Consolidated Financial Statements 2024

ANNUALFINANCIALREPORT

For the year ended December 31, 2024

Consolidated Financial Statements Annual Management Report

1. Consolidated statement of income

(in millions of euros except for earnings per share)                                                                                                                 Note               Full Year 2024                  Full Year 2023

* Adjusted EBITA (Earnings Before Interest, Taxes, Amortization of Purchase Accounting Intangibles): Operating profit before amortization and impairment of purchase accounting intangible assets, before goodwill impairment, other operating income and expenses and restructuring costs.

** EBITA (Earnings Before Interest, Taxes and Amortization of Purchase Accounting Intangibles): Operating profit before amortization and impairment of purchase accounting intangible assets and before goodwill impairment.

The accompanying notes are an integral part of the consolidated financial statements.

Other comprehensive income

(in millions of euros)                                                                                                                                                                     Note               Full Year 2024                  Full Year 2023

The accompanying notes are an integral part of the consolidated financial statements.

2. Consolidated statement of cash flows

(in millions of euros)                                                                                                                                                                     Note               Full Year 2024                  Full Year 2023

The accompanying notes are an integral part of the consolidated financial statements.

*In 2023, transactions with non-controlling interests mainly related to the purchase of AVEVA’s non-controlling interests.

3. Consolidated balance sheet

Assets

(in millions of euros)                                                                                                                                                                     Note                Dec. 31, 2024                   Dec. 31, 2023

The accompanying notes are an integral part of the consolidated financial statements.

Liabilities

(in millions of euros)                                                                                                                                                                     Note                Dec. 31, 2024                   Dec. 31, 2023

The accompanying notes are an integral part of the consolidated financial statements.

4. Consolidated statement of changes in equity

Dec. 31, 2023                                                      572,836                2,291                   2,872                21,593                    (294)                26,462                       706            27,168

The accompanying notes are an integral part of the consolidated financial statements.

5. Notes to the consolidated financial statements

Contents

      Note 1                                              Summary of accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                            6

      Note 2               Changes in the scope of consolidation                                     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   18

      Note 3             Segment information                                         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         19

      Note 4                                           Research and development expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      20

      Note 5                                      Impairment losses, depreciation and amortization expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 20

      Note 6              Other operating income and expenses                                    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   20

      Note 7                                            Other financial income and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                        21

      Note 8                                                 Income tax expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                            21

      Note 9                                                    Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                22

      Note 10                                                Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                              24

      Note 11                                           Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                         25

      Note 12                                       Investments in associates and joint ventures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                     27

      Note 13                                             Non-current financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                           28

      Note 14                                             Deferred taxes by nature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                          29

      Note 15            Inventories and work in progress                                      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                     29

      Note 16            Trade and other operating receivables                                     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   30

      Note 17            Other receivables and prepaid expenses                                   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  31

      Note 18           Cash and cash equivalents                                        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                       31

      Note 19                                              Shareholder’s equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                            31

      Note 20                                    Pensions and other post-employment benefit obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                  34

      Note 21                                         Provisions for contingencies and charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      38

      Note 22                                         Current and non-current financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                      39

      Note 23             Classification of financial instruments                                     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   42

      Note 24                                                 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                               47

      Note 25           Related party transactions                                        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                       48

      Note 26                                          Commitments and contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                        48

      Note 27                                               Subsequent events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                             49

      Note 28                                              Statutory Auditors’ fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                           49

      Note 29                                              Consolidated companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                            51

All amounts are in millions of euros unless otherwise indicated.

The following notes are an integral part of the consolidated financial statements.

The Schneider Electric Group’s consolidated financial statements for the financial year ended December 31, 2024 were authorized for issue by the Board of Directors on February 19, 2025. They will be submitted to shareholders for approval at the Annual General Meeting of May 7, 2025.

The Group’s main businesses are described in Chapter 1 of the Universal Registration Document.

NOTE 1           Summary of accounting policies

1.1- Accounting standards

The consolidated financial statements have been prepared in compliance with the international accounting standards (IFRS) as adopted by the European Union as of December 31, 2024. The same accounting methods were used as for the consolidated financial statements for the year ended December 31, 2023.

The IFRS standards and interpretations as adopted by the European Union are available at the following website: https://finance.ec.euro pa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/financial-reporting

Standards, interpretations and amendments endorsed by the European Union whose application is mandatory as of January 1, 2024

The following standards and interpretations that were applicable during the period did not have a material impact on the consolidated financial statements as of December 31, 2024:

•   Amendments to IAS 1 - Presentation of Financial Statements: Classification of Liabilities as Current or Non-current; Deferral of Effective Date; Non-current Liabilities with Covenants;

•   Amendments to IFRS 16 - Leases: Lease Liability in a Sale and Leaseback;

•   Amendments to IAS 7 - Statement of Cash Flows and IFRS 7 - Financial Instruments: Disclosures on supplier finance arrangements.

Standards, interpretations and amendments unendorsed by the European Union as of December 31, 2024 or whose application is not mandatory as of January 1, 2024

•   IFRS 18 - Presentation and Disclosure in Financial Statements;

•   Amendments to IFRS 7 - Financial Instruments: Disclosures and IFRS 9 - Financial Instruments on the Classification and Measurement of Financial Instruments;

•   Amendments to IFRS 7 - Financial Instruments: Disclosures and IFRS 9 - Financial Instruments for Contracts Referencing Naturedependent Electricity;

•   Amendments to IAS 21 - The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability;

•   Annual Improvements to IFRS Standards Volume 11;

The Group is currently assessing the potential effect on the Group’s consolidated financial statements of the standards not yet applicable as of December 31, 2024. At this stage of analysis, the Group does not expect any material impact on its consolidated financial statements.

Climate-related matters

The potential impacts of climate-related matters on the measurement of the Group’s assets and liabilities, as well as on significant judgements and estimates, have been analyzed from multiple perspectives: climate transition risks and opportunities, physical risks, and Schneider Electric’s net-zero Commitment. The Group is committed to be “net-zero ready” in its operation (scope 1 and 2) by 2030 and net-zero across the whole value chain by 2050. Those objectives are concretely integrated in the Group’s Sustainability strategy through the Schneider Sustainability Impact (SSI) and Schneider Sustainability Essentials (SSE) programs that are externally reported respectively on a quarterly and annual basis.

To achieve its emission reduction objectives and meet the net-zero commitment taken, the Group has defined a comprehensive roadmap and key actions to enable the decarbonization of both its own operations and its value chain, having direct implications on its processes, sites decarbonization, R&D and investment priorities:

•   Significant investments on both industrial processes (e.g., electrification) and real estate portfolio (e.g., Electric Vehicles chargers instalment) planned to decarbonize operations by 2030 (scopes 1 & 2) in line with company-wide energy climate targets (150 ZeroCO2 sites by 2025, double energy productivity by 2030, 100% of electricity from renewables by 2030, shift 100% of corporate vehicle fleet to electric vehicles by 2030). Specifically on manufacturing and distribution centers, the Group has defined a priority list and invests progressively on electric and efficient systems (e.g., heat pumps, micro grids, solar panels, thermal insulation) to achieve net-zero ready operations by 2030.

•   Implementation of a process to follow carbon footprint evolution at an early stage of new product development to reduce the footprint of future generations of products. The Group committed on a step up in R&D in coming years, from a circa 5% of Group revenues dedicated to strategic R&D investment pre-covid to a future circa 7%, with a strong focus on sustainability. In total, around EUR13billionhavebeeninvestedbytheGroupinR&Dbetween2017and2024(refertoNote4formoredetailsabouttheyear2024).

The actual and potential financial links and effects of the Group’s external commitments and specific climate risks identified, are detailed as follows: • At Schneider Electric, climate risks to operations and supply chain are addressed with a comprehensive supply chain resilience and adaptation program, aiming at identifying climate risks, quantifying the value at risk under different climate scenarios, and reducing the Group’s vulnerability with a comprehensive supply chain resilience and adaptation plan. Schneider Electric is working with multiple actors on its value chain to adapt to climate change and increase its resilience. The Group invests in protecting

sites exposed to extreme weather events by implementing engineered and built environment adaptation solutions. It also detects potential risks using real-time predictive weather analysis to alert at-risk sites, enabling them to proactively activate their business continuity plans. This approach helps contain the potential impact of these risks and defines necessary remediation and control measures. The Group is not a capital-intensive company, majority of its sites are leased and not owned, and the individual residual value of its tangible assets in the most at-risk locations is not material. The Group has a low dependence on water in its production processes. Additionally, the multi hub position of the Group with agile capacity to relocate its production in case of climate disaster is a way to significantly mitigate risks and potential effects. No material impact has been identified, notably on evaluation and useful life of tangible assets or in the impairment tests performed at Group level. From 2023, the Group has worked on quantifying investments and additional costs, as well as opportunities, to achieve long-term net-zero carbon commitments, taking into consideration several scenarios to integrate them into the Group’s impairment tests. Schneider Electric is well-positioned to capitalize on the global push for electrification and the net-zero commitments of other companies. The alignment between the Group’s sustainability commitments, its transformation, and its financial statements was further strengthened in 2024 with the implementation of the Corporate Sustainability Reporting Directive (CSRD). The Group has not identified any risk of impairment as of December 31, 2024.

