A world leader in its sector, Schneider Electric has a unique portfolio of digital and energy solutions that meet customers’ needs for sustainable development and business efficiency. The multinational company focuses on two main areas (energy management and industrial automation) with four end markets: construction, data centers (data center), infrastructure and industry.
Schneider Electric has goals for sustainable development and wants to support its customers in sustainable development. The company’s ESG score is above the average for its sector, and it is ranked among the 100 most ethical companies in 2021 for the tenth consecutive year. The company has developed the Schneider Sustainability Impact (SSI) program, which aims to be carbon-neutral with compensation by 2025. This will mean 800 million tons of CO emissions.2 spared. The ambition for 2050 is to have 0 net CO emissions2 throughout the supply chain.
The company is committed to continuing its progress in 100% recycled cardboard packaging, it also wants to ensure that the steel contained in its products comes from responsible sources and production chains, and to train more people in energy management.
On April 27, the company’s reports for the first quarter of 2022 were published. Schneider Electric showed good results and even confirmed its goals for the whole year. Profits exceeded the expectations of 4.1% of investors who were in reserve due to Covid-19 and the shortage of raw materials. The effects of various quarantines (especially in China between March and May 2022) should be felt in the second quarter.
The turnover for the first three months of the financial year amounted to 7.57 billion euros, an increase of 9.8%. Schneider Electric benefited from the positive impact of the exchange rate, in particular due to the strengthening of the US dollar and the Chinese yuan against the euro (North America accounted for 30% of sales at the end of March and the Asia-Pacific region – 31%). The positive change in exchange rates brought sales of 258 million euros, or the equivalent of 4% of revenue.
On February 24, Schneider Electric suspended all new investments and all international deliveries of new orders for projects in Russia and Belarus. On April 27, the group announced its intention to sell Schneider Electric Russia to a local management team. It remains only to obtain the approval of the country’s authorities. Russia accounts for 2% of Schneider Electric’s accounts and a potential depreciation of the book value of up to 300 million euros.
Despite the problems associated with Covid-19 and the shortage of raw materials, Schneider Electric is still in strong and dynamic demand, and sales have a larger order book than in 2021. Uncertainties related to the crisis remain, but management remains confident that China will be the driver of the group’s growth this year.
Schneider Electric is a company with very good principles: very good diversification and distribution of activities, it is truly a leader in the sector, as well as a player in the transition to sustainable development. The group overcame the challenges of recent news and exceeded market expectations.
Shares of Schneider Electric have just corrected 50% of the uptrend after Covid, we are now in the “overlap zone” at 129 euros (former resistance zone, which became support), it seems that support at 123 euros is strong.
We can anticipate continuing the rebound with a target of 140 euros, or a performance of 9%, putting the stop at 123.5 euros, or 4.5% below the current price. This trade offers us a good risk / reward ratio 2.
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