Schneider Electric S.E.

The company reported H1 revenue of EUR 21.2 billion, a record first half, with organic sales growth of 14%. Q2 revenue was EUR 11.5 billion, up 16.5% organically, including Energy Management growth of 18% and Industrial Automation growth of 11%. H1 adjusted EBITA was EUR 4.1 billion, up 22% organically, with adjusted EBITA margin at 19.3% and up 120 bps organically. Gross margin was 42.5%, up 10 bps organically. Net income was EUR 2.5 billion, up 30%, and adjusted net income was up 21% reported. Free cash flow was a record EUR 1.6 billion in H1, and operating cash flow rose 28% year over year to about EUR 3.8 billion. For the full year, management raised organic revenue guidance to 10% to 13% from 7% to 10%, and adjusted EBITA margin expansion guidance to 70 to 100 bps from 50 to 80 bps.

Olivier Pascal Blum framed the quarter as evidence that Schneider’s strategy and operating discipline are starting to translate into results. He emphasized the company’s balanced exposure across data center, infrastructure, buildings and industry, and pointed to progress on technology leadership, regional differentiation and operational excellence. His tone was confident but measured: he repeatedly noted the uncertain macro backdrop, while saying the company is “well on track” and aiming to exceed the upgraded targets.

Nathan Fast highlighted H1 revenue of EUR 21.2 billion, adjusted EBITA of EUR 4.1 billion, gross margin of 42.5%, and free cash flow of EUR 1.6 billion. He said gross margin benefited from strong productivity and faster price realization, offset by inflation, tariffs and mix, and noted productivity was above EUR 500 million in H1, with tariff refunds contributing about EUR 100 million in Q2. He also said R&D spending was around EUR 1.2 billion in H1, SFCs grew 8% organically versus 14% revenue growth, restructuring charges should peak in 2026 at around EUR 450 million, and cash conversion is expected to be around 100% for the full year.

Analysts pressed on why H2 margin expansion should be lower than H1 despite stronger-than-expected gross margin and EBITA leverage. Management said H1 was in line with its broad expectations, pricing and productivity are ramping well, and tariff refunds were not part of the original February view. On data centers, management said it uses customer gigawatt forecasts, backlog and pipeline to plan capacity, is increasing safety stock and capacity with Foxconn, and is selecting projects with the right long-term economics. On Industrial Automation, management said the legacy business is still in turnaround mode, with portfolio simplification and profitability recovery expected to take time, while AVEVA is progressing toward subscription and supporting margins.