Investors Presentation November 2011 En

7/31/2019 Investors Presentation November 2011 En

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Investors presentation

November 2011


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All forward-looking statements are Schneider Electric

managements present expectations of future events and are

subject to a number of factors and uncertainties that could

cause actual results to differ materially from those described

in the forward-looking statements.

Disclaimer


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Schneider Electric 5- Investor Relations Investors Presentation November 2011

Schneider Electric the global specialist in

energy management

billion sales(last twelve months)

of sales in new economies

(last twelve months)

people in 100+ countries

of sales devoted to R&DResidential 9%

Utilities & Infrastructure 20%

Industrial & machines 24%

Data centres 17%

Non-residential buildings 30%

Balanced geographies H1 2011sales

Diversified end markets FY 2010 sales1

NorthAmerica

23%Asia

Pacific26%Rest of

World

18%

Western

Europe33%

1

On a comparable basis with 12- months of Areva D


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.Measure

our commitmentPlanet & SocietyBarometer (June 2011)

Engageall our people

GainrecognitionIn 2 ethical stock indexes:

- Dow Jones Sustainability Stoxx

(Europe) Index

- Aspi Eurozone

People & communities development

Sustainable and responsible business

A responsible commitmentsupporting Schneider Electrics sustainable growth

Access to energy

Environmental protection

BipBop programme

Green Premiumproducts

Health & Safety and engagement

Ethics and responsibility

Schneider Electric Foundation


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Strategy andbusiness update


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Strong sales and EBITA increase in H1

despite inflation and investment for growth

+10.2%

Investments& customer

Portfolio

H1 organic growth, driven mainly by Industry and neweconomies. Strong reported growth, +21%

Organic investments in geographical coverage & skills

Customer 1st approach temporarily penalized working capital

Strategic acquisitions to strengthen the business portfolio

in particular solutions (on track to add > 1bn of sales), India & Latin America

+14% EBITA* up 14% - growth and efficiency offset strong

inflation headwinds and investments to tap future growth

Well positioned to grow in energy efficiency,

smart grid and new economies

* Before acquisition and integration costs


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(20%)

(10%)

+0%

+10%

+20%

Strong investments in solutions in H1 to deliver

superior growthSolutions - Share in Group sales Sales organic growth

30%

35%

H1

2011

2008

Services:10%

Solutions

Group

H1 H2 H1 H2 H1

2009 2010 2011

+4ptsvs Group

+14%

Investment in

Architectureby marketsegment

Commercial& execution

competencies

Servicesramp-up

Softwaretechnology


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Approaching 40% of sales in new economies

Sales in new economies

Investment in

billion sales

2006

2008LTM

June 2011

38% of sales in new economies

1.1*

* Excluding Elektroshield TM Samara consolidatedwith the equity method (2010 sales: 0.4bn)

1.8

4.0

EasternEurope

Middle EastAfrica

Asia

1.3

LatinAmerica

Commercialpresence

Local R&Dand offer

development

Solutions &services

ramp-up

Sales in new economies(Last 12 months to June 2011)

Geographicalcoverage


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Business portfolio strengthened, in line with

stated strategic priorities

DigilinkLuminous

+ APW

Power

Telvent

Energy

Leader &Harvest1

Industry

SummitEnergy

LeeTech.

BuildingsIT

SteckGroup

1 Deals in process but not closed

Boosting growth and shareholder returns

Targeting quick EPS accretion

ROCE above WACC beyond year 3

Maintaining a solid rating:A- or BBB+ if necessary

Maintainstrict M&Adiscipline

2011 deals (closed and in-process)

25m 80mEstimated sales 188m 750m 103m 46m 104m

New economies

Solutions and services(smart grid, energy efficiency)

Business leadership


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Finance presentation


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Solid growth across businesses, coupled with

acquisitions, drove total H1 growth to +21%

Analysis of change in Group sales (in m)

8,571

Power

+8.5%

10,336+20.6%

Change inScope

+11.4%Fx

(1.0%)

Industry

+17.8%

IT

+9.8%

Buildings

+7.0%Energy

+5.4%

Organic+10.2%

H1 2010 H1 2011

Power

Energy

Industry

IT

Buildings

38%

20%

21%

14%

% of H1 sales

7%


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EBITA increased on strong volume & productivity,

offsetting significant inflation headwinds

1 On a comparable basis including Areva D since 1 Jan 2010

2 Of which Raw materials: -214, Production labour & other Costs: -39

H1 2010comparable1

Volume

Currency

effects

1,252

1,413

+355

+9 -7+4

Other

+46

PriceSupportfunctioncostinvestments

SFC

Inflation

Change

in scope

-253

-84-51

Produ-ctivity

Mix

+233

COGSinflation2

-91

H1 2011

Analysis of change (in m)

SFC organic

increase of ~+7%

vs. sales at

+10%

Mix positive on

geographies,

negative on

solutions


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Most businesses showed EBITA progression,

in particular Industry

Power

IT

Buildings

821

166

188

20.9%

436

H1 2011

m and as % of sales

1 Before acquisition and integration costs

Before Corporate costs of 252m in H1 2011 (239m in H1 2010)2 On a comparable basis including Areva D since 1 Jan 2010

