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1. Company Snapshot

1.a. Company Description

Schneider Electric S.E. provides energy and automation digital solutions worldwide.It operates through two segments, Energy Management and Industrial Automation.The company offers busway and cable support products, circuit breakers and switches, contactors and protection relays, electrical protection and control products, energy management software solutions, transfer switches, surge protection and power conditioning products, power monitoring and control products, power quality and power factor correction products, pushbuttons, switches, pilot lights and joysticks, software products, and switchboards and enclosures.


It also provides access control, building management, fire detection, sensors and room units, valve and valve actuator, and variable and frequency speed drive.In addition, the company offers feeder automation, grid automation and SCADA software products, medium voltage switchgears and transformers, outdoor equipment, substation automation products, and switchgear components.Further, it provides critical power and cooling services, data center software, IT power distribution products, prefabricated data center modules, racks and accessories, and security and environmental monitoring products; home automation and security, installation materials and systems, light switches and electrical sockets, and uninterruptible power supply products; and human machine interface, industrial automation software, industrial communication, measurement and instrumentation, motion control and robotics, signaling units, programmable logic and automation controllers, power supply and protection, process control and safety, RFID systems, signaling devices, and other industrial automation and control products, as well as solar and energy storage.


The company was founded in 1836 and is headquartered in Rueil-Malmaison, France.

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1.b. Last Insights on SU

Schneider Electric's recent performance has been driven by several positive factors. The company's unveiling of new long-term targets through 2030, including organic revenue growth of 7-10% and adjusted EBITA margin expansion, has boosted investor confidence. Additionally, its share buyback program of up to €3.50 billion and planned divestments of €1.00-1.50 billion in revenues have contributed to a positive outlook. The company's strong financial performance, driven by robust data center demand, has also been a key driver. Its focus on sustainable procurement practices and leadership in energy management and industrial automation have further enhanced its position.

1.c. Company Highlights

2. Schneider Electric's Strong 2025 Results and Promising 2026 Outlook

Schneider Electric reported a robust financial performance for 2025, with revenues reaching EUR 40.2 billion, up 9% organically, and a record backlog of over EUR 25 billion. The company's adjusted EBITA margin improved by 50 basis points organically, and its free cash flow was above EUR 4 billion for the third year in a row. The digital flywheel grew 15%, and the agnostic software business reached 79% recurring revenues. The actual EPS came out at EUR 4.61, beating estimates of EUR 4.5.

Publication Date: Feb -27

📋 Highlights
  • Full-Year Revenue Growth:: EUR 40.2 billion revenue with 9% organic growth, driven by 8% and 7% growth in Energy Management and Industrial Automation, respectively.
  • Adjusted EBITA Performance:: EUR 7.5 billion adjusted EBITA, up 12% organic, with a 50 bps margin expansion and a 12.3% growth in line with guidance (10-15%).
  • Free Cash Flow & Dividend:: EUR 4.6 billion free cash flow (110% conversion rate) and EUR 4.2 per share dividend, reflecting strong financial health.
  • Digital Flywheel Expansion:: 62% of revenue (EUR 25 billion) from digital flywheel, growing 15% YoY, with 79% recurring revenues in agnostic software.

Segmental Performance

The company's two businesses, Energy Management and Industrial Automation, showed acceleration in Q4 with a growth of 8% and 7% respectively. Energy Management grew slightly above 10%, while Industrial Automation achieved 3% growth. The Industrial Automation segment has margins below 15%, which is a concern, but the company expects improvements in gross margin and operating leverage in the segment, driven by mix improvements, AVEVA's transition to subscription, and productivity gains.

Outlook and Guidance

Looking ahead to 2026, Schneider Electric expects a continued strong market demand, which will drive growth and a positive contribution from all end markets. The company expects revenue growth of 7% to 10% organic and an increase in adjusted EBITDA margin of 50 to 80 bps. Analysts estimate next year's revenue growth at 8.1%, indicating a positive outlook for the company.

Valuation

Schneider Electric's current valuation metrics indicate a premium valuation. The company's P/E Ratio is 35.92, P/B Ratio is 5.73, and P/S Ratio is 3.9. The EV/EBITDA is 21.75, and the Dividend Yield is 1.43%. The ROE is 14.97%, and the ROIC is 10.54%. These metrics suggest that the company's strong financial performance and growth prospects are reflected in its valuation.

Growth Drivers

As Olivier Pascal Blum mentioned, "We're well-positioned for the transition to 800-volt direct current architecture, with a strong offering in solid-state transformers and solid-state braking." The company is expected to benefit from the growing demand for data centers and the transition to more efficient electrical infrastructure. The company's focus on energy intelligence and its comprehensive architecture for the future are expected to drive growth and improve profitability.

