Schneider Electric S.E.: history, ownership, mission, how it works & makes money

A Brief History of Schneider Electric S.E.

Schneider Electric S.E., founded in 1836, initially focused on mechanical engineering and construction. The company began producing machinery and tools in the early 20th century and transitioned into electrical equipment by the 1960s, marking a significant evolution in its business strategy.

In 1981, Schneider Electric acquired a majority stake in the company Modicon, which was pivotal in developing programmable logic controllers (PLCs), a core technology in industrial automation.

By 1999, Schneider Electric entered the circuits and controls market through the acquisition of the company, Telemecanique, expanding its product offerings significantly. The year 2000 saw a major merger with the American company Square D, valued at approximately USD 2 billion, further strengthening its presence in North America.

Continuing its global expansion, Schneider Electric acquired APC (American Power Conversion) in 2007 for about USD 6.1 billion. This acquisition enhanced Schneider’s capabilities in power distribution and management, especially in data centers and IT environments.

In 2015, Schneider Electric launched its "Open Innovation" program, investing over EUR 500 million into startups focusing on energy management and automation solutions.

Schneider Electric's revenue for the fiscal year 2022 was reported at EUR 28.9 billion, with an adjusted EBITDA margin of 17.6%. The company also delivered a net income of EUR 3.5 billion for the same period, showcasing robust financial performance despite global supply chain challenges.

In 2023, Schneider Electric announced a commitment to achieve net-zero emissions by 2025 across its operations and supply chain, aligning with global sustainability goals. As of July 2023, the company's market capitalization stood at approximately EUR 95 billion, reflecting strong investor confidence.

Schneider Electric continues to innovate and expand in the sectors of energy management and automation, driven by digital transformation and sustainability, positioning itself as a leader in the global market.

A Who Owns Schneider Electric S.E.

Schneider Electric S.E., a global leader in energy management and automation, has a diverse ownership structure that reflects both institutional and individual investors. As of the latest financial reports, the company’s shareholder base includes significant stakes held by various entities.

As of September 2023, the key shareholders of Schneider Electric are as follows:

These figures indicate a strong presence of institutional investors in Schneider Electric's ownership structure. The largest shareholder, Schneider Electric Industries SAS, is part of the parent company, reinforcing a robust internal ownership dynamic.

Furthermore, Schneider Electric's market capitalization is estimated at approximately €90 billion as of the end of September 2023. The company’s stock has exhibited stable performance with a year-to-date increase of around 15%.

The geographic distribution of Schneider Electric's ownership also plays a vital role in its corporate governance. Roughly 40% of its shares are held by investors based in France, while approximately 30% are owned by investors in North America and the remaining 30% spread across Europe, Asia, and other regions.

In terms of governance, Schneider Electric has a board composed of 14 members, with a diverse mix of expertise ranging from technology to finance and sustainability. This structure supports the company’s strategic objectives and aligns with its stakeholder interests.

In the fiscal year 2022, Schneider Electric reported revenues of €31.3 billion, a growth of 12% compared to the previous year. This financial success has helped bolster its market presence and increase shareholder value, further attracting both institutional and retail investments.

Schneider Electric S.E. Mission Statement

Schneider Electric S.E. articulates its mission statement as “We empower all to make the most of our energy and resources, bridging progress and sustainability for all.” This reflects a commitment to sustainability, efficiency, and innovation across various sectors, including energy management and automation.

As of 2023, Schneider Electric operates in over 100 countries, emphasizing their global reach and commitment to localizing solutions for different markets.

The company's focus on sustainability is underscored by their target to achieve €25 billion in revenue from their Green Premium products by 2025. These products are designed to be more energy-efficient and environmentally friendly, aligning with Schneider's mission of promoting sustainable development.

In their recent earnings report for the fiscal year 2022, Schneider Electric reported revenues of approximately €34.1 billion, a robust increase of 15% compared to the previous year.

Schneider Electric also aims to achieve operational carbon neutrality by 2025. Their sustainability initiatives include reducing greenhouse gas emissions in their own operations by 80% by 2025, compared to 2017 levels.

Furthermore, Schneider Electric has been recognized in multiple sustainability indices. For example, in 2022, the company was included in the Dow Jones Sustainability Index, reinforcing its leadership in sustainable business practices.

In terms of employee engagement and societal impact, Schneider launched the “Schneider Sustainability Impact” program, targeting to train 1 million people on green skills by 2025, thus aligning their workforce development with their mission of promoting sustainability and energy efficiency.

Overall, Schneider Electric S.E. integrates its mission with its strategic objectives, aiming to deliver sustainable solutions that cater to pressing global challenges in energy management and industrial automation.

