CEO Presentation at EPG 2019 · Discrete Automation + Process Automation + Industrial Software Full...

Investor Relations - Schneider Electric | Page 1

EPG 2019 Presentation

Jean-Pascal Tricoire

Chairman & CEO - Schneider Electric

All forward-looking statements are Schneider Electric management’s 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. For a detailed description of these factors and uncertainties, please refer to the section “Risk Factors” in our Annual

Registration Document (which is available on www.schneider-electric.com). Schneider Electric undertakes no obligation to

publicly update or revise any of these forward-looking statements.

This presentation includes information pertaining to our markets and our competitive positions therein. Such information is based

on market data and our actual revenues in those markets for the relevant periods. We obtained this market information from

various third-party sources (industry publications, surveys, and forecasts) and our own internal estimates. We have not

independently verified these third-party sources and cannot guarantee their accuracy or completeness and our internal surveys

and estimates have not been verified by independent experts or other independent sources.


Disclaimer

Schneider Electric

Key figures for 2018€26 billion2018 revenues

137,000+Employees in over 100 countries

c.5%Revenues invested in R&D

42%2018 revenues in new economies

Transmission & DistributionPower Generation Demand/Consumers

Energ

y V

alu

e C

hain

>90%<10%Our revenues

More Electric + More Digital + More Distributed + More Automation

IoT, Big Data, Renewables, EV, Data Centers

Industry Infrastructure Residential & Buildings IT


We positioned the business on the optimization of the demand side

Energy Management

Industrial Automation Industry 4.0Energy Transition

Significant

Customer

Benefits…ENERGY EFFICIENCY

Buildings Data Centers Infrastructure Industry

~65% -50% 50% 0PRODUCTIVITY RELIABILITY & SAFETY SUSTAINABILITY

Up to Up to Up to Aiming at

(Average 30%) CapEx (integration) fewer incidents carbon emissions

Serving 4

end-markets


Our unique positioning : Energy and automation digital solutions for efficiency and sustainability

€20billion revenues

17.8Adj. EBITA (%)

Energy Management

Number one for Energy efficiency and electrification

KEY TECHNOLOGIES:

Medium Voltage + Low Voltage + Secure Power

Unrivalled Portfolio Depth to cover

the full Power Management chainLargest Partner Network

Digitally integrated within

EcostruXure Power


Energy Management

€6billion revenues

18.0Adj. EBITA (%)

Industrial Automation

Process efficiency, cross selling with energy efficiency

KEY TECHNOLOGIES:

Discrete Automation + Process Automation + Industrial Software

Full automation capabilities from

OEM/ discrete to process

Full digital asset lifecycle

management with AVEVA

Digital integration in EcostruXure

Plant and machine




Our strategy is delivering (2018 figures)

€20billion

€6billion

€26bn, +7%Group FY 2018 revenues org.

15,1%, +50bpsGroup FY 2018 org. Adj.EBITA

…delivering strong financial performance

* Including Delixi, reported under equity method since 2016

+8%FY organic sales growth

c.+70bpsOrg. adj. EBITA


Process Efficiency

+7%FY organic sales growth*

c.+60bps Org. adj. EBITA

Energy Management

Energy Efficiency

€4.7billion

€1.6billion

€6.3bn, +5.9%Group Q1 2019 revenues org.

2019 Target Reaffirmed

* Excluding panels business phase down in the U.S.

c.+4%*


Process Efficiency

+7%

Energy Management

Energy Efficiency


Strong start to 2019, confirming 2018


Our strategy has led us to be more balanced, resilient and agile

2018 Group Revenue FY 2018 org. growth

c.29%

c.28%

c.16%

c.27%

Orders (Internal Estimation)

Balanced across the cycleBalanced and growing across regions

Agile & FlexibleSoftware & Services growing within portfolio

% Of Group Revenue• Multi-regional set up with proximity to

customers

• Tailored Sustainable & Connected Supply

Chain, with focus on regional manufacturing

• Flexible cost base

Variable Costs Fixed Costs

Software & Services expansion ’13-’18 (c.16%)

Software & Services in 2013 (circa 10%)

Asia Pacific Early cycle+10%

North America Mid & Late cycle+8%

Western Europe +3%

Rest of World +5%

Cost Of Goods Sold


We have been and are committed to corporate social responsibility

#3 in CAC40 Leading Digital

Transformation

Recognized for Best Practices

for Employee Share Plan

Supply Chain Rankings 2018:

#12 Global / #5 in Europe

Commitment

for Human

Rights

Commitment for

principles of

women

automomy

Top 15

Respecting

gender equality

Performance index

in gender equality

Ranked by

Women in IndiaOne of the best

employers

promoting diversity

Most Ethical companies

For the 9th

consecutive year

Commitment for circular

economy

#1 of global companies

Commitment for

sustainable and low

carbon development

Most sustainable

companies

Top 100 for the 7th

consecutive year

#3 global

Sales towards energy

transition

Commitment for more

renewable energy

Climate Change:

rated A for the 8th

consecutive year

Engagement in Energy

efficiency

Commitment for higher

energy efficiency

For the second

year in a row

One of the

best

employers

promoting

diversity

Attractivity by

LinkedIn

One of the

most

attractive

employers

#5 globally of

« SRI Leader »

