Schneider Electric announced on Thursday a share buyback program of up to EUR3.5 billion by 2030, marking its first such initiative in several years, while unveiling its medium-term financial targets during an investor day.

In a statement, the electrical equipment manufacturer said it is aiming for organic revenue growth between 7% and 10% CAGR over the 2025-2030 period, along with a cumulative organic increase of 250 basis points in adjusted EBITA margin for 2026-2030.

Previously, the company had targeted a 50 basis point increase between 2023 and 2027.

The company has raised its ROCE ambition to 15-20%, while free cash flow conversion is expected to be around 100% over 2026-2030.

In a note, JP Morgan analysts said that maintaining the organic growth target is positive, dispelling concerns about a potential downgrade.

As of 10:41 GMT, the stock was up 3.32%, leading the CAC 40.

The group, which specializes in energy management among other areas, also plans to buy back EUR2.5 to EUR3.5 billion of its own shares by 2030, alongside a divestment program of EUR1.0 to EUR1.5 billion in revenue by the same deadline.

The most recent share buyback program was completed in the third quarter of 2023, according to a spokesperson.

DRIVEN BY THE RISE OF AI

The group has recently established itself as one of the leading suppliers to data centers, particularly in North America.

Last month, Schneider Electric announced the signing of two supply agreements with Switch and Digital Realty worth $2.27 billion (EUR1.94 billion) to meet demand in AI and data centers in the United States.

"We are seeing very strong demand (for data centers) outside North America," said Schneider CEO Olivier Blum during a press conference on Thursday, citing China, India, the Middle East, and Europe as regions where governments are investing in AI.

However, the group has repeatedly reported delays in data center projects in Europe, mainly due to electricity supply issues.

"It is too early to say that these obstacles are completely disappearing," CFO Hillary Maxson told the press.

(Written by Coralie Lamarque, with Gianluca Lo Nostro and Léo Marchandon; edited by Augustin Turpin)

By Coralie Lamarque