•   The Schneider Sustainability Impact (SSI), which encompasses several climate objectives, serves as a factor in the annual shortterm variable compensation. Over 100,000 employees, including Corporate Officer, are eligible, with the weight varying up to 20%, depending on the type of plan. Also, criteria related to climate targets on scopes 1, 2, and upstream scope 3 have been introduced in 2024 in the long-term incentive plan granted to more than 4,000 employees, including the Corporate Officer (25% weight). These criteria replace the previous Schneider Sustainability External and Relative Index (SSERI). This amendment has been designed to alignexecutiveremunerationwiththeGroup’scommitmentintermsofclimatetransitionandSchneiderElectric’ssustainablevalue creation over the long-term.

•   To further tie climate-related issues to financial planning, Schneider Electric has linked in 2022 its bank fundings with the SSI performance with the signature of a KPIs linked facility.

1.2- Basis of presentation

The financial statements have been prepared on a historical cost basis, except for the following:

•   derivative instruments and certain financial assets, measured at fair value;

•   assets held for sale - measured at the lower of carrying amount and fair value less costs to sell; • defined benefit pension plans - plan assets measured at fair value.

Financial liabilities are measured using the amortized cost model. The book value of hedged assets and liabilities, under fair-value hedge, corresponds to their fair value, for the part corresponding to the hedged risk.

1.3- Use of estimates and assumptions

The preparation of financial statements requires the Group management and subsidiaries to make estimates and assumptions that are reflected in the amounts of assets and liabilities reported in the consolidated balance sheet, revenues and expenses in the statement of income and the commitments created during the reporting period. Actual results may differ.

These assumptions and estimates mainly concern:

•   the measurement of the recoverable amount of goodwill, property, plant and equipment and intangible assets (Note 1.8 and 1.9) and the measurement of impairment losses (Note 1.11);

•   the measurement of the recoverable amount of non-current financial assets (Note 1.12 and 13);

•   the realizable value of inventories and work in progress (Note 1.13);

•   the recoverable amount of trade and other operating receivables (Note 1.14);

•   the valuation of share-based payments (Note 1.20);

•   the calculation of provisions or risk contingencies (Note 1.21);

•   the measurement of pension and other post-employment benefit obligations (Note 1.19 and Note 20);

•   the recoverability of deferred tax assets (Note 14);

•   the measurement of provisions covering uncertainties over income tax treatment (Note 1.21);

•   the estimation of the margin at completion for Construction contracts (Note 1.24);

•   the assumptions retained to evaluate the lease liability (IFRS 16): lease term and discount rate (Note 1.10).

1.4- Consolidation principles

Subsidiaries, over which the Group exercises exclusive control, either directly or indirectly, are fully consolidated.

The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

Accounting policies of subsidiaries, joint-venture and associates have been changed when necessary to ensure consistency with the policies adopted by the Group.

Group investments in entities controlled jointly with a limited number of partners, such as joint ventures and companies over which the Group has significant influence (“associates”) are accounted for by the equity method. Significant influence is presumed to exist when more than 20% of voting rights are held by the Group.

Under equity method, the net assets and net result of a company are recognized pro rata to the interest held by the Group in the share capital.

On acquisition of an investment in a joint venture or an associate, goodwill relating to the joint venture or the associate is included in the carrying amount of the investment.

When the Group’s share of losses in an equity-accounted investment equals or exceed its interest in the entity, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the other entity.

Companies acquired or sold during the year are included in or removed from the consolidated financial statements as of the date when effective control is acquired or relinquished.

Any acquisition or disposal of an interest in a subsidiary that doesn’t change the control is considered as a shareholder transaction and must be recognized directly in equity.

A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in a separate reserve within equity attributable to owners.

Intra-group transactions and balances are eliminated.

The list of consolidated main subsidiaries, joint ventures and associates can be found in Note 29.

The reporting date for all companies included in the scope of consolidation is December 31, with the exception of certain immaterial associates accounted for by the equity method. For the latter however, financial statements up to September 30 of the financial year have been used (maximum difference of three months in line with the standards).

1.5- Business combinations

Business combinations are accounted for using the acquisition method, in accordance with IFRS 3 - Business Combinations. Acquisition costs are presented under “Other operating income and expenses” in the statement of income.

All acquired assets, liabilities and contingent liabilities are recognized at their fair value at the acquisition date, the fair value can be adjusted during a measurement period that can last for up to 12 months from the date of acquisition.

The differential between the cost of acquisition excluding acquisition expenses and the Group’s share in the fair value of assets and liabilities at the date of acquisition is recognized in goodwill. When the cost of acquisition is lower than the fair value of the identified assets and liabilities acquired, the badwill is immediately recognized in the statement of income.

Goodwill is allocated to Cash-Generating Units (CGUs) or groups of cash-generating units that benefit from business combination synergies.

Goodwill is not amortized but tested for impairment at least annually and whenever there is an indication that it may be impaired (see Note 1.11 below). Any impairment losses are recognized under “Amortization and impairment of purchase accounting intangible”.

The full goodwill method is applied at Group level, therefore, non-controlling interests are valued at fair value.

In accordance with IAS 32, put options granted to minority shareholders are recorded as financial liabilities at the option’s estimated strike price.

The share in the net assets of subsidiaries is reclassified from “Non-controlling interests” to “Purchase commitments over non-controlling interests” and the differential between the value of the non-controlling interests and the liability, corresponding to the commitment, is recorded in equity.

1.6- Translation of the financial statements of foreign subsidiaries

The consolidated financial statements are prepared in euros.

The financial statements of subsidiaries that use another functional currency are translated into euros as follows:

•   assets and liabilities are translated at the official closing rates;

•   income statement, backlog and cash flow items are translated at average annual exchange rates.

The functional currency of an entity is the currency of the primary economic environment in which it carries out its operations. In most cases, the functional currency corresponds to the local currency. However, a functional currency other than the local currency can be retained for certain entities, if it represents the currency of the main transactions carried out by the entity and that it ensures faithful representation of its economic environment.

Translation adjustments are recorded in consolidated equity under “Translation reserve”.

Upon exit from the scope of consolidation, the cumulative translation reserve of a company whose functional currency is not the euro are recycled in the income statement and are part of the gain or loss on disposal.

The Group applies IAS 29 - Financial Reporting in Hyperinflationary Economies to the Group’s subsidiaries in countries with hyperinflationary economies (Argentina and Türkiye). IAS 29 - Financial Reporting in Hyperinflationary Economies requires the non-monetary assets and liabilities and income statementsofcountries with hyperinflationary economiesto be restated to reflect the changes inthe general purchasing power of their functional currency, thereby generating a profit or loss on the net monetary position which is recognized in net income within “Other financial income and expenses”. In addition, the financial statements of the subsidiaries in these countries are translated at the closing exchange rate of the reporting period concerned, in accordance with IAS 21. In 2024, all the necessary conditions were met to consider Türkiye and Argentina as a hyperinflationary country within the meaning of IFRS. The Group has applied IAS 29 to Argentina in its financial statements from January 1, 2018 and to Türkiye in its financial statements from January 1, 2022. The Group used the Consumer Price Index (CPI) for both Argentina and Türkiye to remeasure its income statement items, cash flows and non-monetary assets and liabilities. This index was up 118% for Argentina and up 44% for Türkiye between December 2023 and December 2024.

1.7- Foreign currency transactions

Foreign currency transactions are recorded using the exchange rate in effect at the transaction date or at the hedging rate. At the balance sheet date, monetary items in foreign currency (e.g. payables, receivables, etc.) are translated into the functional currency of the entity at the closing rate or at the hedging rate. Gains or losses on translation of foreign currency transactions are recorded under “Net financial income/ (loss)”. Foreign currency hedging is described below, in Note 1.23.

However, certain long-term receivables and loans to subsidiaries are considered to be part of a net investment in a foreign operation, as defined by IAS 21 - The Effects of Changes in Foreign Exchange Rates. As such, the impact of exchange rate fluctuations is recorded in equity and recognized in the statement of income when the investment is sold or when the long-term receivable or loan is reimbursed.

1.8- Intangible assets

Intangible assets acquired separately or as part of a business combination

Intangible assets acquired separately are initially recognized in the balance sheet at historical cost. They are subsequently measured using the amortized cost model.

Intangible assets (mainly trademarks, technologies and customer relationships) acquired as part of business combinations are recognized in the balance sheet at fair value at the combination date, appraised externally for the most significant assets and internally for the rest, and that represents its historical cost in consolidation. The valuations are performed using generally accepted methods, based on future inflows.

Intangible assets are generally amortized on a straight-line basis over their useful life or, alternatively, over the period of legal protection. Amortized intangible assets are tested for impairment when there is any indication that their recoverable amount may be less than their carrying amount.

Amortization expenses and impairment losses on intangible assets acquired in a business combination are presented on a separate statement of income line item, “Amortization and impairment of purchase accounting intangible” assets.

