Good morning, everyone. Very happy to have you here. As you can see, we are at almost full capacity. We're also webcasting the event. It's available live. Just wanted to say thank you for all of you for the interest in our company. Thank you for your investment. Most importantly, thank you for the time today that you've decided to spend with us. I wanted to very quickly share what the agenda is for today. Really, the day is in two halves. The first half here in this auditorium, in the morning session where we have a few presentations. Of course, strategy and finance, followed by presentations from our two businesses. We have slots also for services business and the ambition of growth on the services business.
An interesting sort of operations interaction as well, which is not normally that we've been having in the past. We put that in. We'll make sure that we have time for question and answers. We have a hard stop at about 12:00 P.M. The second half of the day, and that's interesting, is a visit to Le Vaudreuil, about a little over an hour from here. I'll get back on the arrangements later. Really what we're going to showcase to you in our factory over there is two things. One, our complete offer for the industrial end market that we have as a company. Secondly, some of the EcoStruxure and digital technologies that we put in practice into our own factory and which we do that for our customers as well to drive efficiency.
The presentations from today are going to be available towards the end of this morning session on the website. I do have to get everyone's attention to the disclaimer regarding forward-looking statements. With that, I want to get the day started, and we start with Chairman and CEO, Jean-Pascal.
Thank you, Amit. Good morning to all of you. Thank you for making it all the way to Paris, to tropical Paris, I have to say. I live in Hong Kong, I work in Paris, always under the tropics, and for the Parisians for making it all the way to Le Vaudreuil, which is, for a Parisian, very difficult to access to. Today I'm going to be sharing the stage with many of my colleagues, and hopefully it will give you a broader picture of Schneider than the usual Tricoire and Babeau show that you get normally. It's a good opportunity to know more people of the team, to exchange, ask questions, and get answers.
In the 25 minutes or so, what I would like to do is to set the stage, because when I look at our industry, which I have been working for the past 33 years, I think there has been more repositioning, restructuring, transformation in the past 2 years than in the previous 20 or 30 years. One could lazily say that all the companies look equal in our environment. Actually, I think we are profoundly different, company by company, which means that today some have to start a journey of repositioning, and some others have to execute on the plan that was fixed a long time ago.
What I want to do or try to do in the next 25 minutes is to make you come back and make you understand how we have positioned Schneider and what are the distinctive traits of our company in the industry we are in. Let's move straight into the fundamentals. We've positioned Schneider onto the two major transitions of the beginning of this century. The first one is energy transition, which we are all realizing with climate disorders, climate change. The big headline of all this is more energy efficiency. It goes with subtitles. The first subtitle is an accelerated electrification. We see a proportion in the energy consumption of the world, a consumption that, of electricity, that will in proportion double in the next coming 20 years. Today, electricity is just 20% of energy consumption.
It's going to be 40% in 2040 on the base of consumption, which is increasing. Think about IT. Think about heating and cooling going electrical everywhere. Think, of course, about electric mobility. Think about generation which used to be remote on the way and which is getting, and this is the second headline of energy transition, decentralized and decarbonized. Today, predictions say that 50% of the installed power generation in 2050 will be based on renewable and storage. That's a massive shift of paradigm. All of this will be only possible because of digitization to manage the intermittency of generation on the volatility of a modulated consumption. That's the first transition. Second transition we have been addressing, which is the other part of the equation of efficiency of our customers, is Industry 4.0. Headline is process efficiency if all of our customers are putting those two efficiencies together.
This will be accelerated, boosted by IoT. Eight times more objects connected to the web in 2020 than people. Massive acceleration of big data and AI in quantity and in spending, multiplied by five to multiplied by six in the next coming five years. Acceleration due to 5G, of which 35% at least of the application are speaking to our business, are speaking about energy or industrial automation. Plus 75% of our customers coming to us and have already deployed the digital twin, while working hard to deploy it in the very near future. All of this is happening now. Our customers are not asking about this or that. They are asking about one thing, which is all solution of efficiency.
We have, from the beginning, made no difference between the two, because if you want to manage the efficiency and energy of your customers, you have to understand and tweak the process. If you want to operate efficiently your process, you have to get an impeccable and very reliable energy. What we have been doing is put together those two worlds and converge energy and automation in one solution of efficiency, with the benefits of energy efficiency and the collateral benefits of productivity, safety, reliability, and sustainability. We've defined, 15 years ago, our mission as the following, to provide energy and automation digital solutions for efficiency and sustainability. This is what we have been pursuing for the past 15 years.
I'd like to come back on that journey because it's been a journey which has been incremental, rewarding, and sometimes painful, and I thank you for having accompanied the journey. I see 3 phases in that journey. The first one was build, second one was integrate, and the third one, where we are in, is about scaling. If you go into the detail of that, build was the 10 years going from 2003 to 2013. If you remember, we were very acquisitive at that time, with the purpose to build 2 things, a world-leading power distribution capability, medium voltage, low voltage, secure power. We're leading in all categories, coupled with digital clear solutions for each of the 4 markets we are addressing. That was 10 years of intense building.
We actually decided to be very, very selective on any kind of new acquisition that we do. Actually, 2018 was a time where a few of our projects landed together, and they are a good example of what we want to do. Software, AVEVA, IGE XAO. We have the pleasure to have Craig with us, Craig Hayman, the CEO of AVEVA, and very, very targeted on value-accretive bolt-ons to what we do in the company, so the example of ASCO or Larsen & Toubro. Phase 1. Phase 2, integrate. We want to simplify the life of our customers, and our customers are facing a huge complexity in their installations, and they need to integrate that whole equation of efficiency. That phase of integration started with the launch of EcoStruxure V1 in 2008. That's more than 10 years ago.
There is no better example of what we do in integration. Connected endpoints, connected products, going into edge control, going into a set-up of digital services, analytics, and software, which are serving our 4 markets, building, IT, industry, infrastructure, based on 6 domains, and all of this completely integrated and completely consistent. I shouldn't forget here, massive effort done on cybersecurity. What is important if you want to be cybersecure is to have a clear platform. Therefore, there, you can build the monitoring and the defense. Those were the years of integration. There again, sometimes painful, because those were a lot of costs that we had to assume on the top of improving or bettering our results. Phase 3, this is where we are today, and that phase 3 is very simple. It's about focusing.
When we did acquisition, there were parts of those acquisitions which were less core. When we were trying new innovations, some didn't work. What we've done in the past three years is to divest EUR 1.5 billion of revenue to focus on pruning the portfolio. We have announced that we are upping the review to EUR 1.5 billion to EUR 2 billion more of revenue in our portfolio, so that the focus part on with what we have built, focused, and integrated, we are scaling out and growing, and you saw momentum building in 2017, 2018, confirmed in Q1 2019. Those are the priorities that we have in front of us. What was somewhere the mission or the target of this journey?
It was to serve a unique mission with our customers, which is the following, to do what we call the triple integration, and actually, I'm going to go from triple to quadruple. Let's make it very simple. First integration is energy and automation, and I spoke already about it. I won't detail that more. The second one is what I call the vertical integration, what we call the vertical integration, going in a total transparency from the endpoint up to the cloud, which is a journey we started as a company much ahead of any other company with Transparent Factory in 1997, and EcoStruxure is just the evolution or the next evolution of this architecture. Making sure there is complete digital transparency on the same digital model to the service of the operator on the shop floor to the CXO in the control room.
Actually, the notion of control room is reductive, because at the time of the cloud, you can get access to everything on your tablet, on a remote point, on a VR4 point on the cloud. Third integration, which we have ambition and we are delivering now with AVEVA, is what I call the horizontal integration, the digital thread integration, a full digital journey from design to commissioning and from operation to maintenance, so that there is no drop of your digital model all across the life cycle of an installation. The best example, of course, is what we've built with AVEVA last year by building a unique company completely dedicated to the digitization of manufacturing, and going in an integrated manner from the design into the maintenance of operation. Let me now speak probably of a fourth dimension of integration, which is very often underestimated.
When you look at companies today, very often they are managed site by site. On the list of companies you see scrolling here, the forefront thinker companies, which have decided to escape or to get outside this old notion of site-by-site management and have decided to integrate. Thanks to digitization, they are all company on a full scale. When you connect the connected sites together, you get a lot of advantages, like sharing the data of your whole company in real time, being able to negotiate with your suppliers, energy, waste on a complete global scale, sharing better your competency, putting your sharpest and rarest competencies in one place for the service of all the sites, benchmarking your sites to make sure that all the sites get to the same competency, articulating the flows of goods between your sites in real time.
You start really to get to the next level of efficiency. Triple to quadruple integration that we are doing with EcoStruxure and with our set of software. This is a strategy of integration of efficiency, integration of complexity for our customers. To do that, we have built the whole company on four strategic pillars, four strategic distinctive features which support this mission of delivering integrated solution. The first one is that we are the integrated company. If I detail, it's in all aspect of what we do. We are integrated in sales, to start with. When I look at the sales we do, we are using the same distribution network, which is more than 50% of our sales for energy and automation. Integrators and machine builders are putting together bundles of technologies to equip their machines, equip their equipment, automation and energy together.
When you go to end users, they buy roughly 50/50, half and half automation and half energy management, which means we have integrated our commercial organization. At Schneider, there is a country president who is in charge to deliver sales synergies, maximize growth, maximize sales, and who is in charge also of leverage cost all across our business and diminish your cost. When we went to one Schneider, because before it was all silos in a country, we gain three points of structural cost because there are a lot of duplication of cost on the ground when you've got separate entities. Integrated in sales. Integrated in supply chain, actually under the roof of Mourad Tamoud, who is here in the room and will lead you this afternoon in Le Vaudreuil. We are a unique case in our industry where the whole supply chain is under one person.
Why did we do that? Because there is no point to be a large company if you can't flex the muscle of the scale. It's good for cost, it's good for purchasing. We do more than 12 billion of purchasing with suppliers, and we've been developing, since we globalized the supply chain, a much more strategic and efficient relationship with a bit more than 1,000 suppliers. It allows you to have more resources, shared resources to the service of quality and digitization of factories. I'll tell you the most important, and it's true in our sales organization, too. One sales organization in a country, one supply chain in a region makes that the jobs you have to propose to people who join the company is much bigger than the jobs that competitors would be able to propose. Therefore, it's very attractive for the best talents in the industry.
The third point is one digital, because when customers come to us, again, thinking about the complexity, they want to benefit from the integration, the plug-and-play integration we've realized. It's about one EcoStruxure, one cloud, one exchange, that I'm going to talk about later, which is putting on the digital platform the exchanges of our ecosystem, and one IT. That drives to higher corporate costs in what we declare because we decided to put it at the corporate center because it's more simple and it's a better reflection of reality, but it makes it much more efficient.
Finally, one marketing, I am going to scroll through that quite fast, but one World Innovation Tour, 30,000 customers last year, 15 cities, one unified brand portfolio, more than 70% of our sales under the Schneider brand name, one PRM and CRM, and more important for the customer experience, one website and one call center because our customers don't want to talk to several Schneider. When we started this journey 15 years ago, I started with one thing. Polling a lot of people on the market, a lot of customers, by far, their biggest ask was to say, "We want one Schneider, because you guys are too complicated, and we need a simple interface for us, a simple architecture for us." This is what we built by integrating those. By the way, it has also streamlined the organization because at least things are very clear.
Our countries are in charge of the P&L, our business are in charge of innovation. Innovation is accelerating as we speak, it needs a full focus. Our supply chain is in charge of quality, of course, delivery on cost. Our functions are global, and they are in charge of cutting the cost and ensuring the circulation of resources around the company. But very defined and very clear roles for each of us. All of this being supported by a management system, the Schneider Electric Performance System that we have presented to you by small touches at times, especially in supply chain, but we have the same system that we deploy in the company, in all major trades of the company. One company program, and we keep you informed every three years or every five years according to the frequency of those programs of what's happening there.
One management cadence, whereby, while we are global and connected, we have regular meetings with different circle of management in a very military organized cadence. Leadership, which is organized globally under one roof so that we all speak the same language and are all aligned on the way we train and skill our people. So principle number one of our strategy, integrated organization to serve a strategy of delivering integrated solution. Second one, which is really important, is multi-local. I've never believed personally in full globalization. Maybe because I worked in different countries in the past, or maybe because it's easier in our business because standards are not even the same between the U.S., between Europe, between China. The products we sell are not the same. The business models are a bit different. I believe in speed.
Maybe because I live in a very speedy part of the world. But at the end of the day, you beat your competition, you serve better your customers on speed. We believe that the major articulation of speed is at the level of the local. So we want to be the most local of the companies on the ground. And it has worked for us because when you look at where we are in 2003, 80% of our business was trans-Atlantic. While 15 years after, 45% of our business is done in emerging countries or in the rest of the world, especially Asia-Pac, which has grown very fast and has taken the pole position in terms of business size. But this rebalancing has been very efficient. Maybe one distinctive point also, that goes, if you want to be local, you have to empower locally the people.
