Schneider Electric Revenue Rises 9.8% on Currency Gains

The Tip Desk · June 30, 2015 · 2 min read

The energy management company reported consolidated revenue of 12,848 million euros for the first half of 2015.

Schneider Electric reported consolidated revenue of 12,848 million euros for the first half of 2015, a 9.8% increase compared to the first half of 2014. The company said this growth was driven by a 10.5% currency effect, primarily from the US dollar and Chinese yuan, which offset an organic growth decline of -0.9%.

Performance varied across operational sectors. The Buildings & Partner segment, which represents 44% of group revenue, reached 5,763 million euros. This represented a 13.0% increase in current data, supported by construction market growth in the United States and a recovery in Mexico. Infrastructure revenue rose 6.4% in current data to 2,516 million euros. The company attributed this to project execution in France, Spain, Italy, and the United Kingdom.

Conversely, the IT segment saw revenue fall 13.4% in current data to 1,735 million euros. The Industry segment, accounting for 22% of group revenue, rose 4.8% in current data to 2,834 million euros, though it fell -5.3% on a comparable basis. The company said Industry was affected by lower industrial investments linked to falling oil prices and a weak market for machine builders in China.

Adjusted EBITA rose 6.4% to 1,601 million euros. However, the adjusted EBITA margin decreased slightly to 12.5% from 12.9% in the first half of 2014. Segment margins showed mixed trajectories. The Infrastructure adjusted EBITA rate rose 0.6 point to 6.2%. The Industry adjusted EBITA rate fell 2.7 point to 15.5%, which the company attributed to low volumes, particularly at Invensys, and higher research and development spending. The IT adjusted EBITA rate declined 0.8 point to 16.1% due to currency fluctuations.

Operating costs were impacted by simplification initiatives. Restructuring costs rose to 158 million euros from 71 million euros in the first half of 2014. The company said these costs were higher due to efforts to reduce support function expenses. Consequently, support function costs as a percentage of revenue decreased to 24.5% from 25.2%.

Cash flow from operating activities rose to 598 million euros from 565 million euros in the first half of 2014. The company reported net cash of 1,806 million euros at the end of the period. During the half-year, the company reimbursed a maturing bond of 750 million euros and issued a new bond with the same amount maturing in March 2025.

For the remainder of 2015, the company expects continued growth in the US construction market and a recovery in Western Europe. It anticipates persistent weakness in China and in investments related to the oil and gas sector. The company now targets organic revenue growth that is around stable for the full year.