UPDATE 1-Schneider raises 2010 target, expands in Russia

Published 10/20/2010, 02:53 AM
Updated 10/20/2010, 02:56 AM

* Targets 2010 EBITA margin of 15.5 to 16 percent

* Q3 sales up 11.9 percent to 5.45 bln eur

* Agrees to purchase 50 percent of Russia's Electroshield

(Adds detail, background)

PARIS, Oct 20 (Reuters) - Schneider Electric raised its 2010 margin target on Wednesday thanks to higher quarterly sales and said it would expand in Russia through the purchase of half of medium-voltage specialist Electroshield.

The world's largest maker of voltage equipment now expects its EBITA (earnings before interest, tax and amortisation) margin to reach 15.5 to 16 percent before restructuring costs and the impact of acquisitions.

Schneider was previously aiming for an EBITA margin of around 15.5 percent.

The company also said it expects organic sales to rise by a high single-digit percentage in the second half.

Schneider designs and manufactures industrial plugs, automation systems and energy sensors, and it bought distribution assets from nuclear firm Areva in June for 1.02 billion euros ($1.4 billion). It competes with Germany's Siemens and ABB of Switzerland.

Third-quarter sales rose 11.9 percent organically to 5.45 billion euros, with Industry unit volumes up 27.5 percent to 942 million and IT division sales up 11.9 percent to 703 million, Schneider said in a statement.

Organic sales growth excludes the effect of currency movements, acquisitions and divestments.

Foreign exchange fluctuations added 325 million euros to sales in the third quarter, thanks notably to the appreciation of the dollar against the euro.

Schneider said it agreed to buy half of Electroshield-TM Samara, which it said was the leader in medium-voltage products in Russia with key positions in oil and gas, power generation and electro-intensive industries, for 265 million euros.

It said it could obtain full ownership of the company under similar financial conditions.

Schneider shares have gained 21.9 percent so far this year, slightly outperforming the STOXX Europe 600 industrial goods and services index, which has risen 20.9 percent.

ABB will publish its third-quarter results on Oct. 28. ($1=.7264 Euro) (Reporting by Matthias Blamont; Editing by James Regan)

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