Dive Brief:
- Schneider Electric reported robust performance in North America during the third quarter of 2024, driven by organic growth in energy management and strong growth in systems revenue, led by its data center and infrastructure end markets.
- The company’s North America region accounted for 38% of total third-quarter revenue, organically growing 15.1% year over year to 3.5 billion euros, or roughly $3.8 billion in the third quarter. Revenue for Schneider Electric’s North America energy management group organically grew 18.3% year over year, to nearly $3.4 billion in the third quarter, according to the earnings release. The company’s overall third quarter revenue organically rose 8% year over year, to about $10.1 billion.
- “Volume is a strong positive contributor in energy management across categories,” Schneider Electric CFO Hilary Maxson said on an earnings call Wednesday, pointing to accelerated growth in the data center market, improvements in its North America supply chain and continued momentum in electrification.
Dive Insight:
Total revenue for Schneider Electric’s energy management group organically rose 11.6% year over year, to approximately $8.3 billion in the third quarter. The energy management group’s revenue reached about $24.2 billion in the first three quarters, growing 10.1% organically year over year, per the release.
Growth in both U.S. product revenues and field services fueled energy management revenue growth in North America, Schneider Electric said in its earnings presentation.
Schneider Electric’s products business, which generated 51% of third-quarter revenue, organically grew 2% year over year, while its systems business, 31% of third-quarter revenue, organically grew 19% year over year in that period. Field services revenue, 11% of total third-quarter revenue, organically grew 9% year over year, the company said.
Schneider Electric’s buildings end market continues to drive performance due to robust demand in non-residential and technical buildings, including those in the healthcare and retail segments. This growth reflects the group’s “comprehensive offers across medium and low-voltage technologies,” building management systems and its EcoStruxure advisors products to boost building energy efficiency, decarbonization, reliability, availability, comfort and safety, Schneider Electric said in its earnings release.
In its data center and networks end market, sales growth in pure data centers “was relatively stronger” than that of distributed IT products sold through independent channels into the business-to-business and business-to-consumer markets, the company said. North America and the Asia-Pacific region led the data center growth, with “strong contribution from Internet Giants and large colocation providers,” it said.
The company also “continues to benefit” from its end-to-end portfolio, including data center cooling solutions, furthered by its recently announced agreement to buy a 75% stake in data center cooling firm Motivair, according to its earnings release. That deal, subject to regulatory approvals and slated to close in 2025, will “enhance our thermal management abilities to ensure we’re ready to meet all data centers,” Maxson said on the call.
Maxson alluded to strong growth in recurring revenues and energy management software and noted that the company is “well on track for a success in shifting our software business model to subscription.”
For the fourth quarter, Schneider Electric expects continued strength in market demand and trends in data centers, a continued focus on subscription transition in software and growth in services as the company executes capacity investments to “support unprecedented high demand, especially in North America,” according to its earnings presentation.
Maxson noted that demand recovery has begun, with growth signs emerging globally, except in Asia. “And we expect this demand recovery to continue, particularly as interest rates slowly decline,” Maxson said.
Separately, Schneider announced on Nov. 4 that it had replaced CEO Peter Herweck amid strategic execution issues and that it was investigating a cyber incident following claims by a suspected threat actor that it had gained access to company data.
Editor’s Note: This story has been updated with additional company developments in the last paragraph.
Interested in more facilities management news? Sign up for Facilities Dive’s newsletter today.
