Schneider Electric S.E.

Overview Key strengths Key risks Global leader in the digital transformation of energy management in the low- and medium-voltage segment. Indirect exposure to commodity price movements through industrial automation business and to the performance of construction markets in different regions. Balanced geographic diversification and customer distribution. Continuously expanding share of software and service revenue. Shareholder-friendly financial policy, progressive dividend payouts, and an acquisitive expansion strategy. Well-positioned to take advantage of global megatrends, namely energy efficiency, decarbonization, decentralized power production, and connectivity. Clear commitment to a strong investment-grade credit rating and sustainability. Track record of profitability (19%-21% EBITDA margin for 2023-2025) that is resilient throughout the cycle and higher than most European peers. The company's revenue during the first nine months

...We think Schneider Electric will achieve strong organic growth of 11%-13% in 2023 due to its consistent performance in the past nine months and at least mid-single digit growth in 2024. The company's revenue during the first nine months of 2023 reached 26.4 billion, achieving sound organic growth of approximately 14% when compared to the corresponding period in 2022. In 2023 we expect the company's organic growth to remain solid, between 11%-13% (this excludes foreign exchange impacts). Growth will primarily be driven by strategic pricing initiatives, alongside robust demand from its energy management segment backed by a positive upswing in global data center and infrastructure end-markets. The growth may also be negatively affected by foreign exchange fluctuations, leading to a 6%-8% revenue increase, incorporated into our base-case assumptions. We anticipate that the industrial automation segment will contribute to growth, even in the face of challenges in discrete automation markets...

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