What is striking today is that the balance of people, sorry, I went too fast on that one. The balance of people that we have around the world is exactly in sync with the business we do. It's a fair proxy of what we do in R&D, on what we do in supply chain, on the way we have organized our suppliers. If you look at the way we work, what we call our multi-hub organization is the following. The capacity to go fast in the major hubs of the world, North America, EMEA, and Asia, inclusive of R&D, of supply chain, of suppliers, of the whole commercial network. Things which are loosely connected for speed, but tightly aligned by our business and functions.
This is served by a model of leadership, which is quite original, whereby not everybody is in the same center, but we spread out our resources around the world closer to the largest customers and closer to the largest centers of talents, so that we can develop people in global missions from wherever in the world. Served by a board now that I would argue is one of the most diverse and the most international in our industry. Multi-local as a second base. Third point and third key element of our strategy is our focus on sustainability. That has been extremely important for Schneider. We started, I think, earlier than many other companies. The first thing it has fixed is our mission. While if I look where we were 20 years ago, our mission was to deliver electrons or to deliver energy to our customers.
We focus helping people and empower all in the world to do more while using less of the resources, ensuring that life is on everywhere for everyone and at every moment. When we say that life is on, we provide energy, which is a passport to all to a decent life. We provide digital, which is a passport to all for inclusion, economic inclusion, and progress. That's what we do at Schneider. For us, sustainability is not only a mission, it's also the way to drive the company and lead the company. You remember, every three years, we come with a new step-up in our sustainability impact, defining areas for progress, measuring the progress. That's part of our performance. That's fixed in a part of the incentive.
That's audited by auditors so that we make sure it's as important for the people of Schneider as the financial. When we do that, we also get recognition, which we are very proud of. It's good for the attractiveness of the company, also it's good for the retention, it's good for the pride of the customer to work for us. Frankly, I've been working 10 years on that. I'm feeling very alone about it, because I didn't get many questions on that. Customers didn't seem to be interested. Investors, mildly interested at times. This has turned. This has really changed, and you see that at the top of the agenda everywhere. With people, when they want to join you, they ask you very precise question about that. With customers, because they want to progress in sustainability, and we are part of their supply chain, so they need sustainable company.
Of course, in the dialogue we have with you. Recent turning point, but good turning point. We are also very attentive with the people that we embark on board of Schneider, because we believe that great people make a great company, and we want the people who onboard Schneider to be motivated by working for the company with the most meaningful mission in our industry, on working in the most inclusive and empowered environment, which our multi-hub organization is allowing and enabling. I like to come to the fourth distinctive pillar of our strategy. It's openness. In our industry, it starts with the way we do business. We are the company that does the most business with partners. Hundreds of thousand of integrators, system developers, software developers. That's the first one.
This is being put on steroids, on accelerated by the launch of Exchange that we launched in Hanover this year, where we have already 45,000 customers exchanging tips, working in communities, 200 apps are already on Exchange and being traded between our ecosystem. It goes also in the direction of innovation. We've been 20 years with a venture capital fund that we just rebooted and reinforced. It goes also in other parts, like the partnership we signed with Carlyle, where we allied in the U.S. to revamp the U.S. infrastructure, align the force in project and finance of Carlyle together with capacity of engineering in green infrastructure of Schneider. Strategy technology partners is something that you know we are very attentive not to develop what others have already developed, and we've kept building more alliances with other technology partners with whom we build and develop EcoStruxure.
When you look at the results of that strategy, while we've delivered performance, we've multiplied by three our size in the past 15 years. We've multiplied by four our EPS and our Adjusted EBITA, multiplied by four our enterprise value. By the way, when I was looking at the growth, we've grown the number of people inside the company at half the pace. When we are growing 100, number of people was growing by 50, if you take a cut around the year. Gaining productivity and leveraging our scale as we are progressing. We have delivered a consistent return for shareholders. Frankly, I think we suffered at the point in time when we were learning painfully solutions. The good news that we have been delivering for several years now, progress in results on that side, which shows that we are on the top of this.
It has been a learning, and that learning has been complicated. We have a very simple strategy that we have told you, that we are reporting on, which is more products. We develop solutions directly with the most advanced customer. We productize it, and we scale it through our network of partners. More services, and we're going to speak about that today. More digital, we're going to speak a lot about that today. Better systems, which is that we are focusing our system capability where we are truly able to create value. At the same time, we've been attentive to make our company more resilient. I mean, we went through a crisis of 2008 and keep some vivid memories of that time. We've worked many aspects in making sure that we would be more resilient in case there would be a downturn.
Making sure that the business is more diversified geographically, I already spoke about that. Making sure that the people footprint would be more close to the business and in more flexible countries. West Europe, which used to be 58% of our head count in 2003, is today only 27% of our head count. Making the business as cyclical, less early cycle, only 40% of our portfolio today. Growing recurrent business around services and software, up to 16% of our business. Making sure that our cost base is as externalized as possible. We've taken new commitments in February. We are committed to grow our adjusted EBITA margin to 200 basis points. That's our new objective. Keeping the growth across the cycle of three to six points. We do that with three priorities.
Portfolio optimization, growth in high-margin business, the best example being software, internal productivity that we have always delivered, even when we were in relatively slow growth times. To sum up and to conclude, just want to leave you with those four elements of distinction and those four pillars of our strategy. Being integrated to serve a strategy of integrated solution by product or integrated directly to a customer, mostly by product today. Multi-hubSustainability as a core objective, open and with a clear mission to empower all to do more with less, making sure that life is on everywhere for everybody, at every moment. This being said, it's been a long speech, and as my marketing team would say, it's been far too long. We tried a summary of that long speech into a video that I would like to share with you this morning. Thank you.
The world is full of people telling you who to believe they are. We thought we'd tell you who we're not. Let's start here. We're not in shipping. We don't make lists. Seriously, no lists. We do this. We're good at this. We make all of these. Even though you'll find us here and here, we don't make energy, we make you save it. You'll be saving the environment, too. Are we an internet company? We connect and power just about everything around you, helping machines talk to each other and to you, making your world more personal. We're seeking out the big questions and answering them honestly. Like, how can we do more with less? Can we make access to energy and digital basic human rights? We're real people, employees, developers, partners, investors, and inventors, all passionate about doing what's right. We're open.
Humans of all sorts from all over, learning from each other and about each other. We're not here to save the world. It'll go on with or without us. We're here to help power and connect what you do every day to ensure that life is on everywhere, for everyone, at every moment.
Good morning, everybody. Thank you very much for being with us today. Great to have you, I hope you are going to have a fantastic day this morning and then later this afternoon at Le Vaudreuil. Great introduction from Jean-Pascal on our strategy, where we stand, the great positioning that we have taken, obviously now it's time to talk about finance. What I really want to do with you in the next 20 minutes is to share about our ambition to deliver a very strong performance, financial performance, sustainable and which has been quite consistent in the past years. Before doing that, I may surprise with the start of my presentation, I want to start with something which is not precisely what you would call a strong financial performance KPI.
I believe that it's going to be absolutely instrumental in our future success. I want to speak, of course, about our principle of responsibility. Those are the principles that are going to guide our action in the coming years, setting the very high ethical standard that we want to follow, defining the impeccable way we want to deal with CSR matters. Of course, they are not new at Schneider Electric. We actually started almost 20 years ago in 2002. Of course, we keep improving them, putting more granularity, being more comprehensive in the field they are covering. We are now reorganizing them around five pillars, which are going to be extremely exhaustive in the way they are covering all aspect of the company. The first one, human rights, people development. Of course, it's about respect of the people. It's about inclusiveness. Jean-Pascal mentioned that.
It's about diversity and it's about health and safety. The second one, ethical business conduct. We want, of course, to have a very fierce fight against corruption. We want to make sure that we fully respect all the rule in term of trade. We want to make sure that we are in a fair competition everywhere, of course, we want to protect our asset. Third one, probably one which has been growing, the digitally trusted and secure partner that we want to be for our customer. Very clearly here, it's about bringing a best-in-class cybersecurity solution for our customer and making sure as well that we take care of privacy of the data and we are fully compliant with regulation. Fourth one, acting for the environment. Jean-Pascal, of course, already alluded to that.
We want to make sure that we limit the impact of our business on the planet. We go for full recycling. We limit the carbon emission, we go for a sustainable world. Fifth, a responsible corporate citizenship. We want, of course, to go for responsible lobbying. Here, we're really talking about all the impact that we can have among a community we're dealing with and make sure that we have a positive impact, including for the less favored community. Our customer, our partner, our people, our shareholder are asking us to be very strict in implementing those principle of responsibility. As I said, we are absolutely convinced that they're going to be key for our future success. All right. Now let's move to a more traditional way of looking at financial performance. We have one strong conviction.
Sustainable financial performance will come from a combo, a combo between dynamic top-line growth and margin expansion. Let's start with top-line growth, of course, here. When you look at the past, we've been doing quite well, quite consistently better than our peers.
We've been seeing in the previous presentation that we are indeed riding two of the most powerful and positive mega trend of the century. We are fundamentally on a positive market. On top of that, we have selected the battle we want to fight, and we think we're going to win them. We are clearly positioned with a lot of competitive advantage in terms of capacity to innovate, in terms of breadth and depth of the portfolio, in terms of geographical coverage. For all those reasons, we believe that we are able to deliver a superior growth versus the market, and as you can see, we've done that on a systematic basis in the past. When we look at the future, roadmap is very clear. We want more product, and of course, more connected product. We want more services. We want, of course, more digital services.
We want more software. I would say globally, we want a more digital experience for our customer that goes through the growth of what we call layer 2 and layer 3 of our EcoStruxure architecture. They represent today 15% of our sales. We want them to grow significantly faster than the average of the company. We're not against selling system. Don't get us wrong. We are very pleased with selling system. We just want to sell system with a good margin, and we've been doing quite good inroads in that respect. Last four years improving by 400 basis points of margin on system. We just want to continue in that direction. Strong top-line growth, GDP plus company, beating the market and our competition on average. This is going to come with an improvement, a regular improvement on the margin.
We are 100% convinced that the more we going to go for innovation, technology, and digital content in our offering, differentiation, the more we're going to be able to gradually increase the margin in the future. We are just, you know, on one step in the journey, and we have many, many positive step ahead of us in that direction. That starts with the gross margin. The added value that you deliver to your customer is visible at the level of the gross margin. Look at the journey that we have had in the last three years, growing the gross margin by 200 basis points, not only in an organic manner, but largely in an organic manner. Our ambition is, of course, to continue, and we have clear roadmap to do that. First of all, the priority.
I described that we want to go for more product, more software, more system. They're going to come with a higher growth margin and therefore a positive mix. We're going to increase the price and make sure that we bring more value to the customer, and this is reflected in the pricing policy that we can implement. We're going to go for more productivity, and we're going to also work on better system margin. We also are enabling us, allowing us to go for inorganic improvement of the growth margin. I'm going to talk later about what we intend to I would say prune in the portfolio. Quite obviously, there will be largely businesses with lower growth margin, so that should contribute as well to the overall performance. Rapidly just digging on two of the driver for the growth margin.
On price, I would say the logic on price is the one I've been describing. If you come with the innovation, if you come with strong technology and digital content, the differentiation, which is absolutely key, then the customer will recognize the value you are bringing to the to his business, and you will be able to price for it. This is a strategy that we intend to continue in the coming years. If you look at the past, we've been quite nicely beating the raw material inflation, which is just, I would say, a mark or a reference. You know, we want to make sure that we are above that over the last 10 years.
If you look more recently, 2017, 2018, well, remember 2017, there was a burst in the raw material inflation, despite that, we very quickly managed to start moving up on making sure that we were increasing price, and we intend to continue in the coming quarters. Second element, very strong productivity. We have a, I think, a fantastic track record in that respect. Once again, for the 2019/2021 period, it is our intention to deliver a very strong productivity around EUR 1.1 billion of productivity. You know what are the driver of productivity? It starts with excellence in procurement, of course, first thing. Second, it's reengineering of product. Third, improving the logistic. Fourth, of course, using our full manufacturing footprint to keep optimizing our cost. Fourth element to have productivity on what we call manufacturing base cost.
Below the growth margin, you're going to find the support function cost. Here again, we believe that we are a truly global, integrated company, and we have the capacity in the future, as we did, by the way, in the past years, to keep growing sales at a faster pace than our SFC. Look at the last year. Since 2015, we did that pretty nicely, 130 basis point difference between top line growth and SFC growth. The roadmap is clear, the journey is clear. We want to continue to do that in the coming years, and as I said, we believe that we have already the platform, we have the model, and we have the critical mass to do that successfully.
A clear path toward this 200 basis point improvement and toward the 17%. We want already to be very clear, this is not the end of the journey. This is a milestone. It's an important one. We need to work very diligently to deliver it, but it's only one step, our ambition is to go beyond that in the future. You've understood that the driver to deliver the 200 basis point are well-defined. It's about the right priority for the top line. It's about price, productivity. It's about simplification and efficiency on our support function cost. As I said, we are also looking at our portfolio, and we're going to put this EUR 1.5 billion-EUR 2 billion under review. We certainly some help on the margin. That should come only as a marginal point, a part of the 200 basis point.
