Schneider Electric Replaces CEO; Seeks to Accelerate Sustainable IT, Data Center and Energy Transition Business Execution

Schneider Electric's board ousted CEO Peter Herweck and installed Olivier Blum as the company's new chief executive officer. The surprise move arrived roughly one week after Schneider Electric announced strong quarterly financial results, and less than one month after the company acquired 75% of liquid cooling data center specialist Motivair for $850 million.

What triggered the CEO change? Apparently, the board wants Schneider Electric to capitalize even faster on artificial intelligence (AI), the energy transition, data centers and sustainable IT services. A statement from the board said: "The Board of Directors decided to remove from office Peter Herweck as Chief Executive Officer due to divergences in the execution of the company roadmap at a time of significant opportunities." The board also thanked Herweck for his service to the company.

Who Is New Schneider Electric CEO Olivier Blum? New CEO Olivier Blum most recently led Schneider Electric's energy management business -- which includes the company's data center business. Earlier, he was chief strategy and sustainability officer at the company. He joined Schneider Electric in 1993, and has held various roles involving sale, marketing, HR, county leadership more.

Former Schneider Electric CEO Peter Herweck: Business Track Record

Ousted CEO Peter Herweck had led the company since May 2023. He previously ran AVEVA, which Schneider Electric acquired in January 2023.

The company appeared to be performing well under Herweck's leadership. Among the proof points:

• Schneider in November 2023 forecast organic revenue growth of between 7% and 10% for the 2024-2027 period, with an organic expansion of the adjusted core profit (EBITA) margin of around 50 basis points, Reuters noted.
• The company in October 2024 reported organic revenue growth of 8% for the third quarter and confirmed its full-year outlook, the report noted.
• Schneider Electric's stock rose more than 50% during Herweck's CEO tenure.

Offering more context on the CEO change, Schneider Electric CFO Maxson said the board felt the strategic roadmap was not being executed quickly enough or in a decisive and collaborative manner, The Wall Street Journal reported.

Schneider Electric: Sustainable IT Services Market Opportunity

The CEO change arrives at a key time. Among the anecdotes to note:

• Roughly 73% of IT buyers are not completely prepared for the energy requirements of AI, research from Pure Storage and Wakefield Research finds.
• Moreover, 89% of IT buyers found ESG goals more difficult to meet as a result of upgrades to their IT infrastructure for AI adoption, Pure Storage and Wakefield added.

With those opportunities in mind, Schneider Electric's overall business generally spans four areas as:

1. Buildings, which is experiencing "growing demand for renovation, retrofit and sustainability initiatives related to energy efficiency."
2. Data center & networks, which experienced strong double-digit Q2 sales growth within the data center segment.
3. Infrastructure, which serves electric utilities.
4. Industry, which sells a combination of Energy Management and Industrial Automation.

In each of those areas, Schneider Electric emphasizes "electrification, automation and digitization to enable a sustainable future."