- Full-Year Revenue Growth: EUR 40.2 billion revenue with 9% organic growth, driven by 8% and 7% growth in Energy Management and Industrial Automation, respectively.
- Adjusted EBITA Performance: EUR 7.5 billion adjusted EBITA, up 12% organic, with a 50 bps margin expansion and a 12.3% growth in line with guidance (10-15%).
- Free Cash Flow & Dividend: EUR 4.6 billion free cash flow (110% conversion rate) and EUR 4.2 per share dividend, reflecting strong financial health.
- Digital Flywheel Expansion: 62% of revenue (EUR 25 billion) from digital flywheel, growing 15% YoY, with 79% recurring revenues in agnostic software.
Segmental Performance
The company's two businesses, Energy Management and Industrial Automation, showed acceleration in Q4 with a growth of 8% and 7% respectively. Energy Management grew slightly above 10%, while Industrial Automation achieved 3% growth. The Industrial Automation segment has margins below 15%, which is a concern, but the company expects improvements in gross margin and operating leverage in the segment, driven by mix improvements, AVEVA's transition to subscription, and productivity gains.
Outlook and Guidance
Looking ahead to 2026, Schneider Electric expects a continued strong market demand, which will drive growth and a positive contribution from all end markets. The company expects revenue growth of 7% to 10% organic and an increase in adjusted EBITDA margin of 50 to 80 bps. Analysts estimate next year's revenue growth at 8.1%, indicating a positive outlook for the company.
Valuation
Schneider Electric's current valuation metrics indicate a premium valuation. The company's P/E Ratio is 35.92, P/B Ratio is 5.73, and P/S Ratio is 3.9. The EV/EBITDA is 21.75, and the Dividend Yield is 1.43%. The ROE is 14.97%, and the ROIC is 10.54%. These metrics suggest that the company's strong financial performance and growth prospects are reflected in its valuation.
Growth Drivers
As Olivier Pascal Blum mentioned, "We're well-positioned for the transition to 800-volt direct current architecture, with a strong offering in solid-state transformers and solid-state braking." The company is expected to benefit from the growing demand for data centers and the transition to more efficient electrical infrastructure. The company's focus on energy intelligence and its comprehensive architecture for the future are expected to drive growth and improve profitability.