Trademarks

The trademarks are recognized at fair value at the acquisition date. The trademarks fair value is determined using the relief from royalty method.

Trademarks acquired as part of a business combination are not amortized when they are considered to have an indefinite life.

The criteria used to determine whether or not such trademarks have indefinite lives and, as the case may be, their lifespan, are as follows:

•   brand awareness;

•   outlook for the brand in light of the Group’s strategy for integrating the trademark into its existing portfolio.

Indefinite-lived trademarks are tested for impairment at least annually and whenever there is an indication they may be impaired. When necessary, an impairment loss is recorded.

Internally generated intangible assets

Research and development costs

Research costs are expensed in the statement of income when incurred. Development costs for new projects are capitalized if, and only if:

•   the project is clearly identified and the related costs are separately identified and reliably monitored;

•   the project’s technical feasibility has been demonstrated and the Group has the intention and financial resources to complete the project and to use or sell the resulting products;

•   the Group has allocated the necessary technical, financial and other resources to complete the development;

•   it is probable that the future economic benefits attributable to the project will flow to the Group.

Development costs that do not meet these criteria are expensed in the financial year in which they are incurred.

Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.

Before the commercial launch, capitalized development projects are tested for impairment at least annually. From the date of the commercial launch, capitalized development projects are amortized over the lifespan of the underlying technology, which generally ranges from three to ten years. The amortization expenses of such capitalized projects are included in the cost of the related products and classified into “Cost of sales” when the products are sold.

As for development-related assets which are in the amortization period, they are tested for impairment in case an impairment risk has been identified.

Software implementation

External and internal costs relating to the implementation of Enterprise Resource Planning (ERP) applications are capitalized when they relate to the programming, coding and testing phase. They are amortized over the applications’ useful lives.

1.9- Property, plant and equipment

Property, plant and equipment is primarily comprised of land, buildings and production equipment and is carried at acquisition cost, less accumulated depreciation and any accumulated impairment losses.

Each component of an item of property, plant and equipment with a useful life that differs from that of the whole item is depreciated separately on a straight-line basis. The main useful lives are as follows:

•   buildings: 20 to 40 years;

•   machinery and equipment: 3 to 10 years;

•   other: 3 to 12 years.

The useful life of property, plant and equipment used in operating activities, such as production lines, reflects the related products’ estimated life cycles.

Useful lives of items of property, plant and equipment are reviewed periodically and may be adjusted prospectively if appropriate. The depreciable amount of an asset is determined after deducting its residual value, when the residual value is material.

Depreciation is expensed in the period and included in the production cost of inventory or the cost of internally generated intangible assets. It is recognized in the statement of income under “Cost of sales”, “Research and development costs” or “Selling, general and administrative expenses”, as the case may be.

Items of property, plant and equipment are tested for impairment whenever there is an indication they may be impaired. Impairment losses are charged to the statement of income under “Other operating income and expenses”.

Since 2019, property, plant and equipment also includes right-of-use assets, in accordance with the recommended treatment in IFRS 16 Leases, and as described in the following note.

1.10- Leases

Scope of the Group’s contracts

The lease contracts identified within all the Group entities fall under the following categories:

•   real estate: office buildings, factories, and warehouses;

•   vehicles: cars and trucks;

•   forklifts used mainly in factories or storage warehouses.

The Group has retained the exemption for low-value assets (i.e. assets with a cost lower than USD 5,000). Thus, the defined scope does not include small office or IT equipment, mobile phones or other small equipment, which all correspond to low-value equipment. Shortterm contracts (i.e. less than 12 months without purchase option) are also exempted under the standard. In this case, for example, for occasional vehicle or accommodation rentals.

Rental obligation

At the inception date of the lease, the Group recognizes the lease liabilities, measured at the present value of the lease payments to be made over the term of the lease. The present value of payments is calculated mainly using the marginal borrowing rate of the contracting entity’s country, at the contract starting date.

Rental payments include fixed payments (net of rental incentives receivable), variable payments based on an index or rate initially measured using the index or rate as at the commencement date and amounts that should be paid under residual value guarantees. Besides, the simplification allowing not to split services components has not been elected by the Group. Therefore, only the rents are taken into account in the lease payments.

Lease payments also include, when applicable, the exercise price of a purchase option reasonably certain to be exercised by the Group and the payment of penalties for the termination of a lease, if the term of the lease takes into account the fact that the Group has exercised the termination option.

Variable lease payments that are not dependent on an index or rate are recognized as an expense in the period in which the event or condition that triggers the payment occurs.

After the start date of the contract, the amount of rental obligations is increased to reflect the increase in interest and reduced for lease payments made.

In addition, the carrying amount of the lease liabilities is revalued in the event of a reassessment or modification in the lease (e.g. change in the term of the lease, change in lease payments, application of annual indexation, etc.).

The obligation is recorded under other current and other non-current liabilities.

Right-of-use assets

The Group accounts for the assets related to the right-of-use on the lease starting date (i.e. the date on which the underlying asset is available).

Assets are measured at cost, less accumulated depreciation and impairment losses, and adjusted for the revaluation of lease liabilities.

The cost of right-of-use assets includes the amount of lease liabilities, initial direct costs incurred and lease payments made on or before the effective date, minus lease inducements received. They are recognized as tangible assets, in the Balance Sheet.

Unless the Group is reasonably certain that it will become the owner of the leased asset at the end of the lease term, the recorded right-ofuse assets are depreciated using the linear method over the shortest period of time between estimated life of the underlying asset and the duration of the lease. The assets related to the right-of-use are subject to depreciation.

Determining the duration of contracts

The duration of the Group’s contracts varies according to geographies.

The real estate contracts have variable durations depending on the countries and local regulations. Vehicles and forklifts are generally contracted between 3 and 6 years.

In certain geographies, the Group’s real estate contracts offer unilateral options for termination of contracts (particularly in France with contracts 3-6-9).

According to the recommendation of IFRIC, on a case-by-case analysis and based on Real Estate teams’ expertise, experience strategy and projects, the Group is determining the most probable duration to perform our calculations.

In most of cases, the duration chosen is the enforceable duration of the real estate contracts, in particular on the most strategic buildings and factories.

1.11- Impairment of assets

Impairment tests

The Group assesses the recoverable amount of its long-lived assets as follows:

•   for all property, plant and equipment subject to depreciation and intangible assets subject to amortization, the Group carries out a review at each balance sheet date to assess whether there is any indication that they may be impaired. Indications of impairment are identified based on external or internal information. If such an indication exists, the Group tests the asset for impairment by comparing its carrying amount to the higher of fair value minus costs to sell and value in use;

•   non-amortizable intangible assets and goodwill are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

Valueinuseisdeterminedbydiscountingfuturecashflowsthatwillbegeneratedbythetestedassets. Thesefuturecashflowsarebasedon Group management’s economic assumptions and operating forecasts presented in business plans over a period generally not exceeding five years, and then extrapolated based on a perpetuity growth rate. The discount rate corresponds to the Weighted Average Cost of Capital (WACC) at the measurement date, it stood at 9.0% at December 31, 2024 for the Group (8.9% at December 31, 2023). This rate is based on the following main assumptions:

•   a long-term interest rate of 3.0%, corresponding to the interest rate for 10-year OAT treasury bonds

•   the average premium applied to financing obtained by the Group in 2024

•   the weighted country risk premium for the Group’s businesses in the countries in question.

Impairment tests are performed at the level of CGUs (or groups of CGUs) to which the asset belongs. A cash-generating unit is the smallest group of assets that generates cash inflows that are largely independent of the cash flows from other assets or groups of assets. The groups of cash-generating units are Low Voltage, Medium Voltage, Secure Power, Sustainability, EM Software, Industrial Automation and Industrial Automation Software.

NetassetswereallocatedtothegroupofCGUsatthelowestpossiblelevelonthebasisofthegroupofCGUsactivitiestowhichtheybelong.

Goodwill is allocated when initially recognized. The CGU allocation is done on the same basis as used by Group management to monitor operations and assess synergies deriving from acquisitions.

When the recoverable amount of an asset or CGU is lower than its book value, an impairment loss is recognized for the excess of the book value over the recoverable value. The recoverable value is defined as the highest value between the value in use and the selling price less costs to sell. When the tested CGU comprises goodwill, any impairment losses are firstly deducted from goodwill. Impairment indicators

For intangible assets with finite useful lives, the Group reviews indicators of impairment at each closing date.

For research and development integrated in sold offers, deviations from business plan of selected quantitative indicators such as revenue, volumes, price, costs, and qualitative indicators such as change in market, strategic turnaround, changes in R&D roadmap priorities, etc., constitute indicators of impairment that trigger an impairment test.

1.12- Non-current financial assets

Investments in non-consolidated companies are initially recorded at their cost of acquisition and subsequently measured at fair value. The fair value of investments listed in an active market may be determined reliably and corresponds to the listed price at balance sheet date (Level 1 from the fair value hierarchy as per IFRS 7).

IFRS 9 standard allows two accounting treatments for equity instruments:

•   change in fair value is recognized through “Other Comprehensive Income” in the comprehensive income statement, and in equity under “Other reserves” in the balance sheet, with no subsequent recycling in the income statement even upon sale.

