Schneider Electric (SU) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues reached €9.3 billion, up 7.4% organically, driven by strong demand in Energy Management and Data Center segments, with North America and Asia Pacific leading growth.

• Energy Management posted double-digit growth, while Industrial Automation was flat to slightly down due to seasonality and AVEVA's transition to subscription.

• Portfolio strengthened by the acquisition of Motivair and a joint venture with StarCharge for EV charging and storage in Europe.

• Significant progress in sustainability, including a 42% CO2 reduction at top suppliers, 56 million people with access to green electricity, and recognition as the world's most sustainable corporation.

• Residential demand weakened in Western Europe and North America, impacted by high interest rates and low consumer confidence.

Financial highlights

• Organic sales growth of 7.4% year-over-year, with Energy Management up 9.6–10% and Industrial Automation down 0.9–1%.

• Software and services grew 5% organically, with AVEVA's ARR up 14%.

• Foreign exchange expected to reduce FY 2025 revenues by €1.15–1.25 billion and adjusted EBITA margin by ~40bps.

• Free cash flow generation approaching 100% of net income, weighted to H2 due to timing of a €200 million fine payment.

• Q1 revenue by geography: North America 41%, Asia Pacific 26%, Western Europe 22%, Rest of World 11%.

Outlook and guidance

• 2025 guidance reaffirmed: organic revenue growth of 7–10%, adjusted EBITA growth of 10–15%, and margin improvement of 50–80bps, targeting 18.7–19.0% margin.

• All regions expected to contribute to growth, led by U.S., India, and Middle East & Africa; demand recovery in Discrete automation expected in H2.

• Strong seasonality expected in free cash flow due to a €200 million fine payment; cash conversion ratio to trend toward 100% for the year.

• Commercial and supply chain actions underway to offset tariff impacts and ensure resilience.