Schneider Electric NZ profit rises despite lower sales

Schneider Electric NZ reported higher profit for the 2025 financial year despite a decline in revenue, as lower operating costs and reduced expenses helped offset softer sales.

The company posted revenue of NZD $175.4 million for the year ended 31 December 2025, down from NZD $193.9 million in 2024. Profit after income tax increased to NZD $9.2 million, compared with NZD $6.8 million a year earlier.

Revenue decline

Revenue fell by about 9.5% year on year as sales moderated across the business.

The reduction in turnover came alongside a lower cost base. Inventories recognised as an expense during the year declined to NZD $131.9 million, down from NZD $151.6 million in the previous year.

The company also reduced provisions for inventory obsolescence. Finished goods inventory increased to NZD $30.8 million, while the inventory provision fell to NZD $3.1 million from NZD $3.7 million.

Margin improvement

The stronger profit outcome reflected tighter cost management rather than higher sales.

Trade receivables declined to NZD $19.8 million from NZD $21.5 million, indicating lower outstanding customer balances at year end. Impairment provisions on receivables also decreased from NZD $245,000 to NZD $152,000.

Deferred tax assets eased slightly to NZD $5.4 million from NZD $5.7 million, reflecting movements in temporary differences recognised during the year.

Balance sheet

Cash and short-term deposits fell to NZD $6.4 million at the end of 2025 from NZD $9.2 million a year earlier.

The company participates in the Schneider Electric Group's global cash pooling arrangement. Under that structure, surplus cash is held by a central treasury company, while funding is managed through an automated cash management system.

Property, plant and equipment had a net book value of NZD $849,000 at year end after disposals during the period.

Right-of-use assets associated with leased property and motor vehicles totalled NZD $4.2 million, while lease liabilities stood at NZD $4.2 million. Total lease cash outflows for the year were approximately NZD $1.9 million.

Provisions

Total provisions increased to NZD $7.7 million from NZD $7.9 million, with employee benefit and product warranty obligations accounting for most of the balance.

The company also maintained a restructuring provision associated with the closure of offices and warehouses that were no longer required. Most of those costs are expected to be incurred during the next financial year.

Related parties

Purchases of goods and services from related parties totalled NZD $130.4 million, while management service purchases from the parent company amounted to NZD $3.6 million.

Dividends paid to the parent company declined to NZD $7.8 million from NZD $12.8 million in the previous year. Related-party receivables increased to NZD $3.1 million, while related-party payables were NZD $23.1 million at year end.

Operations

The financial statements show the company continued to invest in leased assets during the year, adding NZD $1.1 million in right-of-use assets.

The company also confirmed that its annual goodwill impairment assessment found no impairment. Management based its valuation on cash flow projections over a five-year forecast period, with a post-tax discount rate of 7.80% and a perpetual growth rate of 2.94%.

The directors stated that no matters or circumstances had arisen after the balance date that would significantly affect the company's operations, financial performance or financial position in future financial years.