•   change in fair value, as well as gain or loss in case of sale, are recognized in the income statement.

The election between those two methods is to be made from inception for each equity investment and is irrevocable. For significant investments not listed in an active market, the valuation is performed by external experts at least annually and whenever there is an indication that it may be impaired.

Venture capital (FCPR) / Mutual funds (SICAV) are recognized at fair value through income statement, in accordance with IFRS 9.

1.13- Inventories and work in progress

Inventories and work in progress are measured at the lower of their initial recognition cost (acquisition cost or production cost generally determined by the weighted average price method) or of their estimated net realizable value.

Net realizable value corresponds to the estimated selling price net of remaining expenses to complete and/or sell the products. Inventory impairment losses are recognized in “Cost of sales”.

The cost of work in progress, semi-finished and finished products, includes the cost of materials and direct labor, subcontracting costs, all production overheads based on normal manufacturing capacity and the portion of development costs that are directly related to the manufacturing process (corresponding to the amortization of capitalized projects in production and product and range of products maintenance costs).

Impairment risk is based on historical or forecasted consumptions, depending on the nature of inventories and taking into account:

•   inventory turnover

•   strategic nature of the inventory

•   phasing in or out of the inventory

1.14- Trade and other operating receivables

Trade and other receivables are measured at their transaction price upon initial recognition and then at amortized cost less any impairment losses based on expected credit losses model.

Trade and other operating receivables are depreciated according to the simplified IFRS 9 model. From inception, trade receivables are depreciated to the extent of the expected losses over their remaining maturity.

The credit risk of trade receivables is assessed on a collective basis country by country, as the geographical origin of receivables is considered representative of their risk profile. Countries are classified by risk profile using the assessment provided by an external agency. The provision for expected credit losses is evaluated using (i) the probabilities of default communicated by a credit agency, (ii) historical default rates, (iii) aging balance, (iv) as well as the Group’s assessment of the credit risk considering actual guarantees and credit insurance.

Once it is known with certainty that a doubtful receivable will not be collected, the doubtful account and its related depreciation are written off through the income statement.

Accounts receivable are discounted in cases where they are due in over one year and the discounting impact is significant.

Assignment of receivables

When it can be demonstrated that the Group has transferred substantially all the risks and benefits related to assignment of receivables, particularly the credit risk, the items concerned are derecognized. Otherwise, the operation is considered as a financing operation, and the receivables remain in the balance sheet assets, with recognition of a corresponding financial liability.

1.15- Assets held for sale and liabilities of discontinued operations

Assets held for sale

Non-current assets or disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This classification occurs when the Group takes the decision to sell them and that the sale is considered highly probable.

The assets and liabilities held for sale are presented on different lines of the balance sheet. They are measured at the lower of their carrying amount or fair value less costs to sell. Assets classified as held for sale are no longer depreciated (amortized) as of the date they are classified as assets or disposal groups held for sale.

When a sale involving the loss of control of the subsidiary is considered highly probable, all the assets and liabilities of this subsidiary are classified as being held for sale, independently of whether or not the Group retains a residual interest in the entity after its sale.

Discontinued operation

A discontinued operation is a clearly identifiable component that the Group either has abandoned or that is classified as held for sale:

•   representing a separate major line of business or geographical area of operations;

•   being part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or,

•   being a subsidiary acquired exclusively with a view to resale.

Once the criteria are met, the profit and loss and the cash flow from discontinued operations are presented separately in the consolidated income statement and the consolidated cash flow statement for each period.

1.16- Taxes

Income tax expense

The tax rate is calculated on the basis of the fiscal regulations enacted or substantively enacted at the fiscal year closing date in each country where the Group’s companies carry out their business. The Group’s applicable tax rate corresponds to the average of the theoretical tax rates in force in each country, weighted according to profit obtained in each of these countries. The average effective tax rate is calculated as follows: (current and deferred income tax expense)/(net profit before tax less share of profit of associates, and net profit from discontinued operations).

Deferred taxes

Deferred taxes are recognized for all temporary differences between the carrying amount of assets and liabilities and their tax base (excluding if it arises from the initial recognition of goodwill), the tax loss carryforwards and the unused tax credits.

Deferred taxes are based on tax rates and tax rules that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. The effect of any change in the current and deferred taxes is recognized in P&L, except to the extent that it relates to items recognized on OCI or directly in equity. In this case, the tax is also recognized in OCI or equity.

When the Group decides not to distribute profits retained by the subsidiary within the foreseeable future, no deferred tax liability is recognized.

Future tax benefits arising from the utilization of tax loss carry forwards (including amounts available for carry forward without time limit) are recognized only when they can reasonably be expected to be realized. The carrying amount of deferred tax assets is tested for impairment at each balance sheet date and an impairment loss is recognized to the extent that it is no longer probable that sufficient taxable profits will be available against which the deferred tax asset can be fully or partially offset.

Deferred tax assets and liabilities are not discounted and are recorded in the balance sheet under non-current assets and liabilities. Deferred tax assets and liabilities related to the same unit and which are expected to reverse in the same period are offset.

1.17- Cash and cash equivalents

Cash and cash equivalents presented in the balance sheet consist of cash, bank accounts, term deposits of three months or less and marketable securities traded on organized markets. Marketable securities are short-term, highly liquid investments that are readily convertible to known amounts of cash at maturity. They notably consist of bank deposits, commercial paper, mutual funds and equivalents. Considering their nature and maturities, these instruments represent insignificant risk of changes in value and are treated as cash equivalents.

1.18- Treasury shares

Schneider Electric SE shares held by the parent company or by fully consolidated companies are measured at acquisition cost and deducted from equity.

Gains/(losses) on the sale of own shares are cancelled from consolidated reserves, net of tax.

1.19- Pensions and other employee benefit obligations

Depending on local practices and laws, the Group’ subsidiaries participate in pension, termination benefit and other long-term benefit plans. Benefits paid under these plans depend on factors such as seniority, compensation levels and payments into mandatory retirement programs.

Defined contribution plans

Payments made under defined contribution plans are recorded in the income statement, in the year of payment, and are in full settlement of the Group’s liability. As the Group is not committed beyond these contributions, no provision related to these plans has been booked.

In most countries, the Group participates in mandatory general plans, which are accounted for as defined contribution plans.

IFRIC decision - Attribution of benefits to periods of service IAS 19 - EmployeeBenefits

The Group has taken into account the impact of the IFRIC agenda decision issued in April 2021 when measuring employee benefit obligations. This decision, without any material impact for the Group, clarifies the periods over which employee benefits should be attributed in allocating the IAS 19 expense.

Defined Benefit plans

Defined Benefit plans are measured using the projected unit credit method.

Expenses recognized in the statement of income are split between operating costs (for service costs rendered during the period) and net financial income/(loss) (for financial costs and expected return on plan assets).

The amount recognized in the balance sheet corresponds to the present value of the obligation, and net of plan assets. The valuation is performed by external actuaries.

When this is an asset, the recognized asset is limited to the present value of any economic benefit due in the form of plan refunds or reductions in future plan contributions.

Changesresultingfromperiodicadjustmentstoactuarialassumptionsregardinggeneralfinancialandbusinessconditionsordemographics(i.e., changesinthediscountrate, annualsalaryincreases, returnonplanassets, yearsofservice, etc.) aswellasexperienceadjustments are immediately recognized in the balance sheet as a separate component of equity in “Other reserves” and in comprehensive income as “Other comprehensive income/loss”.

Past service cost is recorded in “Other operating income and expenses”.

Other commitments

Provisions are funded and expenses recognized to cover the cost of providing health-care benefits for certain Group retirees in Europe and the United States. The accounting policies applied to these plans are similar to those used to account for Defined Benefit pension plans.

The Group also funds provisions for all its subsidiaries to cover seniority-related benefits (primarily long service awards for its French subsidiaries). Actuarial gains and losses on these benefit obligations are fully recognized in profit or loss.

1.20- Share-based payments

The Group grants performance shares to senior executives and certain employees.

These equity instruments are measured at fair value, on the date of grant, using the market price discounted from the expected dividend yield during the vesting period and adjusted for market conditions achievement.

The Group is using the Monte Carlo method to estimate the achievement of Relative Total Shareholder Return (TSR) vs. CAC 40 and a Panel of peer companies (market conditions).

The number of equity instruments granted can be adjusted during the vesting period to reflect the Group best estimate of non-market conditions achievement.

Main non-market conditions are the following:

•   Adjusted Earnings per Share (EPS) improvement rate;

•   Schneider Sustainability External and Relative Index (“SSERI”) (until 2023); • Carbon Emissions Reduction Targets (since 2024);

•   Service conditions.

An employee benefits expense is recognized with a corresponding increase in equity on a straight-line basis over the vesting period, in general three years.

1.21- Provisions and risk contingencies

A provision is recognized when it is probable that the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the loss or liability is not likely and cannot be reliably estimated, but remains possible, the Group discloses it as a contingent liability. Provisions are calculated on a case-by-case or statistical basis and discounted when the impact from discounting is significant.

