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Schneider Electric ups 2020 revenue forecast as third quarter returns to growth

(Reuters) - French electrical equipment group Schneider Electric SE SCHN.PA raised its 2020 revenue and margin forecasts on Thursday, citing a better-than-expected third quarter helped by pent-up demand and distributors restocking.

The logo of Scheider Electrics is pictured at the company's headquarters in Rueil-Malmaison near Paris, France, April 22, 2020. REUTERS/Charles Platiau/Files

Schneider, whose products range from electrical car chargers to industrial robotics, now expects revenue to fall 5%-7% this year, compared with a slide of 7%-10% it forecast in July, lifting it above a company-provided analysts’ consensus forecast.

The company also upgraded its full-year core profit margin target to 15.1%-15.4% from 14.5%-15.0% previously, and confirmed its aim to increase this to around 17% by 2022.

Schneider’s quarterly revenue has risen for the first time this year, compared with 2019, helped by its energy management division - which serves buildings, data centres and infrastructure, and posted growth across all its regions.

In a call with Reuters, finance chief Hilary Maxson also pointed to an acceleration in its residential business, which covers areas such as home security and automation, probably driven by work-from-home and consumer spending trends.

She also noted activities restarting in industrial and commercial buildings.

Schneider’s third-quarter revenue stood at 6.46 billion euros ($7.65 billion), up 1.3% year-on-year and beating a company-provided consensus of 6.03 billion.

“The crisis has reinforced our customer’s agenda for sustainability and digitisation, both areas where Schneider has focused its strategy,” Chief Executive Officer Jean-Pascal Tricoire said in a statement.

Maxson noted a big uptick in Schneider’s digital services, which are mostly oriented around efficiency, as well as a big opportunity in infrastructure to support a massive electrification of vehicles.

While the company flagged uncertainty for the coming quarter as COVID-19 cases resurge, Schneider believes the second quarter represented the trough in its sales.

Reporting by Sarah Morland in Gdansk; editing by Uttaresh.V and Mark Potter