397 ISR funds

shareholders

Recommende

d by 81% of

employees

interviewed


Our strategy is deliveringGrowth momentum continues in 2019

Strong Revenue Growth Sustained Profit Momentum Strong Shareholder Focus

Q1

18

Q4

17

Q1

17

Q2

17

Q2

18

Q3

17

Q3

18

Q4

18

7

Q1

19

3 2 3 5 6 8 5 6

More EcoStruxure

More Services

More Products

Better Systems

Quarterly organic growth performance (%)

More EcoStruxure

Higher growth than the Group in

2018 and targeted

More than 2 million connected

assets,+34% vs 2018



EcoStruxure bringing value to customers across end-markets

Data CenterBuilding Industry

EDWARDS

AIR FORCE

BASE

Infrastructure

Schneider Electric Exchange

The first open, multi-industry ecosystem in the world devoted to solving real

problems for a more efficient and more sustainable world

COLLABORATE

Meet experts and innovators for solving

concrete problems and building new

solutions.

SCALE

Increase business by having access to a

world-wide client base

CREATE

Develop integrated efficiency solutions in

every field of energy and automation

management in an open ecosystem



Our strategy is deliveringContinuous improvement of the adj. EBITA margin in past 3 years with further improvement targeted

Continued expansion of Adj. EBITA margin (%) over past 3 years, in both

lower growth and higher growth environments All-time high Net Income in 2018

20192018

15.1

201720162015 2020

13.7 14.1

2021

Ambition

14.8

Sustained Profit MomentumStrong Revenue Growth Strong Shareholder Focus

Basic EPS 2018

€2.3bn +9%

€4.21 +9%

+c.210bps org.

Targeting

+200bps (pre-FX)


Strong focus on optimizing our portfolio and on returns to shareholders

Strong Returns To ShareholdersContinued Portfolio Optimization

2017 20182014 2015

2.4

2016

1.9 2.0 2.0 2.2

Dividend per share

• c.80% of FCF returned to shareholders in past 4 years

• Progressive dividend

• 2019-2021: initiated €1.5-2bn share buyback

Disciplined and successful M&A in the core

AVEVA, ASCO, IGE+XAO

Selective pruning of the portfolio

~€2.3bngenerated through disposals of non-core

activities since 2014

Strong Shareholder FocusStrong Revenue Growth Sustained Profit Momentum

+5% CAGR


2019 Target reaffirmed

2019 Adjusted EBITA margin:

Up +20 to +50 bps organic2019 Revenue growth:

+3% to +5% organic

2019 Target: Adj. EBITA growth between

+4% and +7% organic

Levers:


Reaffirming our objective for the year and our Medium Term Ambition

• Reaffirming through-cycle objective of +3% to +6% organic growth in

revenues, on average

• Over the next 3 years (2019-2021), continue to focus on profitability

levers within control, with an aim to improve adj. EBITA margin by c.

+200 basis points (at constant FX), assuming no major change to the

current macro-economic environment

• This underlying improvement would be achieved through:

• organic growth

• portfolio optimization

• organisational simplification & efficiency

• continued productivity

Improvement of circa 200 bps

(at const. FX) of Adj. EBITA margin

Portfolio Optimization

Simplification And Efficiency

Organic Growth

Continued Productivity

Group Positioning Digital Solutions for Energy Transition & Industry 4.0

Strategy More products, More services, More software, Better systems

Balanced Portfolio By geography, by end-market, from early to mid-late cycle

Organic Growth Sustained growth to deliver Energy and Process efficiency

Portfolio Optimization Up to €2bn of 2018 revenues to be reviewed and addressed in 3 years

Continued Margin Improvement Targeting c.+200bps (constant FX) in 3 years (in a normal macro-environment)

Focus On Shareholder Value Share buyback, progressive dividend, strong governance


Key management messages…

20 May EPG Conference, Miami

21 May Berenberg Capital Goods Conference, USA

11 Jun Exane BNP Paribas European CEO Conference, Paris

13 Jun JP Morgan European Capital Goods CEO Conference, UK

26 Jun Schneider Electric Capital Markets Day, Paris

25 Jul 2019 Half Year Results

5 Sep Morgan Stanley Industrials CEO’s Unplugged Conference, London

TBD Sep Update on Sustainability Topics

2 Oct Schneider Electric Innovation Summit, Barcelona

24 Oct 2019 Revenues


Investor Relations ready to engage

Information on www.schneider-electric.com/finance

Consensus available on http://www.schneider-electric.com/en/about-us/investor-relations/share-information/share-price.jsp

Upcoming Events

Proposing quarterly interaction with investors showcasing specific businesses, geographies or functions

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