Schneider Electric: ethical energy?, Equity trading strategy

A world leader in its sector, Schneider Electric has a unique portfolio of digital and energy solutions that meet the needs of its customers in terms of sustainable development and efficiency in their business. The multinational’s activity focuses on two main areas (energy management and industrial automation) with four end markets: construction, data centers (data center), infrastructure and industry.

Schneider Electric has sustainability objectives and wants to support its customers in sustainable development. The company’s ESG score is above the average for its sector and it was ranked among the 100 most ethical companies in 2021 for the tenth consecutive year. The company has established a sustainability program (Schneider Sustainability Impact / SSI) which aims to be carbon neutral with offsetting by 2025. This would represent 800 million tonnes of CO emissions.2 spared. The ambition for 2050 being to have 0 net CO emissions2 across the entire supply chain.

The company is committed to continuing its progress in packaging with 100% recycled cardboard, it also wishes to guarantee that the steel contained in its products comes from responsible sources and production chains as well as to train more people in the field of energy management.

The company’s first quarter 2022 accounts were released on April 27. Schneider Electric presented good results and even confirmed its objectives for the whole year. Profits exceeded expectations by 4.1% of investors, who were on reserve because of Covid-19 and shortages of raw materials. The impacts of the various lockdowns (especially in China between March and May 2022) should be felt in corporate results in the second quarter.

Turnover for the first three months of the financial year amounted to 7.57 billion euros, which represents a growth of 9.8%. Schneider Electric benefited from the positive effect of the exchange rate, in particular due to the strengthening of the American dollar and the Chinese yuan against the euro (North America represented 30% of sales at the end of March and Asia-Pacific 31% ). The positive change in exchange rates contributed 258 million euros to sales, or the equivalent of 4% of revenues.

Since February 24, Schneider Electric has suspended all new investment and all international delivery of new orders for projects in Russia and Belarus. On April 27, the group announced its intention to sell the activities of Schneider Electric Russia to the local management team. All that remains is to obtain the approval of the authorities of the country. Russia represents 2% of Schneider Electric’s billings and a potential impairment of up to 300 million euros in net book value.

Despite the challenges linked to Covid-19 and shortages of raw materials, Schneider Electric is still experiencing strong and dynamic demand, with sales benefiting from a higher order book than in 2021. Uncertainties linked to the crisis health persist, but management remains confident that China will be a growth driver for the group this year.

Schneider Electric is a company with very good fundamentals: very good diversification and distribution of activity, it is indeed the leader in the sector as well as a player in the transition to sustainable development. The group overcame the challenges that have recently marked the news and exceeded market expectations.

Schneider Electric: ethical energy?

Schneider Electric: ethical energy?
Schneider Electric: ethical energy?

The Schneider Electric share has just corrected 50% of the post-Covid upward movement, we are currently in an “overlap” zone at 129 euros (former resistance zone that has become support), it seems that the support at 123 euros is strong.

We can envisage a continuation of the rebound with the objective of 140 euros, or a performance of 9%, by placing a stop at 123.5 euros, or 4.5% below the current price. This trade offers us a good risk/reward ratio of 2.

Promotional recommendation.

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