Schneider Electric, the renowned French digital energy-management and automation company, is set to release its highly anticipated first-half results on Thursday. Analysts are eagerly awaiting these numbers and here’s what you need to know:
According to a company-provided consensus of analysts’ views, Schneider Electric is expected to report a substantial increase in first-half revenue, reaching a staggering 17.615 billion euros ($19.49 billion). This significant growth is a substantial leap from the EUR16.08 billion achieved during the same period last year. Furthermore, analysts predict that the company will post a remarkable EUR9.12 billion in second-quarter revenue, surpassing the EUR8.51 billion generated in the second quarter of the previous year.
Net Income Surge
The company-provided consensus suggests that Schneider Electric will witness a notable rise in net profit during the six-month period, with analysts estimating an impressive figure of EUR2.02 billion. This projected increase showcases the company’s continued financial growth, surpassing the EUR1.52 billion recorded in net profit from a year ago.
When diving into Schneider Electric’s first-half results, it is crucial to keep an eye on their revenue performance and net income figures. These numbers are a testament to the company’s continued success and market dominance. Stay tuned for an in-depth analysis of their performance, as Schneider Electric once again proves its worth in the digital energy-management and automation industry.
PRIOR TRENDS & CHINA
Jefferies analysts anticipate the second quarter of this year to have followed previous patterns. Schneider Electric, in their first-quarter results released in April, expressed confidence in strong demand driven by electrification, digitization, and sustainability. Citi analysts noted that while long-term prospects remain positive with the themes of decarbonization, automation, and digitalization, there are also negative factors affecting the European electrical equipment sector heading into the second quarter. These include a slower reopening in China, sluggish wind order intake, declining lighting due to destocking, and a slowdown in the appliance markets. According to Deutsche Bank analyst Gael de-Bray, China, which accounts for 16% of the company’s revenues, is expected to have remained subdued in the second quarter, with indicators pointing to ongoing weakness. However, Jefferies analysts believe that 2Q growth in China should be supported by favorable comparisons.
Growth & Guidance: Schneider Electric Boosts 2023 Targets
In April, Schneider Electric announced an upgrade to its 2023 targets, revealing ambitious goals for growth. The company now aims for organic adjusted earnings before interest, taxes, and amortization (Ebita) growth ranging from 16% to 21%. Additionally, Schneider Electric is targeting organic revenue growth between 10% and 13%, and plans to increase its Ebitda margin by 100 to 130 basis points organically. This implies an adjusted Ebita margin of approximately 17.6% to 17.9%.
Schneider Electric made this upward revision in response to strong demand across several sectors during the first quarter. Notably, there was broad-based demand for electrification, software, and digitization. According to Gael de-Bray, an analyst at Deutsche Bank, this trend is expected to continue driving a 15% organic growth in electrification demand for the second quarter.
Deutsche Bank predicts that Schneider Electric’s adjusted Ebita in the first half of the year will exhibit a 14% increase compared to the previous year. Consequently, this would result in an expanded adjusted Ebita margin of 17.9%, up from 17.3% last year. De-Bray also commented that the company’s growth prospects for this year are reinforced by solid pricing dynamics, a record backlog, and a reduction in supply-chain constraints.
Looking ahead, both Deutsche Bank and Citi analysts anticipate Schneider Electric will maintain its 2023 targets for organic growth and Ebita margin. With these positive predictions, Schneider Electric is poised for continued success.