Schneider Electric (SU) Q2 2024 earnings summary

Executive summary

• Record H1 2024 revenues of €18.2bn, up 6.2% organic, and Q2 revenues of €9.6bn, up 7.1% organic, driven by strong growth in Energy Management, Systems, and Services.

• Adjusted EBITA reached €3.4bn, up 12.2% organic, with margin at 18.6%, up 100bps organic; gross margin at an all-time high of 43.4%.

• Adjusted net income rose 10% to €2.2bn, while reported net income declined 7% due to a €220m non-cash impairment on Uplight.

• Operating cash flow hit a record €3.1bn, up 15%; free cash flow at €889m, up 8% despite working capital needs.

• Recognized as the world's most sustainable company by TIME and Statista in 2024.

Financial highlights

• H1 2024 gross profit was €7.9bn, up 8.8% organic; gross margin improved by 100bps to 43.4%.

• Adjusted EBITA margin increased to 18.6%, up 100bps organic.

• Adjusted net income at €2.2bn, up 10%; adjusted EPS at €4.01, up 10%.

• Net debt at June 30, 2024: €10,458m, up from €9,367m at year-end, mainly due to dividend payment.

• Cash conversion ratio: 47% of net income in H1.

Outlook and guidance

• 2024 adjusted EBITA growth target upgraded to 9–13% organic (from 8–12%), with margin up 60–80bps organic, implying 18.1–18.3%.

• Organic revenue growth expected at 6–8% for 2024, unchanged.

• FX impact on FY24 revenues estimated at -€550m to -€650m; adjusted EBITA margin impact around -40bps.

• All regions expected to contribute to growth, led by U.S., India, and Middle East.

• Midterm ambition of 7–10% CAGR in revenues and 50bps CAGR margin improvement through 2027 reaffirmed.