Schneider Electric says its revenues are limited by the supply chain • The Register

Schneider Electric is the latest tech company to blame supply chain constraints for holding back its commercial production, despite posting record revenue of 28.9 billion euros ($32.78 billion) in its results annuals for 2021 [PDF].

The power management and industrial automation giant ended the calendar year with a 7% rise in revenue to 7.9 billion euros ($8.96 billion) in the fourth quarter. This fueled record sales of nearly 29 billion euros for the full year, up 12.7% from a year earlier.

However, according to Schneider CEO Jean-Pascal Tricoire, this performance has been held back by supply chain issues that are hampering the company’s ability to meet customer demand: “We could have done better if we had a supply at the level of our request. “

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Tricoire said that in Schneider’s two main business areas, energy management and automation, the company is seeing double-digit growth. Here he was comparing 2021 to 2019, the last stable year before the pandemic.

He said Schneider had posted 11% organic growth in product sales over the period, with particularly strong performance in the OEM, industrial, data center and residential sectors.

“We had price action throughout the year in the face of increased costs that we have never seen at this level before. And this revenue growth performance could have been much higher because it has been impacted by supply chain pressures,” Tricoire claimed.

Other companies have made similar statements about the effect of supply chain shortages on their ability to meet demand, such as networking company F5 and GPU maker Nvidia.

Chief Financial Officer Hilary Maxson said demand for Schneider’s energy management products, including its EcoStruxure advisers, grew by “strong double digits” in 2021. Services grew 6% over the year, impacted by shortages and the coronavirus, particularly in the fourth quarter.

Schneider’s net profit increased by 51%, from 2.126 billion euros to 3.204 billion euros for the previous calendar and fiscal year.

In terms of supply chain management, Maxson said Schneider’s inventory has increased by about 15 days, primarily due to strategic stocking of components, so the company is better positioned to manage upstream tensions and deadline extensions, and has a stock of finished products to try to meet customer demand.

“We expect some reversal of this increase in days remaining in 2022, although we will continue to focus on resilience and serving our customers,” she said.

Tricoire also said Schneider will continue to be constrained by supply chain pressures, at least for the next few months. “We will also see increased pressure on input costs, which is a guarantee of supply chain pressures that will include raw materials, labor and freight on source for electrical components,” did he declare.

In November, Schneider Electric announced its intention to build and equip three new manufacturing plants in North America, in order to increase its production capacity for electrical products.

The company also announced last year a partnership with IT distributors in the UK, Netherlands, Germany and Austria to provide a managed power-as-a-service solution for customers, including power supplies without Schneider cut. ®

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