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1、HALF YEAR FINANCIAL REPORTSix-month period ended June 30,2023Condensed Consolidated Financial StatementsHalf-Year Management ReportCEO AttestationStatutory Auditors Review Report1.Consolidated statement of income(in millions of euros except for earnings per share)NoteFirst half 2023First half 2022Re
2、venue317,63316,077Cost of sales(10,151)(9,542)Gross profit7,4826,535Research and development4(551)(515)Selling,general and administrative expenses(3,757)(3,238)Adjusted EBITA*33,1742,782Other operating income and expenses515(304)Restructuring costs(41)(85)EBITA*3,1482,393Amortization and impairment
3、of purchase accounting intangibles6(196)(206)Operating income2,9522,187Interest income507Interest expense(204)(49)Finance costs,net(154)(42)Other financial income and expense7(53)(61)Net financial income/(loss)(207)(103)Profit from continuing operations before income tax2,7452,084Income tax expense8
4、(687)(565)Share of profit/(loss)of associates103933PROFIT FOR THE PERIOD2,0971,552attributable to owners of the parent2,0231,519attributable to non-controlling interests7433Basic earnings(attributable to owners of the parent)per share(in euros per share)3.612.73Diluted earnings(attributable to owner
5、s of the parent)per share(in euros per share)3.572.69*Adjusted EBITA(Earnings Before Interest,Taxes,Amortization of Purchase Accounting Intangibles):Operating profit before amortization and impairment ofpurchase accounting intangible assets,before goodwill impairment,other operating income and expen
6、ses and restructuring costs.*EBITA(Earnings Before Interest,Taxes and Amortization of Purchase Accounting Intangibles):Operating profit before amortization and impairment ofpurchase accounting intangible assets and before goodwill impairment.The accompanying notes are an integral part of the consoli
7、dated financial statements.1Other comprehensive income(in millions of euros)NoteFirst half 2023First half 2022Profit for the period2,0971,552Other comprehensive income:Translation adjustment(587)1,551Revaluation of assets and liabilities due to hyperinflation7106Cash-flow hedges(59)(1)Income tax eff
8、ect of cash flow hedges18Gains and losses recorded in equity with recycling(638)1,664Net gains/(losses)on financial assets3717Income tax effect of gains/(losses)on financial assets(8)(4)Actuarial gains/(losses)on defined benefit plans13(21)509Income tax effect of actuarial gains/(losses)on defined b
9、enefit plans54(103)Gains and losses recorded in equity with no recycling62419Other comprehensive income for the period,net of tax(576)2,083TOTAL COMPREHENSIVE INCOME FOR THE PERIOD1,5213,635attributable to owners of the parent1,4603,461attributable to non-controlling interests61174The accompanying n
10、otes are an integral part of the consolidated financial statements.22.Consolidated statement of cash flows(in millions of euros)NoteFirst half 2023First half 2022Profit for the period2,0971,552Share of(profit)/losses of associates(39)(33)Income and expenses with no effect on cash flow:Depreciation o
11、f property,plant and equipment359388Amortization of intangible assets other than goodwill352355Impairment losses on non-current assets(6)167Increase/(decrease)in provisions2048Losses/(gains)on disposals of business and assets(82)6Difference between tax paid and tax expense(116)37Other non-cash adjus
12、tments9658Net cash provided by operating activities2,6812,578Decrease/(increase)in accounts receivable(434)(480)Decrease/(increase)in inventories and work in progress(629)(455)(Decrease)/increase in accounts payable171(165)Decrease/(increase)in other current assets and liabilities(339)(589)Change in
13、 working capital requirement(1,231)(1,689)TOTAL I-CASH FLOWS FROM/(USED IN)OPERATING ACTIVITIES1,450889Purchases of property,plant and equipment(425)(318)Proceeds from disposals of property,plant and equipment834Purchases of intangible assets(213)(164)Net cash used by investment in operating assets(
14、630)(448)Acquisitions and disposals of businesses,net of cash acquired&disposed290(350)Other long-term investments(118)46Increase in long-term pension assets(37)(52)Sub-total(65)(356)TOTAL II-CASH FLOWS FROM/(USED IN)INVESTING ACTIVITIES(695)(804)Issuance of bonds2,926-Repayment of bonds(500)-Sale/(
15、purchase)of treasury shares(41)(219)Increase/(decrease)in other financial debt2,6112,171Increase/(decrease)of share capital-Transaction with non-controlling interests2(4,681)(65)Dividends paid to Schneider Electrics shareholders(1,767)(1,618)Dividends paid to non-controlling interests(39)(32)TOTAL I
16、II-CASH FLOWS FROM/(USED IN)FINANCING ACTIVITIES(1,491)237TOTAL IV-NET FOREIGN EXCHANGE DIFFERENCE(81)63TOTAL V-IMPACT OF RECLASSIFICATION OF ITEMS HELD FOR SALE(1)(105)INCREASE/(DECREASE)IN NET CASH AND CASH EQUIVALENTS:I+II+III+IV+V(818)280Net cash and cash equivalents,beginning of the period153,8
17、632,463Increase/(decrease)in cash and cash equivalents(818)280NET CASH AND CASH EQUIVALENTS,END OF THE PERIOD153,0452,743The accompanying notes are an integral part of the consolidated financial statements.33.Consolidated balance sheetAssets(in millions of euros)NoteJune 30,2023Dec.31,2022NON-CURREN
18、T ASSETS:Goodwill,net924,83025,136Intangible assets,net6,1426,373Property,plant and equipment,net3,9373,935Investments in associates and joint ventures101,2031,241Non-current financial assets111,1681,125Deferred tax assets1,6801,616TOTAL NON-CURRENT ASSETS38,96039,426CURRENT ASSETS:Inventories and w
19、ork in progress4,8554,346Trade and other operating receivables8,3247,514Other receivables and prepaid expenses2,6132,156Cash and cash equivalents153,1673,986TOTAL CURRENT ASSETS18,95918,002Assets held for sale1778940TOTAL ASSETS58,69758,368The accompanying notes are an integral part of the consolida
20、ted financial statements.4Liabilities(in millions of euros)NoteJune 30,2023Dec.31,2022EQUITY:12Share capital2,2842,284Additional paid in capital2,6602,660Retained earnings19,94919,812Translation reserve116683Equity attributable to owners of the parent25,00925,439Non-controlling interests647655TOTAL
21、EQUITY25,65626,094NON-CURRENT LIABILITIES:Pensions and other post-employment benefit obligations131,1691,186Other non-current provisions14974994Non-current financial liabilities1511,9607,330Non-current purchase commitments over non-controlling interests189194Deferred tax liabilities879885Other non-c
22、urrent liabilities784865TOTAL NON-CURRENT LIABILITIES15,95511,454CURRENT LIABILITIES:Trade and other operating payables6,7856,254Accrued taxes and payroll costs3,6693,787Current provisions141,0101,036Other current liabilities1,5321,887Current debt153,9933,133Current purchase commitments over non-con
23、trolling interests2124,554TOTAL CURRENT LIABILITIES17,00120,651Liabilities held for sale185169TOTAL EQUITY AND LIABILITIES58,69758,368The accompanying notes are an integral part of the consolidated financial statements.54.Consolidated statement of changes in equity(in millions of euros)Numberof shar
24、es(thousands)SharecapitalAdditionalpaid-incapitalRetainedearningsTrans-lationreserveEquityattributableto owners ofthe parentNon-controllinginterestsTotalDec.31,2021569,0332,2762,45619,6941424,4403,66928,109Profit for the year-3,4773,477593,536Other comprehensive income-13Comprehensiveinco
25、meforthe year-3,6156694,284654,349Capital increase2,0608204-212-212Dividends-(1,618)-(1,618)(157)(1,775)Purchase of treasury shares-(219)-(219)-(219)Share-based compensation ex-pense-AVEVA minority interest buyout-(1,881)-(1,881)(2,907)(4,788)Other-60-60(38)22Dec.31,2022571,0932,2842,660
26、19,81268325,43965526,094Profit for the period-2,023-2,023742,097Other comprehensive income-4(567)(563)(13)(576)Comprehensiveincomeforthe period-2,027(567)1,460611,521Capital increase-Dividends-(1,767)-(1,767)(39)(1,806)Purchase of treasury shares-(41)-(41)-(41)Treasurysharespurchaseagreement-(153)-(
27、153)-(153)Share-based compensation ex-pense-74-74-74Other-(3)-(3)(30)(33)June 30,2023571,0932,2842,66019,94911625,00964725,656The accompanying notes are an integral part of the consolidated financial statements.65.Notes to the consolidated financial statementsContentsNote 1Summary of accounting poli
28、cies.8Note 2Changes in the scope of consolidation.9Note 3Segment information.10Note 4Research and development.11Note 5Other operating income and expenses.11Note 6Amortization and impairment of purchase accounting intangibles.12Note 7Other financial income and expenses.12Note 8Income tax expense.12No
29、te 9Goodwill.13Note 10Investments in associates.13Note 11Non-current financial assets.13Note 12Shareholders equity.13Note 13Pensions and other post-employment benefit obligations.13Note 14Provisions for contingencies and charges.14Note 15Total current and non-current financial liabilities.15Note 16D
30、erivative instruments.16Note 17Related party transactions.17Note 18Commitments and contingent liabilities.17Note 19Subsequent events.187All amounts are expressed in millions of euros unless otherwise stated.The following notes are an integral part of the consolidated financial statements.The Schneid
31、er Electric Groups consolidated financial statements for the financial half-year ending June 30,2023,were authorized for issueby the Board of Directors on July 26,2023.NOTE 1Summary of accounting policies1.1-Accounting standards and basis of preparationThe consolidated financial statements for the s
32、ix months ended June 30,2023 have been prepared in accordance with IAS 34-Interim Fi-nancial Reporting.As condensed financial statements,they do not include all the disclosures required by International Financial Report-ing Standards(IFRS)and should be read in conjunction with the December 31,2022 a
33、nnual consolidated financial statements includedin the Universal Registration Document filed with the Autorit des Marchs Financiers(AMF)under no.D.22-0171.The accounting principles used for the preparation of the condensed interim consolidated financial statements are identical to thoseused for the
