Schneider Sees Rising Organic Sales After Record EarningsFrancois de Beaupuy
Schneider Electric SA, the world’s biggest maker of low- and medium-voltage equipment, forecast a recovery in organic revenue in 2013, adding to the higher prices and cost cuts that lifted earnings to a record last year.
Net income rose 3 percent to 1.84 billion euros ($2.44 billion) last year, the company, based in the Paris suburb of Rueil-Malmaison, said in a statement today. Analysts had expected profit of 1.83 billion euros, according to the average of eight estimates compiled by Bloomberg. Excluding a one-time impairment charge, net income rose 12 percent.
“For 2013, in an economic environment that remains mixed, we target a low-single digit organic growth in sales and a stable to slightly up adjusted” earnings before interest, taxes and amortization margin, Chief Executive Officer Jean-Pascal Tricoire said in the statement.
Schneider expects continued challenges in western Europe, opportunities for acceleration in emerging economies and a slow recovery in North America this year. The company has speeded up cost cuts by regrouping sites and redesigning products to adapt to a construction slump and government austerity measures in Europe, and weaker demand from Chinese manufacturers.
The company proposed a dividend of 1.87 euros a share, up 10 percent from 1.70 euros a year earlier. The shares rose as much as 4.6 percent in Paris trading to the highest level since July 2011. They were up 3.1 percent at 57.10 euros at 2:20 p.m., giving the company a market value of 31.7 billion euros.
Schneider reported an increase in the adjusted Ebita margin to 14.7 percent of sales in 2012 from 14.3 percent in 2011.
Fourth-quarter sales rose 2 percent from a year earlier, pushing full-year revenue up 7.2 percent to 23.9 billion euros, in line with estimates. Organic sales, or revenue excluding acquisitions and exchange-rate fluctuations, declined 1.2 percent in the quarter amid lower demand for video security systems, data centers and substation equipments.
Schneider spent 242 million euros on acquisitions in 2012 compared with 2.87 billion euros a year earlier as it didn’t find many opportunities “at the right price” after freezing purchases in the first half, the CEO said. It may buy “pockets of software and know-how” if needed, and still favors “bolt-on” deals, Tricoire said today.