SCHR ELEC : Transcript of Analysts/Institutional Investor Meet/Con. Call

SEIL/Sec./SE/2022-23/55	November 7, 2022
The Manager	The Secretary
Listing Department	BSE Limited
National Stock Exchange of India Ltd	Phiroze Jeejeebhoy Towers,
Exchange Plaza, Bandra Kurla Complex	Dalal Street
Bandra (East), MUMBAI 400 051	MUMBAI 400 001
Fax # [phone]	Fax # [phone]/2039
Symbol: SCHNEIDER	Scrip Code No. 534139

Sub: Disclosure pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations")

Dear Sir(s),

In continuation of our letter(s) no. SEIL/Sec./SE/2022-23/51 dated November 2, 2022 regarding intimation of schedule of investor conference call, please find enclosed herewith the transcript and the link of the audio recording of the conference call held on November 4, 2022, for discussing the earning performance of 2nd quarter ended September 30, 2022.

https://infra.schneider-electric.co.in/supervision/images/financialreport2022/ELA0520221104144175.mp3

The above is for your kind information and records.

Thanking you.

Yours Sincerely,

For Schneider Electric Infrastructure Limited

Digitally signed by BHUMIKA

BHUMIKA SOOD SOOD

Date: 2022.11.07 11:27:07 +05'30'

(Bhumika Sood)

Company Secretary and Compliance Officer

Encl: As above

Schneider Electric Infrastructure Limited

Corp. Office: 9th Floor, DLF Building No.10.Tower C, DLF Cyber City, Phase II, Gurgaon - 122002, India; Tel: [phone]; Fax.: [phone]; www.schneider-infra.in

Regd. Office: Milestome-87, Vadodara - Halol Highway, Village Kotambi, Post Office Jarod Vadodara -391510, Gujarat; Tel: [phone] Fax: [phone]; CIN: L31900GJ2011PLC064420

"Schneider Electric

Q2 FY2023 Conference Call"

November 04, 2022

ANALYST: MR. HARSHIT KAPADIA - ELARA SECURITIES PRIVATE LIMITED

MANAGEMENT: MR. SANJAY SUDHAKARAN - MANAGING DIRECTOR - SCHNEIDER ELECTRIC

MR. MAYANK HOLANI - CHIEF FINANCIAL OFFICER - SCHNEIDER ELECTRIC

MR. VINEET JAIN - HEAD - INVESTOR RELATIONS - SCHNEIDER ELECTRIC

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Schneider Electric

November 04, 2022

Moderator:Ladies and Gentlemen, good day and welcome to the Schneider Electric's Q2 FY2023 Conference Call hosted by Elara Securities Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing '*' then '0' on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harshit Kapadia from Elara Securities Private Limited. Thank you and over to you Sir!

Harshit Kapadia: Thank you Chris. A very good evening to everyone. On behalf of Elara Securities we welcome you all the Q2 FY2023 and H1 FY2023 conference call of Schneider Electric Infrastructure Limited. I take this opportunity to welcome the management of Schneider Electric Infra represented by Mr. Sanjay Sudhakaran, Managing Director, Mr. Mayank Holani, Chief Financial Officer, and Mr. Vineet Jain, Head, Investor Relation. We will begin the call with a brief overview by the management followed by Q&A session. I will now hand over the call to Mr. Sudhakaran for his opening remarks. Over to you Sir!

Sanjay Sudhakaran: Good afternoon everybody. This is Sanjay Sudhakaran, Managing Director of your company Schneider Electric Infrastructure Limited. I hope all of you are doing well and we will go straight to page number three where we have a small glimpse about the economic outlook for India. As you can see India has been performing pretty well during these turbulent times. I think it is one of the most attractive economies as you can see globally probably because India has managed to insulate itself from the energy crisis which many countries like in Europe are facing and at the same time the prudent fiscal policies have also paid off in terms of a stable economy. We feel that from the overall macroeconomic statistics that India will continue to have a good run going forward; however, these things are a little bit unpredictable given the global economic situation that we are facing. There are talks of global recession in the US, there are talks of uncertainty in Europe, we have heard about the UK issue and things like that and we need to be cautious about the fact that the economy cannot be decoupled from the world economy in general so I think we should look forward to the next few quarters with cautious optimism.

