Schneider Electric (SU) Q2 2024 earnings summary

Executive summary

• Record H1 2024 revenues of €18.2bn, up 6.2% organic, with Q2 revenues at €9.6bn, driven by strong demand in Systems, Data Centers, and Infrastructure, and robust growth in key geographies.

• Adjusted EBITA reached €3.4bn, up 12.2% organic, with margin at 18.6%, up 100bps organic; gross margin at an all-time high of 43.4%.

• Adjusted net income rose 10% to €2.2bn, while reported net income declined 7% due to a €220m impairment on an associate investment.

• Operating cash flow hit a record €3.1bn, up 15%; free cash flow at €889m, up 8% despite working capital needs.

• Recognized as the world's most sustainable company by TIME and Statista, reflecting strong ESG execution.

Financial highlights

• Gross profit up 8.8% organic to €7.9bn; gross margin at 43.4%, up 100bps.

• Adjusted EBITA margin at 18.6%, up 100bps organic; adjusted EPS at €4.01, up 10%.

• Net debt at June 30, 2024: €10,458m, up from €9,367m at year-end, mainly due to dividend payment.

• Effective tax rate at 23.5%, expected to remain 22–24% for 2024.

• Cash conversion ratio at 47% of net income in H1.

Outlook and guidance

• 2024 adjusted EBITA growth target upgraded to 9–13% organic (from 8–12%), with margin up 60–80bps organic, implying 18.1–18.3%.

• Organic revenue growth expected at 6–8% for 2024, unchanged.

• FX impact on FY24 revenues estimated at -€550m to -€650m; adjusted EBITA margin impact around -40bps.

• All regions expected to contribute to growth, led by U.S., India, and Middle East.

• Midterm ambition of 7–10% CAGR in revenues and 50bps CAGR margin improvement through 2027 reaffirmed.