Electrifying Dreams Germany Gives Schneider Electric Room to Grow

French engineering firm Schneider Electric's chief executive Jean-Pascal Tricoire said Germany was poised to become its largest market in Europe thanks to two mega trends: the energy revolution and the Internet of Things.
Mr. Tricoire, of French industry icon Schneider Electric, is taking on rival Siemens on its home turf.

 

Schneider Electric, a French company that specializes in electricity distribution and energy management, is growing fast on the home turf of its rival Siemens, and expects Germany to become its biggest market in Europe in the near future, its chief executive told Handelsblatt.

Jean-Pascal Tricoire gave Handelsblatt his first big interview in Germany to outline his plans to tap in to Germany’s energy revolution and to the rapid expansion of industrial automation in the era of smart factories, for which Germany is set to be a leading market.

He said Schneider Electric has tripled its revenue in Germany over the past decade. The country is currently its third-largest market in Europe after its home French market and Britain.

As Germany seeks to transition away from fossil fuels to renewable energy, Mr. Tricoire sees growth opportunities for the company’s energy management systems.

Last year, Schneider Electric generated €26.6 billion, or $29.2 billion, in revenue worldwide. One fourth of the company’s revenue came from Europe.

The conditions for the European economy haven’t been this good in a long time. The euro is low, that helps exports. And interest rates are very low, and the low oil price is stimulating our economy. Jean-Pascal Tricoire, Schneider Electric

Speaking to Handelsblatt in Berlin, where Schneider has set up a micro smart grid as part of an electricity innovation project, he said Schneider has 5,000 employees in Germany.

“We only started relatively late to push Germany,” he said. “But we have trebled the business here in the last 10 years. Germany is one of our biggest markets in Europe after France and Great Britain. And will soon be our biggest market.”

He declined to give a sales figure for Germany, saying Schneider’s biggest market was Asia Pacific followed by North America and Western Europe.

He said Schneider Electric was enjoying “very good” growth in Germany and was very strong in the industrial automation market.

“We offer a platform on which machines are linked to optimization software for the Internet of Things. We have a big portfolio of industrial software which for example enables the control of industrial processes or remote maintenance and control.”

Asked where he saw further business opportunities in Germany, he said the company offered a multitude of energy solutions to accompany Germany’s green energy revolution aimed at weaning Europe’s largest economy off fossil fuel by 2050. “We’re assisting customers in the transformation to more digital and more intelligent networks and with the integration of renewable energy.”

He said the slowdown in growth in China was a challenge, but that his group was well placed to profit from China’s investment in Internet technology. “China is electrifying, urbanizing, industrializing and digitizing itself,” he said. “China is the biggest Internet country and needs many data centers. We’re profiting from that.”

He added: “Maybe the growth rates will normalize. But China will remain the engine of growth for the world economy. And Schneider Electric is participating in that.”

In addition, the U.S. was showing good growth and the momentum of business in Europe was also improving, he said. “The conditions for the European economy haven’t been this good in a long time. The euro is low, that helps exports. And interest rates are very low, and the low oil price is stimulating our economy.”

He said Britain’s decision to leave the European Union could put the brakes on European growth but added that it was too soon to assess the impact.

Unlike Schneider, Siemens covers the entire electricity chain from wind turbines to power networks and energy distribution. Asked whether that gave Siemens an advantage, he said:

“Siemens has its own strategy. But I don’t think it’s the same customer who erects the wind turbine and builds a house. We are strongly focused on energy distribution and load management. Power generation is a different business. In future the key will be to save energy and to distribute it intelligently.”

He said U.S. tech firms like Google lacked experience when it came providing industrial solutions that customers really needed.

“Big Data is all very well. But customers want Small Data. They want the data that is crucial. In our company we have 5,000 pure software engineers and they work very closely with the customers to assemble the process data that are relevant to them."

 

Axel Höpner is head of the Handelsblatt office in Munich, focusing on the state of Bavaria's companies, including Allianz and Siemens. To contact the author: [email protected]