Presentation EPG 2010 EN - Schneider Electric · A 5-step planning model. Schneider Electric -...
Transcript of Presentation EPG 2010 EN - Schneider Electric · A 5-step planning model. Schneider Electric -...
EPG conference
May 2010
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.
Disclaimer
Schneider Electric 3- Investor Relations – EPG conference – 17 May 2010
Focus on Areva Distribution20
Review of 2009 Finance presentation
23
31 Outlook
Strategy and growth opportunities04
11 Focus on Data Centers
Strategy and growth opportunities
Schneider Electric 5- Investor Relations – EPG conference – 17 May 2010
Schneider Electric – a global company positioned for long term sustainable growth
billion sales in 2009
% of sales in new economies
people in 100+ countries
in Fortune 500 ranking
of sales devoted to R&D
Sales by geography – FY 2009
North America
27%Asia
Pacific21%RoW
11%
WesternEurope
35%
EasternEurope
6%
Schneider Electric 6- Investor Relations – EPG conference – 17 May 2010
We are the global specialist in energy management …
Energy production& transmission
Energy usage
Energy Management
Making energy:• Safe• Reliable• Efficient• Productive• Green
Schneider Electric 7- Investor Relations – EPG conference – 17 May 2010
…present in diversified end markets
Buildings
Data Centers Energy &
Infrastructures
Industry
Residential
31%
Hospitals/administrations
Offices
Commercial
18%
25%
Electrical power
Oil & gas
Marine
10%
16%
Machinesconstruction
Mining, ores& metals
Water
Industrial
% of 2009 sales
Schneider Electric 8- Investor Relations – EPG conference – 17 May 2010
We are a socially responsible company committed to sustainable development
A measurable commitment•The planet & society barometer
Environment•Apply standards like RoHS, REACH, WEEE
•Eco-design• ISO14001 certification
Access to energy•Provide access to electricity for 1.6 billion people
•Train disadvantaged young people in the field of energy
•Business angel for local entrepreneurs
Ethics•Global compact of the United Nations
•Principles of responsibility signed by every employee
Business•Head of Green Grid•Sign the Clinton Climate Initiative•Partner of Alliance to Save energy
BBop
I
P
6.0 /10 Q4 2009
3.0 /10 Grade in Jan. 2009
Target 8/10 by 31 Dec 2011
Schneider Electric 9- Investor Relations – EPG conference – 17 May 2010
DistributionTransmission
Residential
Commercial
Industrial
Consumers
Transportation
Centralised Generation
Old-style power distribution: the good old Jurassic grid
Schneider Electric 10- Investor Relations – EPG conference – 17 May 2010
Today, the electric grid is undergoing a major transformation and will be “smart”
Active Energy Efficiency: Energy visibility& means to act
2Active
Centralised Generation
DistributionTransmission
Distributed Generation1
Renewable Backup
Renewable Energy Generation1
Residential
Commercial
Industrial
ConsumersIntelligent Intelligent
4 Real-timeGrid management
ElectricVehicles & Energy Storage
3
ElectricVehicleTransportation
Focus on Data Centers
Schneider Electric 12- Investor Relations – EPG conference – 17 May 2010
Our customers’ top challenges
IT density is increasing and challenging the traditional power and cooling infrastructure
Energy efficiency is now a global issue
Design & build cycle timeneeds to be faster and more predictable
all putting pressure onAVAILABILITY
Schneider Electric 13- Investor Relations – EPG conference – 17 May 2010
Innovation making the connection from rack to building for total system efficiency and availability
Integrated energy management
IT floorThe “white space”
Server room supervision Capacity Management
Building management/security
Power Availability
Thought leader
our ideas steer the industry
Capex flexibility
scalable and modular systems
Interactive toolsmake informed
decisions before data center design
Optimised Opexreduced PUE and
eliminate inefficient power use
Schneider Electric 14- Investor Relations – EPG conference – 17 May 2010
A unique set of tools in the industry to help our customer in data center planning
1. Determine IT parameters● Capacity
● Growth
● Criticality
2. Develop system concept
● Analyze high level trade-offs
● Evaluate examples
3. Determine user requirements● Evaluate preferences and
constraints
4. Generate specification
5. Generate detailed design
TradeOff Tools ™
Reference designs
Tools for analyzing trade-offs and priorities
(Data Center capital cost, Power/cooling efficiency, carbon footprint…)
A 5-step planning model
Schneider Electric 15- Investor Relations – EPG conference – 17 May 2010
Scalable, integrated and energy efficient solutions & software suite for data centers
PowerProcess& machines
Whitespace
3rd partysystems & software
Metering
Sub-Metering
MV Distribution
Protection
LV Distribution
Generation
Metering for mechanical
loads
Pump Control
Cooling Towers, Pumps, Fans,
Heaters
Chillers
Buildingmanagement& security
Racks
UPS
Temperature Sensors & Rack
security
In Row Cooling
