First Quarter 2015 Revenues First Quarter 2015 ... - Zonebourse.com

First Quarter 2015 Revenues

April 21, 2015

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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 description of these factors and uncertainties, please refer to the section “Risk Factors” in our Annual Registration Document (which is available on www.schneider-electric.com). Schneider Electric undertakes no obligation to publicly update or revise any of these forward-looking statements. This presentation includes information pertaining to our markets and our competitive positions therein. Such information is based on market data and our actual revenues in those markets for the relevant periods. We obtained this market information from various third party sources (industry publications, surveys and forecasts) and our own internal estimates. We have not independently verified these third party sources and cannot guarantee their accuracy or completeness and our internal surveys and estimates have not been verified by independent experts or other independent sources.

Schneider Electric – Investor Relations – Q1 2015 Revenues – 21 April 2015

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4

Highlights

9

Q1 revenues by business

15

Q1 revenues by region

17

Full year 2015 Targets

19

Appendices


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Highlights


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Strong Q1 growth up +7.8%, revenues reaching €6bn Organic growth is close to flat excluding Invensys Buildings & Partner growth continued, Industry impacted by Invensys, Infrastructure stabilizing ● Buildings and Partner grew despite weakness in China as expected and lower project activity in the U.S. ● Industry was about flat without Invensys, with continued OEM demand in Western Europe ● Infrastructure stabilized organically thanks to good project execution ● IT was down due to weakness in Russia and one-off in India

Stabilization in Western Europe, mixed trends in North America and weakness in China ● Western Europe was up 1% excluding Invensys ● North America saw favorable construction market but lower capex investments, notably in Oil & Gas ● China was down as expected due to weak construction and industry end-markets and high base of comparison

Invensys performance impacted by change in date of fiscal year closing. 2015 synergies on track ● Field device business was down due to slow down in oil & gas demand, Eurotherm business performed well. Q1 revenues were also impacted by ramping down of China nuclear project.

Full year targets confirmed Schneider Electric – Investor Relations – Q1 2015 Revenues – 21 April 2015

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Performance at Invensys was impacted by change in date of fiscal year closing. 2015 synergies on track Revenues (€m)

Mechanical impact €53 million of positive FX impact compared to Q1 2014

455

373

404

481

417

Strong Q1 2014, last quarter of Invensys fiscal year The beginning of Q1 2015 is impacted by strong revenues in Q4 2014 which was Schneider Electric’s fiscal year closing Double impact of the closings is estimated roughly at c. €80 million. This negative impact should gradually decrease throughout the year. Performance highlights

Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015

Field device was down due to slow down in oil & gas while Eurotherm business performed well. Q1 revenues were also impacted by ramping down of China nuclear project.

Invensys fiscal year-end March 2014

Schneider Electric fiscal year-end December 2014


On track to deliver our targeted 2015 synergies

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This quarter, our Planet & Society barometer reaches 3.67/10 10

Performance of our Planet & Society barometer

8 8

Q4 2017 target

6

4

6

3.67 4.5

2 0 Actual

Q1

Q2

Target

Q3

2015

Q4

Q1

Q2

Q3

2016

Q4

Q1

Q2

Q3

Q4

2017

Highlights of the quarter ● The new Planet & Society barometer is composed of 5 sustainability megatrends and 16 progress plans. ● It displays a satisfying start up, at 3.67/10. ● In the first quarter of 2015, 7 indicators over 16 boost the overall barometer score and 5 indicators are not yet measured. See detailed results page 22 Schneider Electric – Investor Relations – Q1 2015 Revenues – 21 April 2015

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Our performance and commitment are recognized Indicators and objectives 2017

01/2015

Q1 2015

This quarter, Schneider Electric was rewarded by:

Planet

Top 10 Global 100 most sustainable corporations

Selected indicators

● Towards zero waste to landfill for 100 industrial sites ● 100% of products in R&D designed with Schneider ecoDesign WayTM

34

39

-

0.5%

Schneider Electric ranked 9th in January 2015 in the top 10 for the second year

Profit

Ethisphere Index

Selected indicators

● 75% of product revenue with Green PremiumTM eco-label

60.5%

● 120,000 tons of CO2 avoided through maintenance, retrofit and end-of-life services

-

64.1%

6,669

People

World's Most Ethical Companies For the 5th consecutive year

Non-financial information received “limited” and “reasonable” assurance from auditors

Selected indicators

● 30% reduction in the Medical Incident Rate (MIR)

