Schneider Electric S.E.

H1 revenues were EUR 21.2 billion, a first-half record, with organic sales growth of 14%. Q2 revenues were EUR 11.5 billion, up 16.5% organically, and both major businesses contributed: Energy Management grew 15.4% in H1 and 18% in Q2, while Industrial Automation grew 7.7% in H1 and 11% in Q2. H1 adjusted EBITA was EUR 4.1 billion, up 22% organically, with margin at 19.3% of sales, up 120 bps organically; H1 gross margin was 42.5%, up 10 bps. Free cash flow reached a record EUR 1.6 billion in H1, operating cash flow was about EUR 3.8 billion, and net income was EUR 2.5 billion, up 30%. For the full year, management raised revenue guidance to 10% to 13% organic growth from 7% to 10%, and adjusted EBITA margin expansion to 70 to 100 bps from 50 to 80 bps.

Olivier Blum said Schneider is starting to see its strategy translate into results, especially through stronger operational execution, pricing discipline and productivity. He emphasized the company’s balanced exposure across data centers, industrial, buildings and infrastructure, and highlighted strategic moves in data and AI, including Cognite, AiDASH, Kraken and the SoftBank partnership. His tone was confident but still cautious about a fragmented and uncertain macro backdrop, repeatedly stressing the need to stay humble and disciplined.

Nathan Fast said H1 gross margin was 42.5%, up 10 bps, helped by productivity and accelerated pricing, partly offset by inflation, tariffs and mix. He noted H1 adjusted EBITA of EUR 4.1 billion, margin of 19.3%, and record H1 free cash flow of EUR 1.6 billion, with operating cash flow around EUR 3.8 billion and cash conversion expected to be around 100% for the full year. He also said FX should be a roughly EUR 450 million to EUR 500 million revenue headwind for the full year at current rates, with negligible adjusted EBITA margin impact, and that restructuring charges are expected to total around EUR 450 million in 2026.

Analysts pressed management on why margin and price realization were better than expected and whether H2 would now have a weaker margin step-up. Management said H1 was in line with the overall plan, that pricing accelerated in Q2 to about 4 points of product growth versus about 2% in Q1, and that tariff refunds and strong productivity helped. Questions on data-center execution risk and AI demand were met with reassurance that Schneider plans capacity using customer gigawatt forecasts, backlog and pipeline, while keeping safety stock and using partnerships like Foxconn to scale without sacrificing margins. On Industrial Automation, management said profitability improvement is still a multi-year turnaround and that the business remains on track toward the 18% margin target by 2028.