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1. Company Snapshot

1.a. Company Description

Schneider Electric S.E. provides energy and automation digital solutions worldwide.It operates through two segments, Energy Management and Industrial Automation.The company offers busway and cable support products, circuit breakers and switches, contactors and protection relays, electrical protection and control products, energy management software solutions, transfer switches, surge protection and power conditioning products, power monitoring and control products, power quality and power factor correction products, pushbuttons, switches, pilot lights and joysticks, software products, and switchboards and enclosures.


It also provides access control, building management, fire detection, sensors and room units, valve and valve actuator, and variable and frequency speed drive.In addition, the company offers feeder automation, grid automation and SCADA software products, medium voltage switchgears and transformers, outdoor equipment, substation automation products, and switchgear components.Further, it provides critical power and cooling services, data center software, IT power distribution products, prefabricated data center modules, racks and accessories, and security and environmental monitoring products; home automation and security, installation materials and systems, light switches and electrical sockets, and uninterruptible power supply products; and human machine interface, industrial automation software, industrial communication, measurement and instrumentation, motion control and robotics, signaling units, programmable logic and automation controllers, power supply and protection, process control and safety, RFID systems, signaling devices, and other industrial automation and control products, as well as solar and energy storage.


The company was founded in 1836 and is headquartered in Rueil-Malmaison, France.

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1.b. Last Insights on SU

Schneider Electric's recent performance faces challenges from macroeconomic uncertainty and rising costs. The company's pricing power helps offset tariff impacts and inflation, but a sluggish environment in some markets and high adoption costs for SMEs may weigh on growth. Additionally, the French government's confidence vote and potential collapse may impact investor sentiment. Despite a strong data center segment with double-digit sales growth, the overall environment remains uncertain. (Source: Schneider Electric's recent earnings release and news articles)

1.c. Company Highlights

2. Schneider Electric Delivers Robust 2024 Full-Year Results, Driven by Data Center Growth and Sustainability Leadership

Schneider Electric reported an impressive set of full-year 2024 results, showcasing accelerated growth and profitability. The company achieved organic growth of 8.4%, surpassing its initial guidance of 6-8%, with record sales exceeding €38 billion. Adjusted EBITDA rose by 14% to €7 billion, also exceeding expectations. The company announced an 11% dividend increase, marking 15 consecutive years of progressive dividends. Olivier Blum, Schneider’s CFO, emphasized, “Our ability to deliver strong profitability while investing in innovation and sustainability underscores our commitment to long-term value creation.”

Publication Date: Feb -24

📋 Highlights
  • Strong Financial Performance:: Schneider Electric reported robust 2024 full-year results, with organic growth of 8.4% exceeding guidance of 6-8%. Adjusted EBITDA rose 14% to €7 billion, and the company announced an 11% dividend increase, marking 15 consecutive years of progressive dividends.
  • Data Center Growth Catalyst:: Data centers led growth, representing 24% of 2024 end orders. Strong demand from AI and hyperscale customers, including large language models like DeepSeek, is driving double-digit growth in this segment.
  • Digital Transformation and Software Strategy:: Schneider emphasized its strategic focus on EcoStruxure and AVEVA, with AVEVA growing ARR by 15% in 2024. The company aims for 56-65% of revenue to come from its digital flywheel by 2027.
  • Sustainability Leadership:: Schneider exceeded its 2024 Schneider Sustainability Impact targets, saving nearly 700 million tons of CO2 since the initiative began. The company was recognized by Corporate Knights, EcoVadis, and Time Magazine for its sustainability commitment.
  • Operational and Regional Expansion:: Schneider highlighted its multi-hrail approach, local supply chains, and regional manufacturing, with 83% of North American sales now locally manufactured. The company also announced the upcoming closure of the Motivair acquisition and strong demand in key markets like the U.S., India, and the Middle East.

Growth Drivers: Data Centers and Digital Transformation

Schneider’s growth was fueled by strong demand in data centers, which accounted for 24% of 2024 end orders. The company highlighted the transformative impact of AI and large language models like DeepSeek, which are driving double-digit growth in this segment. Schneider’s EcoStruxure platform, combining products, edge, and cloud technologies, has been instrumental in this success. The company also noted a return to growth in Industry Automation, supported by improved supply chain resilience and new capacity investments.

Strategic Focus and Market Dynamics

Schneider Electric emphasized its strategic focus on electrification and digitalization, with a balanced exposure across buildings, industry, and infrastructure. The company highlighted its leadership in sustainability, having saved nearly 700 million tonnes of CO2 since launching its Schneider Sustainability Impact initiative. Schneider also announced the upcoming closure of the Motivair acquisition, reinforcing its position in the data center market. The company’s multi-hub approach and regional manufacturing capabilities, with 83% of North American sales now locally produced, further underscored its operational agility.

Financial Performance and Valuation

From a financial perspective, Schneider Electric’s strong top-line growth was complemented by margin expansion, with adjusted EBITDA margins improving by 50 basis points. The company’s net debt-to-EBITDA ratio remained disciplined at 1.56x, supporting its investment-grade rating. On a valuation basis, Schneider trades at a price-to-earnings (P/E) ratio of 34.75x TTM, reflecting its premium positioning in digital transformation and sustainability. The enterprise value-to-EBITDA ratio of 20.02x highlights the market’s confidence in Schneider’s ability to deliver long-term growth.

Sustainability and Innovation

Sustainability remains a cornerstone of Schneider Electric’s strategy. The company exceeded its 2024 Schneider Sustainability Impact targets and was recognized by EcoVadis, CDP, and Time Magazine for its commitment to environmental stewardship. Schneider continues to innovate, with a focus on R&D and digital services. The company aims for 60-65% of revenue to come from its digital flywheel by 2027, positioning itself as a leader in the electrification and digitalization of industries.