-

19%

● 150,000 underprivileged people trained in energy management

73,339

78,448


The Planet and Society Barometer, as well as a selection of CSR information, received limited assurance1 by an independent third party. For the first time, two indicators received a reasonable assurance: "75% of our product revenue achieved with Green Premium" and "1 day training for each employee every year". 1 except

one indicator that was not submitted to the audit process this year

8

Q1 revenues details


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Q1 was close to flat organically excluding Invensys Analysis of change in Group revenues (€m) Organic ~flat excl. Invensys -2.0% Group

5,564

Buildings & Partner +0.3%

Industry -6.5%

~flat excl. Invensys

Q1 2014

Infrastructure +0.1%

Fx +9.5%

IT -4.4%

5,996 +7.8%

Scope +0.3%

Predominantly due to US Dollar and Chinese Yuan

Q1 2015

> Based on current rates, the positive FX impact on 2015 revenues is estimated to be c. €2bn. In this volatile FX environment, the Group continues to expect a limited impact on 2015 adjusted EBITA margin. Schneider Electric – Investor Relations – Q1 2015 Revenues – 21 April 2015

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Buildings and Partner grew despite weakness in China and lower project activity in US Analysis of change in Q1 Revenues (€m)

Fx +10.7%

2,423

Organic +0.3%

2,701 +11.5%

Scope +0.5%

Western Europe was stable. France, Spain and UK grew, compensating for a decline in Germany and Switzerland due to a high base of comparison North America was flat. The US saw mixed trends as construction market remained favorable while project business was impacted by lower capex, notably in oil & gas. Mexico posted positive growth Asia Pacific was down due to persistent weakness in construction market coupled with a high base of comparison in China, while Australia and India continued to grow Rest of the World grew, driven by Middle East, South America, New economies in Central Europe and Africa

45% of Q1 revenues

Q1 2014 Schneider Electric – Investor Relations – Q1 2015 Revenues – 21 April 2015

Q1 2015 11

Industry was about flat organically without Invensys, with continued OEM demand in Western Europe Analysis of change in Q1 Revenues (€m) Comments excluding Invensys: ~flat ex-Invensys

1,336

Fx +9.2%

Organic -6.5%

1,371 +2.6%

Scope -0.1%

In Western Europe, Industry business was about flat with continued growth in Spain and Italy thanks to sustained demand from export-oriented OEMs, while Germany was down North America was slightly down driven by lower investment in oil & gas and weaker demand from export oriented OEMs Asia Pacific presented a mixed picture as Japan and East Asia grew while China declined as expected Rest of the World performed well.

23% of Q1 revenues


Q1 2015 12

Infrastructure stabilized organically thanks to good project execution Analysis of change in Q1 Revenues (€m)

Fx +4.8%

1,089

Organic +0.1%

1,149 +5.5%

Scope +0.6%

Western Europe turned positive in this quarter helped by favorable comparison basis in France and Germany and improvement in Spain Asia-Pacific grew, mainly benefiting from growth in utilities and infrastructure in China and India, which more than offset the decline in Australia North America continued to grow driven by project execution in Canada Rest of the World was down this quarter, mainly impacted by Russia and high base of comparison in Africa Services continued to grow

19% of Q1 revenues


Q1 2015 13

IT was down due to weakness in Russia and one-off in India Analysis of change in Q1 Revenues (€m) Mainly impacted by one-off in India and weak demand in Russia Fx +12.6%

716

Organic -4.4%

775 +8.2%

Scope 0.0%

Performance in India was penalized by the one-off change in credit term and the distributor inventory adjustment to better match seasonality. However the underlying business trend in India remained healthy Western Europe grew driven by active IT investments The US was up driven by continued demand from data centers Services continued to grow

13% of Q1 revenues


Q1 2015 14

Q1 Revenues by region


15

Stabilization in Western Europe, mixed trends in North America and weakness in China %

Comments based on Q1 2015 organic growth ex-Invensys

North America: The US was down, penalized by lower capex investment notably in oil & gas while the construction market remained favorable. Mexico grew as the construction market improved.

27%

-1%

+18%

17%

0%

0%

Organic growth ex-Invensys in Q1

+x%

Total growth in Q1

+1%

+2%

Asia-Pacific: The decline was mainly due to the expected continued weakness in Chinese construction market, soft industrial OEM markets and a high base of comparison. India performed well but was impacted due to a one-off inventory adjustment by Luminous distributors. Australia was slightly up, driven by good growth in construction. The rest of the region showed a contrasted picture as South Korea benefited from export related project execution while South East Asia remained challenging.