34、preparation of the consolidated financial statements for the fiscal year ended December 31,2022,except for the applicationof standards,interpretations and amendments being mandatory as of January 1,2023.Standards,interpretations and amendments endorsed by the European Union whose application is mand
35、atoryas of January 1,2023Standards and interpretations applicable during the period without material impact on the consolidated financial statements as ofJune 30,2023amendments to IAS 12-Income Taxes:Deferred Tax related to Assets and Liabilities arising from a Single Transaction;amendments to IAS 1
36、-Presentation of Financial Statements.IFRS Practice Statement 2:Disclosure of Accounting policies;amendments to IAS 8-Accounting Policies,Changes in Accounting Estimates and Errors:Definition of Accounting Estimates;IFRS 17 and amendments-Insurance Contracts.Standards,interpretations and amendments
37、unendorsed by the European Union as of June 30,2023 or whoseapplication is not mandatory as of January 1,2023amendments to IAS 7-Statement of Cash Flows and IFRS 7-Financial Instruments:Disclosures on Supplier Finance Arrangements;amendments to IAS 12-Income taxes:International Tax Reform Pillar Two
38、 Model Rules;amendments to IAS 1-Presentation of Financial Statements:Classification of Liabilities as Current or Non-current;Deferral ofEffective Date;Non-current Liabilities with Covenants;amendments to IFRS 16-Leases:Lease Liability in a Sale and Leaseback.The Group is currently assessing the pot
39、ential effect on the Groups consolidated financial statements of the standards not yet applicableas of June 30,2023.At this stage of analysis,the Group does not expect any material impact on its consolidated financial statements.Use of judgments and estimatesThe preparation of financial statements r
40、equires the Group management and subsidiaries to make estimates and assumptions that arereflected in the amounts of assets and liabilities reported in the consolidated balance sheet,revenues and expenses in the statement ofincome and commitments created during the reporting period.Actual results may
41、 differ.The judgments and estimates exercised by the Group or subsidiary Management are identical to those described in the consolidatedfinancial statements for the fiscal year ended December 31,2022.Basisofpreparationandmeasurementofthefirsthalf-yearinformationaccordancewithIAS34-InterimFinan-cial
42、ReportingThe segment information corresponds to the information required by IAS 34-Interim Financial ReportingThe Groups activities may be affected by significant changes in the economic situation.Therefore,its interim results are not necessarilyindicative of those to be expected for the fiscal year
43、 as a whole.The income tax expense for the period is calculated by applying the estimated effective income tax rate for the fiscal year,based on theinformation available as of the interim reporting date,to the different categories of profit.Application of IAS 29-Financial Reporting in Hyperinflation
44、ary EconomiesIAS 29 requires the non-monetary assets and liabilities and income statements of countries with hyperinflationary economies to be re-stated to reflect the changes in the general purchasing power of their functional currency,thereby generating a profit or loss on the netmonetary position
45、 which is recognized in net income within“Other financial income and expenses”.In addition,the financial statementsof the subsidiaries in these countries are translated at the closing exchange rate of the reporting period concerned,in accordance with IAS21.The Group has applied IAS 29 to Argentina i
46、n its financial statements from January 1,2018 and to Trkiye from January 1,2022.1.2-Main events of the periodApplication of IFRS 5-Non-current assets held for sale and discontinued operationsIndustrial sensors businessOn October 27,2022,the Group announced the signing of a binding agreement with YA
47、GEO to divest its industrial sensors business,Telemecanique Sensors,which had revenue of around EUR 321 million in 2022 and is reported within Industrial Automation reporting8segment.The all-cash transaction values Telemecanique Sensors at EUR 723 million(Enterprise Value).The Group will grant YAGEO
48、 alicense to use the Telemecanique Sensors trademark.The completion of the proposed transaction is expected to occur in the second semester,subject to the receipt of required regulatoryapprovals and employee information consultation process.In accordance with IFRS 5-Non-current Assets Held for Sale
49、and DiscontinuedOperations,the assets and liabilities have been classified as“Assets held for sale”and“Liabilities held for sale”,for EUR 669 million andEUR 41 million respectively.The assets are mainly intangible assets(including goodwill)for EUR 486 million.GutorOn December 23,2022,the Group enter
50、ed into an agreement with Latour Capital,a French private equity investor,for the sale of GutorElectronicsoperations.Gutor is a global leader in the manufacturing of industrial uninterruptible power supply(UPS)systems and theprovision of related services.Gutor sales in 2022 were approximately EUR 14
51、6 million,reported under Energy Management.Subject to the satisfaction of certain conditions,including customary regulatory approvals,the transaction is expected to close in thecoming months.In accordance with IFRS 5-Non-current Assets Held for Sale and Discontinued Operations,the assets and liabili
52、ties havebeen classified as“Assets held for sale”and“Liabilities held for sale”,for EUR 112 million and EUR 45 million respectively.The assets aremainly working capital items for EUR 68 million and intangible assets(including goodwill)for EUR 35 million.NOTE 2Changes in the scope of consolidation2.1
53、-Scope variationsMain acquisitions of the periodTransaction with AVEVAs non-controlling interestsOn September 21,2022,the Group confirmed its firm intention to acquire the share capital of AVEVA that it did not already own.On November 11,2022,the Board of Schneider Electric and the AVEVA Independent
54、 Committee announced that they reached an agree-ment on the terms of a cash offer of 3,225 pence per AVEVA share.Such acquisition is to be effected by means of a Court approved schemeof arrangement(the Scheme),under Part 26 of the Companies Act 2006.On November 25,2022,the requisite majority of AVEV
55、As shareholders approved the Scheme,and passed the Special Resolution to im-plement the Scheme during respectively the Court Meeting and the General Meeting.This led to the immediate recognition of a currentfinancial liability in the Groups financial statements of GBP 4,039 million(EUR 4,554 million
56、)as of December 31,2022).The recognitionof this liability triggered an immediate reduction in non-controlling interests and in the group share of equity.OnJanuary18,2023,followingthe deliveranceoftheUKCourtOrdertotheRegistrarofCompanies,theScheme(acquisitionbytheGroupof the outstanding AVEVA shares
57、not already owned)became effective.AVEVA shares were unlisted from the London Stock Exchange onJanuary 19,2023.The financial liability was settled in cash on January 31,2023 for GBP 4,055 million(EUR 4,610 million at the foreign exchange closing rateincurred on January 31,2023)including stamp duties
58、.The Groups transaction cash out,including EUR 71 million legal fees paid,waspresented under the financing section of the cash flow statement and amounted to EUR 4,681 million.In the context of this transaction,the Group also incurred,through hedging schemes,a negative impact on cash for EUR 106 mil
59、lion.Main divestments of the periodTransformer plants in Poland and TrkiyeOn January 6,2023,the Group closed the transaction for the disposal of its Transformer plants in Poland and Trkiye to Cahors Group,aninternational company specializing in energy distribution,headquartered in France.The busines
60、ses have around 800 employees and arereported within the Energy management reporting segment up until disposal effective date.As of December 31,2022 net assets were already measured at fair value less costs to sell,leading to no impact from the disvestment in theconsolidated statement of income of t
61、he period.VinZeroOn May 31,2023,the Group closed the transaction for the disposal of RIB Softwares VinZero business to a European corporate.VinZero isanITinfrastructuresolutionsgroupandsoftwarepartnerforarchitecture,engineering,construction,owner-operator,andmanufacturingorganizations providing valu
62、e-add services and consulting.The business is reported within the Energy management reporting segmentup until disposal effective date.The gain on disposal was recorded under“Other operating income and expenses”.Follow-up on acquisitions and divestments transacted in 2022 with effect in 2023EV Connec
63、t Inc.On June 21,2022,the Group completed the purchase of a 95.52%controlling stake in EV Connect Inc.and now reports within EnergyManagement reporting segment.The Group holds an agreement to acquire the remaining 4.48%of non-controlling interests in 2027.Therelated debt has been recognized in“Non-c
64、urrent purchase commitments over non-controlling interests”.The purchase accounting as per IFRS 3R is completed as of June 30,2023.The net adjustment of the opening balance sheet,resultingmainly from the booking of identifiable intangible assets(technology,customer relationship and trademark),led to
65、 the recognition of aEUR 255 million goodwill at acquisition date.AutogridOn July 20,2022,the Group completed the acquisition of Autogrid,raising its stake from 24.2%to 91.8%controlling stake and now reportswithin Energy Management reporting segment.The Group holds an agreement to acquire the remain
66、ing 8.2%of non-controlling interestsin 2026.The related debt has been recognized in“Non-current purchase commitments over non-controlling interests”.The purchase accounting as per IFRS 3R is not completed as of June 30,2023.The net adjustment of the opening balance sheet,resultingmainly from the boo
