Schneider Electric (SU) Q2 2025 earnings summary

Executive summary

• Achieved record H1 2025 revenues of €19.3 billion, up 7.9%–8% organic year-over-year, with strong performance in Energy Management, especially in Data Centers and infrastructure, and reaffirmed FY25 targets.

• Recognized as the world's most sustainable company for the second consecutive year, with significant progress on 2021–25 sustainability goals.

• Major acquisitions included Motivair and the remaining 35% stake in the India JV for €5.5 billion, reinforcing multi-hub strategy and expanding Data Center solutions.

• Free cash flow was impacted by a €200–207 million legal fine in France and higher working capital needs, but strong H2 cash flow acceleration is expected.

• Continued responsible investments in capacity, innovation, R&D, and AI to support future growth.

Financial highlights

• H1 revenues reached €19.3 billion, up 7.9%–8% organic year-over-year; Q2 revenues at €10 billion, up 8.3% organic.

• Adjusted EBITA/EBITDA grew 6.9%–7% organic to €3.5 billion, with margin at 18.2% (down 10bps organic) due to gross margin pressure and mix.

• Adjusted net income up 6% organic to €2.2 billion; reported net income at €1.9 billion, up 1.6%–2% year-over-year.

• Gross margin at 42.4%, down 90bps organic, impacted by raw material inflation, adverse mix, and timing of price increases.

• Free cash flow at €474–500 million, down year-over-year due to legal fine and working capital; net debt increased to €12 billion after dividend and acquisitions.

Outlook and guidance

• FY25 targets reaffirmed: organic revenue growth of 7–10%, adjusted EBITA/EBITDA growth of 10–15%, and margin improvement of 50–80bps organic.

• All regions expected to contribute to growth, led by U.S., India, Middle East & Africa, with strong demand in Data Centers and Infrastructure.

• FX headwinds expected to reduce FY25 revenues by €1.25–1.35 billion and EBITA/EBITDA margin by ~40bps.

• Free cash flow conversion expected to approach 100% of net income for FY25.