28% Schneider Electric – Investor Relations – Q1 2015 Revenues – 21 April 2015

+x%

Western Europe: France was positive thanks to good execution in a still challenging market. Spain was up benefiting from demand of export-driven customers . Italy was positive driven by export oriented OEMs. UK performed well. Switzerland declined due to a high base of comparison and lower demand as a result of the sudden currency appreciation versus the Euro. Germany was down due to a higher comparison basis and slightly lower industrial activity in the beginning of the year.

28%

Rest of the World: Middle East was up driven by good demand in Saudi Arabia and the UAE. Underlying market in Russia was weak. Africa declined due to a high base of comparison. South America performed well in a difficult environment.

% of Group revenues in Q1

-2%

+10% 16

Full year 2015 Targets


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2015 targets confirmed Q1 performance is broadly in line with our expectations, with the stabilization in Western Europe, favorable construction market in North America and weakness in China. Despite the impact in Q1 of the change in date of fiscal year closing, Invensys is expected to contribute to the Group performance on a full year basis. Therefore the Group confirms its 2015 targets: > Low single-digit organic growth in revenues > Adjusted EBITA margin at 14-14.5% assuming no negative FX impact on margin


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Appendices


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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


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Q1 2015 revenues performance €m

Q1 2014

Q1 2015

Organic

Organic Ex-Invensys

Scope

FX

Reported

Buildings & Partner

2,423

2,701

+0.3%

+0.4%

+0.5%

+10.7%

+11.5%

Industry

1,336

1,371

-6.5%

-0.3%

-0.1%

+9.2%

+2.6%

Infrastructure

1,089

1,149

+0.1%

+0.1%

+0.6%

+4.8%

+5.5%

716

775

-4.4%

-4.4%

0.0%

+12.6%

+8.2%

5,564

5,996

-2.0%

-0.5%

+0.3%

+9.5%

+7.8%

IT Group

€m

Q1 2014

Western Europe

Q1 2015

Organic

Organic Ex-Invensys

Reported

1,623

1,659

0%

+1%

+2%

Asia-Pacific

1,507

1,665

-5%

-2%

+10%

North America

1,378

1,620

-1%

-1%

+18%

Rest of the World

1,056

1,052

-2%

0%

0%

Group

5,564

5,996

-2.0%

-0.5%

+7.8%


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The Planet & Society barometer Our 2015-2017 detailed sustainability scorecard, as of Q1 2015 Planet & Society barometer

Start 01/2015

Results T1 2015

Target 12/2017

3.00

3.67

8/10

10% energy savings

-

2%

10%

10% CO2 savings from transportation

-

-

10%

34

39

100

-

0.5%

100%

60.5%

64.1%

75%

100% of new large customer projects with CO2 impact quantification

-

-

100%

120,000 tons of CO2 avoided through maintenance, retrofit and end-of-life services

-

6,669

120,000

x5 turnover of Access to Energy program to promote development for underprivileged people

-

x1.18

x5

100% of our recommended suppliers embrace ISO 26000 guidelines

48%

51%

100%

All our entities pass our internal Ethics & Responsibility assessment

-

-

100%

30% reduction in the Medical Incident Rate (MIR)

-

19%

30%

One day training for every employee every year

79%

70.8%

85%

64% scored in our Employee Engagement Index

61%

-

64%

-

-

85%

73,339

78,448

150,000

460

523

1,300

(objectives for 2017)

Overall score (out of10)

Towards zero waste to landfill for 100 industrial sites 100% of products in R&D designed with Schneider ecoDesign

WayTM

75% of product revenue with Green PremiumTM eco-label

85% of employees work in countries with Schneider gender pay equity plan 150,000 underprivileged people trained in energy management 1,300 missions within Schneider Electric Teachers NGO

Schneider Electric – Investor Relations – Q1 2015 Revenues – 21 April 2015 The arrow shows if the indicator has risen, stayed the same or fallen compared to the previous quarter. The colour shows if the indicator is above or below the objective of 8/10.

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Contacts & agenda Anthony Song – Head of Investor Relations Tel: +33-1-41-29-83-29 [email protected]

Alexis Denaud – Senior Investor Relations Manager Tel: +33-1-41-29-51-24 [email protected]

July 29, 2015


H1 2015 Results

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Help people make the most of their energy


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