67、king of a preliminary amount of identifiable intangible assets(technology,customer relationship and trademark),ledto the recognition of a EUR 184 million preliminary goodwill at acquisition date.92.2-Impact of changes in the scope of consolidation on the Group cash flowChanges in the scope of consol
68、idation at June 30,2023,decreased the Groups cash position by a net EUR 4,591 million outflow,as de-scribed below:(in millions of euros)First half 2023First half 2022Acquisitions(58)(379)Disposals14829FINANCIAL INVESTMENTS NET OF DISPOSALS90(350)AVEVA(4,681)-Others-(65)TRANSACTION WITH NON-CONTROLLI
69、NG INTERESTS(4,681)(65)TOTAL CASH FLOW IMPACT(4,591)(415)In 2023,the cash outflow is mainly due to EUR 4,681 million related to the acquisition of AVEVAs non-controlling interests(Note 2.1)andother individually not significant acquisitions.NOTE 3Segment informationThe Group is structured into two re
70、porting segments and organized as follow:EnergyManagement leverages a complete end-to-end technology offering enabled by EcoStruxure.The Groups go-to-market is orientedto address customer needs across its four end-markets of Buildings,Data Centers,Industry and Infrastructure,supported by a worldwide
71、partner network.Industrial Automation includes Industrial Automation and Industrial Control activities,across discrete,process&hybrid industries.Expenses concerning General Management that cannot be allocated to a particular segment are presented under“Central functions&digital costs”.Operating and
72、reporting segment data is identical to that presented to the Chief Executive Officer,which has been identified as the maindecision-making body for allocating resources and evaluating segment performance.Performance and decisions on the allocation ofresources are assessed by the Chief Executive Offic
73、er and are mainly based on Adjusted EBITA.Share-based payment is presented under“Central functions&digital costs”.The Chief Executive Officer does not review assets and liabilities by business.The same accounting principles governing the consolidated financial statements apply to segment data.Detail
74、s are provided in the Half-Year Management Report.Due to the substantial number of customers served by the Group,to their significant diversity in multiple sectors and to their wide geo-graphical dispersion,the Groups largest customer does not exceed 10%of Schneider Electrics revenue.3.1-Information
75、 by reporting segmentFirst half 2023(in millions of euros)EnergyManagementIndustrialAutomationCentral functions&digital costsTotalRevenue13,6693,964-17,633Adjusted EBITA2,824758(408)3,174Adjusted EBITA(%)20.7%19.1%18.0%First half 2022(in millions of euros)EnergyManagementIndustrialAutomationCentral
76、functions&digital costsTotalRevenue12,3073,770-16,077Adjusted EBITA2,506685(409)2,782Adjusted EBITA(%)20.4%18.2%17.3%3.2-Information by regionThe geographic regions covered by the Group are:Western Europe,North America(including Mexico),Asia-Pacific,Rest of the World(Eastern Europe,Middle East,Afric
77、a,South America).10Non-current assets include net goodwill,net intangible assets and net property,plant and equipment.First half 2023(in millions of euros)WesternEuropeAsia-PacificNorthAmericaRest of theWorldTotalRevenue by country market4,4695,0365,9422,18617,633Non-current assets as of June 30,202
78、312,2545,56615,8111,27834,909First half 2022(in millions of euros)WesternEuropeAsia-PacificNorthAmericaRest of theWorldTotalRevenue by country market4,0464,9114,9332,18716,077Non-current assets as of June 30,202212,7756,07716,5741,37736,803Moreover,the Group follows the share of new economies in rev
79、enue:(in millions of euros)First half 2023First half 2022Revenue-Mature countries10,75361%9,42359%Revenue-New economies6,88039%6,65441%TOTAL17,633100%16,077100%NOTE 4Research and developmentResearch and development expenditures are as follows:(in millions of euros)First half 2023First half 2022Resea
80、rch and development expenditures in costs of sales(244)(211)Research and development expenditures in R&D costs*(551)(515)Capitalized development costs(202)(157)TOTAL RESEARCH AND DEVELOPMENT EXPENDITURES*(997)(883)*Including EUR24million of research and development tax credit in first half 2023 and
81、EUR20million in first half 2022*Excluding amortization of R&D costs capitalizedIn addition to the research and development expenditures,amortization expenses of capitalized development booked in cost of sales,amounted to EUR 117 million in the first half of 2023 and EUR 119 million in the first half
82、 of 2022.NOTE 5Other operating income and expensesOther operating income and expenses are as follows:(in millions of euros)First half 2023First half 2022Gains/(losses)on assets disposals(2)3Gains/(losses)on business disposals82(230)Impairment of assets-(1)Costs of acquisitions and integrations(59)(6
83、4)Other(6)(12)OTHER OPERATING INCOME AND EXPENSES15(304)In 2023 the gains on business disposals mainly relate to VinZero disposal,described in Note 2.In 2022,the losses on business disposals and asset impairment were mainly made of EUR 173 million impairment of assets held for saleas well as working
84、 capital impairments(mainly inventories and receivables)from the Groups exposure to Russia.11NOTE 6Amortizationandimpairmentofpurchaseaccountingintangibles(in millions of euros)First half 2023First half 2022Amortization of purchase accounting intangible assets(196)(206)Impairment losses of purchase
85、accounting intangible assets-AMORTIZATION AND IMPAIRMENT OF PURCHASE ACCOUNTING INTANGIBLES(196)(206)NOTE 7Other financial income and expenses(in millions of euros)First half 2023First half 2022Exchange gains and losses,net(19)3Net monetary gain/(loss)(IAS 29 Hyperinflation)22(13)Financial component
86、 of defined benefit plan costs(27)(18)Dividends received11Fair value adjustment of financial assets77Financial interests-IFRS16(15)(18)Effect of discounting&undiscounting(6)-Other financial expenses,net(16)(23)OTHER FINANCIAL INCOME AND EXPENSES(53)(61)NOTE 8Income tax expenseWherever the regulatory
87、 environment allows it,the Group entities file consolidated tax returns.Schneider Electric SE files a consolidatedtax return with its French subsidiaries held directly or indirectly through Schneider Electric Industries SAS.8.1-Analysis of income tax expense(in millions of euros)First half 2023First
88、 half 2022Current taxes(723)(611)Deferred taxes3646INCOME TAX EXPENSE(687)(565)8.2-Tax reconciliation(in millions of euros)First half 2023First half 2022Profit attributable to owners of the parent2,0231,519Income tax expense(687)(565)Non-controlling interests(74)(33)Share of profit of associates3933
89、Profit before tax2,7452,084Geographical weighted average Group tax rate22.6%23.2%Theoretical income tax expense(620)(482)Reconciling items:Tax credits and other tax reductions7251Impact of tax losses(5)1Withholding taxes(45)(27)Other elements without tax bases(current or deferred)(30)(44)Other perma
90、nent differences(59)(64)INCOME TAX EXPENSE(687)(565)EFFECTIVE TAX RATE25.0%27.1%EFFECTIVE TAX RATE WITHOUT RUSSIA DECONSOLIDATION25.0%Theoretical tax expense from continuing operations is reconciled above from the Companys weighted-average global tax rate(ratherthan from the French domestic statutor
91、y tax rate),as the Companys consolidated income from continuing operations is predominantlygenerated outside of France.12NOTE 9GoodwillThe main changes during the period are summarized in the following table:(in millions of euros)June 30,2023Dec.31,2022Net goodwill at opening25,13624,723Acquisitions
92、36387Disposals(9)(119)Reclassifications-(536)Translation adjustment(333)681NET GOODWILL AT END OF PERIOD24,83025,136including cumulative impairment losses(366)(367)NOTE 10Investments in associatesThe variations of the period correspond mainly to the share of profit and loss of investment in associat
93、es.Main contributor is Delixi Sub-Group investment with a share of profit of EUR 36 million for the six-month period ended June 30,2023compared to EUR 39 million for the six-month period ended June 30,2022.NOTE 11Non-current financial assetsNon-current financial assets amount to EUR 1,168 million as
94、 of June 30,2023,and mainly comprise unlisted financial assets and pensionassets.NOTE 12Shareholders equitySchneider Electric SE did not issue shares during the six-month period ended June 30,2023 upon exercise of performance shares grant.Based upon the assumptions described in the notes to the 2022
95、 consolidated financial statements,the expense recorded under“Selling,general and administrative expenses”for performance shares totaled EUR 72 million in the six-month period ended June 30,2023(EUR73 million in the six-month period ended June 30,2022).An additional EUR 2 million expense was recorde
96、d under“Share of profit/(loss)of associates”.These expenses were offset under“Retained earnings”in Shareholders equity.Incompliancewithapplicableregulations,theGroupenteredintoasharebuybackagreementwithaninvestmentservicesproviders(PSI)onJune26,2023.ThisagreementinstructedthePSItoplaceordersonSchnei
97、derElectricSEsharesforaonemonthperiodstartingJune27,2023.The Group recognized a EUR 153 million“Current financial debt”against“Retained earnings”in Shareholders equity,representingthe maximum amount the PSI is allowed to buyback as of June 30,2023.NOTE 13Pensions and other post-employment benefit ob
98、ligationsChanges in provisions for pensions and other post-employment benefit obligations were as follows:(in millions of euros)Pensions andtermination benefitsOther post-employmentand long-term benefitsProvisions forpensions and other post-employment benefitsDec.31,2022662244906Net cost recognized
