Published by Global Banking and Finance Review
Posted on April 28, 2025
By Anna Peverieri
(Reuters) -Electrical equipment maker Schneider Electric cut its 2025 implied core profit margin outlook on Monday due to the impact of foreign exchange rates, after its sales missed market expectations in the first quarter.
Schneider Electric, which develops AI-related data centre cooling systems, now sees 2025 adjusted earnings before interest, taxes and amortization (EBITA) margin between 18.7% and 19%, compared with its previous core profit margin expectation of between 19.2% and 19.5%.
"The weakening of the U.S. dollar and the weakening of the Chinese yuan have both impacted our results on an absolute basis," group Chief Financial Officer Hilary Maxson told journalists, when asked about the implied core profit margin outlook cut.
“The FX impact at current rates on adjusted EBITA margin for FY 2025 could be around ‑40 basis points," Maxson added.
CEO Olivier Blum in a statement noted the increased uncertainty across all markets, but said: "We are confident in our structural growth drivers."
The statement made no mention of the impact of U.S. President Donald Trump's tariffs, whose on-again-off-again status has roiled global markets, destabilised U.S. trading partners and left companies reassessing their operations.
Swiss industrial robot maker ABB also acknowledged increased uncertainty in the global business environment when it announced its first-quarter results on April 17.
Schneider Electric maintained its 2025 outlook of organic revenue growth of 7% to 10% and its EBITA margin rising organically by 50-80 basis points.
It reported a 7.4% organic rise in quarterly sales to 9.33 billion euros ($11 billion), missing analysts' consensus of 9.47 billion euros and revenue growth of 8.9% in a survey provided by the company.
Sales in the first quarter were hit by declining revenue in Schneider's industrial automation business and softness in the residential buildings market, the group said.
Schneider Electric said its Systems division revenue grew 21% organically in the first quarter, driven by strong traction in the data centre end-market.
($1 = 0.8790 euros)
(Reporting by Anna Peverieri; Editing by Emelia Sithole-Matarise, Tomasz Janowski and Leslie Adler)
