First Quarter 2016 Revenues. April 21, 2016

Transcription

1 First Quarter 2016 Revenues April 21, 2016

2 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 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. Page 2

3 4 Q1 performance highlights 7 Q1 performance by business 13 Q1 performance by region 15 Full year 2016 Targets 17 Appendices Page 3

4 Q1 performance highlights Page 4

5 Products, Software & Services grew about +2% org., driving Q1 Group revenues up +0.1% org. in a mixed environment Continued growth in Buildings & Partner, IT up and Industry down in weak markets Buildings & Partner was up driven by the Retail business which grew across all regions In difficult markets, Industry declined at a slower pace thanks to growth in Software and Process Automation Infrastructure was flat thanks to Western Europe, while higher project selectivity started to impact growth IT was up, as growth in North America more than offset the weakness in Western Europe N. America & W. Europe grew, China declined at a slower pace, Rest of the World mixed North America was up thanks to strong growth in the U.S construction market and continued recovery in Mexico Western Europe continued to grow with different dynamics across countries China declined at a slower pace with early, to be confirmed, signs of improvement in tier 1 city construction markets Growth in Middle-East slowed down, Brazil was weak while LATAM outside Brazil and CIS were up Strategic initiatives progressing well Products grew, Services were up 8% and Industry software grew mid-single digit Increased project selectivity started to impact revenues growth, as expected Continued focus on costs, adapting to a mixed environment 2016 targets confirmed. Focus remains on execution of strategic initiatives Page 5

6 This quarter, our Planet & Society barometer reaches 6.70/10 Selected Indicators & Objectives Q Q Barometer s score end of Q1: Planet 10% CO 2 savings from transportation 100% of products in R&D designed with Schneider ecodesign Way TM 8.4% 13.3% 8.4% 8.9% /10 1 st quarter 2016 Target Profit % of product revenue with Green Premium TM eco-label 100% of our recommended suppliers embrace ISO guidelines 67.1% 64.7% 66.7% 65.2% 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q People 85% of employees work in countries with Schneider gender pay equity plan 1,300 missions within Schneider Electric Teachers NGO 57% % 938 This quarter, Schneider Electric was awarded by: Ethisphere recognized Schneider Electric within the World s Most Ethical Companies for the 6 th consecutive year in March 2016 Page 6 See detailed results page 20

7 Q1 performance by business Page 7

8 Q1 revenues up +0.1% organically, driven by Buildings & Partner and IT Analysis of change in Group revenues ( m) 5,996 Buildings & Partner +1.4% Industry -2.6% Organic +0.1% Infrastructure -0.1% IT +0.7% Scope -1.4% Fx -2.4% 5, % Q Q > Based on current rates, the negative FX impact on FY 2016 revenues is estimated to be ~- 1.0bn, due to the strengthening of the euro against several currencies. Page 8

9 Buildings & Partner was up driven by the Retail business which grew across all regions Analysis of change in Q1 Revenues ( m) 2,701 Organic +1.4% Scope -2.0% 45% of Q1 revenues Fx -2.6% 2, % North America was up thanks to strong growth in Mexico and the U.S. The U.S. performance was driven by new offer launches in a favorable construction market In Western Europe, Spain, Italy and Germany were up benefiting from channel initiatives and project execution. France was down, but grew in the residential construction market Asia Pacific was about flat as growth in India offset declines in China. China was down moderately, with some early, to be confirmed, signs of improvement within tier 1 city construction markets Rest of the World was up benefiting from success in the medium range offer and price increases in certain countries Q Q Page 9

10 In difficult markets, Industry declined at a slower pace thanks to growth in Software and Process Automation Analysis of change in Q1 Revenues ( m) 1,371 Organic -2.6% Scope -0.4% 23% of Q1 revenues Fx -2.1% 1, % The U.S. continued to be impacted by lower O&G investment and the focus remains on leveraging channels and new offer launches In Western Europe, Spain and Italy continued to benefit from export-oem demand and OEM business grew in Germany thanks to channel initiatives in a soft market. French markets were difficult In China, weakness in traditional industrial segments persisted due to capacity adjustments and rebalancing end-market exposure remains a priority Process Automation was up thanks to solid project execution and Services in difficult markets Q Q Page 10

11 Infrastructure was flat thanks to Western Europe, while higher project selectivity started to impact growth Analysis of change in Q1 Revenues ( m) 1,149 Organic -0.1% Scope -2.3% 19% of Q1 revenues Fx -3.3% 1, % The impact of increased project selectivity was estimated to be around 20-30m. Western Europe grew strongly. France, U.K. and Germany were up thanks to project execution while Spain was impacted by a high base of comparison In North America, Canada benefited from project execution while the U.S. was impacted by weak industrial investments Asia Pacific was penalized by a high base of comparison in Australia and project selectivity in India Rest of the World observed a slowdown in the Middle East and continued market weakness in Russia Services were up double-digits Q Q Page 11

