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Feb 15 (Reuters) - French electrical equipment producer Schneider Electric on Thursday posted a 90 basis points organic increase in its 2017 adjusted core profit (EBITA) margin, beating its own target, driven by improving prices and cost management.
It reported “record” adjusted earnings before interest, taxes and amortization (EBITA) of 3.65 billion euros ($4.55 billion), giving an adjusted core profit margin of 14.8 percent and offsetting stronger-than-expected negative currency effects.
“The continued execution of our strategy delivers a strong +90bps organic adjusted EBITA margin improvement, confirming the continuous and structural improvement of our operating margin over the past 10 quarters,” said the chairman and chief executive of the company, Jean-Pascal Tricoire.
Tricoire added that “2017 is the year of a combined highest ever adjusted EBITA, net income and free cash flow”.
As it had seen good momentum in its results making up for the growing strength of euro, Schneider Electric hiked its guidance twice last year to finally target an organic adjusted EBITA margin improvement of 50-70 basis points.
The company ended 2017 with 24.74 billion euros in revenues, an organic increase of 3.2 percent.
The results were roughly in line with a poll conducted by Reuters which saw full-year adjusted EBITA of 3.66 billion euros on sales of 24.75 billion euros.
However, the firm which generates roughly three quarters of its revenue outside the euro zone said the negative impact of foreign exchange fluctuations was established at 341 million euros in the fourth quarter. The company had guided for 300 million euros negative impact on full-year revenues in October.
It expects this trend to continue, with a negative impact of about 1.0-1.1 billion euros on 2018 revenues and about 20 basis points on adjusted EBITA margin.
Equally, for its current fiscal year, the developer of the Triconex system, a recent target of a hackers attack, expects its organic top-line growth between 3-5 percent and the organic adjusted EBITA margin expansion towards the upper end of the 20-50 basis points range. ($1 = 0.8026 euros) (Reporting by Piotr Lipinski in Gdynia; Editing by Stephen Coates and Himani Sarkar)