Fani Bogoeva

Competitive Analysis- Schneider Electric

Ticker: Schneider Electric S.E. (SU.PA)

Stock: 95.58+1.54 (+1.64%)

Industry: Energy management and automation

Website: https://www.se.com/us/en/

Competitors: ABB, Siemens, Honeywell, Johnson Controls

History/ Background:

With global presence in over 100 countries, Schneider is the undisputable leader in Power Management
– Medium Voltage, Low Voltage and Secure Power, and in Automation Systems. Schneider Electric
provides integrated efficiency solutions, combining energy, automation and software. In the company’s
global ecosystem, they collaborate with the largest Partner, Integrator and Developer Community on
the firm’s Open Platform to deliver real-time control and operational efficiency.

The company is based of Rueil-Malmaison, France. Schneider Electric is a Fortune Global 500 company,
publicly traded on the Euronext Exchange, and is a component of the Euro Stoxx 50 stock market index.
In FY2018, the company posted revenues of €25.72 billion. Schneider Electric is the parent company of
Square D, APC and others. It is also a research company, investing EUR10 billion in innovation and R&D
for sustainable development between 2015 and 2025. The company holds 20,000 patents either active
or in application worldwide and invests 5% of its annual revenue in Research and Development.
Schneider Electric refocused in 2010 to include software, critical power and smart grid applications
through strategic acquisitions. In 2015, the company launched a brand strategy called “Life Is On” which
aims to showcase the business and societal value of sustainability and efficiency. The emergence of the
digital economy created opportunities for IoT-enabled platforms, which Schneider Electric identified as a
growth opportunity. In 2016, the company launched EcoStruxure, its IoT-enabled architecture.
(Wikipedia, 2019)

Marketing Strategy:

With its array of products and solutions Schneider electric is active in the market of digital automation
and energy management for Industry, Hospitality, Banking and finance, Services, Secure power, Solar
and EcoXpert partners that are consultants working with SE’s products consulting other companies on
how to operate and properly manage them. In addition, the company also offers products for residential
and small businesses such as circuit breakers, lightening control and uninterruptable power supply.

The way the company sells its products is by utilizing digital marketing and in person strategies.
Schneider electric’ global presence is heavily relying on their digital marketing. The company uses tools
such as Marketo, LinkedIn Elevate, Sprinklr (social media tool) and company blogs. In addition, Schneider
Electric partners with suppliers, electrical engineers, consultants and contractors that sell the company’s
products and solutions.

Corporate Governance:

According to Jean-Pascal Tricoire (CEO and Chairman), by 2030, Schneider commits to achieve carbon
neutrality across our extended supply chain. By 2050, we also commit to a 60 percent absolute CO2
reduction for Scopes 1 and 2, meaning, respectively, our direct CO2 emissions and our indirect CO2
emissions from energy we purchased.

“Our goals for 2020 include:

80% renewable electricity

10% CO2 efficiency in transportation

120 million metric tons of CO2 avoided on our customers’ end through our offers

25% increase in turnover for our EcoStruxure™ Energy & Sustainability Services.” (JPT)

In addition, the company’s products follow the Schneider’s eco-design, which ensures the products are
easy to maintain, repair, and reprocessed at the end of their life cycle. Schneider Electric's employee
well-being program has been deployed globally since 2015. It takes a holistic view of well-being,
spanning physical, mental, emotional, and social dimensions. Across the value chain, the corporation
implemented a human rights policy and broad program in accordance with the United Nations Guiding
Principles on Business and Human Rights. By 2025, Schneider Electric will deliver low-carbon lighting and
communication solutions to 50 million people. We will also provide energy skills to one million
underprivileged people.

Schneider Electric’ independent board of directors has 16 members, with a chairman that is also the
company’s CEO. The stakeholders are mainly inside stockholders, institutional investors and partners.
The company also has several acquisitions.

Stock Price Forecast

The 17 analysts offering 12-month price forecasts for Schneider Electric SE have a median target of
21.13, with a high estimate of 24.41 and a low estimate of 11.08. The median estimate represents a
+0.61% increase from the last price of 21.00.

Analyst Recommendations

The current consensus among 18 polled investment analysts is to buy stock in Schneider Electric SE. This
rating has held steady since January, when it was unchanged from a buy rating.
Conclusion:

 Positive factors: Schneider Electric regularly appears in industry rankings aimed at promoting
sustainability and inclusion. Recently at the World Economic Forum in Davos, Schneider Electric
was ranked in the Corporate Knights Global 100 Most Sustainable Corporations, and the Carbon
Disclosure Project (CDP) 'A-List' for the 7th and 9th consecutive years, respectively. It was also
included in the 2020 Bloomberg Gender-Equality Index and in the Financial Times Diversity
Leaders 2020 Report, which assess companies' success in promoting gender equality and all
types of diversity. For Schneider Electric, such recognitions reinforce the company's strong
commitment to an inclusive, empowering culture, and its longstanding efforts to promote
sustainability. The company is experiencing growth in their sales over the last years and the last
3 quarters. The industry has a good performance rate. (Yahoo Finance, 2019)
 Neutral factors: The company hasn’t gotten the popularity in North America, such as its
competitors.
 Negative factors: Schneider Electric’s net debt is 15% of its market cap. This could bring some
additional risk, and reduce the number of investment options for management; Schneider
 Electric saw earnings per share improve by -2.1% last year. And its annual EPS growth rate over
5 years is 5.6%.

https://www.crunchbase.com/organization/schneider-electric/acquisitions/acquisitions_list

https://sdreport.se.com/en/introduction-our-impact

https://finance.yahoo.com/quote/SU.PA/profile?p=SU.PA

https://money.cnn.com/quote/forecast/forecast.html?symb=SBGSY

https://simplywall.st/news/should-we-worry-about-schneider-electric-s-e-s-epasu-p-e-ratio/