3. NewsRoom

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Wolfspeed Appoints Silicon Carbide Industry Veteran Daihui Yu as Regional President, Greater China

Mar -13

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What Makes Super Micro Computer (SMCI) Appear So Good

Mar -12

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Solid-State Transformer Pioneer DG Matrix Appoints Former Vertiv CMO Rainer Stiller as Chief Marketing Officer

Mar -12

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Is New AI Ecosystem Partnerships Embedded In Modular Data Centers Altering The Investment Case For Super Micro Computer (SMCI)?

Mar -11

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ISG Xperience Summit to Explore AI-Driven Customer Experience Transformation

Mar -11

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Digital Oilfield Solutions Industry Report 2026-2035: Market to Reach $58.66 Billion by 2030 with Microsoft, Siemens, Intel, IBM, Deloitte, General Electric, Schneider Electric Leading

Mar -10

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A Look At Schneider Electric (ENXTPA:SU) Valuation After Recent Share Price Weakness

Mar -09

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DAELIM BELEFIC Group Appoints Matthew Rice as CEO of USA DAELIM Transformer

Mar -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.70%)

6. Segments

Energy Management

Expected Growth: 7.0%

The energy management segment is expected to grow slightly above the global average due to the increasing focus on sustainability, energy efficiency, and the integration of renewable energy sources. Regulatory pressures and technological advancements will drive this growth.

Industrial Automation (Industry)

Expected Growth: 6.4%

While Industry 4.0 trends drive growth, the segment faces challenges like cyclical industrial demand and intense competition. Thus, it grows slightly below the global average, driven by the need for efficiency and productivity.

7. Detailed Products

EcoStruxure

An open, interoperable, IoT-enabled system architecture and platform that delivers enhanced value around safety, reliability, efficiency, sustainability, and connectivity for various industries.

Medium Voltage Products

A range of medium voltage switchgear and circuit breakers for electrical distribution and transmission applications.

Low Voltage Products

A range of low voltage electrical distribution and control products, including circuit breakers, switches, and sockets.

Industrial Automation

A range of industrial automation products and solutions, including programmable logic controllers (PLCs), human-machine interfaces (HMIs), and sensors.

Critical Power and Cooling

A range of critical power and cooling solutions, including uninterruptible power supplies (UPS), power distribution units (PDUs), and cooling systems.

Building Management Systems (BMS)

A range of building management systems and solutions, including building automation, energy management, and security systems.

Data Center Infrastructure

A range of data center infrastructure solutions, including data center infrastructure management (DCIM) software, racks, and cooling systems.

Grid Automation

A range of grid automation solutions, including advanced distribution management systems (ADMS), outage management systems (OMS), and grid management systems.

8. Schneider Electric S.E.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Schneider Electric S.E. operates in a industry where substitutes are available, but they are not a major threat. The company's products and services are highly specialized and customized, making it difficult for substitutes to replicate.

Bargaining Power Of Customers

Schneider Electric S.E. has a diverse customer base, which reduces the bargaining power of individual customers. The company's products and services are also highly customized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Schneider Electric S.E. has a large and diverse supplier base, which reduces the bargaining power of individual suppliers. However, the company is still dependent on a few critical suppliers, which could impact its operations if they were to experience disruptions.

Threat Of New Entrants

The industry in which Schneider Electric S.E. operates has high barriers to entry, including significant capital requirements and the need for specialized expertise. This makes it difficult for new entrants to enter the market.

Intensity Of Rivalry

The industry in which Schneider Electric S.E. operates is highly competitive, with several established players competing for market share. The company must continually innovate and improve its products and services to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 34.31%
Debt Cost 4.48%
Equity Weight 65.69%
Equity Cost 8.94%
WACC 7.41%
Leverage 52.24%

11. Quality Control: Schneider Electric S.E. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Alfa Laval

A-Score: 5.3/10

Value: 2.4

Growth: 6.8

Quality: 6.6

Yield: 3.8

Momentum: 3.0

Volatility: 9.0

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A-Score: 5.2/10

Value: 3.5

Growth: 5.0

Quality: 5.6

Yield: 5.0

Momentum: 6.5

Volatility: 5.7

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A-Score: 5.2/10

Value: 0.8

Growth: 3.9

Quality: 7.4

Yield: 3.1

Momentum: 6.0

Volatility: 10.0

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Atlas Copco

A-Score: 5.2/10

Value: 1.6

Growth: 6.9

Quality: 7.8

Yield: 6.2

Momentum: 2.0

Volatility: 6.3

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Eaton

A-Score: 4.2/10

Value: 1.3

Growth: 5.9

Quality: 7.3

Yield: 3.1

Momentum: 3.0

Volatility: 4.3

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Schneider Electric

A-Score: 4.1/10

Value: 1.5

Growth: 5.6

Quality: 6.6

Yield: 2.5

Momentum: 3.5

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

248.0$

Current Price

248$

Potential

-0.00%

Expected Cash-Flows