schneider electric presentation: 2016 j.p. morgan conference

Schneider Electric presentation: 2016 J.P. Morgan conference

Disclaimer

All forward-looking statements are Schneider Electric management’s present expectations of future events and are subject

to a number of factors and uncertainties that could cause actual results to differ materially from those described in the

forward-looking statements. For a detailed description of these factors and uncertainties, please refer to the section “Risk

Factors” in our Annual Registration Document (which is available on www.schneider-electric.com). Schneider Electric

undertakes no obligation to publicly update or revise any of these forward-looking statements.

This presentation includes information pertaining to our markets and our competitive positions therein. Such information is

based on market data and our actual revenues in those markets for the relevant periods. We obtained this market

information from various third party sources (industry publications, surveys and forecasts) and our own internal estimates.

We have not independently verified these third party sources and cannot guarantee their accuracy or completeness and our

internal surveys and estimates have not been verified by independent experts or other independent sources.

Schneider Electric – JPM Conference 2016

Schneider Electric – Annual General Meeting – April 25, 2016

Schneider Electric, a leader in energy management and automation


A unique positioning to answer three long term trends


Digitization Industrialization Urbanization

Challenges

> Increasing energy demand

> Peaks in demand

> Pollution

> City congestion

> Climate change

> Resource scarcity

Buildings2

(34% of group revenues)

Industrial and Machines (Discrete and Process)

(27% of group revenues)

Utilities and Infrastructure (25% of group revenues)

Data Centers and Networks (14% of group revenues)

AUTOMATION SOFTWARE3 &

ANALYTICS

1 Estimated based on 2015 revenues

2 Including residential and non-residential buildings

3 Including standalone software

ENERGY END MARKETS1

~65% of Group revenues

~35% of Group revenues

A portfolio converging energy, automation and software

synergistically to serve our four diversified end markets


2015 revenues

(€ bn)

Worlwide

position

Buildings & Partner

Infrastructure

Industry

IT

Key technologies Low voltage

& Building automation

Medium voltage

& Grid automation

Discrete & process

industrial automation Critical power &

cooling services

11.9 5.4 5.7 3.7

#1 #1 #2 discrete

#1 #4 process

A focused portfolio of 4 activities with worldwide leadership

Activity in

Schneider Electric

2015 Adj.

EBITA Margin

(%)

18.0% 9.1% 17.1% 17.6%


A model focused on its core activities through a constant

portfolio optimization

ACQUISITIONS STRENGTHENING OUR CORE

Pipeline management / ADMS

DISTRIBUTION

DISPOSAL OF NON CORE ACTIVITIES

APPLIANCE

TRANSPORTATION


6.7

2016 objective

already reached in

Q4 2015

A RECOGNIZED COMMITMENT OUR COMMITMENTS PILLARS

Global 100 Most Sustainable Corporations

Schneider Electric ranked 12th (2015)

Ethisphere Most ethical companies

For the fith year in a row

Sponsor of COP21:

10 commitments in order to be carbon neutral

by 2030

Schools electrification in Kenya

Program of prevention towards our employees:

principle of responsibility and ethics (R&ED)

/10 Q1 2016

Every quarter, Schneider Electric

communicates its progress through 16

indicators composing its Planet &

Society barometer.

Strategically committed into sustainable development

> Energy efficiency

> Access to energy

> Ethics, social responsability,

environnemental protection



Our balanced and robust model creates value for our shareholders


A balanced geography and end-market exposure, a leading

position in new economies

GLOBAL AND BALANCED FOOTPRINT FY 2015 revenues

27% North

America

18% Rest of

World

26% Western

Europe

29% Asia-

Pacific

4 DIVERSIFIED MARKETS FY 2015 revenues - estimated

43% of revenues in new

economies

~160 000+ Employees in 100+

countries

Data centers

and networks

Buildings Infrastructures Industries

14% 34% 25% 27%


Products Solutions

43% of 2015 revenues

Solutions

Low capital intensity

Products

Scale

Leverage our strengths

Enhance our expertise

57% of 2015 revenues

Products for small diffuse projects thanks to the largest global partner network

Solutions to access mission critical customers’ needs

2 balanced business models to serve our customers

Differentiated softwares & services

More projects with our partners

Segment expertise

Strong brand

Global partner network

Excellence of our products


An integrated commercial setup, to supply more to each

customer in each country

Low Voltage

& Building

Automation

Discrete & Process

Automation

Critical Power

& Cooling

Medium Voltage &

Grid Automation

Buildings &

Partner Infrastructure IT Industry

Deliver value to the customer

Non-residential & Residential Utilities & Infrastructure Industrial & Machines Data Centers & Networks

Structured commercial setup in each country to drive cross selling and maximize coverage


A flexible cost structure benefiting from our scale

359334329

309

0

100

200

300

400

Schneider

is On ’15

Connect

’12-’14

One

’09-’11

New 2

’05-’08

Average yearly industrial productivity (m€)

Flexible Business

Model ~70% of production costs are variable

~54%1 of production costs located in new

economies Global

supply-chain

Mutualized

Back-Offices

Efficient regional organization

Customer care centers mutualized by zone

Regional clusters in Accounting & payroll

Strong scale

effect

€12.6Bn of purchases

Negotiation is our first productivity lever

1 Estimated end of 2015

A FLEXIBLE STRUCTURE PROVEN RESULTS OVER YEARS


Sound cash generation and financial structure

STRONG & CONSISTENT CASH GENERATION

113106120

94

0

50

100

150

Schneider

is On ’15

Connect

’12-’14

One

’09-’11

New 2

’05-’08

SOLID BALANCE SHEET & RATING

> A- rating

> Rapid deleverage after the Invensys

acquisition (2014) and solid balance

sheet

Average cash conversion rate

by company program (%)

Net debt / Adj.EBITDA

2015 2014

1.0 1.2


A strong focus on shareholders returns

2.0

1.5

1.0

0.5

2011 2010 2009

CAGR +12%

2015 2014 2013 2012

DPS (€)

PROGRESSIVE DIVIDEND SHARE BUYBACK

> Dividend targeted at c.50% of net income

> Progressive dividend policy with no year-on-

year decline

> In 2015,~11m shares bought back for ~€0.6bn

> Now target ~€1.5bn share buy back by 2016

571

2015

565

2014

Shares count (adjusted for treasury shares)



2016 targets


2016 targets confirmed

As expected, the Group observed growth in Western Europe and in the construction market in the U.S.,

continued weakness in O&G and its related segments, and a mixed picture in new economies outside China.

China declined at a slower pace with early signs of improvement in tier 1 city construction markets, however

these signs of improvement need to be further confirmed.

Increased project selectivity started to impact revenues in Q1 as planned and the Group anticipates this impact

will accelerate through the year.

Moving forward, the Group’s priorities remain cost optimization, growth in Products, Software and Services and

improvement in Solutions margin.

Based on these trends, the Group confirms its 2016 targets of:

> Organic revenue growth to be flat to down low single-digit, impacted by the Group’s higher selectivity on

project activities.

> +20bps to +60bps improvement on adjusted EBITA margin before FX. The negative FX impact on margin is

estimated at -40bps to -50bps at current rates.


schneider electric presentation: 2016 j.p. morgan conference

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