99、in the statement of income451459Service cost261036Curtailments and settlements(2)-(2)Past service cost(2)-(2)Interest cost1534157Interest income(130)-(130)Benefits paid(18)(11)(29)Employer contributions(37)-(37)Actuarial(gains)and losses recognized in equity23(2)21Translation adjustment(12)(4)(16)Ch
100、ange in the scope of consolidation and other-June 30,2023663241904Surplus of plans recognized as assets(265)-(265)Provisions recognized as liabilities9282411,16913Following the agreement reached with the Trustee of the Invensys Pension Scheme in the UK on February 7,2014,Schneider Electric SEguarant
101、eed all obligations of the Invensys subsidiaries which participate in the Scheme,up to a maximum amount of GBP 1.75 billion.AtJune 30,2023,plan assets exceed the value of obligations subject to this guarantee and thus it cannot be called.The pension net assets are included in other non-current finan
102、cial assets.NOTE 14Provisions for contingencies and charges(in millions of euros)EconomicrisksCustomerrisksProductsrisksEnvironmentalrisksRestructuringOtherrisksProvisionsDec.31,202220615012,030of which long-term portion8326994Additions22227Utilizations(16)(12)(91)(1
103、3)(40)(138)(310)Reversals of surplus provisions-(1)(3)-(2)(10)(16)Translation adjustments(4)(4)(21)(5)(2)(8)(44)Changesinthescopeofconsol-idation and other(2)(5)55(4)87June 30,202320644551,984of which long-term portion12299974Provisions are primarily set aside to cover:economic
104、risks:these provisions relate to probable tax risks,other than income tax related,arising on positions taken by the Groupor its subsidiaries.Each position is assessed individually and not offset,and reflects the best estimate of the risk at the end of thereporting period.Where applicable,it includes
105、 any late-payment interest and fines.In accordance with IFRIC 23-Uncertainty overincome tax treatments,provisions covering uncertainties over income tax treatment are presented under“Accrued taxes and payrollcosts”since 1st of January 2019;customer risks:provisions for customer risks mainly integrat
106、e the provisions for losses at completion for some of long-term con-tracts.Provisions for expected losses are fully recognized as soon as they are identified;product risks:these provisions comprise statistical provisions for warranties:the Group funds provisions on a statistical basis for the residu
107、al cost of Schneider Electricproduct warranties not covered by insurance.The provisions are estimated with consideration of historical claim statisticsand the warranty period;provisions to cover disputes concerning defective products and recalls of clearly identified products.environmentalrisks:thes
108、e provisions are primarily funded to cover clean-up costs.The estimation of the expected future outflowsis based on reports from independent experts;restructuring costs,when the Group has prepared a detailed plan for the restructuring and has either announced or started toimplement the plan before t
109、he end of the year.The estimation of the liability includes only direct expenditure arising from therestructuring.14NOTE 15Total current and non-current financial liabilitiesNet debt breaks down as follows:(in millions of euros)June 30,2023Dec.31,2022Bonds11,0558,627Other bank borrowings1,76742Short
110、-term portion of bonds(800)(1,299)Short-term portion of long-term debt(62)(40)NON-CURRENT FINANCIAL LIABILITIES11,9607,330Commercial paper2,3731,491Accrued interest8939Other short-term borrowings547141Bank overdrafts122123Short-term portion of convertible and non-convertible bonds8001,299Short-term
111、portion of long-term debt6240SHORT-TERM DEBT3,9933,133TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES15,95310,463CASH AND CASH EQUIVALENTS(3,167)(3,986)NET FINANCIAL DEBT excl.purchase commitments over non-controlling interests12,7866,477Non-current purchase commitments over non-controlling inte
112、rests189194Current purchase commitments over non-controlling interests124,554NET FINANCIAL DEBT incl.purchase commitments over non-controlling interests12,98711,225Cash and cash equivalents net of bank overdrafts totaled EUR 3,045 million,corresponding to the amount reported in the consolidatedcash
113、flow statement.There is no non-recourse factoring of trade receivables realized during the six-month period ended June 30,2023,compared with EUR 50million during the six-month period ended June 30,2022.Marketable securities generally consist of highly liquid instruments traded on regulated markets t
114、hat are readily convertible into knownamounts of cash,such as commercial paper,mutual funds,and equivalents.All the financial instruments are usually valued at fair value,except the long-term debt which amounts to EUR 11,960 million as at June30,2023.Loan agreements related to the Groups long-term d
115、ebt do not include any rating triggers.15NOTE 16Derivative instrumentsJune 30,2023(in millions of euros)AccountingqualificationMaturityNominalsalesNominalpurchasesFair ValueCarryingamountin assetsCarryingamountin liabilitiesOf whichcarryingamountsin OCIForwards contractsCFH 1 year542(353)-14(14)-For
116、wards contractsCFH 2 years6(11)-Forwards contractsFVH 1 year1,115(254)(8)32(40)(3)Forwards contractsFVH 2 years557-33-(2)Forwards contractsNIH 1 year666-99-9Forwards contractsTrading 1 year150(2,196)18(7)2Cross currency swapsCFH 1 year97(20)(5)-(5)(5)Cross currency swapsNIH 1 year506-TOTALFOREIGNEX-
117、CHANGE DERIVATIVES3,664(2,859)-67(67)2Forwards contractsCFH 2 years1,050(1,050)44-Interest Rate Derivatives1,050(1,050)44-OptionsCFH 1 year-Shares derivatives-TOTAL4,714(3,496)(9)71(80)(11)Dec.31,2022(in millions of euros)AccountingqualificationMaturityNominalsalesNominalpurchasesFair ValueCarryinga
118、mountin assetsCarryingamountin liabilitiesCarryingamountsin OCIForwards contractsCFH 1 year579(316)-14(14)-Forwards contractsCFH 2 years12(19)-1(1)-Forwards contractsFVH 1 year1,762(5,493)(118)37(155)(3)Forwards contractsNIH 1 year420-22-2Forwards contractsTrading 1 year221(1,811)16(5)-Cross currenc
119、y swapsCFH 1 year75(46)-1(1)4Cross currency swapsNIH 1 year797-(87)-(87)(85)TOTALFOREIGNEX-CHANGE DERIVATIVES3,897(7,704)(202)62(264)(82)Forwards contractsCFH 2 years250(250)(3)-(3)-Interest Rate Derivatives250(250)(3)-(3)-OptionsCFH 1 year-Shares derivatives-TOTAL4,147(8,373)(194)73(267)(71)16.1-Fo
120、reign currencySince a significant proportion of affiliates transactions are denominated in currencies other than the affiliates functional currency,theGroup is exposed to currency risks.If the Group is not able to hedge these risks,fluctuations in exchange rates between the functionalcurrency and ot
121、her currencies can have a significant impact on its results and distort year-on-year performance comparisons.As a result,the Group uses derivative instruments to hedge its exposure to exchange rates mainly through FX forwards and natural hedges.Further-more,some long-term loans and borrowings grante
122、d to the affiliates are considered as net investment in foreign operations according toIAS 21.16Schneider Electrics currency hedging policy is to protect its subsidiaries against risks on transactions denominated in a currency otherthan their functional currency.16.2-Interest rateInterest rate risk
123、on borrowings is managed at the Group level,based on consolidated debt and taking into consideration market condi-tions to optimize overall borrowing costs.The Group uses derivative instruments to hedge its exposure to interest rates through swaps orcross-currency swaps.Cross-currency swaps may be p
124、resented both as foreign exchange hedges and interest rate hedges depending onthe characteristics of the derivative.During the first half of 2023,the Group has set up EUR 800 million interest rate swaps to hedge its exposure.16.3-Commodity hedgesThe Group is exposed to fluctuations in energy and raw
125、 material prices,in particular steel,copper,aluminum,silver,lead,nickel,zinc andplastics.If the Group is not able to hedge,compensate for or pass on to customers any such increased costs,this could have an adverseimpact on its results.The Group has,however,implemented certain procedures to limit exp
126、osure to rising non-ferrous and preciousraw material prices.The Purchasing departments of the operating units report their purchasing forecasts to the Corporate Finance andTreasury department.Purchase commitments are hedged using forward contracts,swaps and,to a lesser extent,options.16.4-Counterpar
127、ty riskFinancial transactions are entered with carefully selected counterparties.Banking counterparties are chosen according to the customarycriteria,including the credit rating issued by an independent rating agency.Grouppolicyconsistsofdiversifyingcounterpartyrisksandperiodiccontrolsareperformedto
128、checkcompliancewiththerelatedrules.Inaddition,the Group takes out substantial credit insurance and uses other types of guarantees to limit the risk of losses on trade accountsreceivable.16.5-Liquidity riskAsofJune30,2023,theGrouphadconfirmedcreditlinesofEUR2,950million,allunusedwithEUR2,850millionma
129、turingafterDecember2023.Among them,EUR 2,700 million are sustainable-linked credit line with margin indexed on the annual performance of the SchneiderSustainability Impact(SSI).With EUR 3 billion available committed facility and EUR 3 billion cash&cash equivalent,the liquidity of the Group amounts t
130、o EUR 6billion end of the period.In the next 12 months,the total short term and bond maturity amounts to EUR 4 billion.Loan Agreement and committed credit lines do not include any financial covenants or credit rating triggers in case of rating downgrade.NOTE 17Related party transactions17.1-Associat
131、esTheseareprimarilycompaniesoverwhichtheGrouphassignificantinfluence.Theyareaccountedundertheequitymethod.Transactionswith these related parties are carried out on arms length terms and were not material during the period.17.2-Related parties with key management personnelNo transactions were carried
