France-based automation technology giant Schneider Electric today reported a 28% increase in sales in its third quarter, once again fueled largely by its acquisition of American Power Conversion which closed earlier this year.
Sales totaled €4.5 billion in the quarter ended Sept. 30 on what Schneider terms a current structure and exchange rate basis. Of that total, €592 million was contributed by acquisitions (€519 million from APC alone).
Schneider's organic sales rose nearly 14% on a constant structure and exchange rate basis, driven by a number of factors, including "accelerated development of new activities" in such areas as services, energy management, building automation, and installation systems and controls; a rebalancing of sales to favor profitable end-user markets; strong sales activity in emerging markets; and particularly high demand in the energy and infrastructure area, Jean-Pascal Tricoire, Schneider's chairman and chief executive, said today on a call with analysts to announce the quarterly results.
The company did not report on its net income or earnings per share for the quarter.
North American sales grew by 13.1%, to €1.3 billion, on par with the growth recorded in the first half of 2007. "Our strategy of repositioning ourselves into high-growth businesses and targeted verticals clearly allowed us to outperform the market and capture additional growth opportunities," Tricoire said of Schneider's performance in the region.
Schneider still faces depressed demand in the North American residential construction sector. Nonetheless, solid activity in the commercial sector, strong investments by businesses in data centers and IT, and demand for capacity expansion and infrastructure upgrades in the industrial segment more than offset the continued decline in residential numbers, Tricoire said.
In Europe, sales were up 12.2%, to €1.9 billion, thanks in large part to a "booming construction market" in Russia and Eastern European countries. Asia-Pacific sales grew by 14.7%, reaching €882 million. In the "rest of the world" region, which includes the Middle East, Africa, and Latin America, sales once again grew at the highest rate, up 22.6% in the quarter to €390 million.
Looking ahead, Tricoire said Schneider expects to benefit from "faster growing areas" of new business in North America, including the new Critical Power and Cooling Services business unit, which includes APC; and the Building Automation business, which was bolstered by Schneider's acquisition earlier this month of Pelco, a provider of video security systems.
Owing to sustained high growth rates over the past three quarters and the realization in September of a €717 million backlog of orders, officials said, Schneider again revised its organic sales growth target upward, to 13% for 2007. At the end of the first half, Schneider set expectations at 10% growth for the year; earlier in the year the figure was 8%.