Schneider Electric says results hit by strong euro
French electrical equipment group Schneider Electric warned on Friday that sales growth for 2013 would be lower than expected, blaming an over-valued euro and problems in its home-market Europe.
"It's painfully evident that the eurozone is the only major economic zone that doesn't use its currency as a economic weapon and a weapon of competivity," Finance Director Emmanuel Babeau told AFP.
The Paris-based company, a world leader in electrical engineering, said organic growth in sales for this year would be stable to limited, instead of an earlier forecasts of moderate growth.
The operating profit margin for 2013 would be slightly higher than last year's 14.7 percent, the company said, but this was only after factoring out the effects of the strong euro.
The electrical gear company said it had suffered acutely from the sharp depreciation in emerging market currencies against the euro over the summer which impacted revenue by 352 million euros in the third quarter.
For the year, this figure could rise to between 800 million and 900 million euros ($1.1-1.24 billion), Babeau said.
Babeau said that currencies had depreciated by 10 to 20 percent gainst the euro over the summer in markets where the company can make as much a billion euros in sales.
"We find ourselves overvalued in relation to many currencies, including the dollar, that's very clear," he said.
The criticsm came as Schneider Electric reported a 3.2-percent fall in third-quarter sales to 5.9 billion euros, far below an analyst estimate for 2 percent growth.
Schneider Electric said that currency exchange effects alone reduced sales by 5.8 percentage points.
On a slightly falling Paris stock exchange, shares in Schneider were down by 3.59 percent to 61.03 euros.
© 2013 AFP