attendees Discover more • Innovation hub focused on new • Over 3,500 external attendee
Slide 10: Sustainability at the heart of our strategy and business
Sustainability at the heart of our strategy and business Establishing roadmap for the Schneider Sustainability Impact: 7.08/10 in Q3 carbon neutral world Indicators & objectives 2020 - selection Q3 2019 Q2 2019 Reinforcing our commitments at Climate Week NYC, Sept’19 CLIMATE 25% increase in turnover
Slide 11: Our distinctive DNA is externally recognized in Q3
Our distinctive DNA is externally recognized in Q3 Commitment to sustainability: Climate, Ethics, Empowered Diversities; Inclusive Practices; Lean Organization; Multi-Hub Model; Circular economy, Health and Equity, Development Inclusive Behaviors; Advocacy The Schneider Way; #FreeUpYourEnergy #1 Ind
Slide 12: Q3 2019 Business Performance
Appendix Q3 2019 Business Performance Photos: J.Deloy – SE Design Lab
Slide 13: Group Q3 Revenues +4.2% reported, +3.1% organic
Group Q3 Revenues +4.2% reported, +3.1% organic ANALYSIS OF CHANGE IN GROUP REVENUES (in €m) FX 6,646 Scope +2.2% +4.2% +3.1% org. -1.1% 6,377 Mostly Pelco and US Mainly USD vs. panels deconsolidation EUR impact announced in H1’19 Q3 2018 Q3 2019 Based on current rates, the FX impact on FY 2019 reve
Slide 14: Organic growth derived from Products, Systems, Services and Software
Organic growth derived from Products, Systems, Services and Software Organic Growth YTD Products • Solid performance across end markets though +3% (c.60%) pressure on industrial markets • Good momentum in orders supporting backlog creation YTD Systems + 6% • Q3 sales performance a function of phasin
Slide 15: Energy Management: good growth, up +3.9% organic
Energy Management: good growth, up +3.9% organic €5.1bn Q3 performance highlights • Residential & Small building offers sustained mid-single digit growth, 77% of Group Q3 2019 revenues leveraging new innovations and our unparalleled partner network Energy Management • Commercial and Industrial Build
Slide 16: Energy Management: growing in all regions, led by North America
Energy Management: growing in all regions, led by North America Org. growth N. America W. Europe Split of Q3 2019 revenue by geography: 32% 24% 28% 16% Asia Pac. Rest of the World North America +7% Western Europe +4% • Sustained demand across Buildings end-market supported by • Good growth driven by
Slide 17: Industrial Automation: up +0.4% in Q3, with strong growth from Process & Hybrid
Industrial Automation: up +0.4% in Q3, with strong growth from Process & Hybrid €1.5bn Q3 performance highlights 23% of Group Q3 2019 revenues • Discrete end markets softened from Q2 levels, down mid-single digit for Q3. Some pockets of growth were seen in discrete in Germany, Industrial Automation
Slide 18: Industrial Automation: growth driven by new economies
Industrial Automation: growth driven by new economies Org. growth N. America W. Europe Split of Q3 2019 revenue by geography: 21% 29% 33% 17% Asia Pac. Rest of the World North America -2% Western Europe -5% • Continued softness in discrete end-markets • General slowdown of discrete industries • Good
Slide 19: Portfolio update – focusing on the core
Portfolio update – focusing on the core Larsen & Toubro E&A: Closing expected in Q1 2020 Further progress in Q3 on the €1.5bn to €2bn portfolio € 0.4bn addressed so far optimization program: • Announcement of JV with the Russian Direct Investment Fund (RDIF) to further strengthen the long- term outl
Slide 20: Full Year 2019 Target - Reaffirmed
Appendix Full Year 2019 Target - Reaffirmed Photos: J.Deloy – SE Design Lab
Slide 21: Q4 2019 – Expected market trends
Q4 2019 – Expected market trends In its main markets, the Group currently expects the following trends in Q4 2019: • In North America, the Group anticipates moderate growth due to the high base of comparison in Energy Management and the continuing weakness in discrete automation. The strong decline
Slide 22: 2019 Target: adj. EBITA growth between +6% and +8% organic
2019 Target reaffirmed The Group reaffirms its target for 2019 adj. EBITA growth between +6% and +8% organic. This would be achieved through a combination of organic revenue growth and margin improvement 2019 Target: adj. EBITA growth between +6% and +8% organic Levers: 2019 Revenue growth: 2019 Adj
Slide 23: Key management messages…
Key management messages… Group positioning Digital Solutions for Energy Transition & Industry 4.0 Strategy More Products, More Services, More Software, Better Systems Balanced portfolio By geography, by end-market, from early to mid-late cycle Organic growth Sustained growth to deliver Energy and Pr
Slide 24: Appendix
Appendix Appendix Photos: J.Deloy – SE Design Lab
Slide 25: 2019 additional notes
2019 additional notes • Foreign Exchange impact: Based on current rates, the FX impact on FY 2019 revenues is estimated to be around +€400 million. The FX impact at current rates on adjusted EBITA margin could be at the higher end of the -10bps to -20bps range. • Industrial Productivity: While the i
Slide 26: Definitions
Definitions EBITA EBIT before amortization and impairment of purchase accounting intangibles and impairment of goodwill Adjusted EBITA EBITA before restructuring and other operating income and expenses EBITDA EBIT before depreciation, amortization, provisions and before share-based compensation cost
Slide 27: Schneider Sustainability Impact 2018 – 2020, Results as of Q3 2019
Schneider Sustainability Impact 2018 – 2020, Results as of Q3 2019 Objective Beginning Results Results 12/2019 01/2018 Q2 2019 Q3 2019 Our megatrends 2015 – 2020 and targets 2018 – 2020 Overall Score of 10 7/10 3 6.78 7.08 CLIMATE 80% renewable electricity -- 40% 45% 10% CO2 efficiency in transporta
Slide 28: Organic growth by region in Q3 2019 – Energy Management
Organic growth by region in Q3 2019 – Energy Management % Business Sales Org. growth NORTH AMERICA WESTERN EUROPE 32% +7% 24% +4% United States Canada Mexico France Germany United Kingdom Spain Italy REST OF WORLD ASIA PACIFIC 16% +2% 28% +2% China India Australia Indonesia Japan Russia South Americ
Slide 29: Organic growth by region in Q3 2019 – Industrial Automation
Organic growth by region in Q3 2019 – Industrial Automation % Business Sales Org. growth NORTH AMERICA WESTERN EUROPE 21% -2% 29% -5% United States Canada Mexico France Germany United Kingdom Spain Italy REST OF WORLD ASIA PACIFIC 17% +11% 33% +2% China India Australia S. Korea Japan Russia South Am
Slide 30: Investor Relations ready to engage
Investor Relations ready to engage Upcoming events: Proposing quarterly interaction with investors showcasing specific businesses, geographies or functions 24 Oct Q3 2019 Revenues 13 Nov Société Générale European ESG Conference (Paris) - IR 4 Dec Société Générale Premium Review Conference (Paris) –
Slide 31: Investor Relations contacts
Investor Relations contacts Amit Bhalla – Head of Investor Relations, Tel: +44 207 592 8216, Email: amit.bhalla@se.com Phil Buller – Investor Relations Director, Tel: +44 207 592 8291, Email: phil.buller@se.com Investor Relations - Schneider Electric Page 31
Slide 32: Lifels On | Schneider
Lifels On | Schneider GeElectric