Research Update: Schneider Electric's 'A-/A-2' Ratings Affirmed Amid OSIsoft Acquisition; Outlook Remains Stable

On Aug. 25, 2020, Schneider Electric S.E. announced that its majority-owned subsidiary, AVEVA Group PLC, had agreed to acquire U.S. industrial data and analytics company OSIsoft LLC for $5 billion. Schneider has shown resilient financial performance and strong cash flow generation in difficult operating conditions; we expect the group to continue to generate strong free operating cash flow over the next 12 months, with margins close to the pre-COVID-19 level. We are affirming our 'A-/A-2' long- and short-term issuer credit ratings on Schneider Electric. The stable outlook indicates that although credit metrics weakened in 2020, the group's financial ratios are likely to strengthen quickly because of its free cash flow generation, the shelving of its share-buyback program, and by refraining

...- On Aug. 25, 2020, Schneider Electric S.E. announced that its majority-owned subsidiary, AVEVA Group PLC, had agreed to acquire U.S. industrial data and analytics company OSIsoft LLC for $5 billion. - Schneider has shown resilient financial performance and strong cash flow generation in difficult operating conditions; we expect the group to continue to generate strong free operating cash flow over the next 12 months, with margins close to the pre-COVID-19 level. - We are affirming our 'A-/A-2' long- and short-term issuer credit ratings on Schneider Electric. - The stable outlook indicates that although credit metrics weakened in 2020, the group's financial ratios are likely to strengthen quickly because of its free cash flow generation, the shelving of its share-buyback program, and by refraining from further sizable acquisitions until it has regained its financial flexibility. We view funds from operations (FFO) to debt of above 30% and debt to EBITDA of about 2.5x as in line with the...

Research Update