Schneider Electric Lifts Dividend, Expects Revenue and Earnings Growth

By Dominic Chopping

Schneider Electric hiked its dividend and said it expects revenue and earnings to rise this year with a record order backlog providing good visibility.

The French energy-management and automation group on Thursday reported net profit of 4.0 billion euros ($4.29 billion) in 2023, up from EUR3.48 billion in the previous year as revenue rose 5.1% to EUR35.9 billion.

Analysts in a company-compiled consensus had seen net profit of EUR4.05 billion on revenue of EUR35.99 billion.

Organic revenue grew 12.7% on the year while organic adjusted earnings before interest, tax and amortization grew 24.5%, after the company had guided for 11%-13% and 18%-23%, respectively.

Schneider Electric said results benefited from a strong net price impact mainly related to price actions taken in 2022, improving gross margin in its systems business and stronger industrial productivity, particularly in the second half.

Good volumes and control of costs in support functions also contributed, it said.

Looking to 2024, the company said it expects "strong and dynamic" market demand to continue on the back of structural megatrends, including data centers, grid infrastructure investment and increased investments across process industries.

It sees a gradual demand recovery in its products unit, weighted toward the second half, and said all four regions are expected to contribute to group growth, led by the U.S., India and the Middle East.

"We enter 2024 with a record level of backlog, particularly in relation to our systems business, giving us enhanced visibility for the coming quarters," said Chief Executive Peter Herweck.

"Backlog and continuing strong demand dynamics across most of our portfolio solidifies setting strong financial targets for 2024."

Schneider Electric said it is targeting organic adjusted Ebita growth of between 8% and 12% in 2024 and expects organic revenue growth of 6% to 8%, with an adjusted Ebita margin of around 18% to 18.2%.

The company proposed a dividend of EUR3.50 a share compared with EUR3.15 for 2022.

It also backed recently announced mid-term financial targets.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

February 15, 2024 01:55 ET (06:55 GMT)

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