Schneider beats profit expectations as data center demand offsets weak dollar

Feb 26 (Reuters) – French industrial group Schneider Electric on Thursday reported stronger-than-expected core earnings, driven by robust data centre demand, supporting its 2026 outlook despite pressure from a weakening dollar.

The group reported triple-digit year-on-year growth within its pure data centre segment. Quarterly revenues grew organically by 10.7% to 11.10 billion euros ($13.12 billion). Full-year adjusted earnings before interest, taxes and amortisation (EBITA) totaled 7.52 billion euros.

Analysts polled by the company expected on average fourth-quarter revenue of 10.90 billions and full-year adjusted EBITA of 7.48 billions.

While the United States is driving data centres growth, demand in also picking up in Northern European countries and France, the company’s CFO Hilary Maxson told media.

“We start to see some unlock of data centers in Europe in places where they’ve put together permitting, electrical connection, with the governments pushing,” Maxson said.

Schneider, once known primarily for industrial components like fuses and circuit breakers, now builds the backbone of data centers, supplying everything from cooling units and server racks to critical power distribution equipment. Data centers and networks account for about 30% of its total orders.

It is the latest company to provide bullish expectations for AI demand this year, after upbeat comments by chipmaker Nvidia  and French electrical and digital building infrastructure group Legrand.

Schneider said it expects organic revenue growth between 7% and 10% and its adjusted EBITA margin growing between 50bps and 80 bps this year.

That is in line with long-term targets it laid out in December, which guided for average annual organic revenue growth of 7% to 10% and organic adjusted EBITA margin growth of around 250 basis points cumulatively between 2026 and 2030.

The group, which makes over a third of its revenues in North America, said it expected a foreign exchange impact of between 850 and 950 million euros on its 2026 revenues, after currency fluctuations reduced its fourth-quarter revenues by 701 million euros due to a weakening dollar, Indian Rupee and Chinese Yuan.

The company sees an impact from import tariffs, including in the U.S., of “a little bit less than double” the incremental 160 million euros reported for 2025, Maxson said.

Maxson will leave the company on April 5 and be replaced by investor relations head Nathan Fast, Schneider said.