Provisions are primarily set aside to cover:

•   economic risks: these provisions relate to probable tax risks, other than income tax related, arising on positions taken by the Group or its subsidiaries. Each position is assessed individually and not offset, and reflects the best estimate of the risk at the end of the reporting period. Where applicable, it includes any late-payment interest and fines;

•   customer risks: provisions for customer risks mainly integrate the provisions for losses at completion for some of long-term contracts. 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 residual cost of Schneider Electric product warranties not covered by insurance. The provisions are estimated with consideration of historical claim statistics and the warranty period;

–   provisions to cover disputes concerning defective products and recalls of clearly identified products.

•   environmental risks: these provisions are primarily funded to cover clean-up costs. The estimation of the expected future outflows is 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 to implement the plan before the end of the year. The estimation of the liability includes only direct expenditure arising from the restructuring.

1.22- Financial liabilities

Financial liabilities primarily comprise bonds, commercial paper and short and long-term bank borrowings. These liabilities are initially recorded at fair value, from which any direct transaction costs are deducted. Subsequently, they are measured at amortized cost based on their effective interest rate.

1.23- Financial instruments and derivatives

Risk hedging management is centralized. The Group’s policy is to use derivative financial instruments exclusively to manage and hedge changesinexchangerates, interestratesorpricesofcertainrawmaterials. TheGroupusesinstrumentssuchasforeignexchangeforwards, foreign exchange options, cross currency swaps, interest rate swaps and commodities future, swaps or options, depending on the nature of the exposure to be hedged.

All derivatives are recorded in the balance sheet at fair value with changes in fair value recorded in the statement of income, except when they are qualified in a hedging relationship.

Cash flows from financial instruments are recognized in the consolidated statement of cash flows in a manner consistent with the underlying transactions.

Foreign currency hedges

The Group periodically enters into foreign exchange derivatives to hedge the currency risk associated with foreign currency transactions.

Whenever possible, monetary items (except specific financing items) denominated in foreign currency carried in the balance sheet of

Group companies are hedged by rebalancing assets and liabilities per currency through foreign exchange spots realized with Corporate Treasury (natural hedge). The foreign exchange risk is thus aggregated at Group level and hedged with foreign exchange derivatives. When foreign exchange risk management cannot be centralized, the Group contracts foreign exchange forwards to hedge operating receivables and payables carried in the balance sheet of Group companies. In both cases, the Group does not apply hedge accounting because gains and losses generated on these foreign exchange derivatives naturally offset within “Net financial income/(loss)” with gains or losses resulting from the translation at end-of-year rates of payables and receivables denominated in foreign currency.

The Group also hedges future cash flows, including recurring future transactions and planned acquisitions or disposals of investments. In accordance with IFRS 9, these are treated as cash flow hedges. These hedging instruments are recognized at fair value in the balance sheet. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is accumulated in equity, under “Other reserves”, and then recognized in the income statement when the hedged item affects profit or loss.

The Group also hedges foreign exchange risk financing receivables or payables (including current accounts and loans with subsidiaries) using foreign exchange derivatives that can be documented either in Cash Flow Hedge or Fair Value Hedge depending on the nature of the derivative.

The Group may also designate foreign exchange derivatives or borrowings as hedging instruments of its investments in foreign operations (net investment hedge). Changes of value of those hedging instruments are accumulated in equity and recognized in the statement of income symmetrically to the hedged items.

The Group qualifies foreign exchange derivative based on the spot rate. The Group adopted the cost of hedging option offered by IFRS 9 to limit volatility in the statement of income related to forward points:

•   For foreign exchange derivatives hedging an item on the balance sheet: forward points are amortized in statement of income on a straight-line basis. Forward points related to foreign exchange derivatives hedging financing transactions are included in “Finance costs, net”;

•   For foreign exchange derivatives hedging future transactions not yet recorded on the balance sheet: Forward points are recorded in the statement of income when the hedged transaction impacts the statement of income.

Interest rate hedges

Interest rate swaps allow the Group to manage its exposure to interest rate risk. The derivative instruments used are financially adjusted to the schedules, rates and currencies of the borrowings they cover. They involve the exchange of fixed and floating-rate interest payments. The differential to be paid (or received) is accrued as an adjustment to interest income or expense over the life of the agreement. The Group applies hedge accounting as described in IFRS 9 for interest rate swaps. Gains and losses on re-measurement of interest rate swaps at fair value on the balance sheet are recognized in equity (for Cash Flow Hedges) or in profit or loss (for Fair Value Hedges).

Borrowings hedged by an interest rate derivative in a fair value hedge are revaluated at fair value for the portion of risk being hedged, with offsetting entry in the statement of income.

Cross-currency swaps may be presented as foreign exchange hedges or as interest rate hedges depending on the characteristics of the derivative.

Commodity hedges

The Group also purchases commodity derivatives including forward purchase contracts, swaps and options to hedge price risks on all or part of its forecast future purchases. According to IFRS 9, these qualify as cash flow hedges. These instruments are recognized in the balance sheet at fair value at the period-end (mark to market). The effective portion of the hedge is recognized separately in equity (under “Other reserves”) and then recognized in income (gross margin) when the underlying hedge affects consolidated income. The effect of this hedging is then incorporated in the cost price of the products sold.

1.24- Revenue recognition

The Group’s revenues primarily include transactional sales and revenues from services, system contracts (projects) and software.

Some contracts may include the supply to the customer of distinct goods and services (for instance contracts combining build followed by operation and maintenance). In such situations, the contract is analyzed and segmented into several components (“performance obligations”), each component being accounted for separately, with its own revenue recognition method and margin rate. The selling price is allocated to each performance obligation in proportion to the specific selling price of the underlying goods and services. This allocation should reflect the share of the price to which Schneider Electric expects to be entitled in exchange for the supply of these goods or services.

Revenue associated with each performance obligation identified within a contract is recognized when the obligation is satisfied, i.e. when the control of the promised goods or services is transferred to the customer.

The following revenue recognition methods can be applied:

Recognition of revenue at a point of time

Revenue from sales is recognized at a point of time, when the control of the promised goods or services is transferred to the customer. This method is applicable for all transactional sales and for specific services such as spare parts deliveries, or on-demand services. Recognition of revenue over time

To demonstrate that the transfer of goods is progressive and recognize revenue over time, the following cumulative criteria are required:

•   the goods sold have no alternative use, and

•   enforceable right to payment (corresponding to costs incurred, plus a reasonable profit margin) for the work performed to date exists, in the event of early termination for convenience by the customer.

When these criteria are fulfilled, revenue is recognized using the percentage-of-completion method, based on the percentage of costs incurred in relation to total estimated costs of the performance obligation. The cost incurred includes direct and indirect costs relating to the contracts.

Expected losses on contracts are fully recognized as soon as they are identified.

Penalties for late delivery or for the improper execution of a contract are recognized as a deduction from revenue.

This method is applicable for systems contracts (projects) as the constructed assets are highly customized, and thus the Group would incur significant economic losses to redirect the built solutions to other customers.

Revenue from most services contracts is recognized over time, as the customer simultaneously receives and consumes the benefits of the services provided. When costs incurred are stable over the contract’s period, revenue is linearized over the contract’s length.

Provisionsforthediscountsofferedtodistributorsareaccruedwhentheproductsaresoldtothedistributorandrecognizedasadeduction from revenue. Certain Group’ subsidiaries also offer cash discounts to distributors. These discounts and rebates are deducted from sales.

Consolidated revenue is presented net of these discounts and rebates.

Recognition of software revenue

The group generates software-related revenue mainly through subscriptions, licenses, maintenance and services. Revenue is recognized upon transfer of control of the promised software or service to the customers.

•   Subscriptions contracts are either:

–   SaaS (Software as a Service: remote access to a cloud software solution, hosting and services) contracts, which are recognized linearly over the contract term

–   On premise subscriptions: containing two separate performance obligations pertaining to on premise software license and maintenance, the revenue from such arrangements is recognized in line with revenue from arrangements with multiple performance obligations. • Software license revenue represents fees earned from granting customers licenses to use the Group’s software. It includes license revenue of perpetual and periodic license sales of software products and is recognized at a point in time when control is transferred to the client.

•   Maintenance includes annual fees as well as separate support and maintenance contracts. Revenue is recognized over time on a straight-line basis over the period of the contract.

•   Services include notably setup services, training services, customization services. Revenue from these services is recognized over time as the services are performed.

Backlog and balance sheet presentation

Backlog(asdisclosedinNote3)correspondstotheamountofthesellingpriceallocatedtotheperformanceobligationsthatareunsatisfied (or partially unsatisfied) at closing date and includes binding contracts only.

The cumulated amount of revenue accounted for, less progress payments and accounts receivable (presented on a dedicated line of the balance sheet) is determined on a contract-by-contract basis. If this amount is positive, the balance is recognized under “contract assets” inthebalancesheet. Ifitisnegative, thebalanceisrecognizedunder“contractliabilities”(seeNote16). Reservesforonerouscontracts(socalled reserves for loss at completion) are excluded from contract assets and liabilities and presented among the “provisions for customer risks” item.

1.25- Earnings per share

Earnings per share are calculated in accordance with IAS 33 - Earnings Per Share.