One could say, "Well, that looks very ambitious, this 200 basis point of margin improvement." Actually, some of you have said that. Well, actually, that's what we delivered in the last years. If you look at the last three years, we've actually delivered a bit more than 200 basis point organic improvement. Together with nice top-line growth, that has enabled us to deliver this very nice growth of our Adjusted EBITA and organic growth of 8% over the last three years. Nice growth in our profit. Nice cash flow generation as well. You can see, we've been, over the last years, above the 100% target that we have and that we'll continue to keep in the future, of conversion of our net profit into free cash flow generation. That has been done despite the growth.
You know that growth is generating working capital need, we've been absorbing that and generate this strong cash flow, our ambition is to continue to be a very strong cash flow generative company. Strong cash flow generation, that has been enabling us, despite some targeted acquisition, despite strong cash return to shareholder, to stay with a very solid balance sheet. We will want to keep some leverage in the balance sheet, we also clearly retain the ambition to have a strong rating on the long term. Strong growth for the top line, margin expansion, good cash flow generation. That is explaining why we did manage to put our return on capital employed on a good trajectory. Look at the last three years. Even in 2018, when we've been closing the AVEVA deal with some capital deployed, we did manage organically to improve by 40 basis points.
Before Forex, the return on capital employed, which is quite an achievement, when you invest to keep improving the ROCE and just show the efficiency of the model that we have here. We wanted to show as well, because I think it's a very important element, what we call the return on operating asset. You see that we have been crossing the 40% mark when it comes to return on operating asset. What is this criteria about? It's simple. It's a return on asset, or the return on capital employed, less the goodwill. That gives you a vision of how profitable is the growth when it is an organic growth.
Now that we have put together what we think is a very powerful portfolio, set for a very nice ride in terms of organic growth, you can see that any growth is going to have a fantastic return, and of course, that bodes very well for our performance in the coming years. Strong financial performance in terms of growth, in terms of expanding the margin, in terms of cash flow generation, and also very disciplined capital deployment. We've been doing targeted deal and build in size and really on our priority. Digital, AVEVA is a fantastic success. Great to have you, Craig, with us today. Since the announcement of the deal, the AVEVA share price has been growing by more than 200%. Today, as you know, AVEVA has been joining the FTSE 100 index, I think illustrating the success. IGE+XAO is a great success.
It's slightly smaller size, it's a great success as well. ASCO and the Larsen & Toubro deal are just highlighting our ambition to keep building our leadership in energy management and on the low voltage grid more precisely. As you know, we've been quite active as well on pruning the portfolio. We have, today, of course, a lot of work going on. I will elaborate on that in a second. Look at the past. We've been selling for a cash amount of EUR 2.3 billion of non-core business in the past. We've been quite active already on managing our portfolio and making sure that we are becoming a more focused company. All that has made possible a great cash return for the shareholder.
80% of the cash generated over the last four years have been returned to our shareholder, whether through buyback, you've seen that we've been accelerating a EUR 1 billion buyback, which was supposed to end in 2019. We concluded it in 2018, with some kind of anticipation. We've been immediately launching a new EUR 1.5 billion-EUR 2 billion buyback program that will conclude in 2021. The dividend has been growing very nicely, with a 5% CAGR. Nice growth over this five-year period. On portfolio optimization, EUR 1.5 billion-EUR 2 billion, you know the number now. We've been announcing Pelco. I can tell you we are working on many files. We believe we're going to take the three years to go for the full program. Nevertheless, we do expect to be able to come with more move in 2019.
Bear with us, in the coming months, we think we're going to come with more announcement on this EUR 1.5 billion-EUR 2 billion business, which is under review. Roadmap is clear for the 200 basis points, we know what are the priority for the next three years. At the same time, as I said, it is just a step in the journey, not the end of the journey. We believe that we need to prepare already today what's going to be the next growth generation, or how we're going to generate the next growth wave, if you want. Of course, that's going to take some time, the idea is certainly beyond 2021 and beyond the 200 basis points on which we have already set the plan to prepare more top-line growth and more margin expansion.
To do that, we need to invest on the core driver of our performance on the long term, innovation, of course, R&D. It's, of course, about digital, where we need to keep investing up, even if we've been quite active already in the past. Working on the sales force, we need new size, new priority, new skills as well, and we need to work on that. Of course, we need to keep increasing our impact among our customer. We need to keep building the brand, and that's the marketing and communication effort. No surprise, of course, we want to do that by having no impact on the short term on the bottom line.
The impact on the long term will be positive, to have no impact on the short term, it has to be a redeployment from what we would call a non-productive cost, back office, middle office, global function, toward this priority. We target a size of redeployment that could be up to 10% of our current support function cost. That gives you a magnitude, the way we're going to do it is by increased productivity on our support function cost. It's going to have a moderate impact on our restructuring cost. We were guiding for a bracket of EUR 150 million-EUR 200 million, where we think that integrating that move, we could be, in the next four years, between EUR 200 million and EUR 250 million.
Last, but probably not least, it give us also some capacity to use this saving and this efficiency, this simplification gain in case of a downturn. That is giving us here some leeway. Conclusion, we are today a high-quality company. I think that we can say that we are clearly focused, simpler, and with all the strengths of a pure player. We've been delivering a very consistent and strong financial performance in the past year. We are well-positioned today, with clear path and clear plan to deliver in the coming years, continued success and strong financial performance. Clear objective already for 2019, 2021, we are already preparing the growth beyond 2021 and future success beyond 2021. That, together with strong discipline on capital deployment, will ensure a strong return for our shareholder. Of course, we are confirming our guidance for 2019 and our midterm objective.
Thank you very much. I'm going now to hand over to Peter. Thank you.
Well, good morning also from my side. It's a pleasure to be here and talk about how we digitize industries. Of course, digitization is at the heart of the industrial automation. If I could have the first slide, it would be fantastic. I have something to say, but I also have some slides. The digital transformation, as I say, is at the heart of what's going on, and you can read about this very much also in the social media. I invite all of you to come in the discussion rooms and so forth, what's going on. It's heavily discussed out there. It's one of the largest transformations. I've been in the business for 28 years in automation. It's probably the most exciting years in the last three years that I've seen in this industry. The industrial automation business is the same as the group.
It's a very geographically nicely distributed business. Meanwhile, our strongest foothold is in Asia Pacific, also in Europe, there is a strong industrial base, and with it, that's our second-largest market, also strong in North America and in the rest of the world. What is very important and unique about us is the distribution of our portfolio in early, mid, and late cycle, or if you wish, the discrete business and more the hybrid and the process business. Roughly 50/50, the split in 2018. That's pretty good. You'll see later on, as we're moving more towards a software company with our industrial automation portfolio, also the R&D spend as a percent of our revenue is growing.
With 8%, I think we have a healthy spend at the moment that helps us to have our portfolio at the top of what's out there, delivering number one positions of some of our portfolio. For example, in safety, we are very well known for safety in our HMI offering in control and signaling, of course, motor protection and control that are relevant throughout all markets. With EUR 6.2 billion, you may say in the market we're a little bit small, you will see how laser focused we are. It's important to be laser focused in this market because that allows you for superior margins. Currently, at an Adjusted EBITA margin of 18% in our business. To build a little bit on what Jean-Pascal has said, how have we grown this business?
I think it's important to understand. If we start off in 2013, where the automation business was roughly EUR 4.3 billion in sales. The main focus at that time was really on the discrete and the hybrid space, with a very strong offering also in motion control, where we very much focused on certain applications, where we are able to be the world market leader. I'll show you some of those applications later. Also resulting in a comprehensive PLC family that we use throughout those different end markets, and then a comprehensive family of drives. With the acquisition of Invensys in 2014, we were able to supplement our portfolio into the process markets and become even stronger in the hybrid markets. Hybrid meaning, food and beverage, pharma, biotech, water, wastewater, metals, mining, mineral, where we already had a strong foothold.
We also moved into the continuous process industries, being chemical refining or the whole streams of oil and gas in downstream, midstream, and also upstream. Also in power generation, where we already had a good foothold on the energy management side. That's very relevant as we will see as we go into a little bit more detail here. With the Invensys acquisition and a couple other acquisitions that we've done, we also started to have a pretty significant software portfolio. Extremely strong in the area of monitoring and control, in planning and operations, and also asset performance management.
A couple of packages that came together, we said, "Why don't we build a complete software company that can have an end-to-end portfolio from the design to the building of a plant to the operation and maintenance?" That's what we did with a reverse takeover of AVEVA, which we closed last year in March. We added kind of the engineering design suite software to it and created a unique listed software company. We're going to be talking about this in a minute because in the past you've had quite a few questions of that. That allowed us to really be, what I say, a full liner in automation. Very dedicated, but a full liner throughout all segments. It is very relevant because it allows us to live through the cyclicality of that market.
It also allowed us to move more from a couple of, we would say, electromechanical products that we have into software. If you look at our PLC offerings, if you look at our motion offering, if you look at our process control offering, that's all extremely heavy software already, with 75%, as I mentioned the last time, 75% of our R&D investment going in software. It's just nicely packaged with a little bit of hardware. Of course, our software offering in total, that's 100% R&D in software. That allowed us a very nice growth of 7.6% over a period of five years, as you can see here. We're moving up the value chain.
You will see later on also that even in our, I would say, most electromechanical products that we have, we are now moving in the direction of integrating software in it will disrupt parts of the market where we and some of our competitors are active. We're talking a little bit about software, of course, who better can explain than Craig Hayman, CEO of AVEVA.
Thank you
have you here. Usually we do this in front of customers together. This is a premier one in front of the investor community. I'm looking forward. Craig, you want to talk a little bit about
Sure
the journey of the last 18 months?
Yeah. It's been 18 months, as Peter said, since Peter first called me with that twinkle in his eye saying, "Hey, we have this idea for AVEVA, a company that's listed on the London Stock Exchange, has 60% ownership by Schneider Electric." This combination. As we spent time working together, with investors and with customers around the world, it's actually been quite amazing. We've moved very, very rapidly. The company, AVEVA, is listed on the London Stock Exchange. It is 3 times larger than it was just two short years ago. It is 2 times the size in terms of market cap than it was 12 months ago. We're moving unbelievably quickly. We have about 150 scrum teams around the world focused on software development. There are about eight to 12 people.
Every 90 days, we reprioritize their work around what we learn out with our customers around the world. It's an amazing model. That's generated some good results. In the last 2,012 months, we generated our sort of revenue grew by 12%. Our adjusted EBIT margins grew by almost 24%. What we call is recurring software. Recurring software is software that's available through a subscription or a rental model. The customer renews it each year. What's great about that type of that model is it creates a lot of free cash flow in the out years. As a percent of our overall business, that recurring software is 54%. Now we have these metrics aligned. We have our engineering team aligned. Now we're off driving this digital transformation across the asset and operations life cycle of our customers, across the industries that Peter just mentioned.
I have to say it's quite rewarding to go talk to some customers and very rapidly be able to show them how we can transform them very quickly. We also recently committed a medium-term roadmap purely for the AVEVA business to grow our top-line revenue at or above the market growth rate, grow our adjusted EBIT margins to 30%, and grow that recurring revenue line as a percent of our overall business to 60%. The future ahead is quite bright. People ask us why is it important to own the software and not just be in alliances? I go back to the three transformations or three plus one, so the quadruple. One more. It explains the journey of the company. It also explains very well the journey of our customers, that many times come to us and ask us, "How can I reduce my carbon footprint?
How can I reduce my energy cost, and can you get and help us to do that?" With that, of course, we need the full integration of energy and automation. In order to do that, one needs to have all the data and bring up all the data that's available in their operations. As I go from a sensor or actuator from the ground floor, from the power distribution, from a sensor that takes a temperature to more sophisticated, a piece of equipment, or a drive that's there. We bring up data to, and I say cloud, this may be in the cloud, this may be in a private cloud, or it may be in a hybrid solution. That's unique for every customer.
If you have this data, of course, you want to use all the engineering models that were built, all the design that was done of the plan to bring this data together with this end-to-end software, and we'll demonstrate this to you in a second, because that allows you to holistically improve the performance and reduce the cost of the plant. Basically, there are 3 elements of improvement. It's about safety, it's about the efficiency, and it's also about the cost of the raw material that we're bringing into those factories. That's why it's important to own the software and have a joint development roadmap to make sure that the data that comes up and the control systems and the software is aligned to each other. That's what we're working on as one major work stream together.
If we have this discussion with our customers, if they go from the ground floor to the control room and further into multi-location setups, they say, "What about cybersecurity?" It's been a constant discussion. The second discussion we have with the customer, there are three elements to it. There is the element that we protect our company and the assets that we have from our customers. That's taken care of by our chief digital officer. Secondly, we need to develop products that are absolutely cybersecure, that's done by our development departments, there is, of course, the product security officer that takes care. We thought, "Well, why don't we do a business out of that?" We go out and we help our customers to make their facilities more cybersecure.
I'm going to be talking about that because it's a quite exciting business that we have. Since we are at Schneider, I got to talk about EcoStruxure, obviously, because it's our architecture, people ask us, "How does AVEVA fit into the EcoStruxure stack?" Of course, with what I said earlier, having aligned roadmaps and so forth, it is very clear that our people can go out and also sell the software. If I say our people, I'm not talking necessarily about the AVEVA people, which I also think are our people, but also our Schneider people. People say, "How is that working?" I think we developed a pretty mature go-to-market model that has been, of course, originated in the heritage Schneider Electric software, we've brought it to AVEVA and have refined it.
Maybe we start off how the model works in AVEVA, I complement to Schneider, you see how this works together in the field. Yeah. Just all the way back to where we started, we have this commercial alignment on how the company is set up structurally. We have the technical alignment around EcoStruxure being powered by AVEVA software, now we have the go-to-market alignment. Let's just start with the channel, for example. About 30% of AVEVA's business comes through the channel. About 10% of our total business is in concert together with Schneider Electric, where our channel partners are working together around the Schneider footprint and the AVEVA footprint on this digital transformation.
Right. What's channel? I mean, channel are people like industrial automation distributors or system integrators. By accident, we have, yesterday and today, our 400 largest system integrators and industrial automation distributors and also technology partners here in Paris. They come to us to discuss how we can move business forward together. Yesterday, Craig and I, we were there jointly together, 400 partners there. More than 200 of those are already selling software and automation today. Those are our partners, bringing those networks together has really helped on this level.
Right. Then we have, if you think, we're engaging with these customers, we learn from them about these great best practices to unlock productivity, drive productivity improvements. We put this into a specialty sales team. One of those, for example, is asset performance management. These will be our regional specialty sales teams, they work together with the Schneider team to go off and illustrate the transformational value of some of these solutions.
Sometimes you would see us together, at customers, Jean-Pascal and Craig or others, those are the top customers that we are really worried about. It's a couple of handful of customers, 60-plus strategic accounts that we're driving this forward together because on their agenda at the CEO level is the digital transformation. They want to talk to one company, in order to make this happen. To come from the theory maybe to an example, let's talk about North American International Oil and Gas Company. Not everybody wants to be named. I leave this to your fantasy who it is. There are not so many out there. I want to guide you through the journey that we have gone with this customer so that you understand how we're functioning also if we're saying we are bringing the whole company together at one account.
In 2013, you know this is prior to Invensys, we really had a transactional, if you wish, relationship to this customer. If you wanted to find somebody at the customer who knew Schneider Electric, you would need to go deeply into the purchasing department and with that, invisible to the top floor of the customer. With the acquisition of Invensys, we became, I need to read this because these are the words that our customer used, we became an industrial automation and software partner. With that, you start engaging in what is called main automation contracting. If they do a plant, you do the complete automation solution with them, with the safety system, process control system. It is the instrumentation. Sometimes it is also the analytics that goes with it. You move into the control room at the customer.
Since we had that, we said, we're strong in energy management, obviously, why don't we bring this together to the customer? There is value, of course, for him. We became, in addition to that, the main electrical contractor. That means you bring in things like medium voltage, low voltage transformers, motor control centers that go with it. Of course, since this year, we've became the strategic relationship management partner category. SRM is abbreviated in the company. That allows us now, if you look at the cycles 2010 to 2013, EUR 15 million in average, then 2014 to 2018, EUR 50 million revenue in average per year. You can see how we've grown this customer by an integrated approach with our complete offering. Of course, that looks a little bit theoretical still.
That's why we've brought a little bit of a demonstration, that I'm trying to guide you through with Craig.
Sure
In two or three minutes.
So-
Why don't we go over there?
We're in a process industry here, and we're in this area of a de-ethanizer, which is a step where you take ethane and propane out of a natural gas. That's the scenario we're looking at over here.
I'm here. You see me on the screen, I hope, in a second. You can look straight forward. I'm really in the machine room of the plant. The machine room is where the power distribution is. You need to imagine hundreds of cabinets of this side where you have power distribution, medium voltage, low voltage, and then what you see here is a motor control center. The motor control center is connected usually to a motor. Of course, not of the size that we have here, but these are pretty large pieces of equipment. Sometimes they go into the range of megawatts, so they can fill half a room here, and they operate pumps, they operate fans, they are close to a compressor, and so forth.
They are, of course, connected to the DCS system that you see up here that may be in the same or may be in an adjacent room. What's totally relevant and what people haven't believed in the past, that we can go all the way from the electrical equipment and the motors into the DCS system, and the DCS system you would see in the control room here. That's where the people operate the plant. In case we would have an error on one of those motors, then usually this is where the panic breaks out and people want to make sure that they keep the plant under control. This has been extremely simplified with the integration of, we're coming from power through the DCS system or the process control system now to the software.
If they look at the error here, they can see the error is at a pump, and then one could immediately look at the 3D model of the plant, and that's where AVEVA comes in.
We're in a deethanizer, we're in a pump that's involved in the flow of the feedstock into and out of that deethanizer. Now we want to go from this operational view, we know there's a problem with the pump, so now look at how that looks to the capital view. Maybe if we can just look to the 3D display at the top, ahead of just slightly to the right of Peter there. You'll see this 3D view, and that is the asset view. You're now looking at that same pump that you saw in a 2D schematic. You're now seeing it in context of the electrical control system. You're now seeing it in the 3D context. Now you're able to switch from the design view to the operated view.
Which would be really important if now you needed to do something with that pump to correct it.
What you need to imagine is that this is all happening context-sensitive, that's the change to the past, that's the clear advantage of being totally integrated. On the process control system, you go with your cursor to the pump, on the 3D model, automatically you can see where that pump is located. You see that here in such a plant, you would have a certain redundancy. That means, if one pump fails, you have another pump there. Before you go out and get this pump fixed, you want to understand what's the performance of the second pump here. Is that going to be potentially failing in the future? That's where you would call, in larger plant, the so-called reliability center. In the reliability center, we have quite a bit of AVEVA software running.
For example, here, our asset performance management suite of products, Craig will explain what we can do with that.
This idea of asset performance management, when you have downtime, it's okay as long as it was planned. You don't want it to be unplanned. That's very expensive. In this situation, we know that there's a pump, we know it has an issue, we're about to switch over to a second pump. Of course, we want to look at the information around that second pump to be sure that is it going to be reliable. It turns out we've been capturing all of the operational data of that pump over a long period of time, based on that, we can predict when it would fail or not fail in the future using some artificial intelligence and some machine learning. We're able to look at that before we actually activate the switch over to the backup.
Right. With the same asset performance management suite, you would actually send out the service engineer. He will get his work order. He will look at his mobile device. He will have all the data plus the 3D model, everything on his mobile device as he does the service on site. What you also could do prior or after the service, you can calculate with our profit advisor automatically what's the profit impact for the company or for the plant that you would have. I understand, of course, this is only a model. Let's see how that could look like at the customer side.
We've talked before about Abu Dhabi National Oil Company, or ADNOC, and we've talked before about how in eight weeks we were able to deliver Schneider Electric and AVEVA software together-
Can we have the slide?
Yeah.
Nice. Okay.
Together into what you see here, which is a 50-meter wall, visually breathtaking, 100,000 data points across over a dozen different operating companies, rendered in real time into this digital view of Abu Dhabi National Oil Company. This was the foundation of our work together. They're very proud of it. We're very proud of it. This formed what ADNOC now call Oil and Gas 4.0 as part of their digital transformation. I want to come back to the customer says, "Well, this is great. How can I drive productivity improvement?" We've gone in with that account team, that coverage model we described earlier, and we've worked with them around two scenarios. First, asset performance management-
Absolutely
we just talked about.
Yep.
Looking at a certain asset class, predicting when it's going to fail before it fails, dramatic improvement in productivity. Secondly is optimizing the feedstock. Looking at the sulfur content of oil coming out of the ground, optimizing where that gets routed to the refinery capacity, to the storage facility, to the vessels at sea, to the spot market prices. Every optimization in this end-to-end point, by ADNOC's words, is over EUR 50 million of economic value generated. We're just getting started with ADNOC.
Right. It's upsell, downsell, cross-sell all over the place here at the customer. We don't want to leave the impression that this is only oil and gas. Let's move, so to say, from the most heavy process industry all the way to discrete with a couple of examples.
Black Rock Mine Operations in South Africa, they produce 3.7 million tons of manganese. Manganese is an important material. It's used for fertilizer. It's used for steel production. It's one of the three major materials in electric batteries, for example. What we did with work with them is over less than 90 days, bring together all of that operational data, this time in the context of a mining facility. Something very interesting happened there. Now the operational team have this data at their fingertips, and they're better able to collaborate and work through areas such as improving reliability, improving asset utilization. Very compelling. The customer is really excited about this as part of their own digital transformation.
Yeah, why don't we listen to the customer as opposed to just showing slides?
Great.
Thanks very much, Craig, for joining me. Can we have the video, or do I need to press here something? Yeah, I guess so.
Black Rock Mine Operations is situated in South Africa, about 600 km southeast of Johannesburg. Currently at Black Rock, we produce 3.7 million tons of manganese ore. The Black project was mainly aimed around two objectives. One was to replace and to upgrade the existing infrastructure. The second phase was to install additional capacity for us to be able to expand our production from just about 3 million tons to 4.6 million tons in three years' time.
The road to modernization and technologies that we applied at BRMO had a number of enablers, and one of them was the visualization, the video wall, and the OMI, which I believe was the first in South Africa to be deployed. The video wall also needed to facilitate a single communication platform for the multi-disciplines across the operations, a place that's easily accessible and speaks of one version of the truth.
You can hear them talking about the integrations that we're talking about in one room. That's what the customer tells us. If we can help them, that's happening, not only in oil and gas and metals or mining here, but also if you go to a food and beverage customer that we have in North America, I guess in the background, they're producing a little bit of chocolate bars here. We started off in 2013, and you see the different aspects of cross-selling that we have in these examples. We started off with an installed base of automation. Then, through, again, the acquisition of Invensys, we brought in the first software packages that allowed us to establish a larger footprint at the customer, and then also moved into energy management contracting.
With that, as we are moving forward into a more recurring revenue with our customers, in 2019, we've engaged into a five-year contract that allows us to retrieve recurring revenue with that customer. Over this period of time, five years, 18% growth. This is one of the largest food companies on the planet. Again, triple integration at this customer here. Now, if we were to go one step further and we move into a discrete environment, I steal a little bit of the show of Mourad this afternoon, and maybe for those who don't have a chance to join, but only on one slide, because our factories are discrete operations. In 60 of our factories, we have heavily deployed our automation and software offering to make them what we call smart factories. And some of you may have seen this in Wuhan.
That's a fairly new facility. This afternoon, you have the chance to see it in a facility that's 50 years old, and also the average age of folks is, of course, different in China than it is in France, and I don't need to talk about the unionization. All of that has not stopped us in driving that forward and deploying our automation technology, our combined offering of automation and energy management to bring down the energy bill of that facility. Then, within a short period of time of implementation, three to four weeks, improve the overall equipment efficiency by 5%-15%, pending on the machine that you will see this afternoon.
We're deploying latest technology like augmented reality, for example, in those plants, artificial intelligence, all deployed there in 60 of our factories and growing, together with AVEVA and energy management, a complete suite of products. Let me go 1 level further down. I go into a machine automation. As I said earlier, in the machine automation, we are world leading. Why are we world leading? Because we are focusing on certain specific segments, as I will tell you in a minute. This is a cabinet of a pumping station, for example, and we're pretty good at pumping stations. Of course, this has only Schneider equipment in it. I'm not showing competition here, but you could imagine that at many of our customers, there is also a variety of different equipment in there.
Whatever I have marked here in red with our new technology is going away. We're just replacing it and integrating it into software in our new offer. We take out all the I/Os that come with a PLC. You know our PLC market share. We're not targeting to take away our I/Os. We will, but we take away the I/Os of others. That's a pretty nice business to integrate I/Os into our contactors because our contactors now have software integrated, and we're eliminating, so to say, one step. We're taking away 15% of the relays out of this cabinet. We eliminate auxiliary wiring. Of course, the wiring has no cost. It has cost to put it in, actually significant depending where you are, and it reduces also the amount of failures.
There is just one cable that goes from the PLC that is over here, this blue box. You see one of those cables that is connected to the contactor. That's the only connection we need, and then we drive the power in this application, and the power is not going to go away because it moves the physics. It moves the pieces of the machine. That's something that will need to stay. The I/Os, our history, and I told you, the PLC, anyway, 75%, 80% software content today. It's just a question of time, where, and how the software will run. Of course, we also got rid of the network switches. We integrated those in our PLC, and also protection relays.
People have asked me, "Well, that's bad news for Schneider if it's 20% cheaper for the customer." No, it's good news for us because it's 20% cheaper for the customer and it increases our content by 33%, given what the overall market shares are in the company. Of course, if I go from 100% Schneider solution to 100% Schneider solution, then it's 20% less for us. That's probably a small fraction of the pieces, installations that we have out there. It's an additional proof point of moving from electromechanics to a software-based IIoT solution that we're moving up the ladder. You've seen this curve before, for those that follow us for a longer period of time. That's very important for us in our machine business, in our motion business, the number of machines we are converting. Converting means somebody builds a new machine.
