RUEIL-MALMAISON, France — Schneider Electric today announced its first-quarter revenues for the period ending March 31, 2022.
Jean-Pascal Tricoire, Chairman and CEO commented: “Our Q1 revenues confirm a strong start to the year, 2022, growing by +10% organically. As expected, we have experienced continued strong demand across all of the Group’s end markets, with our unique portfolio of electrical and digital solutions resonating with our customers as they look to drive sustainability and efficiency in their operations. We, like others in our industry and beyond, continue to operate in a supply chain environment under pressure, and we strive to make the best of this situation through our unique supply chain organization, in partnership with our customers and suppliers.
Since mid-February, we have witnessed the global impact of the war in Ukraine, the economic impact of which commenced in March. First and foremost, our actions have been aimed at supporting our Ukraine employees, their families and communities. We continue to comply with applicable sanctions and are progressing with a plan to transfer our Russia operations to our local leadership.
On COVID-19, while much of the world has progressively opened up propelling our growth prospects around the world, China has seen several provinces enact partial to full lockdowns since March. The lockdown in Shanghai impacts some of our factories and distribution centers and the continuation into April impacts China Q2 revenues.
Demand continues to be strong in an increasingly inflationary environment, and we remain agile to best serve our customers through our unique portfolio and operating model. We acknowledge the uncertain macro environment but confirm our full-year target, despite the significant developments of the last months.”
FIRST QUARTER REVENUES WERE UP +10% ORGANIC
2022 Q1 revenues were €7,566 million [USD $7,965.48 million], up +9.8% organic and up +15.9% on a reported basis.
Products (60% of Q1 revenues) grew +13% organic in Q1, with double-digit growth in both Energy Management and Industrial Automation. Growth in the quarter included a balanced contribution from volume expansion and price contribution (as a carryover from actions taken in 2021, and new price actions in Q1). Growth remained constrained by supply chain pressures throughout the quarter, primarily relating to electronic component shortages.
Systems (22% of Q1 revenues) grew +3% organic in Q1, consistent between the Group’s two businesses. In Energy Management there remained strong demand across end-markets, but growth was constrained by the availability of components. Industrial Automation was also impacted by supply chain pressures, although systems sales into Process Automation end-markets did return to growth in the quarter.
Software & Services (18% of Q1 revenues) grew +7% organic in Q1.
Software and Digital Services grew double-digit in Q1. AVEVA had a strong finish to their financial year (to 31 March 2022), up double-digit in the quarter, and with good performance from OSIsoft (included in scope effects). The Group’s suite of Energy Management software offers also performed strongly, with good traction across end-markets, and particularly strong growth from recent acquisitions. Digital services grew strong double-digit with strong growth across EcoStruxure advisors in Energy Management, and for Cybersecurity services within Industrial Automation.
Field Services grew low-single digit in Q1. Performance was hampered by limitation in the supply of electronic components impacting the sale of spare parts, and additionally by continued restrictions on site access in some parts of the world. In Industrial Automation markets, a slower return to growth in Process & Hybrid has had a knock-on impact in the ability to bundle field service contracts.
Sustainability: The Group’s Sustainability offers (split between Digital and Field Services) delivered strong double-digit growth in the quarter, led by North America. The Group remains focused on leveraging sustainability consulting as a catalyst for the rest of the portfolio.
Digital update: The Group continues to prioritize and track digital adoption with good progress in the growth of Assets under Management (AuM), reaching 6.2 million, up +46% year-on-year by the end of March 2022.
The breakdown of revenue by business and geography was as follows:
|Revenues||Organic Growth||Reported Growth|
|Energy Management||North America||1,783||+10.2%||+19.6%|
|Rest of the World||775||+15.0%||+14.1%|
|Total Energy Management||5,673||+10.0%||+14.6%|
|Industrial Automation||North America||484||+28.4%||+89.1%|
|Rest of the World||271||+19.1%||+15.4%|
|Total Industrial Automation||1,893||+9.2%||+20.0%|
|Rest of the World||1,046||+16.1%||+14.4%|
Q1’22 PERFORMANCE BY END MARKET
The Group sells its full integrated and digital portfolio into four main end-markets: Buildings, Data Center, Infrastructure and Industry, leveraging the complementary technologies of its Energy Management and Industrial Automation businesses. In Q1, the Group continues to benefit from increased customer focus on efficiency and sustainability.
- Buildings –The Group’s end-to-end offer suite for the Buildings end-market continues to see very strong demand through the The Residential end-market continued with strong sales growth with contribution from all regions. The growth was also strong in Non-residential technical buildings (including healthcare and retail), while demand in the office/hotel segment continued its recovery from the COVID-19 impacts in several countries. EcoStruxure advisors for Smart Buildings showed strong growth and the Group secured multiple customer wins in this space. Government funding schemes introduced in the wake of COVID-19 across different countries are also starting to support demand.
- Data Center – Demand in the Data Center & Network end-market remains very strong as customers seek the Group’s unique technologies and total solution approach combining hardware, software and services. There was high single-digit sales growth impacted by some project timing and supply chain shortages. North America and Asia Pacific were the main contributors to the growth in the quarter. There was also strong growth in Distributed IT across regions driven by demand for localized computing and reliable power
- Infrastructure – In the Electric Utilities segment, overall demand remains strong and growth was supported by the ongoing execution of a project in Egypt and E.U. recovery fund investments. Demand for Software and Services was solid, including double-digit growth in Smart Grid sales in the U.S. Transportation segment demand was stable in the quarter while Water and Wastewater (WWW) saw strong demand for both the Energy Management and Industrial Automation
- Industry – Discrete automation markets (served by both businesses) drove strong growth particularly with customers in material handling, HVAC and pumps & compressors. Growth in Hybrid industries continued, including demand from Consumer-Packaged Goods (CPG) customers. Growth in Process markets turned positive with strong demand from Metals, Mining and Minerals (MMM) in part due to rising commodity Oil & Gas (O&G) continues with strong demand recovery for both the Energy Management and Industrial Automation businesses, with underlying market conditions continuing to have positive impact on sales driven by digital transformation and acceleration of services.
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