12 IT was up, as growth in North America more than offset the weakness in Western Europe Analysis of change in Q1 Revenues ( m) 775 Organic +0.7% Scope 0.0% Fx -0.8% % The U.S. was up thanks to a favorable baseline. Additionally there were signs of improvement in some data center segments Western Europe was down, as IT markets softened Asia Pacific was about flat, as the growth in India almost offset the declines in China and Japan Products and Services showed solid growth 13% of Q1 revenues Q Q Page 12

13 Q1 performance by region Page 13

14 North America & Western Europe grew, China declined at a slower pace, Rest of the World was mixed Comments based on Q organic growth % % of Group revenues in Q1 +x% +x% Organic growth in Q1 Total growth in Q1 North America: The U.S. was up thanks to strong growth in the construction market while industry markets were impacted by low O&G investment. Additionally, the IT markets were soft, with signs of improvement in some data center segments. Canada was up benefiting from project execution and Mexico continued to grow. 28% +1% -1% Western Europe: Italy continued to grow while Spain was down impacted by a high base of comparison and several projects phasing. Germany performed strongly benefiting from growth initiatives in a favorable construction market and project execution. France was down in stagnant markets, though residential construction showed some early signs of recovery. The focus in France remains on gaining new customers and strengthening core businesses. 28% +1% -1% Rest of the World: The Middle East showed slower growth as investments were impacted by continued weakness in the price of oil. South America was about flat as the growth in Argentina, Colombia, and Chile offset weakness in Brazil. CIS was up driven by project execution outside Russia, where conditions remained difficult. 17% +1% -9% Asia-Pacific: Revenues were stable outside China. China declined at a slower pace. The overall market continued to be difficult and the priority remains rebalancing the Group s end-market exposure. New economies outside China were up, driven by growth in India and in South-East Asia. Australia was penalized by a high base of comparison and weakness in commodity-based segments, while the residential market remained positive. 27% -2% -5% Page 14

15 Full year 2016 Targets Page 15

16 2016 targets confirmed As expected, the Group observed growth in Western Europe and in the construction market in the U.S., continued weakness in O&G and its related segments, and a mixed picture in new economies outside China. China declined at a slower pace with early signs of improvement in tier 1 city construction markets, however these signs of improvement need to be further confirmed. Increased project selectivity started to impact revenues in Q1 as planned and the Group anticipates this impact will accelerate through the year. Moving forward, the Group s priorities remain cost optimization, growth in Products, Software and Services and improvement in Solutions margin. Based on these trends, the Group confirms its 2016 targets of: > Organic revenue growth to be flat to down low single-digit, impacted by the Group s higher selectivity on project activities. > +20bps to +60bps improvement on adjusted EBITA margin before FX. The negative FX impact on margin is estimated at -40bps to -50bps at current rates. Page 16

17 Appendices Page 17

18 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 Page 18

19 Q revenues performance m Q Q Organic Scope FX Reported Buildings & Partner 2,701 2, % -2.0% -2.6% -3.2% Industry 1,371 1, % -0.4% -2.1% -5.1% Infrastructure 1,149 1, % -2.3% -3.3% -5.7% IT % 0.0% -0.8% -0.1% Group 5,996 5, % -1.4% -2.4% -3.7% m Q Q Organic Reported Western Europe 1,659 1,643 +1% -1% Asia-Pacific 1,665 1,577-2% -5% North America 1,620 1,597 +1% -1% Rest of the World 1, % -9% Group 5,996 5, % -3.7% Page 19

20 The Planet & Society barometer Our detailed sustainability scorecard, as of Q Planet & Society barometer (objectives for 2017) Start 01/2015 Results Q Results Q Target 12/2017 Overall score (out of10) /10 10% energy savings - 4.5% 4.5% 10% 10% CO 2 savings from transportation - 8.4% 8.4% 10% Towards zero waste to landfill for 100 industrial sites % of products in R&D designed with Schneider ecodesign Way TM % 8.9% 100% 75% of product revenue with Green Premium TM eco-label 60.5% 67.1% 66.7% 75% 100% of new large customer projects with CO 2 impact quantification % 120,000 tons of CO 2 avoided through maintenance, retrofit and end-of-life services - 44,777 56, ,000 x5 turnover of Access to Energy program to promote development - x2.07 x3.04 x5 100% of our recommended suppliers embrace ISO guidelines 48% 64.7% 65.2% 100% All our entities pass our internal Ethics & Responsibility assessment - 88% 88% 100% 30% reduction in the Medical Incident Rate (MIR) - 17% 37% One day training for every employee every year 79% 85.6% 85.6% 64% scored in our Employee Engagement Index 61% 61% 61% 85% of employees work in countries with Schneider gender pay equity plan - 57% 57% 150,000 underprivileged people trained in energy management 73, , ,365 1,300 missions within Schneider Electric Teachers NGO 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. 30% 85% 64% 85% 150,000 1,300

21 Contacts & agenda Anthony Song Head of Investor Relations Tel: Alexis Denaud Senior Investor Relations Manager Tel: April 25, 2016 July 28, 2016 Annual Shareholder Meeting Half-year Results Page 21

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