SBGSF - Schneider Electric S.E. (SBGSF) Full Year 2023 Results Earnings Call Transcript
2024-02-15 14:04:06 ET
Schneider Electric S.E. (SBGSF)
Full Year 2023 Results Earnings Conference Call
February 15, 2024 2:30 AM ET
Company Participants
Amit Bhalla – Head-Investor Relations
Peter Herweck – Chief Executive Officer
Hilary Maxson – Chief Financial Officer
Conference Call Participants
Andrew Wilson – JPMorgan
Phil Buller – Berenberg
Andre Kukhnin – UBS
Alasdair Leslie – Societe Generale
James Moore – Redburn Atlantic
Jonathan Mounsey – BNP Paribas
Gael de-Bray – Deutsche Bank
Max Yates – Morgan Stanley
Martin Wilkie – Citi
Daniela Costa – Goldman Sachs
William Mackie – Kepler Cheuvreux
Presentation
Amit Bhalla
Thank you for being with us. We join you today from Paris with CEO, Peter Herweck; and CFO, Hilary Maxson. The press release and presentation are already on our website. We'll make sure to keep some time for question and answers at the end. I have to remind you about the disclaimer that you will see both in the presentation and the press release, as usual.
But without further ado, for the business highlights, over to Peter.
Peter Herweck
Well, thanks very much, Amit. Very happy to be with you today on the back of a very strong execution that has delivered record performance for Schneider in 2023 and I think we're well positioned to the next frontier. It's also 364 days until we announce the change in governance, and I can assure you this has been a smooth ride as you can see in the results. Now let me start off with the record revenue that we have, €36 billion in fiscal 2023, a growth of 13%, delivering an adjusted EBITA margin of 17.9%, a growth of 180 bps. Now that results in an adjusted EBITA up 25% on an organic basis, exceeding our targets.
When you look at the end markets, you can basically see that we're much stronger, of course, in data center networks where we're the number one. We'll talk about it. The infrastructure has gained in weight as well. While, of course, as we've talked before in the buildings and industrial market, there is a little bit of – some weakness in pockets and we'll talk about this in more detail. Now a very solid print of energy management with 14% growth in the year, €28 billion of revenue, and the industrial automation, a little bit of a mixed picture. We talked about the weakness of the discrete market and OEM market, you see that in the result, but still 7% and the longer-cycle process automation market and software very strong. We'll get into the details.
Now – but let me start off with the key metrics that are really at a record level and the net income and free cash flow also at record levels. The first time ever, we're crossing €4 billion in net income, up 15%. Free cash flow, €4.6 billion, up 36%, and that has been a solid work in respect to working capital in 2023. And that will continue to be our focus as we go into the next year and will drive, as we said at the Capital Markets Day, we want to maintain the cash flow around 100% cash conversion rate over the cycle. We've proposed and we will propose through the shareholders at the AGM a dividend of €3.50, which is an 11% increase on – for the group.
Now, I think, we're very well positioned with respect to the megatrends that we've talked about at the Capital Market Day that deliver unprecedented opportunities for us. And let me give a couple of highlights. Of course, we're starting off with the digitization and AI, which is so important for the market and with the deliveries that we have with the most complete and best electrical and cooling infrastructure that is out there supported by digital solutions, you can see we're ready and we're delivering to it at the edge and, of course, also hyperscalers and colos, and we've talked about this for quite some time....
Schneider Electric S.E. (SBGSF) Full Year 2023 Results Earnings Call Transcript