Schneider Electric (SU) 2024 India Investor Event summary

India growth and business update

• India reported domestic sales of €2.2 billion in 2023, up from €2 billion in 2022, reflecting strong double-digit growth.

• The India business is positioned as a key driver of profitable growth, with margins now comparable to global levels and no material differential between the two main brands.

• India is expected to remain one of the most dynamic markets, alongside the US and Middle East, and is at the upper end of group growth targets.

• The business model in India is heavily transactional, with significant opportunities in electrification, digitization, and software as the market matures.

• India is also a growing export hub, with plans to expand capacity and leverage local R&D and manufacturing for global markets.

Financial strategy and capital allocation

• The company is targeting 2.5% of sales for tangible CapEx, balancing new capacity with potential shutdowns of older assets and a make-versus-buy approach.

• R&D investment has increased from 5% to nearly 6% of sales, with further step-ups expected to support growth and innovation.

• No major M&A is included in the current mid-term guidance, but the company remains opportunistic, especially in India, balancing integration of past acquisitions with future opportunities.

• The joint venture with Temasek remains stable, with no immediate plans for IPO or structural changes, prioritizing operational focus over additional administration.

Supply chain and regionalization

• The company is advancing toward 90% regionalization of its supply chain, with India for India and India for global as key pillars.

• India is being leveraged for both local and international markets, with significant investments in manufacturing, R&D, and talent development.

• The supply chain strategy emphasizes agility, resilience, and dual sourcing (Power of Two), with ongoing expansion of capacity in India to meet rising demand.