Diluted earnings per share are calculated by adjusting profit attributable to equity holders of the parent and the weighted average number ofsharesoutstandingforthedilutiveeffectofperformancesharesoutstandingatthebalancesheetdate. Thedilutiveeffectofperformance shares is determined by applying the “treasury stock” method.

1.26- Statement of cash flows

The consolidated statement of cash flows has been prepared using the indirect method, which consists of reconciling net profit to net cash provided by operations. The opening and closing cash positions include cash and cash equivalents, comprised of marketable securities, net of bank overdrafts and facilities.

1.27- Other operating income and expenses

Material non-recurring operations that could affect operating performance readability are classified under “Other operating income and expenses”.

They notably include:

•   gains or losses from the disposal of activities or groups of assets;

•   costs in relation with acquisitions or separation (advisors’ fee, costs from external experts involved in the due diligence process);

•   costs in relation with integration (one-off costs expensed in the next three years after acquisition, in relation with upgrade or modification of existing IT systems, to reach the Group standards);

•   significant provisions and impairment losses for property, plant and equipment and intangible assets;

•   provisions or costs relating to significant legal risks or litigations;

•   gain or loss related to the amendment, curtailment or settlement of a defined benefit plan.

1.28- Other financial income and expense

Other financial income and expenses notably include:

•   Exchange gains and losses;

•   IFRS 16 - Leases financial interests;

•   Financial component of defined benefit plan costs;

•   IAS 29 - Financial Reporting in Hyperinflationary Economies Net monetary gain or loss;

•   Fair value adjustment of financial assets;

•   Effect of discounting or unwinding of discount;

•   bank commissions; • factoring fees.

NOTE 2           Changes in the scope of consolidation

The list of main consolidated companies can be found in Note 29.

2.1- Scope variations

Main acquisitions of the period

Transaction with ETAP’s non-controlling interests

OnJanuary23, 2024, theGrouppurchasedtheremaining20%non-controllinginterestsofETAPinaccordancewiththeforwardagreement concluded in 2021 when it acquired 80% of the company.

Planon

On July 30, 2024, Schneider Electric signed an agreement to acquire an additional 55% stake in Planon for a consideration of EUR 525 million, fully paid in cash, increasing its ownership of Planon to a controlling stake of 80%. The transaction further strengthens Schneider’s agnostic software strategy, with Planon’s established and strong footprint in the global buildings market, cloud-based Integrated Workplace Management System offer and subscription-based software business model well positioned to capitalize on the fast-growing smart building software market. Planon, with revenues of EUR 161 million in 2023, was previously consolidated under the equity method and this operation is treated as if it were disposed of and reacquired at fair value on the acquisition date, resulting in a non-cash gain in “Other operating income and expenses”. Since transaction closing date on October 28, 2024, Planon is consolidated within the Energy Management reporting segment.

Until January 2030, the minority shareholder has the right to sell and transfer to the Group their remaining 20% stake in Planon. The Group also hold a right to acquire the remaining 20% of non-controlling interests between July 2027 and January 2030. The related debt has been recognized in “Current purchase commitments over non-controlling interests” for EUR 191 million at acquisition date.

The purchase accounting as per IFRS 3 is not completed as of December 31, 2024. Planon carrying value at acquisition date for net identifiable assets was EUR 48 million. The preliminary net adjustment of the opening balance sheet is EUR 288 million, resulting mainly from the booking of identifiable intangible assets (developed technology, customer relationships and trademark) net of deferred tax liabilities. The preliminary goodwill recognized amounts to EUR 608 million at acquisition date.

Main divestments of the period

Autogrid

On December 14, 2023, the Group entered into an agreement with Uplight Inc. (in which Schneider Electric holds a strategic minority investment) to sell AutoGrid to Uplight. This transaction represents a reorganization among Schneider Electric-owned or affiliated businesses aimed at Prosumers, to better align their capabilities. The transaction, which closed on February 8, 2024, has raised the interest percentage of the Group in Uplight Inc. to 43.46%, which remains consolidated as an equity investment. The impact from the disposal in the income statement of the period is not material.

Follow-up on acquisitions and divestments transacted in 2023 with effect in 2024

EcoAct

On November 2, 2023, the Group acquired 100% of the capital of EcoAct SAS (“EcoAct”), an international leader in climate consulting and net-zero solutions headquartered in Paris, France. EcoAct is reported within the Energy management reporting segment.

The purchase accounting as per IFRS 3 is completed as of December 31, 2024. The main identifiable assets recognized as part of the purchase price allocation were customer relationships and trademark. At acquisition date, goodwill amounted to EUR 130 million.

2.2- Impact of changes in the scope of consolidation on the Group cash flow

Changes in the scope of consolidation at December 31, 2024, decreased the Group’s cash position by a net EUR 635 million outflow, as described below:

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

In2024,cashoutflowismainlyduetotheacquisitionsofPlanonandETAP’snon-controllinginterestsandotherindividuallynotsignificant acquisitions. The main acquisitions and disposals of the year are described in Note 2.1.

In 2023, cash outflows mainly related to the acquisitions of AVEVA’s non-controlling interests and EcoAct. Cash inflows mainly related to the disposals of Telemecanique Sensors, VinZero and Gutor.

NOTE 3          Segment information

The Group is organized into two reporting segments as follows:

EnergyManagement leverages a complete end-to-end technology offering enabled by EcoStruxure. The Group’s go-to-market is oriented to address customer needs across its four end-markets of Buildings, Data Centers, Industry and Infrastructure, supported by a worldwide partner network.

IndustrialAutomation 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”.

The Executive Committee, which is chaired by the Chief Executive Officer, has been identified as the main decision-making body for allocating resources and evaluating segment performance. Performance and decisions on the allocation of resources are assessed by the Executive Committee and are mainly based on Adjusted EBITA.

Share-based payment is presented under “Central functions & digital costs”.

The Executive Committee does not review assets and liabilities by reporting segments.

The same accounting principles governing the consolidated financial statements apply to segment data.

Details are provided in the Management Report.

Due to the substantial number of customers served by the Group, to their significant diversity in multiple sectors and to their wide geographical dispersion, the Group’s largest customer does not exceed 10% of Schneider Electric’s revenue.

3.1- Information by reporting segment

Full Year 2024

Energy                    Industrial     Central functions Management        Automation                        & digital costs

(in millions of euros)                                                                                                                                                                                                                                                                Total

On December 31, 2024, the total backlog to be executed in more than a year amounted to EUR 4,842 million.

Full Year 2023

Full Year 2023

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

* Including EUR 46 million of research and development tax credit in full year 2024 and EUR 58 million in full year 2023

** Excluding amortization of capitalized development costs

In addition to the research and development expenditures, amortization expenses of capitalized development costs booked in cost of sales, amounted to EUR 232 million in 2024 and EUR 236 million in 2023.

NOTE 5              Impairment losses, depreciation and amortization expenses

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

In 2023, a EUR 34 million impairment was recognized on Clipsal brand following the annual impairment tests realized by the Group.

NOTE 6           Other operating income and expenses

Other operating income and expenses are as follows:

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

In 2024, the gains on business disposals mainly relate to the revaluation of the Planon’s shares previously owned by the Group, following the acquisition of a controlling stake in 2024 as described in Note 2. The costs of acquisitions and integrations are mainly related to the recent and ongoing acquisitions of the year. “Others” mainly include EUR 104 million provision in relation to the French Competition Authority decision described in Note 26.2.

In 2023, the gains on business disposals mainly related to the 2023 divestments (Telemecanique Sensors, VinZero and Gutor). The costs of acquisitions and integrations mainly related to the recent acquisitions.

NOTE 7           Other financial income and expenses

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

NOTE 8          Income tax expenses

Wherever the regulatory environment allows it, the Group entities file consolidated tax returns. Schneider Electric SE files a consolidated tax 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)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

8.2- Income tax expense by country market

Full Year 2024

Western       of which        Asia-              of which        North            of which        Rest of the Europe           France           Pacific           China             America USA                World

(in millions of euros)                                                                                                                                                                                                                                                                Total

*after reallocation of withholding taxes on dividends

Full Year 2023

*after reallocation of withholding taxes on dividends

8.3- Tax reconciliation

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

The Company’s consolidated income from continuing operations being predominantly generated outside of France, theoretical tax expense from continuing operations is reconciled above from the Company’s weighted-average global tax rate (rather than from the French domestic statutory tax rate).

In December 2022, member states of the European Union adopted the Pillar 2 directive, introducing an overall minimum corporate tax rate of 15%, which came into force for the financial year ending December 31, 2024. The impact on the Group’s effective tax rate is 0.4%, in line with the range communicated in 2023.

NOTE 9         Goodwill

9.1- Main items of goodwill

Goodwill is broken down by groups of Cash Generating Units (CGUs) as follows, with long-term growth rates and WACC used for annual impairment test:

(in millions of euros)                                                                                                                                   LTG                        WACC                 Dec. 31, 2024                   Dec. 31, 2023

The Group performed the annual impairment test of all the groups of CGUs’ assets using the same methodology as the one used on previous periods and described in Note 1.11.

