Dive Brief:
- Schneider Electric grew revenue 17% in the third quarter to $12.9 billion, led by its North America energy management business, which was up 20% as a result of momentum in data centers and strength across other nonresidential building markets, the firm said Oct. 16.
- The company took proactive pricing actions in January, primarily due to copper, silver and other rising input costs, according to Schneider Electric CFO Nathan Fast. It also increased prices in April to help offset the impact on oil, transport and oil derivatives like plastics from the Iran conflict.
- “Now we see the next wave coming [affecting semiconductors], memory, copper, which has also spiked again a bit over the last couple of months and quarter,” Fast said on the company’s earnings call. “To the extent there’s inflationary pressures coming into 2027, we’ll be flexing those muscles from an execution perspective.”
Dive Insight:
Schneider Electric’s energy management business saw strong demand, driven mostly by non-residential facilities, particularly in the U.S., where the company worked with a lot of public access and public administration buildings.
“From a buildings end-market perspective, higher interest rates are impacting some momentum [with new construction]. But today in infrastructure, in government administration buildings [and] technical buildings, we continue to see momentum,” Fast said. “In fact, sometimes interest rates can boost retrofit because you are not having churn in the market. From that perspective, we do not see … anything impacting yet the demand.”
Earlier this month, the company announced a $500 million partnership with energy-as-a-service firm Budderfly to provide capital to help small- and medium-sized U.S. municipalities to modernize energy infrastructure. As part of the Modernizing American Cities program, Budderfly and Schneider will work with local leaders to identify, prioritize and implement projects that strengthen the resilience of essential services, including solar, battery storage, EV charging, HVAC and lighting upgrades and technology that can monitor and optimize energy performance.
CEO Olivier Blum said electrification and heat pumps are helping to boost the company’s buildings end-market business.
“The massive acceleration of electrification [and] of electric cars, of course, is very visible,” Blum said on the call. “Heat pumps [are] definitely creating an opportunity for a company like Schneider to benefit really from extended growth.”
Data centers led much of the company’s growth in the U.S. The sector saw sustained customer demand for Schneider’s offerings in prefabricated solutions and cooling. Industry and infrastructure energy management revenues, by contrast, were down.
The industrial automation segment grew 16.3%. Double-digit growth by Schneider’s industrial software affiliate AVEVA benefited from contract renewals and new business through its distribution channels, per the earnings release.
Schneider Electric has seen double-digit order growth in three out of the last four quarters, and expects its business that focuses on data centers to increase as a result.
Part of that growth stems from its prefabricated data center solutions business, according to Fast. “We’ve been doing prefab for some time,” he said. “The idea with prefab is to have the offer that the customer needs for their application,” whether that’s to speed up “the project or construction or whether that’s a lack of labor on site,” he said.
