Schneider Electric (Paris:SU) reported first quarter revenues of ?5,996
million, up +7.8% in total and about flat organically
The breakdown of revenues by business segment was as follows:
|? million||Q1 2015|
|Buildings & Partner||2,701||+0.3%||+0.4%||+11.5%|
Jean-Pascal Tricoire, Chairman and CEO, commented: ?On a reported
basis, we achieve a revenue growth in Q1 of 7.8%. The organic growth is
about flat excluding Invensys, which is impacted by an exceptionally
high base of comparison due to the change in 2014 fiscal year closing.
Q1 performance is broadly in line with our expectations, we therefore
confirm our 2015 targets. Moving forward, we will remain focused on
executing our new company program ?Schneider is On? to deliver growth,
efficiency and cash generation?
Organic growth analysis by business segment
Buildings & Partner (45% of Q1 revenues) was up +0.3% organically.
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.
Industry (23% of Q1 revenues) was down -6.5%. Excluding
Invensys, 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.
Invensys Q1 2015 growth was negative due to a double mechanical impact
as the fiscal year closing moved from March to December: Firstly, Q1
2014 was strong as it was the last quarter of Invensys fiscal year.
Additionally, the beginning of Q1 2015 was impacted by strong revenues
in Q4 2014 which was Schneider Electric?s fiscal year closing. The
double impact of the closings is estimated to be roughly around ?80
million. This negative impact should gradually decrease throughout the
year. By activity, Field device business was down due to slow down in
oil & gas demand while Eurotherm business performed well. Q1 revenues
were also impacted by ramping down of China nuclear project. We are on
track to deliver our targeted synergies in 2015.
Infrastructure (19% of Q1 revenues) was stable, posting +0.1% organically
with growth across most regions. 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.
IT (13% of Q1 revenues) was down -4.4% organically in the
first quarter mainly impacted by one-off in India and weak demand in
Russia. 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
The Product business was down -3% in the quarter, while the
Solution business declined -1% organically and represented 42%
of revenues. Q1 represents the smallest quarter of the year for the
Organic growth analysis by geography
|? million||Q1 2015|
|Rest of World||1,052||-2%||0%||0%|
Following comments are based on the performance excluding Invensys
Western Europe (28% of Q1 revenues) was up +1% excluding
Invensys. 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.
Asia-Pacific (28% of Q1 revenues), was down -2% excluding
Invensys, 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.
North America (27% of Q1 revenues), declined -1%
organically in the quarter following a strong Q4 2014. The US was down,
penalized by lower capex investment notably in oil & gas while the
construction market remained favorable. Mexico grew as the construction
Rest of the World (17% of Q1 revenues) was flat
organically in the quarter. 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.
Revenues in mature countries were stable while new economies declined -1%
organically and represented 42% of total first quarter 2015
Consolidation1 and foreign exchange impacts on
Net acquisitions contributed ?17 million or +0.3%. This
includes mainly Günsan Elektrik (consolidated in Buildings & Partner)
and some minor acquisitions and disposals in other businesses.
The impact of foreign exchange fluctuations was positive at ?536
million or +9.5%, primarily due to the appreciation of the US
Dollar and Chinese Yuan against the Euro. 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 the 2015 adjusted EBITA margin.
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
The Q1 2015 revenues presentation is available at www.schneider-electric.com.
2015 half year results will be presented on July 29, 2015.
About Schneider Electric
As a global specialist in energy management with operations in more than
100 countries, Schneider Electric offers integrated solutions across
multiple market segments, including leadership positions in Utilities &
Infrastructure, Industries & Machines Manufacturers, Non-residential
Building, Data Centers & Networks and in Residential. Focused on making
energy safe, reliable, efficient, productive and green, the Group’s
170,000 employees achieved revenues of 25 billion euros in 2014, through
an active commitment to help individuals and organizations make the most
of their energy.
Appendix ? Revenues breakdown by business
|? million||Q1 2015|
|Buildings & Partner||2,701||+0.3%||+0.4%||+0.5%||+10.7%||+11.5%|
Appendix ? Invensys Revenues breakdown by quarter
|Q2 2014||Q3 2014||Q4 2014||Q1 2015|
Appendix ? Consolidation impact on revenues and
|In number of months||
Industry business (+ partly Buildings &
1 Changes in scope of consolidation also include some
minor reclassifications of offers among different businesses.
Includes ?53m of positive FX impact compared to Q1 2014