Impairment tests performed in 2024 did not trigger any impairment losses on the groups of CGUs’ assets.

The sensitivity analysis on the test’s main assumptions shows that no impairment losses would be recognized in each of the following scenarios, for each group of CGUs:

•   a 0.5 point increase of the discount rate;

•   a 1.0 point decrease in the growth rate;

•   a 0.5 point decrease in the margin rate.

9.2- Climate-related matters

In 2024, the Group mandated external experts to evaluate the potential impact of climate-related matters and physical risks on fixed assets over the Group future cash flows. This risk assessment covered a broad spectrum of risks as outlined below:

•   Policy: Legislation that are or could be enacted by governments to price and penalize Greenhouse gas (GHG) emissions

•   Market consumer: Consumer preferences could shift towards sustainable alternative products and services, transforming market demand

•   Technology: Disruptive lower-carbon technology could change in key economic sectors and risks to carbon intensive assets and operations

•   Liability: Litigation that could be brought by plaintiffs against companies for their liabilities in causing harm from climate change

•   Investor: Investors prioritize returns from lower-carbon companies, driving cost of capital and valuation changes

•   Reputation: Customer sentiment could be influenced by company’s actions to address climate change risk

•   Physical risk: key facility operational risk and physical asset damage due to extreme weather

Results of the risk assessment are showing that most of those risks do not have a significant impact on the Group future cash flows. The most impactful risk would be the Policy risk. To evaluate this particular risk, external experts considered the Group scope 1, 2 and 3 GHG emissions by country and projected them over 10 years period (based on growth of the business) multiplied by current and projected country-level carbon pricing data, taken from several databases (including IEA, WB, NGFS), and projected across various climate futures based on academic research. Our scope 3 emissions, that represents almost 100% of the Policy risk, are impacting our future cash flows from a drop in demand (downstream) and an increase in our cost of sales (upstream).

However, the model, being conservative, is not considering any upside from the Group’s strong long-term position to meet the increasing demand of organizations making meaningful progress on their energy transition and decarbonization goals, neither the actions taken by the Group to decarbonate its value chain.

In addition, the Group also considered the impact on future cash flows of its commitments to be “net-zero ready” in its operation (scopes 1 and 2) by 2030 and net-zero across the whole value chain by 2050.

Considering the above risk assessment and our commitments, the Group has performed a sensitivity analysis to our impairment tests at groups of CGUs level and did not identify impairment risk on its assets.

9.3- Movements during the year

The main movements during the year are summarized as follows:

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

Acquisitions & Disposals

Movements from acquisitions and disposals are described in Note 2.

Other changes

Translation adjustments mainly concern goodwill denominated in US dollar.

NOTE 10          Intangible assets

10.1- Change in intangible assets

Gross value

Dec. 31, 2023                                                                                               2,871                      1,214                            4,148                         4,536                       292               13,061

Amortization and impairment

Dec. 31, 2023                                                                                                (574)                       (943)                         (2,912)                      (2,579)                    (216)               (7,224)

Net value

10.2- Trademarks

On December 31, 2024, the main trademarks recognized were as follows:

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

Indefinite-lived brands are tested on a yearly basis for impairment.

In 2024, the Group reviewed the value of the main trademarks in accordance with the valuation model described in Note 1.8. Particularly, APC brand was tested using the royalty relief method. The future cash flows used are based on Group management’s economic assumptions and operating forecasts presented in Secure Power’s business plan, and then extrapolated based on a perpetuity growth rate of 2%.

Impairment tests carried out on indefinite-lived brands in 2024 did not show any impairment risk.

The sensitivity analysis on the main assumptions shows that no material impairment losses would be recognized in the following scenarios:

•   a 0.5 point increase of the discount rate; • a 1.0 point decrease in the growth rate;

•   a 0.5 point decrease in the royalty rate.

NOTE 11           Property, plant and equipment

Gross value

Amortization and impairment

Net value

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

The depreciation and impairment of property, plant and equipment restated in the statement of cash flows were as follows:

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

IFRS 16 debt by maturity:

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

NOTE 12            Investments in associates and joint ventures

Investments in associates and joint ventures can be analyzed as follows:

CLOSING VALUE DEC. 31, 2023                                      487                       388                       115                          142                            34                            40                        1,206

In 2024, following slower adoption at customers than was envisaged in the business plan impacting near-term growth, in part due to regulatory challenges, the Group performed an impairment test on its Uplight’s investment and recorded an impairment of EUR (220) million.

12.1- Main entities consolidated under the equity method:

Delixi Electric Ltd.

In 2007, Schneider Electric joined Delixi Group to establish a win-win partnership in a joint-venture, Delixi Electric Ltd., aka “Delixi Electric”. Delixi Electric, based in China, is specialist in manufacturing, retail and distribution of low voltage products.

The key financial indicators for the Delixi Electric subgroup (on a 100% basis) are as follows:

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

NOTE 13           Non-current financial assets

Non-current financial assets, primarily comprising investments, are detailed below:

                                                                                                                        Dec. 31, 2024                                                                 Dec. 31, 2023

                                                                                                            Fair value          Fair value

                                                                              %       Acquisitions                                                                            FX &

(in millions of euros)                                                            through        through         Fair value    Fair value of interest       disposals      others

                                                                                                                    P&L                 Equity

The fair value of investments listed in an active market corresponds to the stock price on the balance sheet date.

“Others” include mainly convertible and treasury bonds, insurance recoveries as well as contributions to US employee deferred compensation trusts ("rabbi trusts").

“SEVentures”isacorporateventurecapitalfundcreatedinpartnershipwithSchneiderElectric. SEVenturescurrentportfolioiscomposed of direct investments in various start-up companies and funds of funds.

NOTE 14          Deferred taxes by nature

Deferred taxes by type can be analyzed as follows:

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

Deferred tax assets recorded in respect of tax losses carried forward on December 31, 2024 essentially concern France (EUR 412 million). These deficits can be carried forward indefinitely, and have been activated using the rate of 25.83%, in accordance with the applicable rate in the expected consumption horizon of 7 years. Unrecognized deferred tax losses amount EUR 116 million as of December 31, 2024.

NOTE 15           Inventories and work in progress

Inventories and work in progress changed as follows:

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

NOTE 16           Trade and other operating receivables

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

Accounts          Accounts      Accounts      Accounts receivable        Impairment                        receivable,  receivable    Impairment   receivable, at cost           net                  at cost           net

Accounts receivable result from sales to end-customers, who are widely spread both geographically and economically. Consequently, the Group believes that there is no significant concentration of credit risk.

In addition, the Group takes out substantial credit insurance and uses other types of guarantees to limit the risk of losses on trade accounts receivable.

Changes in provisions for impairment of short and long-term trade accounts receivable were as follows:

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

The contracts assets and liabilities, respectively reported within the “Trade and other operating receivables” and “Trade and other operating payables”, are as follows:

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

Contract assets increase is linked to an increase of activity on long term contracts, notably data centers, where invoicing milestone are not yet achieved. Contract liabilities increase is linked to new contracts signed in 2024 with large upfront milestone payment received, in excess of revenue recognized as of December 31, 2024, notably on data centers contracts.

NOTE 17           Other receivables and prepaid expenses

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

NOTE 18           Cash and cash equivalents

(in millions of euros)                                                                                                                                                                                               Dec. 31, 2024                   Dec. 31, 2023

Non-recourse factorings of trade receivables were realized in 2024 for a total amount of EUR 343 million, compared with EUR 286 million in 2023. Substantially all risks and rewards have been transferred.

NOTE 19          Shareholder’s equity

19.1- Capital

Share capital

The company’ share capital at December 31, 2024 amounted to EUR 2,302,526,704 represented by 575,631,676 shares with a par value of EUR 4, all fully paid up.

On December 31, 2024, a total of 602,144,867 voting rights were attached to the 575,631,676 issued shares. Schneider Electric’s capital management strategy is designed to:

•   ensure Group liquidity;

•   optimize its financial structure;

•   optimize the weighted average cost of capital.

The strategy must also ensure the Group has access to different capital markets under the best possible conditions. Factors taken into account for decision-making purposes include objectives expressed in terms of earnings per share, ratings or balance sheet stability. Finally, decisions may be implemented depending on specific market conditions.

Changes in share capital and cumulative number of shares

Changes in share capital since December 31, 2022 were as follows:

SHARE CAPITAL AT DEC. 31, 2023                                                                                                                                    572,835,884                                                 2,291,343,536

In 2024, the additional paid-in capital increased by EUR 483 million following the increases in capital due to:

•   Employee share ownership plan: in 2024, it represents a capital increase of EUR 252 million, of which EUR 246 million of additional paid-in capital (refer to Note 19.4)

•   OCEANEs conversion: in 2024, 1.4 million OCEANEs maturing in 2026 were converted, resulting in the creation of 1.4 million shares and representing a capital increase of EUR 243 million, of which 237 million of additional paid-in capital.

19.2- Earnings per share

                                                                                                                 Full Year 2024                                                  Full Year 2023

(in thousands of shares and in euros per share)                                                                                           Basic                        Diluted                             Basic                          Diluted

19.3- Dividends paid and proposed

In 2024, the Group paid out the 2023 dividend of EUR 3.50 per share, for a total of EUR 1,963 million.