How Schneider Electric S.E. Works

Schneider Electric S.E. is a global specialist in energy management and automation. The company operates in more than 100 countries and has more than 135,000 employees. As of 2022, Schneider Electric reported a revenue of €30.8 billion, marking a growth of 10% compared to the previous year.

Schneider Electric categorizes its business into several key segments, primarily focusing on Industrial Automation, Building Management, and Energy Management. The Energy Management segment includes electrical distribution and grid offerings, while Industrial Automation encompasses software and automation services aimed at optimizing manufacturing processes.

Schneider Electric's strategic approach includes a strong emphasis on sustainability and digital transformation. The company has committed to achieving Net Zero across its operations by 2025 and aims to assist its customers in reducing their carbon footprints through smart energy solutions. In 2022, Schneider Electric reported that approximately 87% of its product sales were attributed to solutions that support sustainability.

The company invests heavily in research and development, with R&D expenditures reaching €1.4 billion in 2022. This investment fuels innovative solutions such as EcoStruxure, an IoT-enabled architecture that optimizes energy and operational efficiencies across various sectors.

Schneider Electric also focuses on acquisitions to bolster its technology portfolio. Notable acquisitions include the purchase of AVEVA Group in 2021, which enhanced its software capabilities, as well as the acquisition of the IT energy management firm, RIB Software, in 2020. These acquisitions are part of Schneider's strategy to enhance its software-driven solutions and maintain a competitive edge in the market.

In the stock market, Schneider Electric is listed on Euronext Paris under the ticker symbol SU. As of the end of September 2023, Schneider Electric's market capitalization was approximately €100 billion, reflecting a 5% increase year-to-date. The stock has shown a volatility of 1.5%, indicating a stable performance within the market.

Despite global supply chain challenges, Schneider Electric has maintained strong operational performance. The company reported an operating income of €4.3 billion in 2022, with an operating margin of 14%.

Looking forward, Schneider Electric aims to leverage advancements in artificial intelligence and machine learning to enhance its service offerings further. The company has projected a compound annual growth rate (CAGR) of 8-10% between 2023 and 2025, aiming to capitalize on the growing demand for sustainable energy solutions and automation technologies.

How Schneider Electric S.E. Makes Money

Schneider Electric S.E. generates revenue through a diversified portfolio focused on energy management and automation solutions. The company operates in various sectors, including industrial, commercial, and residential markets.

For the fiscal year 2022, Schneider Electric reported revenues of approximately €34.2 billion, an increase from €27.2 billion in 2021, reflecting a growth rate of 25.7%.

Key Revenue Segments

• Energy Management: This segment accounts for around 69% of total revenues, driven by products and services related to the distribution and management of energy across various applications.
• Industrial Automation: Representing about 31% of revenues, this segment includes solutions for manufacturing and process industries, incorporating hardware and software offerings.

Geographical Breakdown

Geographically, Schneider Electric's revenue distribution is as follows:

Product Offerings

Schneider Electric's offerings can be categorized into the following major products:

• Switchgear and Distribution Equipment: Essential for electricity distribution in a variety of environments.
• Building Management Systems: Facilitate efficient building operations and energy use.
• Industrial Control Products: Include programmable logic controllers (PLCs), human-machine interfaces (HMIs), and sensors.
• Software Solutions: Focus on energy management, building management, and industrial automation.

Strategic Partnerships and Acquisitions

Schneider Electric has pursued growth through strategic partnerships and acquisitions to enhance its portfolio:

• Acquisition of AVEVA Group plc in 2021 for £3.9 billion bolstered its software capabilities.
• Partnership with Microsoft focuses on cloud-based solutions for energy management.

Cost Management and Efficiency

The company emphasizes operational efficiency, which is reflected in its operating margin. For 2022, Schneider Electric reported an operating margin of 15.5%, an increase from 14.1% in 2021. This improvement was attributed to increased economies of scale and cost control measures.

Investment in Sustainability

Schneider Electric is committed to sustainability, with investments in innovative technologies aimed at reducing carbon footprints. The company aims to achieve €2.5 billion in sustainable revenues by 2025.

Market Trends and Future Outlook

Industry trends indicate growing demand for energy-efficient and sustainable solutions, positioning Schneider Electric favorably in the market. The company's focus on digital transformation and smart infrastructure is expected to drive future growth.

In conclusion, Schneider Electric S.E.'s multifaceted approach to generating revenue, combined with its strategic partnerships and commitment to sustainability, positions it as a leader in energy management and automation solutions.