Schneider Electric S.E.

S&P Global Ratings' stable outlook on France-based Schneider Electric S.E. reflects our expectation that the company's credit metrics will stay commensurate with the ratings in 2019-2020, namely funds from operations (FFO) to debt of at least 35% and debt to EBITDA of approximately 2x, combined with continued positive FOCF. Barring unexpected and sizable acquisitions, we project that Schneider will meet our credit metrics guidance during the next three years. The ratings could come under pressure if adjusted FFO to debt falls below 35% and debt to EBITDA is higher than 2x for a protracted period. This could result from larger debt-funded acquisitions than we factor into our base case, especially if the company does not offset this with timely disposals

...Our expectation of a continued track record of substantial free operating cash flow (FOCF).We expect to see Schneider generating FOCF in excess of 2 billion per year over 2018-2020. At the end of the first half of 2018, FOCF was 350 million, impacted by 562 million higher working capital....

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