Schneider Electric Sa

Good morning. Welcome to the Schneider Electric's first quarter 2026 revenues call with Olivier Blum, Chief Executive Officer, and Nathan Fast, Chief Financial Officer. Thank you for standing by. All participants are in listen-only mode, and you may register for a question at any time by pressing star and 1 on your touchtone telephone. I would like to inform all parties that today's conference is being recorded. If you have any objections... You may disconnect at this time. I will now hand you over to Mr. Nathan Fest.

Thank you, operator. And hello, everyone. Good morning. Glad that you can be with us today. I'll personally kick off the call. I'm here together with Olivier Blum, our CEO. For the agenda, you already have the slides available. We'll go through them now and then make sure to have enough time for Q&A. As always, I remind everyone about the disclaimer on page two. And with that, Olivier, I'll hand it over to you.

Thank you very much, Nathan. Good morning to all of you, and thanks for joining our Q1 results call. So I'll go straight into the presentation and share with you that we have delivered a very strong start in 2026. with a growth of 11%, 10 billion revenue, which is a record. Both businesses, as you can see, energy management and industrial automation have contributed to the growth. We'll give you more details with Nathan later on, but you will see that all the regions are contributing to this growth in Q1. We have a very balanced growth across a different business model. You will notice in particular a strong start in product and that gives us really a strong confidence for the rest of the year. As usual, we like to report on our sustainability results. This time is important because that's the first time we are reporting on the new program that we shared with you during the Capital Market Day but also during our yearly results. So it's very important, you know, sustainability has been part of the signature of Schneider that does not live in a parallel universe. This is how Schneider Electric impacts in the short term, but also in the long term. And as usual, we would like to have a certain number of ambition and metrics which are very much connected to the business of Schneider Electric and how we can have a positive impact on all our ecosystem. In this new program, you will see that there is, on one side, a lot of continuity. We have retained a certain number of metrics, which are really the signature of Schneider. So, for instance, save and avoid emission, we are going now and we are reaching, we are going to the next level with Schneider. 1.5 gigatons of CO2 to be saved and avoided by 2030. We continue to have a very strong focus, for instance, on giving access to electrification, clean electrification everywhere in the world, and so on and so forth. But you will notice also that we have new metrics which are related to the acceleration of electrification, how electrification helps our customers to be more efficient, how we are going to commit to support the training of more electrification, and as usual, you will see a certain number of metrics on the social side, on the people side, both in terms of gender diversity, but also how we want to help the different generations. So these are just the Q1 results. It's just the beginning of the program, so we'll probably take more time in H1 to report on the progress of every single metric, but let's give you a good indication on what is this new program and how it continues to make Schneider Electric a leader in sustainability and, more important, how we continue to impact our entire ecosystem. Going back to financial business and now looking forward, I'm not going to give you a long presentation on our strategy, on the trend, because we've done it in CMD and the early results. But just to give you a quick refresh on what we see across the three accelerations we've presented to you, New Energy Landscape, Digitization AI, and Multiplier World. Actually, there is a confirmation already in 26 that both trends are the right one. We are entering, and we have entered, I should say, since probably more than one year already, in the new area. with more electrification, renewable, decentralized energy, I agree with the CDC, acceleration of course of AI everywhere, which means more power, more cooling, and I'm sure everyone would agree to say that the world continues to be very fragmented. So all those trends are very important because this is what we are using to position Schneider Electric strategically. and even more important, to differentiate Schneider Electric. And, of course, when you look at what happened in the Middle East in the past weeks, we can all agree that it's the testimony already of an acceleration of electrification, since all the countries have understood that they need to go to the next stage of more autonomy in energy, which means more electrification, and to deliver more efficiency also in energy, it means more electrification and more digitalization, which is really what Schneider Electric is focused on in terms of strategic differentiation. So when we combine all of that, we believe we have entered already in what we call the fifth revolution. And I say already because it did not start in 26. I don't know if the starting point is 24, 25 exactly, but it is very, very, very obvious. that AI is taking everything to the next level. Of course, it's a great opportunity for a company like Schneider in terms of AI infrastructure, but it's equally a great opportunity for us because this is what helps us to make energy more intelligent. And as I just said, we are in a world today where energy is center to everything. There are different drivers. The driver can be cost for you in your home, can be the cost for enterprise. It can be the availability of energy, it can be security and autonomy since by government, you can take it also from a sustainability standpoint, but definitely the acceleration of electrification and digitalization is going to the next level through this era of intelligence where Schneider Electric has a very strong intention to be a market leader on the technology front. So this is a slide that you have seen many, many times, so I'm not going to spend too much time. But just to tell you that the strategy we have built really continues to be extremely relevant. And if I recap to all of you the journey we have been through, there was a first step in the past 10 years where we really built this EcoStruxure stack. From products, products which are now incorporating ElectroLink at every level, everything moving to the control layer, software-defined architecture, and being able, by capturing data everywhere in our stack, to create more intelligence for our customers. So if you remember the presentation we made, the priority one was really to build this unique technology stack. And we don't believe there are a lot of companies that can pretend to operate across those three layers in building polarity and industrial domain. And we have moved to the stage two, which was to be able to capture data, field data, operational