At the Shareholders’ Meeting of May 7, 2025, shareholders will be asked to approve a dividend of EUR 3.90 per share for fiscal year 2024. On December 31, 2024, Schneider Electric SE had distributable reserves in an amount of EUR 4,183 million (versus EUR 3,102 million at December 31, 2023, not including profit for the year).

19.4- Share-based payments

Nature and extent of existing share-based payments

The Board of Directors of Schneider Electric SE and later the Management Board have set up performance shares plans for senior executives and certain employees of the Group.

Rules governing the performance shares plans are as follows:

•   to receive the shares, the grantee must generally be an employee or corporate officer of the Group. Vesting is also conditional on the achievement of performance criteria; • the vesting period is three to four years;

•   the lock-up period is zero or one year.

The main characteristics of these plans were as follows at December 31, 2024:

End of holding period                                            Mar. 25, 2025 for             Mar. 24, 2026 for                 May 4, 2027 for          March 26, 2028 for

                                                                       Plan 38                                  Plan 40                                 Plan 43                                 Plan 44

Nov 7, 2028 for Plan 44bis

Schneider Electric SE has not created shares in 2024 to deliver vested plans but used existing treasury shares. Determination of fair values

In accordance with the accounting policies described in Note 1.20, the below fair value was calculated for each plan:

IFRS 2 expense

The expense recorded under “Selling, general and administrative expenses” breaks down as follows:

(in millions of euros)                                                                                                                                                                                              Full Year 2024                  Full Year 2023

Worldwide Employee Stock Purchase Plan

Every year, Schneider Electric gives its employees the opportunity to become group shareholders thanks to employee share issues. In countries that meet legal and fiscal requirements, the classic plan has been proposed to employees. Under the plan, employees may purchase Schneider Electric shares at a 15% discount to the price quoted for the shares on the stock market. Employees must then hold their shares for five years, except in certain cases provided for by law.

On April 19, 2024, Schneider Electric gave its employees the opportunity to purchase shares at a price of EUR 179.19 per share, as part of its commitment to employee share ownership. This represented a 15% discount to the reference price of EUR 210.82 calculated as the average opening price quoted for the share during the 20 days preceding the Board of Directors decision to launch the employee share issue. Altogether, 1.4 million shares were subscribed, increasing the capital by EUR 252 million as of July 10, 2024.

As of December 31, 2024, the share-based payment expense recorded in accordance with IFRS 2, measured by reference to the fair value of the discount amounted to EUR 64 million.

19.5- Schneider Electric SE treasury shares

On December 31, 2024, the Group held 14,659,991 Schneider Electric shares in treasury stock, which have been recorded as a deduction from retained earnings.

The Group has repurchased 1,337,391 shares for a total amount of EUR 322 million in 2024.

19.6- Income tax recorded in equity

Total income tax recorded in equity amounts as of December 31, 2024 can be analyzed as follows:

(in millions of euros)                                                                                                                                                   Dec. 31, 2024                 Dec. 31, 2023                   Change in tax

19.7- Non-controlling interests

In 2024, the Group finalized the acquisition of ETAP’s non-controlling interests. Lauritz Knudsen, for which the Group holds 65%, is the main contributor of non-controlling interests.

NOTE 20              Pensions and other post-employment benefit obligations

The Group has set up various post-employment benefit plans for employees covering pensions, termination benefits, healthcare, life insurance and other benefits, as well as long-term benefit plans for active employees.

The benefits offered to each employee depends on local laws and regulations and choices made by the subsidiaries.

Defined Contribution Pension Plans

The Group policy regarding pensions is to propose defined contribution pension plans, including a contribution from the employer. This is the most common active benefit offered worldwide, including for example 401k in US and PERO in France. The contribution to these plans is booked as an operating cost and do not translate into any further obligation by the employer.

Defined Benefit Pension Plans

The Group’s main Defined Benefit pension plans are located in the United Kingdom (UK) and the United States (US). They respectively represent 61% (2023: 62%) and 16% (2023: 17%) of the Group’s total Defined Benefit Obligations (DBO) on pensions. The majority of benefit obligations under these plans, which represent 90% of the Group’s total commitment at December 31, 2024, are partially or fully funded through payments to external funds. These funds are never invested in Group assets.

United Kingdom

The Group companies operate several Defined Benefit pension plans in the UK. The main one is related to the Invensys Pension Scheme. Pensions payable to employees depend on average final salary and length of service within the Group. These plans are registered schemes under UK tax law and managed by independent Boards of Trustees. They are closed to new entrants, and for most of them, the vested rights were frozen as they have been replaced by Defined Contributions plans.

These plans are funded by employer contributions, which are negotiated every three years based on plan valuations carried out by independent actuaries, so that the long-term financing services are ensured.

In relation to risk management and asset allocation, the Board of Trustees’ aims of each plan are to ensure that it can meet its obligations to the plan’s beneficiaries both in the short and long-term. The Board of Trustees is responsible for the plan’s long-term investment strategy and defines and manages long-term investment strategies to reduce risks, including interest rate risks and longevity risks. A certain proportion of assets hedges the liability valuation change resulting from the interest rates evolution. Those assets are primarily invested in fixed income investments, particularly intermediate and longer-term instruments.

Following the agreement reached with the Trustee of the Invensys Pension Scheme on February 2014, Schneider Electric SE guaranteed all obligations of the Invensys subsidiaries which participate in the Scheme, up to a maximum amount of GBP 1.75 billion. At December 31, 2024, plan assets exceed the value of obligations subject to this guarantee and thus this guarantee cannot be called.

Schneider Electric UK pension plans liabilities reflect GMP requirements.

There was a High Court ruling in the case of Virgin Media Limited v NTL Pension Trustees II Limited and others in June 2023, and subsequent appeal outcome on 25 July 2024, which make void any amendment to the rules of a contracted-out pension scheme without required actuarial confirmation under Regulation 42(2) of the Occupational Pension Schemes (Contracting Out) Regulations 1996, for the pension plans in question.

It is not currently possible to reliably estimate if there is any potential impact to the defined benefit obligations of the Pension Schemes should any such amendments be found to be not in accordance with section 37 of the Pension Schemes Act 1993 requirements.

United States

The United States’ subsidiaries operate several Defined Benefit pension plans. These plans are closed to new entrants, frozen to future accruals and have been replaced by Defined Contributions plans. Pensions payable to employees depend on the average final salary and the length of service within the Group.

Each year, the Group companies contribute a certain amount to the Defined Benefit pension plans. This amount is determined actuarially and is comprised of service costs, administrative expenses and payments toward any existing deficits. Since the plans are closed and frozen, there is generally no service cost component.

The companies delegate various responsibilities to Pension Committees. These committees define and manage long-term investment strategies to reduce risks, including interest rate risks and longevity risks. A certain proportion of assets hedges the liability valuation change, resulting from the interest rates evolution. Those assets are primarily invested in fixed income investments, particularly intermediate and longer-term instruments.

In October 2022, a contract was purchased from an insurer for USD 518 million covering all current retirees and a portion of non-retirees of Invensys pension plan. The buy-in contract was purchased using assets from the pension trust and is accounted for at fair value as an investment of the trust. This transaction resulted in an additional net experience adjustment of USD 24 million recognized in other comprehensive income in 2022.

Effective in December 2023, the buy-in contract was converted to buy-out contract in conjunction with the plan termination. All liabilities were transferred to the insurer with no further benefit obligation for the Invensys.

In June 2024, Schneider Electric Pension Plan purchased a Group Annuity Contract from high-quality insurer. As part of the buy-in contract, lump sums were offered to active and terminated participants, to be paid in December 2024 and February 2025. Lump sums were paid in December 2024 for a total of USD 106 million and this generated a credit of USD 22 million recognized through settlement in 2024. Remaining lump sums are expected to be paid in February 2025.

France

The French subsidiaries offer a Retirement Benefit (ICDR) that can be either taken as a lumpsum at retirement or as time off (partial or full) before retirement is effective.

This benefit is calculated based on salary and years of services in company, according to the collective agreements and there is no funding requirement.

The French pension reform voted in April 2023 increased progressively the legal retirement age from 62 to 64 years old. The accounting impacts are not significant on the Group financial statements.

Assumptions

Actuarial valuations are generally performed each year. The assumptions used vary according to the economic conditions prevailing in the country concerned, as follows:

The discount rate is determined based on the interest rate for investment-grade (AA) corporate bonds or, if a liquid market does not exist, government bonds with a maturity that matches the duration of the benefit obligation. In the United States, the average discount rate is determined based on a yield curve for AA and AAA investment-grade corporate bonds.

In the Euro zone, the 2024 discount rate is 3.40% for the main plans.

The rate of compensation increases includes both the salary increase and inflation rate if relevant.

Weighted average duration of defined benefit obligations plans:

20.1- Changes in provisions for pensions and other post-employment benefit obligations

Annual changes in obligations, the market value of plan assets and the corresponding assets and provisions recognized in the financial statements can be analyzed as follows: