JP Morgan European Capital Goods CEO Conference 2015

Transcription

1 JP Morgan European Capital Goods CEO Conference 2015 Jean-Pascal Tricoire, Chairman and CEO June 11,

2 A technology company with strong foundations 2

3 We are the global specialist in energy management and automation 25 billion FY 2014 revenues ~5% of revenues devoted to R&D 43% of revenues in Solutions ~170,000 people in 100+ countries DIVERSIFIED END MARKETS FY 2014 revenues BALANCED GEOGRAPHIES FY 2014 revenues Non-residential & Residential Buildings 34% Data Centers & Networks 14% Industrial & Machines Utilities & Infrastructure 26% 26% 44% of revenues in new economies 25% North America 19% Rest of World 28% Western Europe 28% Asia Pacific 3

4 Four globally leading and focused businesses BUILDINGS & PARTNER INFRASTRUCTURE INDUSTRY IT KEY TECHNOLOGY Low Voltage & Building Automation KEY TECHNOLOGY Medium Voltage Grid Automation KEY TECHNOLOGY Discrete & Process Automation KEY TECHNOLOGY Critical Power & Cooling FY 2014 REVENUES FY 2014 REVENUES FY 2014 REVENUES FY 2014 REVENUES 10.8 billion (43%) 5.3 billion (21%) 5.6 billion (22%) 3.4 billion (14%) WORLDWIDE POSITION #1 GLOBAL COMPETITORS ABB, Eaton, Legrand, Siemens WORLDWIDE POSITION #1 GLOBAL COMPETITORS ABB, Siemens WORLDWIDE POSITION #2 (Discrete) #4 (Process) GLOBAL COMPETITORS ABB, Emerson, Rockwell, Siemens WORLDWIDE POSITION #1 GLOBAL COMPETITORS Eaton, Emerson 4

5 An integrated portfolio, to deliver complete bundles and solutions END MARKETS Buildings 1 (34% of group revenues) Industrial and Machines (Discrete and Process) (26% of group revenues) Utilities and Infrastructure (26% of group revenues) Data Centers and Networks (14% of group revenues) POWER (Low and Medium Voltage, Secure power) AUTOMATION SOFTWARE 2 (Enabling integration) 1 Including residential and non-residential buildings 2 Including standalone software ~65% of Group revenues ~35% of Group revenues 5

6 An integrated business model Products Scale = Cost + Differentiation + Strong partners network A strong and balanced partner model Solutions Strong segments expertise + Solid execution capabilities A strong solutions offer > Balanced distribution channels > Global distribution network > Strong brand > Differentiation through innovation and system design > Segment expertise > Growing share of services > Org. Growth 7pts higher than rest of Group in past 3 years > Differentiated software 6

7 An integrated commercial setup, to supply more to each customer in each country Buildings & Partner Infrastructure Industry IT Low Voltage & Building Automation Medium Voltage & Grid Automation Discrete & Process Automation Critical Power & Cooling Structured commercial setup in each country to drive cross selling and maximize coverage Deliver value to the customer Non-residential & Residential Utilities & Infrastructure Industrial & Machines Data Centers & Networks 7

8 An integrated and globalized supply chain to enable delivery of full offer and all synergies from scale KEY FOCUS > Increase customer satisfaction STRONG RESULTS OVER THE PAST 10 YEARS > 3bn productivity delivered over past 10 years > Low CAPEX > Outsourced COGS Tailored Supply Chain > Continue to improve cash efficiency > Deliver industrial productivity Footprint & Lean Simplification Footprint & Lean Globalization Simplification Footprint & Lean 8

9 A high technology investment, for innovation and differentiation A TECHNOLOGY COMPANY R&D INVESTMENT AN ECOSYSTEM FOR OPEN INNOVATION > c. 11,000 R&D engineers, c. 10,000 application and software engineers > 20,000 patents active or in application worldwide, >500 filed in 2014 > ~5% of sales devoted to R&D 1,119 1,212 Partnering with 50+ best-in-class public and private organisations 1,058 Leading global > With recognized innovations 979 projects for Intelligent Recognized highest ranking DCIM solution in Gartner Magic Quadrant (Oct 2014) buildings, renewables, Boosting Standardisation Zigbee, IEC, NEMA Homes, Minalogic, Smart Electricity M580: World s first epac with built-in ethernet & Machine Solution NEXT Controller Generation Funding start-ups Aster Capital fund Demand response, software breakthrough 9

10 Focusing on execution and value creation 10

11 A solid track record to deliver profitable growth through focused execution REVENUES (Billion ) ADJUSTED EBITA (Billion ) FREE CASH FLOW (Average, Billion ) RETURN ON ASSETS 1 (%) CAGR +9% CAGR +10% pt x Benefit from balanced geography & complementary business model Resilient adj. EBITA margin from 13% 16% Predictable cash generation: over 100% cash conversion from Net income in past 10 years Continuing to improve asset efficiency 1 Calculated on operational assets = property, plant, and equipment + inventories+ trade receivables trade payables. 11

