Slightly weaker IA results in a marginal miss

Schneider Electric’s Q3 revenues slightly missed the company-compiled consensus but were ahead of them on organic growth. This miss is largely attributable to Industrial Automation, considering that Energy Management was in line with expectations. The currency headwinds were also slightly stronger than expected. The organic growth was positive in all regions and most end-markets. With this result, the group confirmed its 2023 targets. Given the recent correction in the stock, we believe the next

Straightforward first half, 2023 outlook raised ever so slightly

Schneider Electric’s H1 23 results were broadly in line with the company-compiled consensus except organic growth which slightly beat expectations. As expected, organic growth was sequentially lower with a higher contribution from pricing than volume. All regions registered good organic growth with Energy Management outpacing Industrial Automation. The gross profit and adjusted EBITA margin expanded due to strong pricing. CFO improved slightly, whereas FCF generation was better thanks to improve

Revenues beat consensus and outlook upgraded but currency impact leaves little upside

Schneider Electric dealt a consensus beat on its Q1 revenues and organic growth. This beat was driven by the Energy Management business, whereas Industrial Automation was in line. The demand was good across most end-markets and geographies. Another highlight worth noting was the very strong growth in the group’s Systems business. On the back of this strong Q1 result, the group upgraded its 2023 revenue and margin ambitions. However, a stronger headwind from currency fluctuations negates much of

Strong Energy Management ensures consensus beat; Jean-Pascal Tricoire steps down as CEO

Schneider Electric’s 2022 results delivered a strong beat on organic growth with marginal beats on revenues and adjusted EBITA courtesy of another solid showing in Energy Management. Organic growth in IA was good too. The group also made good progress on its digital flywheel targets laid out at its last CMD, completed its divestment programme and delivered targeted structural savings. Most importantly, the group announced the separation of the Chairman & CEO roles. For 2022, the board’s dividend

Q3 organic growth beats estimates; 2022 outlook confirmed

Schneider Electric’s Q3 revenues and organic growth beat consensus and our estimates. Both divisions registered similar organic growth with good demand across all end-markets and all geographies except Russia. Its digital flywheel comprising Services, Software and Sustainability grew well and the group expects to continue making good strides in this area. In this quarter, the group also reached its divestment target laid out in 2019 and divested its Russian operations. Following the release, the

First half results exceed expectations; 2022 outlook revised

Schneider Electric’s H1 results were above consensus and our expectations. While both divisions registered solid growth, the beat was driven by robust Energy Management figures. Good organic growth was seen across all regions and end-markets despite the lockdowns in China. Although the EBITA margin expanded yoy, it contracted organically under the ongoing inflationary pressures and supply-chain hinderances. CFO increased but FCF was affected by higher working capital investments. In light of thi

Good start to 2022, China will stifle Q2, Outlook unchanged

Schneider’s Q1 revenue release was above consensus and our estimates. Growth was seen across both divisions with Industrial Automation delivering a robust performance. However, the ongoing supply-chain challenges persisted during the quarter and are expected to last throughout 2022. All end-markets generated demand and all geographies registered growth. The group also provided an update on its operations in China and Russia, and confirmed its FY22 outlook. Lastly, the group purchased c. €120m wo

Another demand-driven year in the offing

Despite being in line with consensus, Schneider Electric delivered an all-round superior performance in 2021. The group witnessed high structural demand across all its segments and geographies. The group exceeded its profitability guidance and generated decent FCF despite higher working capital requirements. For FY22, the group put forward a better than expected outlook with another incremental improvement in margins. Also, the proposed dividend for the year is above our estimates. 2022 should b

On track to hit FY21 targets

Schneider Electric’s Q3 revenues were broadly in line with consensus but slightly better than our expectations. Both divisions recorded growth across all the group’s geographies. Revenues in this quarter were affected by supply-chain issues, with IA being impacted more than EM. These issues are expected to last for another 2-3 quarters. The group also repurchased shares worth €260m in this quarter. On the back of this result, the group confirmed its FY21 outlook.

Stronger profitability and revised FY21 outlook

Schneider Electric’s revenues for the first half were broadly in line with both our and consensus expectations but profitability was above them. Growth was seen across most geographies and almost all of its segments. FCF generation was robust and net income also grew sharply. The group raised its FY21 outlook again and restored its buy-back programme, which will now be finished by the end of 2022. Although we expect the second half to be more sensitive to raw material price inflation.

Strong Q1 bodes well for 2021

Schneider Electric’s Q1 revenues were 5% above consensus expectations and were slightly above our estimates too. Both divisions registered strong organic growth driven by a better than expected recovery in the short-cycle business. APAC, a key geographic region for the group, continued to witness a strong demand and registered the highest revenue growth. Following the results, the group revised its revenue and margin forecasts, which were above our expectations.

Strong H2 brings FY20 above our expectations

Schneider’s FY20 results were better than our expectations but in line with consensus. The second-half of the year saw a strong rebound in business activity, thereby, making up for a weaker first-half. As a result, the group’s overall figures edged slightly above its guidance. FCF generation was a positive development and the group also proposed a dividend of €2.60. The FY21 guidance met our expectations and will also see the group make disposals of c. €1.5-2bn of revenues.

