Schneider: Full-Year Guidance Raised Following Strong First-Quarter Trading Update

Wide-moat Schneider reported organic revenue growth of 16% during the first quarter, benefiting from the spillover of price increases implemented last year and easing of supply chain constraints helping an accelerated execution of the group’s record backlog. We expect pricing to remain stable throughout the year supported by the mission-critical nature of the group’s product and software offering, which will support double-digit revenue and EBITA growth. A record backlog at the end of the first quarter and deceleration of inflation has led management to raise its full-year organic EBITA growth guidance to between 16% and 19% (from 12% and 16%), which translates to an adjusted EBITA margin of around 17.6% and 17.9%. Our estimates had largely baked a strong outlook into account, and thus we maintain our EUR 160 fair value estimate. Shares appear fairly valued.