132、 out during the period with Board members.NOTE 18Commitments and contingent liabilitiesGuarantees given and receivedGuarantees given and received amounted to EUR 4,233 million and EUR 78 million,respectively,as of June 30,2023.Contingent liabilitiesAs previously disclosed,investigations were conduct
133、ed in September 2018 by the French judicial authority and French Competition Au-thority(“Autorit de la concurrence”)at Schneider Electrics head office and other premises concerning the sale of electrical productsthrough commercial distribution activities in France.On July 4,2022,Schneider Electric r
134、eceived a statement of objections(notification de griefs)from the French Competition Authorityalleging that the pricing autonomy of some distributors in the French market would have been limited,in breach of competition rules.Schneider Electric strongly disagrees with the allegations of the statemen
135、t of objections and has submitted its response to the FrenchCompetition Authority on October 4,2022.Concurrently on October 7,2022 Schneider Electric was indicted by an investigating judge who required Schneider Electric to provide abank guarantee of 20 million and a cash guarantee of 80 million.As
136、at December 31,2022,this cash guarantee was recognized as“Othercurrent liabilities”against“Non-current financial assets”.The liability was settled as the cash guarantee was paid mid-January 2023.Those actions do not mean that Schneider Electric will ultimately be found guilty of any wrongdoing.Schne
137、ider Electric firmly disagreeswith all the allegations made by the French investigating judge and the French Competition Authority and intends to vigorously and fullydefend itself.Should the French Competition Authority deny Schneider Electrics arguments and conclude,after examining the substanceoft
138、hematter,thatanti-competitivepracticeshavebeeninvolved,ithasbroaddiscretiontodetermineonacase-by-casebasisthefinancialfines it may impose in accordance with the principles of proportionality and individuality.In light of the difficulty in assessing the extentto which the French Competition Authority
139、 takes into account the arguments of Schneider Electric in its defense as well as the multiple17factors contributing to the determination of a fine,it is not possible to reliably estimate the amount of any potential fine that might beincurred in the event of an adverse decision,even though it might
140、have a significant impact on the Group.In this context,no provisionhas been made at this stage of the investigation.Schneider Electric has other contingent liabilities relating to legal,arbitration or regulatory proceedings arising in the normal courseof its business.Known or ongoing claims and liti
141、gation involving the Group or its subsidiaries were reviewed at the date on which theconsolidated financial statements were authorized for issue.Based on the advice of legal counsel,all provisions deemed necessary havebeen made to cover the related risks.NOTE 19Subsequent eventsIssuance of shares to
142、 employeesEvery year,Schneider Electric gives its employees the opportunity to become group shareholders thanks to employee share issues.Em-ployees in countries that meet legal and fiscal requirements have been proposed the plan.Under the plan,employees may purchase Schneider Electric shares at a 15
143、%discount to the price quoted for the shares on the stock mar-ket.Employees must then hold their shares for five years,except in certain cases provided for by law.As of June 30,2023,the share-basedpayment expense recorded under“Selling,general and administrative expenses”,in accordance with IFRS 2,i
144、s measured by reference tothe fair value of the discount and amounted to EUR 41 million.On April 20,2023,Schneider Electric gave its employees the opportunity to purchase shares at a price of EUR 126.20 per share,as partof its commitment to employee share ownership.This represented a 15%discount to
145、the reference price of EUR 148.47 calculated as theaverage opening price quoted for the share during the 20 days preceding the Board of Directors decision to launch the employee shareissue.Altogether,1.7 million shares were subscribed,increasing the Companys capital by EUR 220 million as of July 6,2
146、023.18MANAGEMENT REPORT FOR THE PERIOD ENDED JUNE 30,2023Consolidated financial statementsMain events of the periodMain acquisitions of the periodTransaction with AVEVAs non-controlling interestsOn September 21,2022,the Group confirmed its firm intention to acquire the share capital of AVEVA that it
147、 did not already own.On November 11,2022,the Board of Schneider Electric and the AVEVA Independent Committee announced that they reached an agree-ment on the terms of a cash offer of 3,225 pence per AVEVA share.Such acquisition is to be effected by means of a Court approved schemeof arrangement(the
148、Scheme),under Part 26 of the Companies Act 2006.On November 25,2022,the requisite majority of AVEVAs shareholders approved the Scheme,and passed the Special Resolution to im-plement the Scheme during respectively the Court Meeting and the General Meeting.This led to the immediate recognition of a cu
149、rrentfinancial liability in the Groups financial statements of GBP 4,039 million(EUR 4,554 million)as of December 31,2022).The recognitionof this liability triggered an immediate reduction in non-controlling interests and in the group share of equity.OnJanuary18,2023,followingthedeliveranceoftheUKCo
150、urtOrdertotheRegistrarofCompanies,theScheme(acquisitionbytheGroupof the outstanding AVEVA shares not already owned)became effective.AVEVA shares were unlisted from the London Stock Exchange onJanuary 19,2023.The financial liability was settled in cash on January 31,2023 for GBP 4,055 million(EUR 4,6
151、10 million at the foreign exchange closing rateincurred on January 31,2023)including stamp duties.The Groups transaction cash out,including EUR 71 million legal fees paid,waspresented under the financing section of the cash flow statement and amounted to EUR 4,681 million.In the context of this tran
152、saction,the Group also incurred,through hedging schemes,a negative impact on cash for EUR 106 million.Main divestments of the periodTransformer plants in Poland and TrkiyeOn January 6,2023,the Group closed the transaction for the disposal of its Transformer plants in Poland and Trkiye to Cahors Grou
153、p,aninternational company specializing in energy distribution,headquartered in France.The businesses have around 800 employees and arereported within the Energy management reporting segment up until disposal effective date.As of December 31,2022 net assets were already measured at fair value less co
154、sts to sell,leading to no impact from the disvestment in theconsolidated statement of income of the period.VinZeroOn May 31,2023,the Group closed the transaction for the disposal of RIB Softwares VinZero business to a European corporate.VinZero isanITinfrastructuresolutionsgroupandsoftwarepartnerfor
155、architecture,engineering,construction,owner-operator,andmanufacturingorganizations providing value-add services and consulting.The business is reported within the Energy management reporting segmentup until disposal effective date.The gain on disposal was recorded under“Other operating income and ex
156、penses”.Follow-up on acquisitions and divestments transacted in 2022 with effect in 2023EV Connect Inc.On June 21,2022,the Group completed the purchase of a 95.52%controlling stake in EV Connect Inc.and now reports within EnergyManagement reporting segment.The Group holds an agreement to acquire the
157、 remaining 4.48%of non-controlling interests in 2027.Therelated debt has been recognized in“Non-current purchase commitments over non-controlling interests”.The purchase accounting as per IFRS 3R is completed as of June 30,2023.The net adjustment of the opening balance sheet,resultingmainly from the
158、 booking of identifiable intangible assets(technology,customer relationship and trademark),led to the recognition of aEUR 255 million goodwill at acquisition date.AutogridOn July 20,2022,the Group completed the acquisition of Autogrid,raising its stake from 24.2%to 91.8%controlling stake and now rep
159、ortswithin Energy Management reporting segment.The Group holds an agreement to acquire the remaining 8.2%of non-controlling interestsin 2026.The related debt has been recognized in“Non-current purchase commitments over non-controlling interests”.The purchase accounting as per IFRS 3R is not complete
160、d as of June 30,2023.The net adjustment of the opening balance sheet,resultingmainly from the booking of a preliminary amount of identifiable intangible assets(technology,customer relationship and trademark),ledto the recognition of a EUR 184 million preliminary goodwill at acquisition date.Applicat
161、ion of IFRS 5-Non-current assets held for sale and discontinued operationsIndustrial sensors businessOn October 27,2022,the Group announced the signing of a binding agreement with YAGEO to divest its industrial sensors business,Telemecanique Sensors,which had revenue of around EUR 321 million in 202
162、2 and is reported within Industrial Automation reportingsegment.The all-cash transaction values Telemecanique Sensors at EUR 723 million(Enterprise Value).The Group will grant YAGEO alicense to use the Telemecanique Sensors trademark.The completion of the proposed transaction is expected to occur in
163、 the second semester,subject to the receipt of required regulatoryapprovals and employee information consultation process.In accordance with IFRS 5-Non-current Assets Held for Sale and DiscontinuedOperations,the assets and liabilities have been classified as“Assets held for sale”and“Liabilities held
164、 for sale”,for EUR 669 million andEUR 41 million respectively.The assets are mainly intangible assets(including goodwill)for EUR 486 million.19GutorOn December 23,2022,the Group entered into an agreement with Latour Capital,a French private equity investor,for the sale of GutorElectronicsoperations.