data, enterprise data, but also third-party data. This is what we do by combining everything in the data cube. And for me, the step three, three is not only leveraging data like we've been doing so far and we amplify by ai but the stage three is creating energy and industrial intelligence which is based on native ai this time and this is what we are working on with the team really to differentiate ourselves so you could ask a question which what does it mean exactly in practical terms and i like this slide because it's a good summary of what energy intelligence means It has the capability really to preempt and optimize energy operations. Because we have been using data for many years in our system. But first of all, the traditional system were really siloed. They were operating in parallel universe. We were using both data with algorithm to monitor, to prevent, based on data of the past. Most of the intervention were manual, and it was taking a lot of time to respond. When we are moving to energy intelligence, you are moving to a place where everything is connected, all assets are connected, they speak to each other, that's why we have a single ontology. We are able to capture data across the lifecycle, so you design, you optimize, you design, you self-simulate, you build, you operate, you maintain, and you capture those data that you bring back to the design stage that help you to permanently improve your efficiency. And last but not the least, you are able to capture data that help you to act And that helps you to be extremely reactive, moving from reactive to pre-inventive, which helps you to move very, very fast on the way you make your decisions. So the bottom line is important. Energy intelligence means your facility does not just tell you that something went wrong. It prevents the problem before it happens in real time and gives you the insight to act effectively. If it's not a critical application, it can even intervene on your behalf, adjust the temperature of your home, or if it's a critical application, of course, an operator will be given the instruction. So you understand that it changed really the game from an outcome standpoint, and it gave much more outcomes to our customer. So this is basically what I call the step three, which is beyond the infrastructure, beyond the fact that we have created the Data Cube to go to something which is more AI-native, and that gives much more outcome for our customer. So this is a slide that you have seen, but I like to present it because that shows how Schneider Electric is differentiated from a company a long time ago which was providing hardware. We are now starting, at the beginning of the life cycle, design. We design, for instance, in the Omniverse, and we are launching right now, when we speak, a new product with the combination of AVEVA and ETAP to help to design and simulate the new data center. We are able to build efficient data centers which have data embedded in all and every single hardware which help to operate and to maintain. But I have also this quarter to show you another example because data center is extremely important, but we are implementing the same in all other segments of Schneider Electric. Here is a very interesting example of a customer in Food and Bed, the Royal AVB Group in Netherlands. Their pain point was very, very simple. They wanted to have better access to power because there was a great congestion. it was taking 8 to 12 years to have a connection to additional power and it was very important at the same time also to be able to electrify their process so we've been working with them to be able to provide a unique solution combining power and process so leveraging all the activity we have both in energy management and industrial automation and being able to help them to electrify and then capture data points that help them at the end of the day want to have a faster access to power. So you see that this time the driver was not necessarily efficiency and cost saving, but faster access to power, and in that case, electricity, because they were moving to electrify process, and in parallel, to reduce the dependency on oil and gas and to be able to have access to clean energy to reduce their CO2 emission. And this is a great example where we leveraged the full portfolio of Schneider Electric on one side but also Aveva Pi system on the other side to deliver great outcome for our customer. So I just conclude my introduction to tell you that Q1 has been really a good start as you can see from a top line standpoint in a market of course with more uncertainty related to the Middle East crisis. I confirm the priority for 26 So, again, I insist we continue to build a very strong technology leadership to deliver energy and industrial intelligence to our customer, leveraging the entire digital portfolio of Schneider, digital services and software. We continue to work on the new energy landscape on all the applications like 800 volt DC for data center, and it's very, very important because this is a segment where we want to keep a very strong leadership. Last but not least, on the technology side, we are reinforcing partnership, partnership with supply chain companies, partnership with tech companies, to make sure we can execute faster our strategy. We continue to go to the next level of regionalization in a market which is very fragmented in the world, I would say, which is more and more fragmented. We do believe our operating model, which relies on four strong regions, from sales, marketing, to R&D, to supply chain, makes Schneider Electric different. faster to react in front of our customer. And with this evolution of our portfolio, we continue to be extremely focused on top of our historical partner business. We have an increased focus on our strategic account, what we call here our enterprise business, because a large part of our portfolio will be decided at enterprise level in the future. And of course, very, very important, we continue to execute seamlessly our backlog. Nathan will come back on that, but on the operational excellence, we are extremely focused on margin, gross margin improvement, with a very strong focus on one side on productivity and cost efficiency of our product, but of course an increased focus since last year on pricing excellence, in order to be able to offset all the impact of raw material on one side, tariff on the other side, and as you can imagine, all the inflation that can be related to the Middle East crisis. And in order to be very, very efficient, and we'll come back to you definitely during the course of the year, we are accelerating our investment in AI to increase our scale, to be more scalable in the next cycle. 7% to 10% growth means a much bigger Schneider year on year, and that's important. That will be the model which is super cost-efficient and scalable, and to do that, we are going to leverage big-time AI in all our internal processes. That's what I wanted to share in terms of business update, and I'm going to hand over to Nathan to give you more detail about our financial performance in Q1. Nathan, over to you.