Strong Q1 growth up +7.8%, revenues reaching
€6bn
Organic growth is close to flat excluding
Invensys
- Buildings & Partner posted
positive growth, Industry was about flat excluding
Invensys
- Infrastructure stabilized, IT
impacted by Russia and one-off in India
- Western Europe stabilizing and
weakness in China as expected
- North America saw lower capex but
construction market remained favorable
- Invensys performance impacted by
change in date of fiscal year closing. Synergies execution on
track.
- Full year targets confirmed
Regulatory News:
Schneider Electric (Paris:SU) reported first quarter revenues of
€5,996 million, up +7.8% in total and about
flat organically excluding Invensys.
The breakdown of revenues by business segment was as
follows:
€ million Q1 2015
Revenues Organic
growth
Organic growth ex.
Invensys
Reportedgrowth
Buildings & Partner 2,701 +0.3%
+0.4% +11.5% Industry
1,371 -6.5% -0.3% +2.6%
Infrastructure 1,149 +0.1%
+0.1% +5.5% IT 775
-4.4% -4.4% +8.2%
Group
5,996 -2.0%
-0.5% +7.8%
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 grow.
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 Group.
Organic growth analysis by geography
€ million Q1 2015
Revenues
Organicgrowth
Organic growthex.
Invensys
Reportedgrowth
Western Europe 1,659 0%
+1% +2% Asia-Pacific 1,665
-5% -2% +10% North America
1,620 -1% -1%
+18% Rest of World 1,052 -2%
0% 0%
Group
5,996 -2.0% -0.5%
+7.8%
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 market improved.
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 revenues.
Consolidation1 and foreign exchange impacts on
revenues
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.
2015 TARGETS
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 margin
*******************
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.
www.schneider-electric.comISIN : FR0000121972
Appendix – Revenues breakdown by
business
€ million Q1
2015 Revenues
Organicgrowth
Organicgrowth ex.
Invensys
Changes inscope
ofconsolidation
Currencyeffect
Reportedgrowth
Buildings & Partner 2,701 +0.3%
+0.4% +0.5% +10.7%
+11.5% Industry 1,371 -6.5%
-0.3% -0.1% +9.2%
+2.6% Infrastructure 1,149 +0.1%
+0.1% +0.6% +4.8%
+5.5% IT 775 -4.4%
-4.4% 0.0% +12.6% +8.2%
Group 5,996 -2.0%
-0.5% +0.3%
+9.5% +7.8%
Appendix – Invensys Revenues breakdown by
quarter
€ million
Q1 2014
Q2 2014 Q3 2014
Q4 2014 Q1 2015 Invensys
455 373 404 481
4172
Appendix – Consolidation impact on
revenues and EBITA
In number of
months
2014
Q1
Q2
Q3
Q4
2015
Q1
Q2
Q3
Q4
Invensys
Industry business (+ partly Buildings
&Partner business)FY 30/9/13 revenue £1,450 millionexcluding
Appliance
3m 3m 3m 3m
Günsan ElektrikBuildings &
Partner businessTRY 100 million (c. €35 million) in 2013
3m 3m
3m 3m
1 Changes in scope of consolidation also include some minor
reclassifications of offers among different businesses.2 Includes
€53m of positive FX impact compared to Q1 2014
Investor Relations :Schneider ElectricAnthony
Song, +33 (0) 1 41 29 83 29Fax : +33 (0) 1 41 29 71
42orPress Contact :Schneider ElectricVéronique
Roquet-Montégon, +33 (0)1 41 29 70 76Fax : +33 (0)1 41 29 88
14orPress Contact :DGMMichel
CalzaroniOlivier Labesse+33 (0)1 40 70 11 89Fax : +33
(0)1 40 70 90 46
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