Strong Euro to Cost Schneider Electric EUR500 Million-EUR600 Million in 2013

By Inti Landauro

PARIS--The stronger euro so far this year is likely to cost French electrical engineering and power-management company Schneider Electric SA (SU.FR) between 500 million euros ($660 million) and EUR600 million in 2013.

Since Schneider Electric makes only about a third of its sales from Western Europe, euro swings against international currencies such as the dollar and the yuan has an impact on its balance sheet when the company converts these revenues into euros, the company's Chief Financial Officer Emmanuel Babeau said Thursday in an interview with Dow Jones Newswires.

The weaker euro against the dollar has boosted sales revenue in 2012 by "a little less than EUR1 billion," Mr. Babeau said. The amount was in line with an October forecast.

However the strong euro, which has appreciated strongly over the past few months, will mean lower revenue for the company. The euro had weakened to 1.23 to the dollar in mid 2012 from 1.48 euros to the dollar in early 2011, as confidence in euro-zone's economy weakened. The common European currency started appreciating in late 2012 as a breakup of the eurozone was seen as less likely, financial stresses eased and on hopes that the euro-zone economy will stabilize later this year.

The currency stood at 1.32 to the dollar on Thursday.

The strong euro has raised concerns, mainly in France, that companies may lose ground to overseas rivals as they become less price-competitive and their profits made abroad shrink in euro terms.

-Write to Inti Landauro at inti.landauro@dowjones.com

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