They start it off with our own equipment, or they have built it with somebody else and we convert this machine to our equipment. That's an early indicator for us, how growth may develop in the future. It's very important to follow. We believe we've been growing three times faster than the market because we are very much focused. We are focused on packaging. We are number 1 in the world in packaging. We are extremely good in material handling. Material handling, extremely important these days. If you look at all the packages that are sent around the world, those need to be handled. Large distribution center packages automated with us. Then hoisting cranes is one of our favorite solutions where we're also extremely strong in the market. HVAC, we're number 1 in the market.
We're picking segments where we bring all capabilities together and then laser-focused go after those customers to establish scale. Not do everything, but be very focused to it. You've asked me before, "Well, you go in and sell those advisors that Schneider has to offer. How much automation equipment are you pulling?" Well, we can say with pretty good confidence these days that with EUR 1 of software advisor that we sell to the customer, we can pull EUR 4 of automation equipment. There is a correlation to it, and it helps us, of course, driving growth to some of those customers. As we go in with software, it's much more sticky and is much more long-term, and there's a much higher level relationship that we have with the customers.
That's true for the OEM customers, that's true for the end users, and that's of course, also true for our partners. They have understood this very well. We've come all the way to the discrete example, let me come to our number 4 topic, which is cybersecurity as a business. What are we doing in cybersecurity? We're not competing against the IBMs of the world. We are competing against people who understand the OT environment. The OT environment is what you see over there when you're on the plant floor, when you're in the control room, where you have PLCs, where you have process control systems, all of which have IP addresses today, and they're extremely difficult to understand.
A couple of years ago, that's how it really started, we had a customer where the IT cybersecurity team went in, changed the Windows version on the process control system, the plant was down. The downtime, unplanned, of a large plant, cost EUR 40 million, if this is an oil and gas plant. It was burning. They called us. We went in and helped them fairly quickly because we understand the process control systems that are established at those plants. Not only our stuff, but also the stuff from others. That's very important because you face a very heterogeneous environment. What we started then in 2015 is that we need to have a process where we can go to our customers, consult them about technology, consult them about processes, and consult them about their people.
It's not only a technology problem, cybersecurity, it's usually a process problem. It's a people problem that you have. You need to have a holistic approach to it to make the plant a safe one. Usually, you start off with the assessment. Our people go into the plants, they look at the OT environment, they assess what is the situation, and then they come up with a report and say, "This is our gap analysis. This is what you need to do to make this plant a safe one." This assessment is paid, of course. This is not free of charge, and we do this quite regular. In 70% of the cases, after the assessment, we are also invited to do the design and the implementation to mitigate the gap. Right? This is a one-time project that you would do.
Then comes the beauty of trying to move this into monitoring, where we use a third-party monitoring software. We don't have a monitoring software on this one at the moment. Then try to maintain the cybersecurity at this level. Once you get into those contracts, they become very beautiful because it's recurring. Right? Unfortunately, we're not at the 70% yet, but you can see we've grown this business by the factor of 10. To give you an indication of scale, in 2019 it's going to be high in the double-digit EUR million range. It has become a sizable business in four years, and if people say you cannot incubate a business newly in a large corporation, I think this is proving them wrong.
To give you an example of a case that we've done, and nobody wants to have his name mentioned on cybersecurity. This is a Middle East national oil company. This contract is a larger one, of $5 million, I think, or EUR 5 million. We're looking at, as I said earlier, we have IT and OT convergence. They want us to worry about OT, then also as it migrates with a site-over-site visibility into the IT space, the DMZ means demilitarized zone implementation, to make sure that it cannot be penetrated, then go into the design and the deployment of the architecture. You see this in this wonderful circle on the left-hand side. Assuring remote access, assuring device control. Device control means that every single piece that has an IP address is controlled in this facility.
Then, of course, worry about the assets that are out there. This was done on an installed base not only of Schneider, but also third party and other manufacturers that we see and sometimes don't see anymore in the market. There is, of course, a huge installed base out there that needs to be worried about. With the triple integration plus cybersecurity, I think we've built a very balanced, again, what I say, full liner in automation, meaning from discrete all the way to process. Very heavy on electronics and software, very little and no equipment like motors or heavy machining equipment. It's an asset-light model where we move further into software that has well-positioned us for a strong growth through the cycle.
From 2013 to 2018, we also had cycles in there, if you remember, in particular in the process industries that were heavy with a 7.6% CAGR. I think it's also delivering superior value by the convergence to software, so we've improved the margin from 2016 to 2018 by 130 basis points, and of course, we'll participate actively in the 200 basis points. We want to continue to deliver forward in respect to portfolio. We've just closed the sale of our cabinet business in the U.S. that was highly margin dilutive. That's been closed before the half year ends. We are in all the efficiency programs. We are working on our supply chain quite actively and have quite some good plans here, so I'm very confident that we will contribute with it. Also, of course, in respect to portfolio, because we are very unique.
We are unique because the approach we have chosen with owning 60% of AVEVA, having it integrated in EcoStruxure, have a joint development roadmap, have a mature go-to-market model that is functioning and delivering double-digit growth of EcoStruxure since we closed the acquisition. I think we're a good company to invest in. Thank you very much. With that Philippe.
Thank you, Peter. It was very impressive and very exciting to see the strengths of our industrial automation portfolio. We're going to move on to our second business, which is energy management. When preparing with Amit, we were trying to collect your feedback on your question. There were many questions about, okay, what's your recipe in energy management to build your leadership, to sustain your leadership? In the coming 45 minutes, we're going to go through this, trying to be as practical and transparent as we can to explain to you what has brought us here in terms of building our leadership, but I would say probably more importantly, what are our plans to strengthen our leadership going forwards to keep delivering superior financial to our shareholders. My name is Philippe Delorme, for the one who don't know me.
I've been 23 years with the company, I lead today the energy management business globally. I'm based in Hong Kong, close to where Jean-Pascal is, traveling quite a bit as our business is very global. For the one who were in this room 18 months ago when we last did our investor day, you probably remember that we kicked off the concept of energy management. We started to share with you what was our growth strategy, what was our portfolio, what would be the benefit of the combination. At that time, if you remember, there were many questions about data centers. Many of you were saying, "Is it a good market? Are you going to grow there?" and so on. Actually, since then, the story has been pretty good. We've delivered beyond expectation. I would say, more importantly, we've delivered better than competition.
On the energy management side, this business represents for Schneider EUR 20 billion. We've been growing in 2018 by 7% organically while growing the bottom line by 60 basis points, reaching close to 18% EBITDA margin. The data center story has been also very strong. Clearly contributing to what's on the left part of your screen, today for Schneider Electric, data center is our biggest segment. It's a place where we grow double digits, where we sell the whole portfolio of Schneider. A lot of secure power for sure, a lot of low voltage, medium voltage, building management. Actually, some industrial automation, and we see a trend here that's very exciting. Really, the full portfolio, and building the future with the biggest name. You know those names, Peter was mentioning those C-level relationship.
We've built very similar relationship with those customers, actually learning a lot, learning with them, making sure that we will raise the bar with these customers. Our ambition is very simple. We want to continue to strengthen that leadership, keep growing faster than the market, beating competition, while being very disciplined on value creation. The recipe behind relies on innovation and digital, I would say the two are very connected, and you will see that through different example we're going to take. Having an end-user-led approach through a segment focus, we'll take a few example about that. Being obsessed by cross-selling. Peter was mentioning a lot the opportunities of selling together, that's really something that we are very disciplined across the board. There is one Schneider. We have salesforce who are incentivized to sell the whole portfolio because it makes sense for our customers.
Emmanuel was talking about the discipline on the value creation, on the efficiency, making sure that every time we invest in cost, we are very frugal about that and very disciplined on the return on these investments. Very disciplined on pricing. We delivered very well in the past years on that, there is still opportunity. I would say on this, we use more and more marketing automation analytics to be even better in the quality of our pricing and portfolio optimization. We are mentioning Penn Medicine. We are very precise in all our business.
Peter is, I am, Frédéric is, on looking at our portfolio and making sure by country, by product line, we scroll places where we believe Schneider would not be the best owner because we wouldn't have the scale, we wouldn't have the strategic positioning, we wouldn't have the right portfolio, and there will be a better owner elsewhere, to drive that. We have indeed very precise plan to drive these value creation levers to make sure that we deliver the commitment we've been exposing to you guys and sharing in the past months. We talk about data center 18 months ago. We are very happy to have a very close customer to us, which is Penmed. Slightly later in the presentation, we'll welcome Steve on stage to share his experience about working with Schneider to build a very innovative hospital.
We'll take a bit more time later in the presentation. Before that, let's take maybe some helicopter view and understand from a market standpoint, an outstanding standpoint, in which market to operate, what are the key trends that are driving our business to come into what make our differentiation and what our plan going forward. Jean-Pascal mentioned two very important trend, and probably no surprise for you, the things related to a more electrical world, the thing related to the more digital world. Let's dive into a few specific figures here. We've been very clear in the past years about the fact that the world is becoming more electric, the all electric world. By 2040, the electrical consumption will double. By 2040, the electrical consumption will double, which is very good for Schneider Electric, because our business is about electricity.
If you go one level down into what it means, it means a lot of change. Everything, or let's say a lot on the generation side, is going to go towards electricity because it's more efficient. 50% of the power generation will be coming from renewable energy by 2040. This is a massive change which will drive more microgrids. On the demand side, the loads are going towards more electric because more electric means more efficient. More electric vehicle, more electricity usage in building, more electricity usage in industry, which are driving more low voltage and more medium voltage. All of this is also driving more dependency on electricity. Life is on when energy is on. The reverse is true. If you have no power, your whole business is in trouble. People, therefore, consider uptime is an absolute must, which is great for secure power.
That's the first thing that's really driving our business in our direction and in really more microgrid, more power distribution, more secure power. Second trend on the all digital world. We are all addicted to our phone, our teenagers even more than us. The new phenomenon or the acceleration phenomenon is that all machines are getting connected, and the pace of that connectivity is actually eight to 10x to what it is for all of us. Think about it. That means more connected products. All that traffic on top of that, which was very centralized, is moving to the edge. To help with the performance of those applications, there is more 5G, and that's moving toward more secure power, more at the edge with smaller data center, which fits very well with the business model of Schneider.
Last but not least, IT and OT are very connected, and we see more and more, and we'll give some example on the fact that there is no efficiency in the OT space without IT. IT and OT are connected, and that means more EcoStruxure for Schneider Electric. All of it goes into very favorable direction for business. Let's sit in the shoes of a customer. I'm a customer, and I'm confronted to that more digital and more electric world. Actually, I have to run two things in parallel. On one side, I have to manage my energy, because if I have no energy, I have no business. I have to manage my process.
Actually, I need someone who can bring me a solution to combine together the Energy Management on automation to be future ready and deliver on the promise that I want to deliver for my customers. That's what we do for a living, to deliver smart buildings, smart data centers, smart infrastructure, smart plants. That's the whole logic of the portfolio of Schneider Electric. We wrap it up. There is an all electric world, there is an all digital world. There is a second parameter that's very important, and that's really, really important in electrical world, which is a multi-local world, which actually goes with a lot of specificities in the electrical space in terms of standards, in terms of products. I mean, the plugs in the U.K. are different from the one in France, are different from the one in the U.S.
That's coming from very different standards, and that requires a very multi-local approach to the business. In front of this, we build with Schneider, and we build with our Energy Management business, four key ingredients of differentiation around our size and our scale and our innovation portfolio, Point 1. Point 2, and getting inspired a lot by what has been very well done in industry space, a full presence on the whole life cycle of our customers, supported, number 3, by a full enterprise architecture that you know by heart, which is EcoStruxure. A unique multi-local reach thanks to our scale, thanks to our history, that allows us to be with our customers everywhere in the world. All of it allow us to have the means to invent the new electric world.
Now, let's go in detail on those four bullet points to understand with some example what it means. Size and innovation, something that you are pretty familiar with. You know we are number 1 in low voltage. We are number 1 in medium voltage. We are number 1 in secure power. We've done a lot of work in the past 18 months with the creation of Energy Management to build synergies across portfolio. Cost synergies, I would say even more importantly, go-to-market synergies to make sure that every sales force will be fully incentivized to sell the full portfolio of Schneider in Energy Management and also with automation. Coupling that with a full focus on innovation, full simplicity. We'll talk about a lot of things related to digital.
There were many questions from many of you on the fact that some of our partners are a bit afraid of that digital transformation. One angle of our innovation is really to make things simple for our customers and for our partners. Now, let's take a few examples of that, and let's scroll back in time, in the past 40 years, on a few of our iconic products. Number 1, everybody talks about IoT and it's been, let's say, more of a discussion in the past five years. We launched our first IoT device in the power distribution world 40 years ago in the U.S. with Square D, 40 years ago. IoT for us is no new news. Now, there are many things that have been moving, it's moving more to the cloud. The whole reality of making power distribution digital started in Nashville, Tennessee in 1978.
