Energy Economy

25 Oct 2020

Schneider Electric ups 2020 Revenue Forecast as Q3 Returns to Growth

25 Oct 2020  by Reuters   
French electrical equipment group Schneider Electric SE raised its 2020 revenue and margin forecasts on Thursday, citing a better-than-expected third quarter helped by pent-up demand and distributors restocking.

Schneider, whose products range from electrical car chargers to industrial robotics, now expects revenue to fall 5 per cent-7 per cent this year, compared with a slide of 7 per cent-10 per cent it forecast in July, lifting it above a company-provided analysts' consensus forecast.

The company also upgraded its full-year core profit margin target to 15.1 per cent-15.4 per cent from 14.5 per cent-15.0 per cent previously, and confirmed its aim to increase this to around 17 per cent by 2022.

Schneider's quarterly revenue has risen for the first time this year, compared with 2019, helped by its energy management division - which serves buildings, data centres and infrastructure, and posted growth across all its regions.

In a call with Reuters, finance chief Hilary Maxson also pointed to an acceleration in its residential business, which covers areas such as home security and automation, probably driven by work-from-home and consumer spending trends.

She also noted activities restarting in industrial and commercial buildings.

Schneider's third-quarter revenue stood at 6.46 billion euros ($7.65 billion), up 1.3 per cent year-on-year and beating a company-provided consensus of 6.03 billion.

"The crisis has reinforced our customer's agenda for sustainability and digitisation, both areas where Schneider has focused its strategy," Chief Executive Officer Jean-Pascal Tricoire said in a statement.

Maxson noted a big uptick in Schneider's digital services, which are mostly oriented around efficiency, as well as a big opportunity in infrastructure to support a massive electrification of vehicles.

While the company flagged uncertainty for the coming quarter as COVID-19 cases resurge, Schneider believes the second quarter represented the trough in its sales.

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