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Energy Economy

Thursday
30 Jul 2020

Schneider Electric Expects Lower Annual Revenue, Margin on Virus Uncertainties

30 Jul 2020  by Reuters   

French electrical equipment group Schneider Electric SE on Wednesday forecast a drop in its 2020 revenue and core profit margin, due to uncertainty around the coronavirus outbreak and a possible second wave of lockdowns.

The group, which sells products ranging from electrical car chargers to home automation systems, now expects a 7-10 per cent organic revenue decline and adjusted earnings before interest, taxes, and amortization (EBITA) margin to shrink to 14.5-15.0 per cent year-on-year.

Schneider had previously forecast organic revenue growth and a higher core profit margin for the year, but scrapped this in March due to the pandemic.

The Paris-based company also flagged further restructuring costs of between 400 million euros and 500 million euros ($469.08 million and $586.35 million) over three years.

However, the group confirmed its medium-term goals, which include raising its adjusted EBITA margin to 17 per cent by 2022.

"Though some markets might be impacted, a large part of our business will be well oriented for future years and will potentially be accelerated by government stimulus," Chief Executive Officer Jean-Pascal Tricoire said.

Schneider's results declined less-than-expected in the first six months of 2020, beating analysts' forecasts. https://bit.ly/30ZaFjQ

The Paris-based firm's adjusted EBITA fell to 1.58 billion euros, a margin of 13.6 per cent.

Analysts polled by the company had estimated an 11.6 per cent margin from a 1.30 billion euro adjusted EBITA.

The group said it was helped by a strong second-quarter rebound in China as well as resilience in its software and services division.

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