* Q3 sales rise 7.1 pct to 6.1 bln euros
* Keeps full-year margin target
* Open to acquisitions, disposals - CFO
* Timing of China rebound in 2013 uncertain - CFO
* Shares up 0.8 percent
(Adds CFO comments, detail, share price)
By James Regan and Gilles Guillaume
PARIS, Oct 25 French engineer Schneider Electric
cut its full-year sales forecast as western European
markets worsen and a rebound in China is delayed until 2013.
Finance chief Emmanuel Babeau said while a decline in sales
in China had stabilised in the third quarter, he was unable to
forecast whether a recovery there would come in the first or
second half of next year.
"We do not know when it will come. I'm certainly not
pointing to clear evidence that the recovery for China is for
the beginning of 2013," he told a conference call on Thursday.
Schneider, like other engineering and infrastructure
companies, has been hit by stagnant growth in some regions and
recession in others, with austerity-minded companies and
governments slashing capital spending.
Swiss engineer ABB for instance posted a 4 percent
drop in quarterly profit on Thursday, though it said rising
demand for energy efficiency and urbanisation underpinned
Babeau added that there was a "more pronounced slowdown"
than expected in western Europe, especially home market France.
Schneider now sees group organic sales flat to slightly
negative this year, against a previous flat-to-slightly-positive
forecast. Third-quarter sales were up 7.1 percent to 6.1 billion
euros ($7.9 billion), but were down 1.9 percent on a like for
The company, whose products help utilities distribute
electricity and which also makes automation systems for the car
and water treatment industries, stuck to its full-year adjusted
EBITA margin target of between 14 and 15 percent, however,
helped by price rises and cost control.
Shares in Schneider were 0.8 percent higher at 48.915 euros
by 0900 GMT. The stock has gained one-fifth this year.
Schneider is several months into a three-year strategic plan
to drive growth from its service business - which provides
infrastructure and IT support and accounts for more than a third
of the total business. The plan also targets emerging markets,
where it makes around two-fifths of sales.
Asia-Pacific caught up with western Europe in the third
quarter, with both regions contributing around 28 percent of
group sales. The sales trend in China was similar to the first
half of the year, declining by a mid-single-digit percentage
amount, Babeau said.
Schneider said demand in its power division suffered from
"sluggish construction and industry markets" in China, while
there was weaker demand from Chinese utilities for its
infrastructure unit. Its information technology business is
growing in China, however, Babeau said.
"We think that there are a number of elements that have
started together to make a more favourable environment for next
year (in China)," Babeau said.
He pointed to the once-a-decade leadership transition due to
take place at China's Communist Party congress next month, as
well as infrastructure plans and some early signs of improvement
in the real estate market.
Economists broadly expect that China will keep pro-growth
policies, though they will not be expanded.
Schneider's power division, which contributed 37 percent of
third-quarter sales, was also hit by a weak business environment
in France and southern Europe, as well as a slowing residential
market in Australia. The infrastructure unit was hurt by reduced
private investment in southern Europe and France.
($1 = 0.7711 euro)
(Editing by Mark John and David Holmes)