Analyst Q&A and Outlook

During the earnings call, analysts highlighted Schneider’s strong execution and growth prospects. Questions focused on order trends post-DeepSeek, with Olivier Blum reaffirming confidence in 2025. Analysts also praised Schneider’s disciplined balance sheet and dividend growth. Looking ahead, Schneider Electric is well-positioned to capitalize on secular trends in data centers, AI, and sustainability, with analysts estimating 7.6% revenue growth for the next year. The company’s strategic focus on innovation, customer differentiation, and capacity investments underscores its ability to maintain leadership in key markets.

3. NewsRoom

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Can GE Vernova's R&D Pipeline Boost Its Clean-Energy Position?

Dec -04

Source: zacks.com

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New Survey Reveals Food Processors Face Escalating Energy Challenges Amid Grid Constraints and Rising Costs

Dec -04

Source:

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Stanley Black & Decker Appoints Agustin Lopez Diaz as Chief Global Supply Chain Officer

Dec -03

Source:

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Cybeats Technologies Corp. Announces Appointment of Cassie Crossley as Chair of the Cybeats Advisory Board

Dec -03

Source:

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The Bull Case For Digital Realty Trust (DLR) Could Change Following Massive India AI Data Center Push

Dec -03

Source:

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European Enterprises Strive for AI Innovation and Compliance, ISG Says

Dec -02

Source:

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Truist Analyst has a Positive Stance on Digital Realty Trust (DLR)

Dec -02

Source:

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Will Landmark Data Center Deals Reshape Schneider Electric's (ENXTPA:SU) Digital Infrastructure Narrative?

Nov -29

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.70%)

6. Segments

Energy Management

Expected Growth: 7.0%

The energy management segment is expected to grow slightly above the global average due to the increasing focus on sustainability, energy efficiency, and the integration of renewable energy sources. Regulatory pressures and technological advancements will drive this growth.

Industrial Automation (Industry)

Expected Growth: 6.4%

While Industry 4.0 trends drive growth, the segment faces challenges like cyclical industrial demand and intense competition. Thus, it grows slightly below the global average, driven by the need for efficiency and productivity.

7. Detailed Products

EcoStruxure

An open, interoperable, IoT-enabled system architecture and platform that delivers enhanced value around safety, reliability, efficiency, sustainability, and connectivity for various industries.

Medium Voltage Products

A range of medium voltage switchgear and circuit breakers for electrical distribution and transmission applications.

Low Voltage Products

A range of low voltage electrical distribution and control products, including circuit breakers, switches, and sockets.

Industrial Automation

A range of industrial automation products and solutions, including programmable logic controllers (PLCs), human-machine interfaces (HMIs), and sensors.

Critical Power and Cooling

A range of critical power and cooling solutions, including uninterruptible power supplies (UPS), power distribution units (PDUs), and cooling systems.

Building Management Systems (BMS)

A range of building management systems and solutions, including building automation, energy management, and security systems.

Data Center Infrastructure

A range of data center infrastructure solutions, including data center infrastructure management (DCIM) software, racks, and cooling systems.

Grid Automation

A range of grid automation solutions, including advanced distribution management systems (ADMS), outage management systems (OMS), and grid management systems.

8. Schneider Electric S.E.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Schneider Electric S.E. operates in a industry where substitutes are available, but they are not a major threat. The company's products and services are highly specialized and customized, making it difficult for substitutes to replicate.

Bargaining Power Of Customers

Schneider Electric S.E. has a diverse customer base, which reduces the bargaining power of individual customers. The company's products and services are also highly customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Schneider Electric S.E. has a large and diverse supplier base, which reduces the bargaining power of individual suppliers. However, the company is still dependent on a few critical suppliers, which could impact its operations if they were to experience disruptions.

Threat Of New Entrants

The industry in which Schneider Electric S.E. operates has high barriers to entry, including significant capital requirements and the need for specialized expertise. This makes it difficult for new entrants to enter the market.

Intensity Of Rivalry

The industry in which Schneider Electric S.E. operates is highly competitive, with several established players competing for market share. The company must continually innovate and improve its products and services to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 34.31%
Debt Cost 4.48%
Equity Weight 65.69%
Equity Cost 8.94%
WACC 7.41%
Leverage 52.24%

11. Quality Control: Schneider Electric S.E. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Siemens

A-Score: 5.5/10

Value: 3.6

Growth: 5.0

Quality: 5.6

Yield: 5.0

Momentum: 7.5

Volatility: 6.3

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Alfa Laval

A-Score: 5.4/10

Value: 2.7

Growth: 6.9

Quality: 6.8

Yield: 3.8

Momentum: 3.0

Volatility: 9.0

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Schindler

A-Score: 5.3/10

Value: 1.1

Growth: 3.9

Quality: 7.2

Yield: 3.1

Momentum: 7.0

Volatility: 9.7

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Atlas Copco

A-Score: 5.3/10

Value: 1.8

Growth: 6.9

Quality: 7.7

Yield: 6.9

Momentum: 2.0

Volatility: 6.3

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Eaton

A-Score: 4.5/10

Value: 0.7

Growth: 5.9

Quality: 6.9

Yield: 2.5

Momentum: 6.0

Volatility: 5.0

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Schneider Electric

A-Score: 4.3/10

Value: 1.3

Growth: 5.6

Quality: 6.3

Yield: 2.5

Momentum: 5.0

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

235.5$

Current Price

235.5$

Potential

-0.00%

Expected Cash-Flows