12 Schneider is on is focused on further creating value for customers and shareholders Create more opportunities for our customers and for ourselves Simplifying our work makes the difference to customers Digitize for our customers, for efficiency and simplicity Innovation to make our customers lives simpler and better Our customers get great service because great people work at Schneider 12

13 Strengthen product leadership, establish excellence in targeted segments MORE INTEGRATED OFFERS Infrastructure Example: E-House integrating Low and Medium-voltage electric distribution MORE COMPLETE SOLUTIONS FOR TARGETED END-MARKETS Targeted segments focus Example: Water Water-loss management software Water & Waste Water Utilities Healthcare Automation & control Datacenters Electric distribution Example: Prefabricated datacenter modules with power, cooling & IT modules, integrated with Schneider modular MV & LV switchgear Oil & Gas Food & Beverage Metals, Mining & Minerals Secure power Safety Internet Giants & Cloud Finance 13

14 Accelerate software and service business MORE SOFTWARE MORE SERVICES 10,000+ application and software engineers Outgrew +7pts rest of group on average during past 3 years Leading Software suites in our end-markets 10,000+ Highly skilled experts Technology area Leading software suites Process Engineering & Optimization Planning & Scheduling Our execution focus: Operations Execution Mgt Ampla Aquis Termis Asset Management Operations Control ClearSCADA INCREASE BREADTH INCREASE DEPTH DEVELOP CAPABILITIES Information Management 14

15 Consistent Project Execution for our customers SCHNEIDER ELECTRIC/ ENERGOBIT CONSORTIUM EPC PROJECT IN ROMANIA CONSISTENT PROJECT EXECUTION - Strong cooperation within Schneider Electric to secure customer satisfaction - Best practices from project on grid connection to wind farms shared throughout Schneider Electric - Technical leadership in providing complete solution from the grid connection to the windmills Consistency Global best practices Agility Technical leadership 15

16 Simplify our operations for enhanced efficiency KEEP HIGH INDUSTRIAL PRODUCTIVITY SIMPLIFYING OUR OPERATIONS New One Average annual productivity ( m) Connect > Simplify management set-up > Make company leaner > Optimize R&D efficiency and solution execution > Increase focus and prioritization > Increase sales force efficiency ~ bn of costs savings targeted by 2017 through industrial productivity and SFC savings Free up resources for reinvestment 16

17 Digitize for our customers, for efficiency and simplicity DIGITAL CUSTOMER EXPERIENCE CONNECTED OFFERS For customers Mix & match App For distributors Quick ref. App Improved customer experience > Simple installation and registration to the cloud > Instant power disturbance notification > Ability to respond remotely to critical events > Easier diagnostic and technical support 17

18 Innovate to support our growth and improve our customer lives FASTER AND MORE TARGETED PROGRAMS Most advanced process simulation solution: > Market ready co-designed with key customers, > Efficiency ready from design to operations > Cloud ready low TCO 1 and built-in collaboration. EASIER INSTALLATION AND USAGE Wireless and connected devices Optimization algorithms in the cloud to enhance performance MORE SERVICES A complete offer based on the cloud Plateforme Cloud Real-time alerts and analysis Customers data 1 Total cost of ownership 18

19 With this program, we continue to focus on profitable growth and ROCE improvement TARGETING 3 TO 6% ORGANIC GROWTH THROUGH THE CYCLE MATURE MARKETS > Renovation > Digitization > Efficiency NEW ECONOMIES 15.4% > Urbanization > Industrialization > Digitization LONG-TERM ADJUSTED EBITA RANGE CONFIRMED AT 13-17% 13.0% 14.7% 14.5% 14.3% 13.9% WE FOCUS ON ROCE IMPROVEMENT > We aim to come back to ROCE pre- Invensys level (c. 12%) by 2015/2016 > 1.5-2pt 1 improvement in ROCE by 2016/ % 11.7% Adjusted for FX c.12% 12.9% 15.0% > More Energy Management 11.0% 12.4% 11.0% > More Digitization > More Automation proforma / 2016 Target 2016/ 2017 target Mediumterm range 1 from the level of the 2013 proforma 19

20 We are targeting strong returns for our shareholders STRONG EPS GROWTH IN THE NEXT COMPANY PROGRAM + SHARE BUYBACKS ( 1.0 to 1.5bn in next 2 years) + We are targeting strong returns for our shareholders PROGRESSIVE DIVIDEND WITH c. 50% PAYOUT FROM NET INCOME 20

21 Full year 2015 Targets 21

22 2015 targets 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 % assuming no negative FX impact on margin 22

23 HELP PEOPLE MAKE THE MOST OF THEIR ENERGY 23