165、Gutor is a global leader in the manufacturing of industrial uninterruptible power supply(UPS)systems and theprovision of related services.Gutor sales in 2022 were approximately EUR 146 million,reported under Energy Management.Subject to the satisfaction of certain conditions,including customary regu
166、latory approvals,the transaction is expected to close in thecoming months.In accordance with IFRS 5-Non-current Assets Held for Sale and Discontinued Operations,the assets and liabilities havebeen classified as“Assets held for sale”and“Liabilities held for sale”,for EUR 112 million and EUR 45 millio
167、n respectively.The assets aremainly working capital items for EUR 68 million and intangible assets(including goodwill)for EUR 35 million.Application of IAS 29-Financial Reporting in Hyperinflationary EconomiesIAS 29 requires the non-monetary assets and liabilities and income statements of countries
168、with hyperinflationary economies to be re-stated to reflect the changes in the general purchasing power of their functional currency,thereby generating a profit or loss on the netmonetary position which is recognized in net income within“Other financial income and expenses”.In addition,the financial
169、 statementsof the subsidiaries in these countries are translated at the closing exchange rate of the reporting period concerned,in accordance with IAS21.The Group has applied IAS 29 to Argentina in its financial statements from January 1,2018 and to Trkiye from January 1,2022.Business and Statement
170、of Income highlightsExchange rate changesFluctuations in the Euro exchange rate had a negative impact on the six-month period ended June 30,2023,decreasing consolidatedrevenue by EUR 351 million due mainly to the evolution observed in Chinese Yuan,Indian Rupia and Egyptian Pound compared to theEuro
171、and a negative impact decreasing adjusted EBITA by EUR 185 million.Results of OperationsThe following table sets forth our results of operations for the six-month period ended June 30,2023 and 2022:(in millions of euros except for earnings per share)First half 2023First half 2022VarianceRevenue17,63
172、316,0779.7%Cost of sales(10,151)(9,542)6.4%Gross profit7,4826,53514.5%Gross profit42.4%40.6%4.4%Research and development(551)(515)7.0%Selling,general and administrative expenses(3,757)(3,238)16.0%EBITA adjusted*3,1742,78214.1%EBITA adjusted18.0%17.3%4.0%Other operating income and expenses15(304)(104
173、.9)%Restructuring costs(41)(85)(51.8)%EBITA*3,1482,39331.6%EBITA17.9%14.9%20.1%Amortization and impairment of purchase accounting intangibles(196)(206)(4.9)%Operating income2,9522,18735.0%Operating income16.7%13.6%22.8%Interest income507614.3%Interest expense(204)(49)316.3%Finance costs,net(154)(42)
174、266.7%Other financial income and expense(53)(61)(13.1)%Net financial income/(loss)(207)(103)101.0%Profit from continuing operations before income tax2,7452,08431.7%Income tax expense(687)(565)21.6%Share of profit/(loss)of associates393318.2%PROFIT FOR THE PERIOD2,0971,55235.1%attributable to owners
175、of the parent2,0231,51933.2%attributable to non-controlling interests7433124.2%Basic earnings(attributable to owners of the parent)per share(in euros pershare)3.612.7332.2%Diluted earnings(attributable to owners of the parent)per share(in eurosper share)3.572.6932.7%*Adjusted EBITA(Earnings Before I
176、nterest,Taxes,Amortization of Purchase Accounting Intangibles):Operating profit before amortization and impairment ofpurchase accounting intangible assets,before goodwill impairment,other operating income and expenses and restructuring costs.*EBITA(Earnings Before Interest,Taxes and Amortization of
177、Purchase Accounting Intangibles):Operating profit before amortization and impairment ofpurchase accounting intangible assets and before goodwill impairment.20RevenueConsolidated revenue totaled EUR 17,633 million for the period ended June 30,2023,up 9.7%on a current structure and currency basisfrom
178、the year-earlier period.Organic growth was positive for 15.3%,acquisitions and disposals accounted negatively for 2.7%,same as the currency effect for 2.2%.Breakdown by businessThe following table sets forth our revenue by business segment for the six-month periods ended June 30,2023 and 2022:(in mi
179、llions of euros)EnergyManagementIndustrialAutomationTotalFirst half 202313,6693,96417,633First half 202212,3073,77016,077Consolidated revenue totaled EUR 17,633 million for the 6 months ended June 30,2023,up+15.3%organic and up+9.7%on a reportedbasis.The Group saw strong growth across end-markets su
180、pported by secular trends of electrification,digitization and sustainability,though some areas such as residential buildings remained impacted by the effects of higher interest rates on consumer spending.TheGroup saw good volume expansion in the first half of the year,but the carryover effect from p
181、rice actions taken in 2022 was the moresignificant contributor to the organic growth.Supply chain pressures continued to ease across H1,with the resulting execution of thebacklog supporting growth.FX impacts were-2.2%where the weakening of the Chinese Yuan and Indian Rupee,and the significantdevalua
182、tion of several other currencies including the Egyptian Pound,Turkish Lira and Argentinian Peso were only partly offset by thestrengthening of the USD against the EUR.There was a net negative impact of-2.7%from acquisitions and disposals,primarily relating tothe Groups exit from Russia.Energy Manage
183、ment(78%of H1 2023 revenues)was up+17%organically for the first half of 2023.North America grew+26%organic withstrong growth across end-markets,including residential buildings which was supported by backlog execution.Western Europe was up+14%organic with double-digit growth in the U.K.,Germany,Italy
184、 and Spain,while France grew high-single digit.There was continuedgood traction in Data Center and non-residential technical buildings,though residential markets,particularly in the north of the region,were impacted by pressures on consumer-spending.Asia-Pacific grew+8%organic,with a slow start to t
185、he year in China notwithstandingthe low base of comparison in the second quarter due to the Shanghai lockdowns of 2022.In contrast,India faced a high base of compar-ison,but continued to benefit from strong demand across end-markets.There was good growth across the rest of the region.Rest of theWorl
186、d was up+18%organic with strong demand for systems offers supported by price actions in certain countries taken in response tocurrency devaluation.Industrial Automation(22%of H1 2023 revenues)was up+11%organically for the first half of 2023.Growth was led by sales into Processautomation markets whil
187、e sales into Discrete automation markets remained strong.The Group saw good growth in its industrial softwareoffers through AVEVA,despite headwinds from a transition from a perpetual license model to a subscription model.North America grew+9%organic led by performance in Discrete automation markets,
188、while growth in Process&Hybrid markets remained strong despitebeing mitigated by a high base of comparison from a project in Mexico.Western Europe was up+13%organic,with strong growth acrossboth Process&Hybrid and Discrete automation markets,supported by backlog execution.Asia Pacific was up+6%organ
189、ic,impacted bythe slow start to the year in China,where Discrete automation growth was muted with softness in OEM demand,particularly among thosetied to construction.There was strong growth across the rest of the region,notably in India and Japan.Rest of the World was up+19%organic,driven by a combi
190、nation of strong demand and price actions in certain countries taken in response to currency devaluation.Gross profitGross profit was up+21.8%organic with Gross margin up+220bps organic,reaching 42.4%in the first half of 2023.The margin expansionwas mainly driven by a strong price carryover impact,o
191、ffsetting inflationary pressures faced over the cycle,and bolstered by positiveindustrial productivity.Support Function costs:Research and development and selling,general and administrative expensesResearch and development expenses,net of capitalized development costs and excluding research and deve
192、lopment costs booked incosts of sales,increased by+7.0%,from EUR 515 million for the six-month period ended June 30,2022 to EUR 551 million for the six-month period ended June 30,2023.As a percentage of revenues,the net cost of research and development is decreasing slightly to 3.1%ofrevenues for si
193、x-month period ended June 30,2023(3.2%for the six-month period ended June 30,2022).Total research and development expenses,including capitalized development costs and development costs reported as cost of sales(seeNote 4 to the Consolidated Financial Statements)increased by+12.9%from EUR 883 million
194、for the six-month period ended June 30,2022to EUR 997 million for the six-month period ended June 30,2023.As a percentage of revenues,total research and development expensesincreased slightly to 5.7%for the six-month period ended June 30,2023(5.5%for the six-month period ended June 30,2022).On the f
195、irst semester 2023,the net positive impact of capitalized development costs and amortization of capitalized development costsamounts to EUR 85 million on operating income(EUR 38 million on the first semester 2022).Selling,generalandadministrative expenses increasedby+16.0%toEUR3,757millionforthesix-
196、monthperiodendedJune30,2023(EUR3,238 million for the six-month period ended June 30,2022).As a percentage of revenues,selling,general and administrative expensesincreased to 21.3%for the six-month period ended June 30,2023(20.1%for the six-month period ended June 30,2022).Combined,total support func
197、tion costs(research and development expenses together with selling,general and administrative costs)totaled EUR 4,308 million for the six-month period ended June 30,2023 compared to EUR 3,753 million for the six-month period endedJune 30,2022,an increase of+14.8%.Support functions costs to sales rat
198、io increased to 24.4%for the six-month period ended June 30,2023(23.3%for the six-month period ended June 30,2022).21Other operating income and expensesFor the six-month period ended June 30,2023,other operating income and expenses amounted to a net income of EUR 15 million,asgains from acquisitions
199、 more than compensated costs of acquisition,integration and separation.For the six-month period ended June 30,2022,other operating income and expenses amounted to a net expense of EUR 304 million,mainly due to EUR 173 million impairment of assets held for sale in Russia as well as working capital im
