Schneider Electric First-Quarter 2006 Sales Show Exceptional Growth | Automation.com

Schneider Electric First-Quarter 2006 Sales Show Exceptional Growth

Rueil Malmaison, May 2, 2006 – Sales for the first quarter of 2006 totaled Euros 3,180 million, up a particularly strong 25.9% on a current structure and exchange rate basis from the year-earlier period.

Acquisitions (primarily ABS EMEA, Juno Lighting and BEI Technologies) contributed a significant Euros 200 million, or 7.6% of growth for the period. The favorable currency effect added Euros 103 million (+5%), reflecting the euro’s still-high rate in first-quarter 2005.

On a constant structure and exchange rate basis, sales growth set a new record at 13.3% in the first quarter 2006 compared to the same period last year.

First-quarter 2006 benefited from a larger number of business days compared with the year-earlier period. This added around 3 points to organic growth. An opposite effect of the same magnitude is expected in the second and third quarters taken together.

Schneider Electric achieved double-digit sales growth in all geographical regions, thanks to high demand in North America and, more recently, in Western Europe. The Group again turned in a remarkable performance in the emerging countries, with average growth of 22%. The figure was close to 30% in Eastern Europe, the Middle East, South America and South East Asia.

In Europe, sales rose 10.1% in a context of investments recovery, notably in industry, in virtually all countries. Strong end-market demand was amplified by the positive impact of the development in new businesses (ultra terminal, services and automation) and a favorable basis of comparison in the first quarter compared to the rest of the year.

Sales increased substantially in Northern Europe, Spain and the UK, exceeding 10%. End-market trends were more mixed in France, Italy and Germany. In Eastern Europe, sales growth reached nearly 30%, on the back of high investment in all sectors.

In North America, demand remained buoyant in the industrial and commercial buildings market and stabilized at a high level in the residential market. Growth action plans, notably the development of energy management and services, also contributed to the 12.2% increase in sales. Schneider Electric offers a unique portfolio of solutions and dedicated competencies to help customers protect themselves from energy supply disturbances.

In the Asia-Pacific region, sales grew 17.8%, reflecting a sustained investment trend and low business levels in first-quarter 2005. All Asian countries enjoyed similar high levels of growth. The Group pursued its active expansion strategy in India, resulting in growth of more than 50%. Demand was strong in Japan, which saw a recovery in industrial investments.

Sales in the Rest of the World reached a fifth straight quarter of over-20% growth, at +28.6%. Schneider Electric’s wide and solid geographic positions puts it in an ideal position to take advantage of the fast-growing economies in the Middle East, South America and Africa, where demand is being driven by the buoyant mining and oil industries.

“We are pursuing an offensive strategy based on innovation and expansion in high-potential markets and businesses to change our growth profile,” noted Henri Lachmann, Chairman and Chief Executive Officer of Schneider Electric. “Thanks to our leading positions in all regions, the deployment of new businesses – which now account for 40% of sales – and sustained investment in technology, we benefited from excellent worldwide business conditions and achieved a record organic growth in first-quarter 2006. Assuming these conditions, we anticipate for 2006 sales organic growth between 6% and 7%, noticeably above the target of our new² company program.”

Half-year financial results and second quarter sales will be released on July 28, 2006.
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