Energy

Industry

8.2%

19.6%

13.3%

7.4%

H1 2010

-0.1 pt

0.0 pt2

+2.3 pts

-1.1 pt

-1.3 pt

769

159

325

181

54

8.7%

14.4%

17.3%

8.2%2

21.0%

57

EBITA by business1Sales

10,336m

IT

14%Buildings

7%

Power

38%

Industry

21%

Energy

20%


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Free cash generation temporarily limited by

high working capital consumptionAnalysis of debt change in m H1 2010 H1 2011 LTM

(781)(772)(424)Change in trade working capital

(4,013)

(1,201)

(236)

48

(1,271)

(199) 1457

(68)

(218)

1,167(2,812)

(4,474)

(1,738)

(111)

30

(642)

(852)(159)

(204)

(329)

1,146(2,736)

(4,474)Net debt at June 30

(461)(Increase) / Decrease in net debt

106Other

287Capital increase

(1,120)Acquisitions net

(852)Dividends1,118Free cash flow

91Change in non-trade working capital

2,447Operating cash flow

(639)Capital expenditure net

(4,013)Net debt at opening

1 ~62% of dividend payout in 2010 was in shares, at shareholders option


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Working capital increase on seasonal effect

and inventory build-up to secure revenues

1 Days of sales2 Days of COGS (cost of goods sold)3 Days of purchases

NB Changes are in days vs. June 2010

4.75

Receivables1

Trade working capital (in bn)

June

2011

Inventories2

Payables3 65 days (=)

55 days (+3 d)

99 days (+8 d)

4.1

Dec

2010

Excess inventories in H1 in the range

of 300m, due to:

Raw material safety stocks to

minimize potential supply chain

disruption caused by Japan natural

disaster

Extra inventory to ensure customer

deliveries and secure revenues

FX &

scope

(0.1) 0.35

0.4

Normative

impact

from sales

rebound

+

raw material

inflation

Additional

inventories

(incl. raw

materials

safety stock)

and

receivables

Inventory to return to normal level

target reduction of about 300m in H2


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Balance sheet continued to be very solid

2009 LTM

June 2011

2010 LTM

June 2011

20102009

1.2x

0.8x

1.2x

63%

191%

101%

Net debt / EBITDACash conversion

(Free cash flow / net income)

EBITDA of 1,667m in H1


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Q3 2011 and 9-month sales performance

Q3 2011 Organic 9M 2011 Organic

+6.4%3,203+7.3%1,174Energy

+7.7%

+3.0%

+12.6%

+6.6%

+7.6%

16,033

1,121

2,294

3,317

6,098

5,697

389

882

1,090

2,162

+10.8%IT

+9.3%Group

+5.6%

+13.9%

+8.2%

Industry

Buildings

Power

m

Q3 2011 Organic 9M 2011 Organic

+3%5,222+0%1,755W. Europe

+7.7%

+10%

+9%

+15%

16,033

2,824

3,743

4,244

5,697

1,014

1,352

1,576

+11%North America

+9.3%Group

+11%

+16%Asia-Pacific

Rest of World

m


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Appendices


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Segment information: H1 EBITA

Results breakdown by division

million Sales

EBITA beforeacquisition

and integration

charges

Margin in % ofsales

Acquisitionand integration

charges

H1 2011

Power 3,936 821 20.9% 0

Energy 2,029 166 8.2% (15)

Industry 2,227 436 19.6% (5)

IT 1,412 188 13.3% (3)

Buildings 732 54 7.4% (3)

Holding - (252) - (15)

Total 10,336 1,413 13.7% (41)

H1 2010 (comparable1)

Power 3,654 769 21.0% 0

Energy 1,944 159 8.2% 0

Industry 1,882 325 17.3% (3)

IT 1,255 181 14.4% 0

Buildings 654 57 8.7% 0

Holding - (239) - (15)

Total 9,389 1,252 13.3% (18)

1 Comparable: including Areva Distribution in H1 2010 in the Energy business (818 million of sales and 9 million of EBITA)


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Segment information: 2010 EBITA

Results breakdown by division

million Sales

EBITA beforeacquisition

and integration

charges

Margin in % ofsales

Acquisitionand integration

charges

FY 2010 Comparable2

Power 7,755 1,660 21.4% 0

Energy 4,341 456 10.5% 0

Industry 3,984 701 17.6% (3)

IT 2,746 453 16.5% 0

Buildings 1,402 138 9.8% (3)

Holding - (437) - (25)

Total 20,228 2,971 14.7% (31)

FY 2010 Reported

Power 7,755 1,660 21.4% 0

Energy 3,693 447 12.1% 0

Industry 3,984 701 17.6% (3)

IT 2,746 453 16.5% 0

Buildings 1,402 138 9.8% (3)

Holding - (437) - (25)

Total 19,580 2,962 15.1% (31)

2 Comparable: including Areva Distribution over 12 months in the Energy business (1878 million of sales and 94 million oEBITA)


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Contacts & agenda

22 February FY 2011 results

Carina Ho Head of Investor RelationsTel: +33-1-41-29-83-29

[email protected]

Grgoire Rougnon Investor Relations ManagerTel: +33-1-41-29-81-25

[email protected]


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