200、pairments(mainly inventoriesand receivables)from the Groups exposure to Russia.Restructuring costsFor the six-month period ended June 30,2023,restructuring costs amounted to EUR 41 million compared to EUR 85 million for the six-month period ended June 30,2022.Amortization and impairment of intangibl
201、es linked to acquisitionsFor the six-month period ended June 30,2023,amortization and impairment of intangibles linked to acquisitions amounted to EUR 196million compared to EUR 206 million for the six-month period ended June 30,2022.EBITA and Adjusted EBITAAdjusted EBITA is defined as EBITA before
202、restructuring costs and before other operating income and expenses,which includes acqui-sition,integration and separation costs.EBITA is defined as earnings before interest,taxes and amortization of purchase accountingintangibles.EBITA comprises operating profit before amortization and impairment of
203、 purchase accounting intangible assets and beforegoodwill impairment.Adjusted EBITA amounted to EUR 3,174 million for the six-month period ended June 30,2023,compared to EUR 2,782 million for thesix-month period ended June 30,2022,an increase of+14.1%.As a percentage of revenues,adjusted EBITA incre
204、ased from 17.3%for thesix-month period ended June 30,2022 to 18.0%for the six-month period ended June 30,2023,as a consequence of the strong pricingimpact,despite the continued investment for future growth,and inflation in Support Function Costs which resulted in a deterioration ofthe SFC/Sales rati
205、o.EBITA increased by+31.6%from EUR 2,393 million for the six-month period ended June 30,2022 to EUR 3,148 million for the six-monthperiod ended June 30,2023.As a percentage of revenues,EBITA increased to 17.9%for the six-month period ended June 30,2023(14.9%for the six-month period ended June 30,202
206、2).Adjusted EBITA by business segmentThe following table sets out adjusted EBITA by business segment:First half 2023(in millions of euros)EnergyManagementIndustrialAutomationCentral functions&digital costsTotalRevenue13,6693,964-17,633Adjusted EBITA2,824758(408)3,174Adjusted EBITA(%)20.7%19.1%18.0%F
207、irst half 2022(in millions of euros)EnergyManagementIndustrialAutomationCentral functions&digital costsTotalRevenue12,3073,770-16,077Adjusted EBITA2,506685(409)2,782Adjusted EBITA(%)20.4%18.2%17.3%Energy Management adjusted EBITA for the six-month period ended June 30,2023 reached EUR 2,824 million,
208、or 20.7%of revenues upc.+140bps organic(up+30bps reported),due mainly to a combination of strong volumes,strong net price impact and an improvementof gross margin in the systems business,more than offsetting a negative mix impact from the relatively stronger growth of Systems vs.Products,continued i
209、nvestment and inflation in Support Function Costs.Industrial Automation generated an adjusted EBITA of EUR 758 million,or 19.1%of revenues,up c.+180bps organic(up+90bps reported),due mainly to a combination of good volumes,strong net price impact,an improvement of gross margin related to systems rev
210、enues anda positive mix contribution from AVEVA,more than offsetting a negative mix impact from the relatively stronger growth of Systems vs.Products,continued investment and inflation in Support Function Costs.Central Functions&Digital Costs in the first semester 2023 amounted to EUR 408 million(EU
211、R 409 million the first semester 2022),reducing slightly as a proportion of revenue to 2.3%.Investment in the Groups strategic priorities continued,while the Corporate costelement continued to be an area of focus and remained under tight control,at around 0.8%of Group revenues in the first semester
212、2023.22Operating income(EBIT)Operating income or EBIT(Earnings Before Interest and Taxes),increased from EUR 2,187 million for the six-month period ended June30,2022 to 2,952 million for the six-month period ended June 30,2023,an increase of+35.0%.Net financial income/lossNet financial loss amounted
213、 to EUR 207 million for the six-month period ended June 30,2023,compared to EUR 103 million for thesix-month period ended June 30,2022.This variation is explained by the increase in the cost of net financial debt(EUR 154 million for the six-month period ended June 30,2023,compared with EUR 42 millio
214、n for the six-month period ended June 30,2022)and the negative evolution on foreign exchange differences(loss of EUR 19 million for the six-month period ended June 30,2023,compared with a gain of EUR 3 million for the six-month periodended June 30,2022)slightly offset by the positive year on year ch
215、ange from the adjustment booked on hyperinflationary countriesfinancials(Argentina and Trkiye):EUR 22 million for the six-month period ended June 30,2023,compared with EUR(13)million for thesix-month period ended June 30,2022.Income tax expenseThe effective tax rate decreased compared with the 2022
216、period and totaled 25.0%for the six-month period ended June 30,2023.The 2022effective tax rate at 27.1%was negatively impacted by the impairments booked on Russian operations.The corresponding income taxexpense increased from EUR 565 million for the six-month period ended June 30,2022 to EUR 687 mil
217、lion for the six-month period endedJune 30,2023.Share of profit/(loss)of associatesThe share of associates was a EUR 39 million profit for the six-month period ended June 30,2023,compared to EUR 33 million profit forthe six-month period ended June 30,2022.Non-controlling interestsNon-controlling int
218、erests in net income for the six-month period ended June 30,2023 totaled EUR 74 million,compared with EUR 33millionforthesix-monthperiodendedJune30,2022.ThevarianceismainlyrelatedtotheacquisitionofAVEVAsnon-controllinginterestsin January 2023(see Note 2.1 of the Consolidated Financial Statements).Pr
219、ofit for the period(to owners of the parent)Profit for the period attributable to the equity holders of our parent company amounted to EUR 2,023 million for the six-month periodended June 30,2023,compared with EUR 1,519 million profit for the six-month period ended June 30,2022.Earnings per shareBas
220、ic earnings per share amounted to EUR 3.61 per share for the six-month period ended June 30,2023 and EUR 2.73 per share for thesix-month period ended June 30,2022.23Comments to the consolidated Cash-flowThe following table sets forth our cash-flow statement for the six-month periods ended June 30,20
221、23 and 2022:(in millions of euros)NoteFirst half 2023First half 2022Profit for the period2,0971,552Share of(profit)/losses of associates(39)(33)Income and expenses with no effect on cash flow:Depreciation of property,plant and equipment359388Amortization of intangible assets other than goodwill35235
222、5Impairment losses on non-current assets(6)167Increase/(decrease)in provisions2048Losses/(gains)on disposals of business and assets(82)6Difference between tax paid and tax expense(116)37Other non-cash adjustments9658Net cash provided by operating activities2,6812,578Decrease/(increase)in accounts re
223、ceivable(434)(480)Decrease/(increase)in inventories and work in progress(629)(455)(Decrease)/increase in accounts payable171(165)Decrease/(increase)in other current assets and liabilities(339)(589)Change in working capital requirement(1,231)(1,689)TOTAL I-CASH FLOWS FROM/(USED IN)OPERATING ACTIVITIE
224、S1,450889Purchases of property,plant and equipment(425)(318)Proceeds from disposals of property,plant and equipment834Purchases of intangible assets(213)(164)Net cash used by investment in operating assets(630)(448)Acquisitions and disposals of businesses,net of cash acquired&disposed290(350)Other l
225、ong-term investments(118)46Increase in long-term pension assets(37)(52)Sub-total(65)(356)TOTAL II-CASH FLOWS FROM/(USED IN)INVESTING ACTIVITIES(695)(804)Issuance of bonds2,926-Repayment of bonds(500)-Sale/(purchase)of treasury shares(41)(219)Increase/(decrease)in other financial debt2,6112,171Increa
226、se/(decrease)of share capital-Transaction with non-controlling interests2(4,681)(65)Dividends paid to Schneider Electrics shareholders(1,767)(1,618)Dividends paid to non-controlling interests(39)(32)TOTAL III-CASH FLOWS FROM/(USED IN)FINANCING ACTIVITIES(1,491)237TOTAL IV-NET FOREIGN EXCHANGE DIFFER
227、ENCE(81)63TOTAL V-IMPACT OF RECLASSIFICATION OF ITEMS HELD FOR SALE(1)(105)INCREASE/(DECREASE)IN NET CASH AND CASH EQUIVALENTS:I+II+III+IV+V(818)280Net cash and cash equivalents,beginning of the period153,8632,463Increase/(decrease)in cash and cash equivalents(818)280NET CASH AND CASH EQUIVALENTS,EN
228、D OF THE PERIOD153,0452,743Operating ActivitiesNet cash provided by operating activities before changes in working capital requirement reached EUR 2,681 million for the six-monthperiod ended June 30,2023,compared with EUR 2,578 million for the six-month period ended June 30,2022.It represents 15.2%o
229、frevenues for first half 2023(16.0%of revenues from first half 2022).Change in working capital requirement consumed EUR 1,231 million in cash in the six-month period ended June 30,2023,compared witha consumption of EUR 1,689 million in the six-month period ended June 30,2022,as the balance of trade
230、payables increased comparedto the levels seen at the end of 2022,partially offset by inventory built up in order to meet strong demand and to mitigate supply issues.In all,net cash provided by operating activities amounts to EUR 1,450 million in the six-month period ended June 30,2023(EUR 889million
231、 in the six-month period ended June 30,2022).24Investing ActivitiesNet capital expenditure,which includes capitalized development projects,increased to EUR 630 million for the six-month period endedJune 30,2023,compared with EUR 448 million for the six-month period ended June 30,2022.As a percentage
232、 of revenues,it increased at3.6%in the first half of 2023,compared to 2.8%in the first half of 2022.The acquisitions net of disposals represented a cash in of EUR 90 million(net of acquired cash)for the six-month period ended June30,2023,mainly due to the disposals of Vinzero and Bochao.It totaled E
233、UR 350 million for the six-month period ended June 30,2022,mainly linked with the acquisition of EV Connect.The main scope movements are described in Note 2.1 of the Consolidated FinancialStatements.Financing ActivitiesNet cash outflow from financing activities amounted to EUR 1,491 million during t
