Consistent strategy & resilient business model to navigate - PowerPoint PPT Presentation

Consistent strategy & resilient business model to navigate ongoing crisis Well positioned and focused to grow in a post-COVID-19 world

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. Investor Relations - Schneider Electric Page 2

04 H1 2020 Business Highlights 27 H1 2020 Financial Performance Highlights 42 Expected market trends & Targets 47 Q&A 48 Appendix Investor Relations - Schneider Electric Page 3

H1 2020 Business Highlights Jean-Pascal Tricoire, Chairman & CEO Investor Relations - Schneider Electric Page 4

COVID-19: a catalyst for Digital adoption for more sustainability, efficiency & NOW resilience 2 Transitions Industry 4.0 Energy Transition Energy Industrial Management Automation 2 synergetic businesses + + SUSTAINABILITY EFFICIENCY RESILIENCE Strengthened Value Digital Solutions Unique business Open Integrated Empowered Sustainable model + + Strong focus on Progressive dividend Disciplined capital allocation Strong cash generation shareholder return Investor Relations - Schneider Electric Page 5

H1 2020 Financial Highlights Delivering resilient financial performance through the crisis Revenues Adj. EBITA margin €11.6 billion 13.6% Down -130bps org. in H1 Down -10% org. in H1 Free Cash Flow Net Debt Adjusted Net Income ~ €1 billion € 4.8 billion € 1.0 billion Benefitting from disciplined After payment of €1.4bn 2019 Down -26% in H1 working capital management dividend Investor Relations - Schneider Electric Page 6

H1 2020: Both businesses impacted due to COVID-19 crisis Energy Management Industrial Automation Energy efficiency Process efficiency € 2.8 € 8.8 b n b n 15.2% 17.1% - 11% c.-200bps c.-80bps -9% Org. adj. EBITA margin Org. adj. EBITA margin H1 org. sales H1 org. sales growth growth Investor Relations - Schneider Electric Page 7

H1 2020: Our key attributes in navigating this unprecedented crisis Consistent Strategy Empowered & very Local & Trained Organization Consistency • • Empowered and integrated country Sustainability, Efficiency and Resilience, organizations for quick decision making enabled by Digital • • Locally Integrated model Local supply chains Digitized Operations Balanced Exposure To Agility • Geographies • Cycles Resilience Partner Based / Asset Light Investor Relations - Schneider Electric Page 8

Key customer successes in recent months Industrial Digital Transformation Greenfield Process Automation Smart Grid An Open standard based IOT Data Country-wide Smart Grid Greenfield development collection and structuration and library for including EcoStruxure ™ to ensure efficient, reliable Industrial Giant - France & safe electricity supply for & AVEVA solutions for a long-term energy needs; sustainable, reliable & c.€ 250 mn, over 18 Cybersecurity cleaner source of energy months timeline - Egypt - Mozambique IT/OT cybersecurity convergence for large Oil & Gas player - Middle East Data Centers Smart Buildings Healthcare Design & Build a reliable Implementing Highly reliable power for EcoStruxure ™ for Edge end-to-end Data cold storage of finished Center including Digital sustainability, operational pharmaceutical goods to Services - Australia efficiency & enabling ensure maximum power remote management - USA uptime - USA Investor Relations - Schneider Electric Page 9

Enabling value for customers through enhanced digitization Digital and service business World leading product business for increased efficiency across lifecycle also going digital Software + • Enabling our world leading partner network in digital transformation Digital services • Step change in eCommerce adoption through crisis - up strong c. 7% double-digit • 3,500 digital events covering 200K customers/partners through c. 50% Group revenue COVID-19 crisis leveraging Field Edge Services Control c. 10% c. 10% Connectable products Assets Under 3.5m c. 25% Management c.+45% YoY Investor Relations - Schneider Electric Page 10

Software & Services offers: more resilient than rest of Group Software & Services c.17% of H1 2020 Customer stickiness Recurring revenues revenues -1% Org. growth Resilience vs Group’s Increased customer Margin Catalyst for growth in performance Accretive controls & connected intimacy Products Investor Relations - Schneider Electric Page 11

Our supply chain set- up responded to the crisis… GSC organization set-up 's Supply • Regionally organized - Globally managed Chain Rankings (2015 – 2020) • Balanced footprint & COGS inline with sales profile • Current GSC model relevant post-crisis 2015 2016 2017 2018 2019 2020 • Supply chain digitization • Schneider Production System towards Industry 4.0 4 11 Key Priorities 12 18 17 • Business continuity, quality and delivery focus 34 • Control tower to align production capacity with demand • Close partnership & engagement with supplier network Applying our technologies • Productivity focus in our own sites • Supporting sales teams for customers seeking Recognized by the World digitization/near-shoring Economic Forum as a 4 th Industrial Revolution Lighthouse Investor Relations - Schneider Electric Page 12

… though we continue to face some challenges Increased costs Supply issues due to contagion and lockdown effect from specific factories North America • Mitigation of challenges/disruptions • Impacting residential end-market in North America • Increased freight costs (using air shipments to reduce • In process of being resolved bottlenecks) India • Cost of deploying health & safety measures • Severe lock down resulted in significant disruption • PPE availability across world & for suppliers • Factories serving local & export markets are currently operational • Deep cleaning of factories and offices • Under absorption to meet social distancing requirements Other short term supply chain issues now mostly resolved Investor Relations - Schneider Electric Page 13

Our employees have come together and stepped up efforts to support COVID-19 relief April to July Respond Tomorrow Rising Fund by First needs of low-income people +60 +65 +800k Projects Countries Beneficiaries July to September Recovery Education system to prepare the future 5 Initiatives identified Chad, Niger, Malawi, Nepal, Ecuador Resilience Employees contribution as a volunteer Digital missions 84 241 Volunteers Brazil, Cambodia, Ecuador, France, India, Poland, Kazakhstan, Kenya, Russia, Vietnam Investor Relations - Schneider Electric Page 14

Our distinctive DNA is externally recognized in 2020 Commitment To Sustainability: Climate, Ethics, Empowered Diversities; Inclusive Practices; Lean Organization; Multi-hub Model; Circular Economy, Health And Equity, Development Inclusive Behaviors; Advocacy The Schneider Way; #Freeupyourenergy Investor Relations - Schneider Electric Page 15

We accelerate our sustainability trajectory Schneider Sustainability Impact: 7.7/10 in H1 selects Schneider Electric as Indicators & objectives 2020 - selection H1 2020 Q1 2020 preferred partner for its CO 2 Neutral objective 120 million metric tons CO ₂ saved on CLIMATE Lessen environmental impact & create long-term 107 97 our customers’ end thanks to our value across supply chain EcoStruxure offers First stage of CO 2 Neutral mission which involves 120,000 metric tons of avoided CIRCULAR 126,113 decarbonizing Faurecia’s operations 104,436 primary resource consumption ECONOMY through ECOFIT™, recycling and take-back programs Purchasing energy produced with low-carbon fuels or from renewable sources HEALTH & Workers received at least 15 hours 48% 32% of learning, and 30% of workers’ EQUITY learning hours are done digitally Reducing energy used by adopting innovative digital solutions for efficiency and heat recovery in all of 350 suppliers under Human Rights ETHICS Faurecia’s locations around the world & Environment vigilance received 298 282 specific on-site assessment Committed to the “CEO Initiative for 15,000 volunteering days thanks Europe’s Recovery, Reform and Resilience” DEVELOPMENT 14,870 13,696 to our VolunteerIn global platform Investor Relations - Schneider Electric Page 16