Since then, we've been going further with more values, UPS and legendary reliability with APC, more efficiency with our circuit breakers, making our circuit breakers smart. Wanted to illustrate 2 points of innovation, which I find very interesting and that are more accelerating going forward. The first one is sustainability. This equipment is a medium-voltage cubicle that's green and digital. Maybe not all of you are specialists of medium voltage, but in medium voltage and high voltage, actually for years, we've been using a gas called SF6 to isolate the conductors to make sure that those equipment would be rather compact. The problem with SF6, it's a fantastic gas for electromechanical specialists. The problem is that one kilogram of SF6 has the equivalent environment foot impact as 20 tons of CO2. One kilogram of SF6, 20 tons of CO2.
That's not a very good gas for environment. We launched, one month ago, a product that can get rid of SF6, that cuts the arc into the air, which is an unparalleled innovation in the industry, which is raising a lot of questions from our competitors, and I would say more importantly, a lot of excitement from our customers. With that product, we are at the forefront of innovation in power distribution to make power distribution green and digital. The second thing where we are really obsessed is driving digital and connectivity to deliver more value for our customers. That's something that actually we see a lot coming with EcoStruxure, and I will talk about that.
Point number 2 is getting inspired with what's happening in industry, where we clearly see in the industrial space probably some advance compared to the building space on thinking the whole cycle, from the whole cycle. We were historically, with our power distribution, very intensely positioned in the build. Actually, we see that all these installations start to live at the design phase and then have a real life in the operate and maintain. All the work we are doing is to expand to the design phase through M&A and alliances. That was the meaning of the recent acquisition we did in IGE+XAO and LK, to help our customers, in this case, a lot of design firm contractors, to make design simple and more efficient.
Then in operate and maintain, building suites of software that help our customers, in that case, facility managers and users, to deliver energy efficiency, sustainability, asset optimization, comfort, and so on. We today rely on 1.3 million assets under management. 18 months before, it was 700,000. We've doubled that pool of assets under management in 18 months. That gives you a trend of how fast that business is growing, which is growing recurring revenue, digital services, which in itself are very interesting business, but which are also a very good pull-through opportunity. Because once you live with your customer in a recurring revenue and a recurring digital relationship, when there are optimization to be done in that facility, the first company to be called is Schneider Electric. This relies on point number 3, our enterprise architecture, that's EcoStruxure. You know it by heart.
You know the level 3. Peter talk about it. Emmanuel talk about it. Jean-Pascal talk about it. Just wanted to give a slight twist to make you understand how this work with our customer. The backbone of our solution is coming with power distribution. Peter, you were mentioning that in most of your example. We have a power distribution footprint that span across all our end markets, and we make it digital, thanks to EcoStruxure power, which is, let's say, the base of helping our customer manage their energy. Actually, what we do on top is to stitch, let's say, the process application that our customer require to bring together the energy and the automation, which was the example I was giving right before. In a building, the process will be the building management.
In a data center, the process will be the data center infrastructure management, the DCIM, EcoStruxure IT. In a grid, that will be the ADMS. In industry application, that would be the machine or the DCS, which is actually the example that Peter was giving before. Here, we are truly unique by bringing the two together, the energy and automation, with a specific focus by segment, and that's been recognized very strongly in the outside world by people like Gartner and Verdantix, that very often put us in their quadrant 4, which is the sort of place of leadership in the world of software. The last point, that's very, very important, in a multi-local world, we have the capacity to respond global, regional, and local. Our industry is driven by local standards.
When you talk to companies like, for instance, Marriott and Hilton, we can engage with them at the global level, for instance, to provide a full energy dashboard or sustainability dashboard, which actually we do with both Marriott and Hilton, which means thousands of site connected. That was the example of Jean-Pascal, of the integrated company. When we talk to these people, and we are working with them on deploying a new hotel in Dubai or in Oakland or in California, we will be confronted to different standard.
The power of Schneider comes with the fact that everywhere in the world, we can accompany those global customer globally, but also locally with a full network of partners, which is really hard to beat because we are cumulating here decades of relationship with partners and decades of investment into multi-standards electrical equipment, which allows us to go now bottom up with a lot of partners. Here you have an example of a contractor in the state of California. The U.S. has an electrical code, which is nationwide, but there are degrees of application of that electrical code that differs by states. Even at the size of the U.S., products would have to fulfill different standard, depending on different states in the U.S.
That's how local our business is, which come with some level of complexity to manage for our customers, which actually is a business we love because that comes with some level of capillarity and presence with our partners. Pretty simple equation of why do we get that leadership and where we are going? We wanted to go one level 1 down into sharing with you our two main business model. Schneider goes to market typically direct when our customer is asking us to do so, or indirect through partners. We're going to take a practical example here with Pe
nn Medicine. I'll be helped with Steve, who will testify about that. Before Steve coming on stage, let me share a video of what this project is all about and what we've been working on together with Steve and his team.
Currently at the Hospital University of Pennsylvania, we are in several buildings. We're designing a hospital for the future, the pavilion at Penn Medicine. This is a way for us to move into the future.
We wanted this hospital to be a hospital that would be at the forefront of medicine for the next 100 years, had the flexibility in its design and construction, as technology changes, as medical practices change, the building could adjust to those changes.
The planning is probably 75% via. Planning here really is centered around the big room concept. What that basically is in an IPD environment, it's pulling all the parties together, collaborating in an environment side by side.
We recognized that we needed to bring on an expert in low voltage, low voltage technology, integration, collaboration. Schneider's been involved in this project as a partner within the first six to nine months of the project.
Because we are a part of it so early, we are able to form very close relationships, not only with the Penn Medicine folks, but also with other key contributors on the IPD. That's been extremely invaluable.
We basically have offered three major divisions of our company to come in and work with Penn Medicine and Schneider Electric and the other entities for the project with our Schneider Electric Buildings division, our Square D by Schneider Electric, and ASCO by Schneider Electric.
I think what Schneider does particularly well, the willingness to work through problems and come up with solutions that look to the greater good. People need a certain amount of courage to be able to work in that environment and do that.
In 2021, we are going to put people into this building, patients, and they're going to get better care than they get today. They're going to be in better facilities than they are today. We will have completed what we set out to do, which was provide a world-class facility for patients and family.
Steve, let's hear from you about that fantastic project.
Good morning. I just want to start out by saying I've only been to Paris a few times, and every time it's been really hot. Maybe it's me, I don't know. I'll stop coming if you want me to. Actually, I'm not going to stop coming. You just saw a short video, a little bit of real quick background on Penn Medicine. We are an $8 billion U.S. health care system in Philadelphia and in that region. Pennsylvania Hospital was the first hospital in the U.S., more than 250 years ago. Today, we have six hospitals. We see about six million patients every year, and have over 40,000 employees, so a pretty substantial enterprise. We also were the first school of medicine in the U.S., and so we've been teaching doctors and nurses, and also researchers.
On the research side, we led in X-ray diagnostics development a long time ago, and today are leading the fight to cure cancer. It's old in U.S. standards, not in maybe European standards, but we are very old in U.S. standards, but have always been innovative and always looking to the future. When we, back in 2014, when we took on the direction to design and build a $1.5 billion new hospital facility, the basic emphasis was this has to be the best hospital that we can build in the U.S., and we're going to open it in mid 2021, but we don't want to build a hospital that is a 2021 hospital. We're looking to the future. Some of the big emphasis really is on, for us, is patient care, clearly, and that is first and foremost what's most important.
Secondly is, we have to have facility that will allow for us to have the best patient care. There's really two parts to that. Jean-Pascal talked about it. Philippe talked about it a lot. That's electrical or power, and digital or IoT. I'm going to talk about both of those things from our project's requirements perspective and how Schneider and the Schneider team has worked with that. You can see here, our Penn Medicine requirements for energy management, and this is really the second part of that, which is the building and the facilities, and the facilities needs to support the patient care. The power reliability.
Early on, we made the decision to go with Square D, to go with ASCO, and a number of other Schneider products on the reliability side. That's sort of the initial capital side of it. Almost more importantly is the sustainability, and how that works throughout the life of the project. We're going to open this hospital in 2021, but it is designed to be a 100-year building. How do we do that? You heard a lot about EcoStruxure. Obviously, you know a lot about EcoStruxure, the different modules. We are in the process of implementing all of those into the design and construction of the building so that we can constantly manage our, monitor, diagnose, and then manage our energy usage for the building.
I don't know much about hospitals in other parts of the world, it is really expensive to run a hospital in the U.S. We have lots and lots of requirements. Jean-Pascal just said he thought France was complicated, but the U.S. is really complicated, and each state is different with their own requirements. We have many operating theaters in this new building. We can't ever afford for power to be out. We can never afford to lose connectivity and integration. The thing that Peter and Craig went through, we're not going to have a screen that's quite as large as that takes up a whole wall. Our central plant, our facility in this hospital, is the heart and soul of what goes on in the building, and we can't afford for an unplanned outage.
It's not necessarily lost profit, it is people's lives could be at stake, quite honestly. We may be losing patients. The power reliability and sustainability are foremost for us. The second part, or really first part, is people. People is two things for us, patients and visitors, and then our staff. That really comes down to process management for this new building. On the patient and visitor side, you saw in the video, I don't know if you could really tell, but we built what we called a lab, I think two and a half years ago, very early on in the process, and tested out all different parts and pieces of the infrastructure.
Lighting in a patient room, shades, air conditioning, how that interacted with our clinical systems so that patients and family would have some level of control, and they felt like they were actually, not in a hotel, but really it wasn't that they were in this sterile environment. Schneider Electric set this up. You saw some of the folks in the video. We've worked through many different products. Many are Schneider products. Some are not Schneider products. There are just some places where we don't even have an opportunity, and some places where, especially clinically, those are not the best solutions. Integrating them is a Schneider role, and again, we worked through that with the lab. As Peter was going through, we've spent a lot of time over the last year and a half getting rid of some of those cables and things in those boxes.
I don't know a lot about this stuff, right? Getting rid of a lot of those cables and things and using modules, whether they were a Schneider product or not. Those saved us money on the capital side. More importantly, a lot of flexibility in the future. On the staff side, we have many clinical systems. Again, Schneider, this is really sort of outside of the Schneider realm, but there's things like Epic and Hill-Rom and things that you've probably heard about out there. Again, it's all about the integration for the clinical side and that the staff feels comfortable that if their nurse call system doesn't function well with the tracking of the nursing, that can affect our patient care. A huge amount of that. The last bullet here is really important again.
I said this before, but we're opening in 2021, but we are looking to the future, and we know that things change in most of your businesses, but in healthcare, they change all the time. We have to be able to evolve, and Schneider has helped us over the past couple of years be flexible and understand what we think we don't know. How did we do this? Again, this project started way back in 2014. We knew from the very beginning that we were going to need to bring on what we called a low voltage integrator. Something we had never done on any of our projects before, and we were looking for someone who would be able to help us integrate all of these different parts and pieces.
We brought Schneider on about nine months or a year into the process, and they've been with us on that integration side through the whole process. People there working with our engineers, our architects, our doctors, and surgeons all the way through. We made the selection to go with Schneider for the building automation system and some security integration. All that's really important on building the building, designing the building. As I'm sure you know, it costs a lot more to maintain the building over the life of its building. We will spend much more maintaining this building for over 100 years than we do spend in building it. Again, it goes back to sustainability and service and maintenance today and into the future. We're already planning for those systems, again, using EcoStruxure.
We, as many of your businesses do, we do a five-year strategic plan, Penn Medicine. Back in 2012, which was a really long time ago, we had six priorities in our strategic plan, and we hadn't yet decided to build this new hospital. We did that. That decision was made about in the middle of that five-year plan. What I've highlighted here are the six priorities and really with how those priorities have aligned. We've used those through the design and construction of this building, but how they've aligned with Schneider's priorities. You can see there, I talked about flexibility, innovation, reliability. All of those things have been really important to us. Leading and optimizing for the future.
I think if I had to pick one, that's really where I would focus, and then optimizing on the future and how we design the building today so that we get the most out of it for the life.
Thank you, Steve. Big thank you for your business, for your trust, and for your time, and for taking the time to stop here and share with us, share with the representative of shareholders, how we've been working together and partnering together. Thanks first for your trust over those long period of time. We are really excited to be on the side of Penn Med folks to build such a hospital. We feel very proud and very happy with that. That was an example of one segment, which is healthcare, which is a very important segment for us, but there are many others. You have the list here. You know that list, the recipe is pretty much always the same. We bring together energy and process. We customize this by end market.
We make sure that everywhere we can, we bring together the energy and the industrial automation, which is especially true in more electro-intensive and critical application. We deliver to market with global teams and with partners. Back to your question, the question was asking what is at the core of Schneider performance? Things like this. Doing them very consistent across segments to have partnership as we do with Steve in other healthcare facilities in other places in the world and with other segments. To complement the view, there were also a lot of question on, let's say, some new energy landscape type of examples.
