Schneider Electric S.A. (SBGSF.PK) reported Wednesday a 6 percent increase in 2011 profit despite margin erosion. The results reflected higher sales in all businesses and geographical segments as well as the acquisition of Areva Distribution. The French energy management company noted that price increases offset more than half of raw material inflation.
Looking ahead, the company expects flat to slightly positive organic growth for sales and an adjusted EBITA margin between 14 and 15 percent for 2012.
In the year 2011, annual sales grew 14 percent, or 8.3 percent on an organic basis. The company noted that the impact of foreign exchange fluctuations turned slightly positive.
For the year, EBITA, a key earnings measure, before acquisition and integration costs increased 7 percent, reaching the 3 billion euro mark for the first time. This was due to strong topline growth, price increases and significant operational efficiency, the company said.
However, the corresponding margin declined 0.5 point to 14.2 percent on a comparable basis, including Areva results, due to cost inflation and higher level of investment for future growth.
In the final quarter of the year, the company's sales grew 14.2 percent as weakness in Western Europe was more than offset by improved results in Asia Pacific, North America and Rest of the World regions. Quarterly like-for-like sales grew 6.1 percent.
In Western Europe, the resilience observed in France, UK and Scandinavian countries was not enough to balance the negative impact of the economic crisis in Spain and Italy, the company said. Sales in new economies were up 12 percent like-for-like representing 41 percent of total sales in the quarter.
Further, the company said it will propose a dividend of 1.70 euros per share at the Annual Meeting on May 3.
In the new year, Western Europe is expected to weigh on growth, while the company sees continued strength in new economies and opportunities from a recovering North America. The company added that the uncertainty surrounding the global economy limits visibility.
In fiscal 2011, net income group share grew to 1.82 billion euros from 1.72 billion euros last year. Earnings per share were 3.39 euros, 3 percent higher than 3.30 euros a year earlier.
Annual sales climbed to 22.39 billion euros from 19.58 billion euros in the previous year. In its fourth quarter, the company's sales were 6.35 billion euros.
Schneider Electric shares are currently trading at 49.97 euros, up 2.13 euros or 4.45 percent in Paris.
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