We go to next slide which is page number four taking off from the macroeconomic scenario into what it means for us for our core segments that we operate in. Power and grid was looking to be a very promising story with the government linked incentives towards modernizing the grid, etc., but there seems to be a little bit of a slowdown in the actual deployment of funds that one would expect into this segment given the mandate that was given to more or less privatize the power and grid utilities and also to modernize the grid in that process. However we feel that even with the time lag there will be investments flowing into this sector in the next few quarters so we are optimistic about the segment. Though there might not be an upside that we anticipated it to have. On the mobility side, I think investments in infrastructure continue to grow especially on the metros that is urban

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Schneider Electric

November 04, 2022

transportation, tunnel projects as well as new airport infrastructures that are coming up. On the minerals, mining and metals I think the story has been pretty good so far; however, we can expect some amount of slowdown in the steel sector primarily because of the incentives to this sector that were provided in terms of higher duties on exports out of the country. There is consolidation also happening as you would have read about with Holcim exiting India and Adani Group taking over. However there does seem to be sufficient capex that is flowing into the cement industry so we expect cement to grow for some more quarters as we go forward. Industry and buildings have been kind of muted especially due to the COVID but we feel that investments in this area will come back strongly and vacancy rates are falling across the country in terms of commercial buildings, people are coming to offices so we would expect rebound in the buildings industry as well. Driven by the data loss I think the cloud and service providers or the data centre industry continues to flourish with more and more multinational players coming into the country and also we see good amount of interest amongst some Indian real estate developers also to capitalize on their land bank and their ability to develop real estate pretty quickly so we see many joint ventures by real estate companies going into the cloud and service provider segment so we expect this market to grow as well so overall I think for our core segments the outlook is positive.

Just to give you some glimpse of the kind of orders that we have been bagging I think we got a pretty large order from Bhutan where we are helping the country with its electrification needs and this is a repeat order something of the similar magnitude which we had last year, we continue to serve the customers in a very engaged manner despite all the challenges of supply chain as well as COVID and we have managed to get a repeat order for 33 Kv and 11 Kv package substations. A large order from a global data centre customer for 33 Kv GIS package. This is the second order a repeat order from the same customer in quick succession. I think our strengths here have primarily been faster deliveries and making sure that we execute the projects flawlessly so positive news here as well. On minerals, mining and metals we have a large order from the steel industry of fully connected product with integration with software so an intelligent solution in line with our strategy to digitize more and to be able to deploy more and more ecostructure solutions with the customers.

We go to the next slide which is industry and building. This is for a government establishment building of pretty good infrastructure and again in terms of digital and connected where we have transformers, HT panels, ring main units and package substations, all connected products and we will be able to leverage cloud analytics here as well as we are creating a roadmap for that as well so this is a good win in the building sector that we can be proud of. Another area which is of keen interest to us I would say is centralized building management where we continue to deploy our software assets like advisory layers on clouds to be able to move buildings from being managed building-by-building into more of a central command centre. This will help organizations and the building industry to move towards their objective of net zero, being able to manage their assets proactively with predicted maintenance, etc., so this is a huge step forwards with one of the IT companies that we have done in

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Schneider Electric

November 04, 2022

deploying our asset advisory solutions on to other solutions as well from the Schneider basket including building management and connected products.

We will go to slide number 10 which is again on services. Here is an acquisition that we Schneider made globally which is for a transformer analytics company. It is not a transformer manufacturing company it is a purely analytics company with sensors and software, which will help customers predict the lifecycle of their transformer assets, be able to take proactive actions and extend the life of the product as well as make sure that the transformers perform to better uptime and efficiencies. So this is a global acquisition which we are actively working in India for pilots, etc., to be able to deploy quickly in the country.

Let us go to slide number 11. I think we are at different maturity levels as far as our accelerating digital is concerned. This includes digitizing our products, being able to connect it to cloud and being able to provide a capex to opex conversion so we see that the power and grid sector continues to be highly regulated because it is a national infrastructure so there are restrictions on connecting to cloud so our deployment has been slow here but we have many other edge control solutions which need not be connected to cloud so we which we are deploying with these customers here. On the transportation side we are working with key metro customers to be able to provide them with more and more digital solutions. We have spoken about certain reference projects that we have won on the steel side and minerals, mining and metals where we are digitizing the entire power train. Of course industry buildings and cloud and service providers also remain our focus as far as digitization is concerned. So ecostructure asset advisor which is primary software layer which is on the cloud which is what provides us with the service stickiness and lifecycle revenues with our customers which is profitable and accretive to the company as well as helps our customers in bringing down their operational cost and better efficiency and asset productivity is the key thing that we are trying to promote and provide in the market place.

Going to slide 12 all these initiatives on the digital side should be able to take up our revenues in terms of maintenance and digital contracts which we call as recurring revenues so recurring revenues we expect to move from a 12% in 2020 to around 22% in 2025. This is key to executing our strategy on digitization. This will enable us to be associated with our customers across the lifecycle of the product; it will provide us with better stickiness in terms of customer relationship and also pull through business that will come through from the customer in terms of spares, modernization and other Greenfield projects which will follow through a satisfied customer base.

Going on to slide 13, what we want to do here is that on services we want to reinforce the core that is being able to get more and more service contracts, modernization projects and spare parts with special emphasis on maintenance contracts. We also want to accelerate the growth on digital and consulting services. Track our installed base more carefully and also grow our business through partners to be able to cater to a larger geography within India so I think these are the six strategic pillars that we are

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