Half Year 2026 Schneider Electric SE Earnings Call Transcript
Key Points
- Strong Q2 growth of 17% with both Energy Management (18%) and Industrial Automation (11%) contributing, indicating a return to balanced business performance.
- Record H1 revenues of EUR21.2 billion and a 120 bps organic improvement in adjusted EBITA margin, driven by operational excellence and pricing actions.
- Robust free cash flow of EUR1.6 billion in H1, reflecting strong P&L performance and disciplined capital management.
- Strategic acquisitions like Cognite and AiDASH, along with partnerships (e.g., SoftBank, Foxconn), are accelerating technology leadership and capacity in AI and data center infrastructure.
- Digital flywheel progress to 62% of group sales, with strong growth in connectable products and recurring software/services, enhancing revenue predictability.
- Gross margin improvement was modest at 10 bps organic, with negative mix from strong systems growth and inflationary pressures from raw materials and tariffs.
- Industrial Automation margins improved only 50 bps organic despite double-digit revenue growth, as the turnaround plan for legacy IA business is still in early stages.
- Foreign exchange translation adversely impacted H1 revenues by nearly EUR750 million, mainly due to weakening of the US dollar and Indian rupee.
- Middle East operations remain subject to considerable uncertainty and volatility, impacting growth in that region.
- Restructuring charges are expected to peak in 2026 at around EUR450 million, reflecting ongoing portfolio simplification and cost actions in Industrial Automation.
Good morning.
This is the conference operator. Welcome to the Schneider Electric Half Year 2026 Results with Olivier Blum, Chief Executive Officer Nathan Fast, Chief Financial Officer and Antoine Sage, Head of Investor Relations.
(Operator Instructions)
I would like to inform all parties that today's conference is being recorded. If you have any objections, you may disconnect at this time.
At this time, I will hand you over to Mr. Antoine Sage.
Please go ahead, sir.
Hello and good morning, everyone.
Thank you for joining us for our Half Year 2026 Results presentation. I'm joined today by Olivier, our CEO, and by Nathan, our CFO here in Paris. When it comes to the agenda, so you have the slides as usual. We will walk through the presentation first and then we'll make sure that we have ample time for your question. As always, I want to remind everyone about the disclaimer that you will find on the page number two.
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