234、he six-month period ended June 30,2023,comparedto cash outflow of EUR 237 million during the six-month period ended June 30,2022.The change is mainly due to the acquisition ofthe remaining non-controlling interests in AVEVA(Note 2.1 of the Consolidated Financial Statements),partially offset by the i
235、ssuance ofbonds and increase in other financial debt.The dividend paid by Schneider Electric SE was EUR 1,767 million in 2023,compared with EUR 1,618 million in 2022.Claims,litigations and other risksMain risks and areas of uncertainty for the second half of 2023The main risks and areas of uncertain
236、ty for the second half of the year are the same as those outlined in Chapter 3,paragraph 3.4(Keyrisks and opportunities)of the 2022 Universal Registration Document filed with AMF on March 28,2023.Guarantees given and receivedGuarantees given and received amounted to EUR 4,233 million and EUR 78 mill
237、ion,respectively,as of June 30,2023.Contingent liabilitiesAs previously disclosed,investigations were conducted in September 2018 by the French judicial authority and French Competition Au-thority(“Autorit de la concurrence”)at Schneider Electrics head office and other premises concerning the sale o
238、f electrical productsthrough commercial distribution activities in France.On July 4,2022,Schneider Electric received a statement of objections(notification de griefs)from the French Competition Authorityalleging that the pricing autonomy of some distributors in the French market would have been limi
239、ted,in breach of competition rules.Schneider Electric strongly disagrees with the allegations of the statement of objections and has submitted its response to the FrenchCompetition Authority on October 4,2022.Concurrently on October 7,2022 Schneider Electric was indicted by an investigating judge wh
240、o required Schneider Electric to provide abank guarantee of 20 million and a cash guarantee of 80 million.As at December 31,2022,this cash guarantee was recognized as“Othercurrent liabilities”against“Non-current financial assets”.The liability was settled as the cash guarantee was paid mid-January 2
241、023.Those actions do not mean that Schneider Electric will ultimately be found guilty of any wrongdoing.Schneider Electric firmly disagreeswith all the allegations made by the French investigating judge and the French Competition Authority and intends to vigorously and fullydefend itself.Should the
242、French Competition Authority deny Schneider Electrics arguments and conclude,after examining the substanceofthematter,thatanti-competitivepracticeshavebeeninvolved,ithasbroaddiscretiontodetermineonacase-by-casebasisthefinancialfines it may impose in accordance with the principles of proportionality
243、and individuality.In light of the difficulty in assessing the extentto which the French Competition Authority takes into account the arguments of Schneider Electric in its defense as well as the multiplefactors contributing to the determination of a fine,it is not possible to reliably estimate the a
244、mount of any potential fine that might beincurred in the event of an adverse decision,even though it might have a significant impact on the Group.In this context,no provisionhas been made at this stage of the investigation.Schneider Electric has other contingent liabilities relating to legal,arbitra
245、tion or regulatory proceedings arising in the normal courseof its business.Known or ongoing claims and litigation involving the Group or its subsidiaries were reviewed at the date on which theconsolidated financial statements were authorized for issue.Based on the advice of legal counsel,all provisi
246、ons deemed necessary havebeen made to cover the related risks.No other significant event occurred since the 2022 Universal Registration Document publication date(Risk Factors described in the Uni-versal Registration Document Chapter 3).Transactions with related partiesThese transactions are describe
247、d in Note 17 to the interim consolidated financial statements.Subsequent eventsIssuance of shares to employeesEvery year,Schneider Electric gives its employees the opportunity to become group shareholders thanks to employee share issues.Em-ployees in countries that meet legal and fiscal requirements
248、 have been proposed the plan.Under the plan,employees may purchase Schneider Electric shares at a 15%discount to the price quoted for the shares on the stock mar-ket.Employees must then hold their shares for five years,except in certain cases provided for by law.As of June 30,2023,the share-basedpay
249、ment expense recorded under“Selling,general and administrative expenses”,in accordance with IFRS 2,is measured by reference tothe fair value of the discount and amounted to EUR 41 million.On April 20,2023,Schneider Electric gave its employees the opportunity to purchase shares at a price of EUR 126.
250、20 per share,as partof its commitment to employee share ownership.This represented a 15%discount to the reference price of EUR 148.47 calculated as the25average opening price quoted for the share during the 20 days preceding the Board of Directors decision to launch the employee shareissue.Altogethe
251、r,1.7 million shares were subscribed,increasing the Companys capital by EUR 220 million as of July 6,2023.26Expected trends in coming monthsAcontinuationofstronganddynamicmarketdemand,supportedbyseculartrendsofelectrification,digitizationandsustainabilityStrongdemandforSystemsoffersacrossend-markets
252、notablydrivenbytrendsinDataCenters,GridInfrastructureinvestment,andincreased investments across Process industries served by both businessesContinued pressure on demand in residential buildings,and a moderation from elevated levels in discrete manufacturing(particu-larly in China and Western Europe)
253、U.S.expectedtocontributestronglytogrowththroughacombinationofstrongdemand,industrialreshoringandbacklogexecutionChina to continue to rebound from slow start to the year,with progressive recovery in market demandMiddle East and India to lead the growth dynamic in emerging marketsGovernment incentives
254、 across the world centered around digitization,energy transition,decarbonization and improved energyefficiency to support growthBacklog execution to support growthThe improved supply environment should support stronger industrial productivity in the second half of the year2023 Target upgradedThe Gro
255、up upgrades its 2023 financial target as follows:2023 Adjusted EBITA growth of between+18%and+23%organic(previously between+16%and+21%organic).The target would be achieved through a combination of organic revenue growth and margin improvement,currently expected to be:Revenue growth of+11%to+13%organ
256、ic(previously+10%to+13%organic)Adjusted EBITA margin up+120bps to+150bps organic(previously+100bps to+130bps organic)This implies Adjusted EBITA margin of around 17.7%to 18.0%(including scope based on transactions completed to-date and FX basedon current estimation).27AttestationI hereby certify tha
257、t,to the best of my knowledge,the condensed half-year consolidated financial statements as at June 30,2023,havebeen prepared in accordance with the applicable accounting standards and present fairly the assets and liabilities,the financial posi-tion and the income of the Company and the entities inc
258、luded in the scope of consolidation,and that the half-year management reportattached provides an accurate overview of the significant events of the first six months of the financial year with their impact on the half-year consolidated financial statements,together with the major transactions with re
259、lated parties and a description of the main risks anduncertainties for the remaining six months of the financial year.Rueil-Malmaison,July 26,2023Peter HERWECKCEO28Statutory Auditors Review Report on the half-yearly financial in-formationPeriod from January 1 to June 30,2023This is a free translatio
260、n into English of the statutory auditors review report on the half-yearly financial information issued in French and isprovided solely for the convenience of English-speaking users.This report includes information relating to the specific verification of information given in the Groups half-yearly m
261、anagement report.This report should be read in conjunction with,and construed in accordance with,French law and professional standards applicable inFrance.To the Shareholders,In compliance with the assignment entrusted to us by your Annual General Meeting and in accordance with the requirements of a
262、rticle L.451-1-2 III of the French Monetary and Financial Code(“Code montaire et financier”),we hereby report to you on:the review of the accompanying condensed half-yearly consolidated financial statements of Schneider Electric SE,for the periodfrom January 1 to June 30,2023,the verification of the
263、 information presented in the half-yearly management report.These condensed half-yearly consolidated financial statements are the responsibility of the Board of Directors.Our role is to express aconclusion on these financial statements based on our review.Conclusion on the financial statementsWe con
264、ducted our review in accordance with professional standards applicable in France.A review of interim financial information consists of making inquiries,primarily of persons responsible for financial and accounting mat-ters,and applying analytical and other review procedures.A review is substantially
265、 less in scope than an audit conducted in accordancewith professional standards applicable in France and consequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit.Accordingly,we do not express an audit opinion.Based
266、on our review,nothing has come to our attention that causes us to believe that the accompanying condensed half-yearly consoli-dated financial statements are not prepared,in all material respects,in accordance with IAS 34 standard of the IFRSs as adopted by theEuropean Union applicable to interim fin
267、ancial information.Specific verificationWehavealsoverifiedtheinformationpresentedinthehalf-yearlymanagementreportonthecondensedhalf-yearlyconsolidatedfinancialstatements subject to our review.We have no matters to report as to its fair presentation and consistency with the condensed half-yearly consolidated financial statements.The Statutory AuditorsFrench original signed byMazarsPricewaterhouseCoopers AuditParis La Dfense,le 26 juillet 2023Neuilly-Sur-Seine,le 26 juillet 2023Juliette Decoux-GuillemotMathieu MougardSverine ScheerJean-Christophe GeorghiouPartnerPartnerPartnerPartner29