We wanted to pick the example of Lidl, which is a customer that for sure wants to keep the light on, but who wants to get use of all the new technologies of solar, EV, energy storage, transfer switch, and these kind of things, coupling connected products and software to run an, let's say, in that case, a logistics center of the future. Which is what we did, in that case, really using the all power of EcoStruxure on the three layers and also the all know-how we have in the field of energy and process, in that case, which is a building automation, to make the full combo that will be future-ready for Lidl. Actually, we see a lot more requests like this coming.
When Emmanuel was mentioning AlphaStruxure and our engagement with Carlyle and GfK, we have a lot of similar conversation with that customer, which is really exciting, which make us very proud and actually very future-driven towards sustainable and digital innovation. That was a deep dive on, let's say, the end-user led. We wanted now, we want to switch gear and move to the partner-led approach, which has been very core to Schneider, very central to our business, leveraging two things, a very wide partner network on one side. Second point, amplified with a stronger digital engagement. Let's have a look at a couple of those ingredients out of that partner-led business model. First of all, I was mentioning scale. For sure, scale is important.
We are blessed to be operating with 600,000 ecosystem partners, which are an extension of Schneider Electric and who really work in an orchestrated way, and I'll give some example about that. I think what we were seeing in the case of Penn Medicine was a very good example of that. They are not only distributors, and distributors are very important. They are system integrators, they are IT resellers, they are panel builders, electricians, electrical suppliers, all our e-commerce partners, which starts to be a very sizable business. All that business, partner-led, means 70% of Schneider sales. A very important part of our business, operating out of that base of 600,000 partners. We have many questions on, are these partners really embracing digital, and is it really moving? How is that working and so on.
On that one, first of all, it's important that when we work with partners, we usually, on project, don't work with them one by one. It starts with a life cycle of design, then build, then operate and maintain. We very often have that orchestration between specifiers, panel builders, contractors, system integrators, which actually are needed so that we would deliver a full solution to an end user. It's a full life cycle, and we see really a big opportunity with Exchange, which is a collaborative platform, a digital platform that helps orchestrate the interaction with all of those partners. The figures are already pretty big. We have 45,000 users of Exchange, so it's not a pilot. It's already a large-scale deployment, and we see an acceleration of adoption because it brings value for our partners.
Scale matters, when we have hundreds of thousands of partners, if we can get more efficient together working on projects, that makes a big difference. Our capillarity, our presence at the point of sales. There are many point of sales in the world from, let's say, Incredible India on the left to a online platform on the right. We believe we are present in one point of sale out of two in the world. From, again, on the left side, a small shop in Incredible India to a Rexel or Sonepar point of sales in developed economies to e-commerce platform, which often actually are run by the same Rexel and Sonepar or by others, it depends. You see here the magnitude of the figures, 350,000 traditional point of sales, 400 online platforms.
When you look at the dynamic, we've gained in the past four years, 150,000 point of sales because we, I wouldn't say religiously, but meticulously follow our point of sale conquest and our presence in point of sales. We do the same work on the right side with our online platform to expand our presence through online platforms. Really to grow and digitize on all cylinders of the partner machine we have, which is extremely powerful. Brands are important. Schneider is a very strong brand. Very strong, let's say, on the project side. The more we go to a more capillary presence with small electrician contractors, might be crazy, but those guys identify themself with brands that we acquired.
That, again, are the results of decades of strong relationship, whether Clipsal in Australia, PDL in New Zealand, Square D in the U.S., of course, Merten in Germany, Feller in Switzerland, Elko in Denmark and Sweden. Sorry, Elko in Sweden, LK in Denmark, Steck in Brazil, Günsan in Turkey, Luminous in India, and Delixi in China. This represent more than 30% of our sales, what we call associated brands. It might represent some very immaterial value and linkage, but for especially the small electrical contractor, this is extremely important, down to they would associate that with the Clipsal family, the Square D family, because they've been trusting those names and those product for such a long time. The products are important, and the products and the offers and the innovation for these electrical contractors are important. These people are very emotional with our brands.
What we try to do with those products is to bring simplicity so that when people go on job site, when the small electrical contractors goes on the job site, he work with Square D, he work with Clipsal or Schneider, he knows there will be no surprise. The product will be easy to use, will be fast to deploy because time on site means money. When we have a Plug-on Neutral with a very easy installation, it makes a big difference for these type of guys. When Clipsal brings a new wiring device, which is very modular so that there is less stock for the electrician, that means a lot for them.
Those people are digital and more and more, and the new generation that comes to us asking us to have better digital interaction apps on their phone to be able to select and configure our products. We see a fast expansion of those tools, which are actually a great way to stay in touch with those communities. When you are in touch with tens of thousands of electricians, that makes a big difference going forward. This innovation is recognized externally. We are very proud to have a very strong ramp-up of design award with new products that can be more consumer-led or more professionally led. We take a lot of care on that design. We've worked in the past 10 years on really improving the brand design so that our product look distinctively the same, so that we code our innovation.
We also get very strong recognition out of the channel award we get, which is really recognizing what we do with our system integrators, with our electrician partners, our distribution partners, and we are very proud and very happy with those recognition. So as a wrap-up, the question was: What is really your equation to lead the market and lead the business in Energy Management? Well, it's a pretty simple equation, which is, it starts from a more electric and a digital world. The pillar and the foundation is sources of leadership that we build over time around a very wide portfolio, a portfolio that brings together energy and process, that relies on leading brands, with a very strong reach at multi-local, with multiple partners. That's really the foundation of our business in Energy Management.
That leadership we want to strengthen and build the future, a lot being fueled by digital, making sure that we innovate for simplicity, that we keep developing EcoStruxure. EcoStruxure, Jean-Pascal was saying, is 10 years old, it's true. We accelerate, actually, our pace of innovation there. We digitize our partner network and really do it across the full life cycle of our assets and our customers. In the background, we want to stay extremely disciplined on execution so that we drive productivity, we drive pricing as a team, we drive efficiency, and we drive our portfolio management.
The result is what you're asking for, which is growing faster than the market and focus on value creation, which is what we've been doing in 2018, which is what we'll be doing in 2019, and for the foreseeable future, per the commitment we've made with Emmanuel and Jean-Pascal in February for the coming years. We take that commitment very, very seriously. That's it for Energy Management. We thank you for your time. We thank the people who are also attending online because we understand there are many of them. We appreciate your time and your trust.
15 minutes
15-minute break, we are back in this room in 15 minutes. Thank you very much.
My father was actually involved in sugar, as a young boy, I used to go to the sugar mills with him. As time passed, I ended up in the sugar industry. My name is Alan Williamson. I'm the manufacturing executive at RCL Foods Pongola Sugar Mill. RCL Pongola Sugar Mill specializes in two types of sugar, mainly the refined sugar and the brown sugar for direct consumption as well as for the industrial market. The biggest challenge faced by RCL when they took over Pongola Sugar Mill was that the plant is very old and in desperate need of modernization. There was lots of downtime, breakages, stoppages in the power station. We used to have roughly 33-40 blackouts in a season.
Obviously with the modernization and putting in the Schneider system, we were able to troubleshoot much quicker, therefore our uptime was increased, our downtime was obviously decreased, we're actually able to control and optimize our process. Schneider Electric EcoStruxure allows us to remotely diagnose and view the plant like we could never do before. This allows us the flexibility in that we're able to access the plant at any time from any location via our laptop, smartphone, or tablet. I think the most important thing that we've achieved with Schneider Electric is that we have become more competitive in the industry. Over the period of implementation, the Schneider Electric system has substantially contributed towards our 20% increase in throughput in the plant.
Our vision for the future is to continue modernizing the plant in partnership with Schneider Electric and to achieve our mission of more food to more people, more often.
Shanghai.
Engineering is not boring and bland as people perceive it to be. It's actually a problem-solving role. My name is Tasnim Abdel-Razaq, and I am the Network Control Manager at SA Power Networks. SA Power Networks is the sole electricity distributor in South Australia. We basically have two peak seasons. One is the summer season, which is when your bushfire events creep up. The other component is around autumn. That's storm events, lightning, rain, wind activity. We have a lot of transient faults, which are basically due to vegetation or animals. We have hundreds of kilometers of line, over 1.5 million customers. When we do dispatch crew, they can spend hours traveling to the location and patrolling the lines.
The ADMS and the feeder automation scheme is going to give us better visibility of the network because it has smarter reporting capability, and it has allowed us to capture a lot of our network structure to have a centralized source of truth. To be able to restore power to the majority of customers on a feeder in under a minute is something that has never been done in SA Power Networks' history. Without Schneider Electric, we probably wouldn't have been able to progress as far as we have and as quickly as we have. It is a very powerful tool. It's a fantastic platform for us just to develop in the future and be the leading edge in the distribution sector.
Luxury and energy efficiency can definitely work together because the better system design, the better-integrated system you have, the more efficiency you can get. Hi, I'm Michael Wang, Marriott Global Design Asia Pacific Continent Head. We, with Schneider Electric's help, conduct regular training and workshop with all of the consultants and owners that they're aware of our goal. The experience that we want the guests to have is really that they're able to have a very comfortable stay with all of the control and lighting, air conditioning requirements, heating requirements, and at the same time, that they are very aware that Marriott is a company that is very focused on sustainability. With Schneider's help, it will help us achieve that faster and quicker.
The use of Schneider Electric systems and services like EcoStruxure Resource Advisor, power distribution, building automation, lighting, guest room solutions, and UPS has given us a great 10%-15% in energy efficiency savings. China really wants to promote internal tourism. They are now building hundreds of resorts within China, which has never been done before. It's a huge market for us. Marriott International and Schneider Electric share the same vision, and I think that's why it becomes much easier for us to reach the same goal, partner towards that sustainability and energy efficiency for all of our hotels.
The rise of digital man is affecting the way the entire industry operates. We all have developed an expectation that if we order a widget on Friday, that it should be on our doorstep Saturday or Sunday. I'm Joel Simpson, Vice President of Corporate Plant Engineering at UPS. The importance of on-time delivery is paramount. The process rates and the speed at which we were once able to perform have been outmatched in what we do today. Schneider Electric has been a great partner to us in being able to help us realize our vision of what automation looks like. It's all about innovation. The smart facility is a new 104,000 pieces per hour rated facility. It's the fourth-largest facility we have in the world.
From medium voltage power distribution to all of the miles of conveyors inside, it brings a wealth of technologies, a wealth of opportunities, a wealth of capacity to our organization. With the growth of the Industrial Internet of Things, understanding the technologies that are available and understanding how to deploy, that's key to us. Our application of EcoStruxure was really organic. Open architecture just makes it so much easier for us to realize real-time communication from plant floor devices all the way up to the control system. The technologies that we have deployed will help us achieve greater efficiency to how we service our customers. Customer packages represent our lifeblood. We are here to ensure that those packages are treated just like our very own packages.
Ich heiße Peter Backes und bin Konstruktionsleiter. Wir bei ABUS, einer der führenden Hersteller von Krananlagen in Europa, fertigen jährlich mehr als 5,000 Krane, beliefern mehr als 35,000 Kunden in Deutschland und exportieren in 55 Länder. Die unterschiedlichen Anforderungen hochkomplexer Krananlagen müssen mit Standardmodulen in möglichst kurzer Fertigungsdauer umgesetzt werden. Das ist eine große Herausforderung. Die Digitalisierung und Konnektivität bieten uns da völlig neue Möglichkeiten. Wir setzen auf ABUControl, unsere auf der EcoStruxure Machine Lösung basierende intelligente modulare Kransteuerung. Sie ermöglicht erstmals die serienmäßige Realisierung aller benötigten Kranfunktionen mit nur two Standardmodulen, und zwar von einfachen bis hin zu komplexen Kranarchitekturen mit mehreren Kranen und Hebezeugen. Maschinenoptionen müssen nicht programmiert werden. Die Anlage wird durch die Kransteuerungssoftware einfach und schnell parametriert. Die EcoStruxure-Steuerungslösungen Modicon M241 bieten ein Plus an Sicherheit und Komfort. Sie sorgen zudem für geringere Ausfallzeiten der Kransysteme.
Mit Altivar-Antrieben kann durch die Rückspeiseeinheit entstehende Bremsenergie wieder ins Netz zurückgespeist werden. So lässt sich eine Energieeinsparung von bis zu 40 % erzielen. Die Lösungen von Schneider Electric haben unsere Wettbewerbsfähigkeit erweitert. Damit sind wir für die Herausforderungen, welche das Internet der Dinge mit sich bringt, bestens aufgestellt.
EastLink is Melbourne's largest tollway and it connects the Eastern, Monash and Frankston Freeways. EastLink is a vital connection in Melbourne's orbital network. My name is Doug Spencer-Roy. I am the Corporate Affairs and Marketing Manager at EastLink. Up to 115,000 vehicles a day drive through EastLink tunnels, the ventilation system is critically important to ensure that the air quality is maintained. EastLink has two 1.6-kilometer tunnels, and they run under the Mullum Mullum Valley, which is a sensitive area. We are very conscious of our environmental responsibilities. The original ventilation system involved the ventilation fans being switched on and off, either fully on or fully off, based on time of day preprogrammed parameters. This was inefficient and used excessive electricity.