Rebound in Q3 leads to a revised FY20 outlook

Schneider Electric today released its Q3 revenue figures. Revenues showed a strong rebound primarily driven by strong growth in APAC. Based on the Q3 figures, the group marginally revised its FY20 outlook. Additionally, the group will continue to maintain its focus on integrating the recent acquisitions (RIB, ProLeiT, and L&T) as well as portfolio optimisation.

Resilient and agile: consensus beaten at all levels

Once again, Schneider proved to be resilient and agile. H1 figures beat consensus, especially in the EBITA line which was 21% ahead. Management provided new targets for the rest of the year and reaffirmed medium-term ambitions, implying a re-rating of consensus. The company is well-prepared to manage this crisis and even to benefit from it. We remain positive on the stock.

Feedback from virtual roadshow

We hosted yesterday a virtual roadshow with Schneider. We remain positive on the stock for several reasons: i) its well-integrated offering in electrification and automation, ii) its successful cross-selling approach, and iii) its ESG flag with sustainability at the heart of the group’s strategy and offering. We also believe that Schneider is much more prepared than in 2008 to cope with this current crisis, notably thanks to its sound balance sheet, better geographic and workforce diversificatio

Supreme (SUP LN) - Record performance, EBITDA ~doubled

Supreme’s FY24 trading update confirms a record performance in the 12 months to 31 March 2024. Organic revenue and profit growth across all four divisions has driven Group revenue +45% YOY to £225m, with FY24 adj. EBITDA almost doubling to ‘at least £38m’, driving record levels of cash generation. Supreme is actively exploring complementary M&A, supported by a debt free balance sheet. Trading on an undemanding FY25 PE of just 6.7x, with a 3.4% yield, we believe downside risks are more than price

Morning Note – 22 April 2024

Morning Note – 25 April 2024

Supreme+ (SUP, House Stock at 125p) - Supreme, Supreme!

Vianet Group: FY24 trading update, strategic contract win

Vianet has published a positive trading update for FY24 with turnover up 7.6% to £15.18m, a 3.5 percentage point increase in gross margin YoY, and adjusted EBITA ahead of market expectations. Net debt continues to fall and closed FY24 at £1.52m (£2.1m at 30 September 2023), demonstrating strong free cash flow generation, even without the benefit of the £0.9m tax receipt received in 1H24, which augers well for a final dividend. The company reported a new contract with Wilcomatic Wash Systems, the

Renewi - Solid trading and better cash generation

Renewi’s FY24 trading update was in line with management’s expectations and its improved cash generation is reassuring for investors. Attention is now likely to turn the strategic review of the UK Municipals with management stating that they remain on track to update markets by the end of June. This could lead to an exit of key liabilities and leave Renewi as an attractive circular economy investment with strong market positions and organic growth plans, which should assist in generating value,

Vianet - FY24 ahead, strategic forecourt customer win

Vianet’s FY24 trading update shows FY24 revenue +1% ahead of our previous forecast, adjusted EBITA +2% ahead, EFCF and net debt +£0.6m ahead, and a strategic new customer win with prominent forecourt operator Wilcomatic. A robust FY25 pipeline and outlook leads us to reiterate our FY25E forecasts at this point, with the update highlighting: strong progress renewing and winning new customers on 3-5 year contracts as they migrate from 3G to Vianet’s advanced 4G LTE solutions; the successful integr

SP Angel Spec Sits: FY Trading Update (LTHM)

Headlam Group - Strategy for growth in tougher market

Headlam Group has laid out an ambitious long-term revenue target of between £900m and £1bn, as it seeks to grow its share of the UK floor coverings distributor market. Despite a challenging backdrop due to the low level of residential housing transactions, management is seeking to expand each of its sales channels: Trade Counters, Larger Customers, Regional Distribution and Europe & Other. The FY23 results reflected the more challenging environment and the group trades at a discount to its long-

Norcros (NXR LN) - Sale of Johnson Tiles UK streamlines the business and improves operating margin

Norcros has announced the sale of its Johnson Tiles UK business to the current management team for a consideration of £1.0m, with a further modest earnout based on the equity value of the business, both payable in April 2028.

Hardman & Co Insight: 2023 was an annus horribilis for Quoted UK Infrastructure and Renewable Energy

The focus of Hardman & Co Research is on the nine quoted Infrastructure Investment Companies (IICs) and on the 22 Renewable Energy Infrastructure Funds (REIFs): the stocks analysed are all members of the Association of Investment Companies (AIC). We are updating our publication of January 2023, assessing both the lacklustre share price performances during 2023 and the key issues, including interest rates, inflation and power prices. As a 31-strong group, its combined market capitalisation is no

SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

Norcros - Sale of Johnson Tiles UK agreed

Norcros’s disposal of Johnson Tiles is the latest strategic activity taken by management to better allocate capital to fit with priorities. Last year it closed its UK adhesives operation. Norcros has a compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. Its rating is low at 6.0x FY24e P/E, which is attractive, especially when compared to its yield of 5.4% on its well

Hybridan Small Cap Feast - 24 April 24

24th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi

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