PDUs
COMPREHENSIVE MANAGEMENT SOFTWARE SUITE
Video surveillance
Central softwareBuilding management
softwarePower management
software
Schneider Electric 16- Investor Relations – EPG conference – 17 May 2010
Boosting the availability and the efficiency of the data center while ensuring the reliability
Real-time energy efficiency
monitoring
Integratedenergy
management
Availability monitoring
Schneider Electric 17- Investor Relations – EPG conference – 17 May 2010
Project management● Equipment Sourcing & Scheduling ● Construction ● Installation● Assembly & Start-up ● Commissioning ● Integration
A service offering spanning the full lifecycle of the data center
Project initiation● Analysis● Assessment ● Planning & Consulting ● Design ● Architecture
Engineering support
Asset management● Operations, Maintenance & Repair● Remote Monitoring - building automation,
IT floor, power quality, security● Training● Asset Planning
Schneider Electric 18- Investor Relations – EPG conference – 17 May 2010
Complete data center solution for Switch Communications in Nevada, US
PowerProcess& machines
Whitespace
3rd partysystems
Buildingmanagement& security
• 407,000 sq foot co-location facility
• Designed to handle super-high densities (up to 1,500 watts / sq foot)
• Relying on Schneider Electric's portfolioAPC critical power & coolingSquare D switch gear TAC building management Pelco security cameras
• Life-cycle servicesArchitecture engineering design & supportand project management
Schneider Electric 19- Investor Relations – EPG conference – 17 May 2010
IT business delivering profitable growth
2006 2007 2008 2009 Q1 2010Proformaincl APC
+14% +7% -14% +6%
6.9%
12.5%
15.2%16.0%
Organic growth
EBITA before restructuring (in $bn)
0.2
0.5
2009 sales breakdown
Home and Business networks
Services~15%
Enterprise systems
SalesUSD3.2bn
� Record margin in 2009
� Back to growth since Q4 2009
More opportunities to come from demand for integrated energy management from rack to building
Margin
Focus on the acquisition project of Areva Distribution
Schneider Electric 21- Investor Relations – EPG conference – 17 May 2010
Areva Distribution business is a perfect fit to our medium voltage business
~billion sales in 2008
~people
Areva DistributionWorld #4 in medium voltage
Geographical fit
Balanced end-markets
Technological fit and smart grid
Reinforced presence with utilities
� Technology leader in primary + secondary MV distribution
� Enhanced smart grid capability
Excellent complementarities in new economies
We will become world leader in MV after the acquisi tion with combined sales of ~€4.5 bn, 45% of which in new economies
Schneider Electric 22- Investor Relations – EPG conference – 17 May 2010
Areva Distribution acquisition is a key industrial project with high synergy potential
Timeline
~ €120M/year on EBITA in year 5
On EPS* from year 1 and ROCE from year 3
Cash impact ~ €1.1 billion for Schneider Electric
� Signing on 20 January� EU antitrust approval on 26 March� A few regulatory approvals still required
Accretive transaction
Highly synergetic
Areva D + Schneider Medium Voltage
• Closing expected by end of Q2
• “Energy” business to be created upon closing* Excluding one-off items
2009: We delivered in a tough business environment while preparing our future
Schneider Electric 24- Investor Relations – EPG conference – 17 May 2010
A strong execution of program One priorities to face unprecedented downturn
Managementresponse
-15.7%
EconomicEnvironment
-5% to-15%
Financial milestones
To drive resilience in a crisis• Support function cost
reduction• Drive productivity• Strict cash management
January 2009
indication
Full-year 2009
outcome
Group:
Of which:• Solutions
• New economies
Organic sales declinein 2009
-10%
-9%
Cost savings from SFC and productivity
Capex(excl. R&D)
Trade workingcapital
�27%
€646m
�20%
12%
Min. EBITAmargin beforerestructuringin 2009
Cash focus
Achieved(before one-off gain)
Record highfree cashflow
Conversion ofadjusted net income
€2bn
12.9%
186%
Schneider Electric 25- Investor Relations – EPG conference – 17 May 2010
R&D spending maintained despite tough market conditions
Commitment to innovation and R&D in products and solutions to support future growth
4.6%4.5% 4.2%
4.2%
764723
542
2005 2006 2007 2008 2009
% of sales
€m
4.8%
R&D budget
Harmony™Biometric Switch
Wireless systems for home automation
Sarix IP security systems
Innovation for products and solutions
SoMachine: One single software to reduce time to market
Schneider Electric 26- Investor Relations – EPG conference – 17 May 2010
Program One is at work to lay a strong base for sustainable growth and profitability
� EcoStruxure: already in the market with key architectures providing best Energy Efficiency
� Green is a reality: Renewables – Low-consumption buildings – Smart Grid – more to come…
� Innovation in offers and solutions
� Accelerating penetration thanks to local R&D and marketing
