Schneider Electric expects to recover from €300m revenue blow caused by Coronavirus
The company says the potential revenue impact of Coronavirus is expected to be around €300m in Q1, mainly in China, but expects to recover that figure throughout the rest of the year.
Schneider Electric has announced its fourth-quarter revenues and full-year results for the period ending December 31, 2019.
The France-based company reported €27.2bn revenues for the full year of 2019, a growth of +6%, and an organic growth of +4.2% with growth across businesses and all regions.
The company said that it is assessing the impact of the Coronavirus to the business, and stated that there will be an impact in Q1 2020 due to factory closures in January and February.
At this point, this impact has been estimated at €300m mainly in China and the company assumes it will be almost entirely compensated in 2020 largely in H2.
For the rest of Asia Pacific, Schneider Electric said it expects India and South-East Asian countries to continue to be growth markets. The Group expects Western Europe to grow at a moderate pace with a higher weight in H2.
In the current macro environment and incorporating the current view on the impact of coronavirus, the company said that it is expecting growth in aggregate in 2020 as it continues to deploy its strategic priorities in key markets.
“In 2019, we reach record levels in revenues, gross profit, adjusted EBITA and a step-change in our free cash flow to €3.5bn,” said Jean-Pascal Tricoire, Chairman and CEO.
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“We strike a strong Q4, comparing to a high base in 2018. We accelerate the execution of our strategy to be the partner of our customers in digital solutions for sustainability and efficiency.
“We grow in both our synergetic businesses and across all regions. We continue to execute on our strategy of more products, more services, more software and better systems bringing together full digital solutions in energy and automation.
“We confirm strong organic growth in Energy management, above 5%, clearly above market, and we grow in Industrial Automation, compensating the softness of discrete markets by a great performance in hybrid and continuous process and Aveva.
“Across those two businesses, Digital and Services now account for around 25% of our turnover, grow above the average, and bring both recurrent revenue and a deep customer relationship.
“EcoStruxure adoption is accelerating, as shown by assets under management up 50%, and cloud-based recurring revenues growing double-digit.
“We continue to deliver good industrial productivity and put focused efforts on cost efficiency. We keep optimising our portfolio in a responsible manner.
“We divested/deconsolidated €0.6bn, as we continue to execute our portfolio optimisation, reviewing assets generating revenues of between €1.5bn – €2.0bn between 2019-2021.”
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