� On track to reach 50% of low-cost production
� Leaner supply chain and supplier concentration
� Simplification of SG&A functions
� Brand simplification to boost marketing efficiency
� New organization to raise value creation potential
World GDP + 5pts
Organic growthacross the cycle
World GDP + 6pts
Lesscomplexity
2009 Financial Results
Schneider Electric 28- Investor Relations – EPG conference – 17 May 2010
Margin resilience to 12.9% thanks to active cost management
In m€ 2008 2009 Change
-16%6,2217,432Gross margin
-1.2pt39.4%40.6%Margin %
-30%2,0442,937EBITA1,2 before restructuring and one-off gain
-3.1pts12.9%16.0%Margin %
-15.7%Organic growth
18,311 -13.8%15,793Sales
1 After reclassification of the interest component of defined benefit plan costs (see appendices for details)2 Excluding €92m one-off pension gain in 2009
Organic growth
Free cash flowas % of sales
EBITA marginbefore restructuring costand one-off gain
-17.9%-13.6%
H107 H207 H108 H208 H109 H209
Sequential improvement through the year
11.6%
14.2%
9.4%
15.5%
Schneider Electric 29- Investor Relations – EPG conference – 17 May 2010
IT business margin ahead of last year, weak industry demand affecting Industry and CST
Power
Buildings
CST
1,5712
2552
132
20
17.0%2
363
2009 €m and as % of sales
1 Corporate costs of €297m in 2009 (€317m in 2008)2 Before one-off gain from US pension curtailment
2009 EBITA before restructuring by business(before corporate costs1)
Sales€15,793m
Industry
IT
9.6%2
16.0%
10.4%
5.7%
Buildings8%
CST2%
Power59%
IT14%
Industry17%
Schneider Electric 30- Investor Relations – EPG conference – 17 May 2010
Net debt reduced by over €1.7bn thanks to robust free cash flow
1 Including R&D capitalization of €211m (€195m in 2008)2 Dividends paid in 2009 amount to €837m, of which €520m have been paid in shares (at shareholders’ option)
813(72)Change in working capital
(2,812)1,741
32158
(103)(317)2
1,971(576)
1,734(4,553)
411
726
770
(4,553)383(85)144
(615)(796)1,735(693)
2,500(4,936)
Net debt at December 311,330Decrease in net debt
OtherCapital increaseAcquisitionsDividends
1,245Free cash flow
964Operating cash flow
Capital expenditure – net1
Net debt at January 1
Analysis of debt change in €m 2008 2009 H1 H2
-38%
2010 Outlookfor Schneider Electric
Schneider Electric 32- Investor Relations – EPG conference – 17 May 2010
Sales organic growth by business
Sales organic growth by region
Q1 2010
3,910
90303542764
2,211
+6.4%IT
+2.3%Group
+6.3%-3.6%
+18.7%
-2.7%
CST
Industry
Buildings
Power
Q1 2010
-2%973North America+23%888Asia-Pacific
3,910
645
1,404
+2.3%
-1%
-4%
Rest of World
Group
Western Europe
€ m € m
Q1 sales renewed with growth at +2.3%, like-for-like
Schneider Electric 33- Investor Relations – EPG conference – 17 May 2010
2010 outlook
Q1 sales performance supports Schneider Electric targets for 2010:
• a return to growth : low single-digit organic sales growth
• a profitability improvement : EBITA margin of around 14% pre-restructuring costs(before Areva Distribution integration impact)
Industry and data-center end-markets first to return to growth
New economies boosting Group sales
Non-residential buildings slowdown to continue for some more months
Business environment in mature countries still uncertain
Industrial productivity and support function costs savings continuing
Risks on raw material inflation ~€150m
Restructuring charges expected at €150-200m
Business trends Profitability
Schneider Electric 34- Investor Relations – EPG conference – 17 May 2010
We are ideally positioned to capture the major growth opportunities of our time
• Renewable energies
• Energy efficiency• Electric vehicle charging infrastructure
• Grid automation
• BRICs to be 4 of the top 5 world
economies by 2050
• 1.6 bn people have no access to energy
Smart Grid New economies (34% of sales)
Power
Industry
Buildings
IT
Our strength
Complete solutions for the smart grid
Our strength
Strong presence in new economies (44,000 employees)
CST
Appendices
Schneider Electric 36- Investor Relations – EPG conference – 17 May 2010
● EBITDA: EBIT before net depreciation and amortization
● EBITA: EBIT before amortization and impairment of purchase accounting intangibles and impairment of goodwill
● Adjusted net income: Group share in net income adjusted for exceptional restructuring costs (above €100m), one-offpension gains/losses and impairment of goodwill and intangibles, at the period’s underlying tax rate
● Cash conversion: Free cash flow / net income
● Free cash flow: Operating cash flow – change in working capital – net capital expenditures
Definitions
Schneider Electric 37- Investor Relations – EPG conference – 17 May 2010
Contacts & agenda
30 July
20 October
2010 Half-YearResults
Q3 2010 Sales
Conference callVideo webcast9:00am (CET)
Conference call9:00am (CET)
Carina Ho – Head of Investor RelationsTel: +33-1-41-29-83-29
Grégoire Rougnon – Investor Relations Manager Tel: +33-1-41-29-81-25
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