My name is Ian Oxworthy. I am the Project Director with EastLink. The existing system was a direct online. It was high operational and maintenance costs. It had a relatively short life, we needed a solution that would overcome all of those issues. Schneider Electric brought together a number of special skills and were able to help us develop a solution with Schneider Electric EcoStruxure platform, which includes Citect SCADA, M580 PLCs, and also Altivar drives. The outcome exceeded our expectations, which meant reduced power consumption, reduced carbon footprint, reduced noise emissions, and the ability to go into the future without any adaptations to the system. It is future proof.
This collaboration between Schneider Electric and EastLink has implemented Australia's first ventilation-on-demand system for our roadway. EastLink has reduced our electricity usage for the tunnels by nearly 70%, and we have also reduced the tunnel ventilation system noise in the local community by half. Connected autonomous vehicles are starting to arrive on our roads now. This project is an example of infrastructure and vehicles communicating, which will help make our roads safer and more efficient.
I arrived in the industry as my father was actually involved in sugar, and as a young boy, I used to go to the sugar mills with him, and as time passed, I ended up in the sugar industry. My name is Alan Williamson. I am the Manufacturing Executive at RCL Foods Pongola Sugar Mill. RCL Pongola Sugar Mill specializes in two types of sugar, mainly the refined sugar and the brown sugar for direct consumption as well as for the industrial market. The biggest challenge faced by RCL when they took over Pongola Sugar Mill was that the plant is very old and in desperate need of modernization. There was lots of downtime, breakages, stoppages in the power station. We used to have roughly 33-40 blackouts in a season.
So obviously with the modernization and putting in the Schneider system, we were able to troubleshoot much quicker, and therefore our uptime was increased and our downtime was obviously decreased, and we are actually able to control and optimize our process. Schneider Electric EcoStruxure allows us to remotely diagnose and view the plant like we could never do before. This allows us the flexibility in that we are able to access the plant at any time from any location via our laptop, smartphone, or tablet. I think the most important thing that we have achieved with Schneider Electric is that we have become more competitive in the industry. Over the period of implementation, the Schneider Electric system has substantially contributed towards our 20% increase in throughput in the plant.
Our vision for the future is to continue modernizing the plant in partnership with Schneider Electric and to achieve our mission of more food to more people, more often.
Shanghai。一静一动，充满活力。上海地铁就像城市的命脉，以每天超过近千万人的运载量连接着这座城市。地铁工作的特点就是白加黑，24小时运营。我是郭德龙，上海地铁维护保障有限公司供电分公司总经理，主要从事上海地铁电力系统安全运营、日常维修、应急处置等。施耐德作为一个大型的国际企业，它为我们提供了离谱的产品，同时呢也提供了离谱的服务。目前我们公司已经实现了变电站无人值守加巡检机器人、智能巡检库、在线辅助系统，通过后台的数据分析来提高我们日常运维的水平。施耐德的服务响应比较及时到位，确实能为用户所想，在第一时间解决和处置突发事件。希望通过与施耐德电气之间加强合作，为上海地铁的管理创新添能助力。
Engineering is not boring and bland as people perceive it to be. It is actually a problem-solving role. My name is Tasnim Abdel-Razaq, and I am the Network Control Manager at SA Power Networks. SA Power Networks is the sole electricity distributor in South Australia. We basically have two peak seasons. One is the summer season, which is when your bushfire events creep up. The other component is around autumn. That is storm events, lightning, rain, wind activity. We have a lot of transient faults, which are basically due to vegetation or animals. We have hundreds of kilometers of line, over 1.5 million customers. So when we do dispatch crew, they can spend hours traveling to the location and patrolling the line.
The ADMS and the feeder automation scheme is going to give us better visibility of the network because it has smarter reporting capability, and it has allowed us to capture a lot of our network structure to have a centralized source of truth. To be able to restore power to the majority of customers on a feeder in under a minute is something that has never been done in SA Power Networks' history. Without Schneider Electric, we probably wouldn't have been able to progress as far as we have and as quickly as we have. It is a very powerful tool. It's a fantastic platform for us just to develop in the future and be the leading edge in the distribution sector.
Luxury and energy efficiency can definitely work together because the better system design, the better integrated system you have, the more efficiency you can get. Hi, I'm Michael Wang, Marriott Global Design, Asia Pacific Continent Head. We, with Schneider Electric's help, conduct regular training and workshop with all of the consultants and owners so that they are aware of our goal. The experience that we want the guests to have is really that they're able to have a very comfortable stay with all of the control and lighting, air conditioning requirements, heating requirements, and at the same time, that they are very aware that Marriott is a company that is very focused on sustainability. With Schneider's help, it will help us achieve that faster and quicker.
The use of Schneider Electric systems and services like Resource Advisor, power distribution, building automation, lighting, guest room solutions, and UPS, has given us a great 10%-15% in energy efficiency savings. China really wants to promote internal tourism. They are now building hundreds of resorts within China, which has never been done before. It's a huge market for us. Marriott and Schneider share the same vision. I think that's why it becomes much easier for us to reach the same goal, and partner towards that sustainability and energy efficiency for all of our hotels.
Well, can I just request everyone to take their seats? I'm glad we all got a chance to have a little bit of a coffee. I must thank the people on the webcast who had to wait a little bit longer for us to start. We're getting into the second part of the morning. Just to be mindful of time, we do have a hard stop at 12 o'clock because we need to move to the factory after. What we're going to do here, we started off with Frédéric Abbal. Frédéric is heading the services business. Maybe a 20-minute presentation around the ambition on services, yeah?
Yeah. I understand. Thank you. It's not going to be 21. I understand this one. Thank you, Amit. Well, very nice to meet you again. I'm Frédéric Abbal. I'm in charge of the service organization, the service business, that we have created actually since 1st of January. Previously, we had many time occasion to meet together. I just want to tell you about the, well, the story of the services and how this is a high level of opportunity for us and our customers. Number one, the customer needs are evolving. We speak about the main four disruption that we are witnessing today, and it means that the customer needs are moving towards a new dimension and toward new needs. The good news is that the technologies are available. We have now more and more technology capable to connect, capable to develop AI into our softwares.
Those are the good news. The even better news is about the fact that we have, in Schneider, a unique position to tackle this one. Number one, because of our EcoStruxure digital platform. Peter and Philippe has been speaking about how we are positioned in this EcoStruxure and digital platform that's a unique positioning. The second point is about the domain expertise we have. We have an expertise in energy management, industrial automation, that's for sure. In the sustainability also. We have a lot of capabilities across the board, a lot of asset management capabilities, cyber securities, all has been presented already by Peter and Philippe. We have an unparalleled install base with a local presence and a local knowledge. That's the story where we are. How big is services today? We are EUR 3 billion business today in the group.
We have been having a growth of 6% during the last four years as CAGR. It's about 15,000 people, and you see the split in terms of geographies. I would say rather a good split, area where we can grow, most probably in the rest of the world and in the Asia-Pacific region. The split in terms of end market is very close to the one we have in Schneider with building data center industry and infrastructure as end markets. How the ambition is? The ambition is starting from a part, a share of services in the turnover of Schneider, which was in 2014, 9%. We were last year 12%, as Jean-Pascal said, we want to grow towards as fast as the group growth average.
This will help us to contribute to one of the target of the group, which is to reach software and services around 20% of the total turnover of the group. That's the ambition. Now, we have two model to achieve this ambition. The Number one model is field services. We have an install base. We are going to see that. We have offers, what we call business lines, and we have a service possibility along the life cycle. That's the Number one opportunity with the field service approach. The second approach is digital services. Digital services, it's a new system. It's a new era. Of course, we'll see how it's moving. It's moving extremely fast, and it's, as we can understand very well, connected to our product, to our install base. Let's move and let's focus on one, on the first topic, which is the field service approach.
On the field service approach, well, we have a real unique position today in the market. Why? Number one, our install base. We are number one in what we call the powertrain, low voltage, medium voltage, secure power. Number one since many years. That has created a huge install base. Second, we are addressing the critical application of our customers. This is a second point that we are having today in terms of criticality that is unique. Let's imagine, in oil and gas, an unplanned shutdown could cost, on average, EUR 40 million. In mining, we have EUR 3,000 per hour of downtime, et cetera. We had, of course, in data center, the same issue. You see here an example in 2016, with 2,000 flights canceled. I mean, actually two days of operation in Heathrow not so long ago.
That's one thing which is very important, which is we are addressing the install base, and we are addressing the critical application of our customers. Unparalleled install base. The install base is the key to develop the services business. We had in 2018, 16 million of critical assets. The topic is very simple. We need to know where are those critical assets, and it's not a given. We need to use as much as we can, all the touch points that we have with the customers, by the way, most of them could be also digitized, and move from 5% in 2014, which you see very low, to 50%, which is our main target. Number one, tracking. Number two, coverage. To cover this install base, here we use AI-based tools.
We need those tools to enable us to sort the real critical asset, to understand where those assets are in terms of sites, how do we rank them and move from 4% of the covered asset in 2014, which is extremely low, to 35%, which is the ambition that we want to aim for. When we have this asset tracked, when we have those assets covered and understood, then we can go with our usual way of doing business. Whether we go direct, whether we go through our partners. In both cases, we are going to cover massively this critical install base. You understand where we want to go, in terms of ambition. Again, 16 million critical assets, move and improve our tracking of the install base.
Second, cover the install base with a direct approach, with a partner approach, and of course, leverage our AI and our digital tools and software in order to address this. It has been a long journey. We have been preparing that since many years. We have developed a lot of tools, a lot of digital tools that are now launched on the market, in our market and enable us to go to this ambition. This is the first topic, which is field services. The second approach is about the digital services. Digital services, that's something which is coming from the assets. The assets, and here we connect with the EcoStruxure architecture that we have. Assets are connected more and more through IoT technology that we have developed. Those assets are going to be connected to the sustainability consulting and advisor suite, which are softwares.
Those software have been developed and built across the, what we call customer practices. Customer practices, what does it mean? Asset performance management. We had a demonstration in Peter presentation. Cybersecurity. Same. Energy efficiency, sustainability consulting. This is a way, somewhere the only way, to monetize the digital services. Going through the customer journey, customer pain points and capabilities. That creates a lot of value. That creates the value of the 24/7 customer connection. That create the stickiness with our customers. That create also innovation, and we will see that later on in terms of R&D. You understand that that's something which is extremely creating value to the customers. If we go and if we enter in the customer cases or the customer example, let's speak about three practices. First one, energy efficiency.
Sodexo, we communicate together in a newspaper, we can communicate, all of them have been actually published. We have been actually supporting Sodexo with our apps, with our advisors to create savings, 20% of energy saving. This is a technological provider we are to this customer, which is a facility manager. We are a tech provider to facility manager somewhere to understand, fit better. BASF, same thing. It's a asset management practice. 40 years old install base. We help them to manage putting our asset advisor on their system and digitizing in fact their install base in order to support them and give them a predictive and preventive maintenance 24/7 connected to our service bureau. Berto, asset performance management as well, is a third example. There is one practice that I would like to focus on, which is the sustainability consulting offer that we have.
We have today one worldwide leader in this aspect, which is a trusted advisor somewhere to our customers in terms of sustainability transformation. The sustainability transformation means that this entity is capable to manage EUR 30 billion of invoices, of spendings, of those customers. By doing this, 500,000 invoices, digitized invoices, in order to make them understand whether they are rightly purchasing energy and rightly purchasing energy in terms of mix, whether green or not green. It's equivalent to 80 gigawatts in terms of power generation. 80 gigawatt, to give you an idea, that's almost the generation we have installed in France, which is 100 gigawatt, just to give you an idea of the magnitude of that one. This is 1,800 people across the board, very connected to the customer to drive them to this journey and to this transformation.
We have, on that one, two examples. First one is about Whirlpool. Same thing, had an energy and sustainability strategy. We helped them to define how they want to move first, save money, which is in terms of sustainability. They save EUR 1 million of saving from recycled waste. They are going and achieving their zero-waste goal this year in Brazil. And they have, just to give you an idea, the largest on-site wind power in the Fortune 500 field. That's first customer where we are working with very closely. The second part is Albéa. Albéa, the same thing. That's an enterprise efficiency around carbon-free efficiency, actually, where we have been capable to generate EUR 1.3 million of savings and 20% of savings achieved across the board of their total cost. Long story short on the service journey. Service journey is resilient.
Resilient because going through the economic cycle with the right continuous course and speed. This is recurrent, because this is a very strong connection on the customer side every day we have to implement. That's a growth engine for the group to reach software and services as a 20% of the mix. There is a huge customer stickiness, which enables us to develop innovative solutions, whether they are from a hardware point of view, whether they are in the digital standpoint of view. Again, two areas. One is about the install base. Install base knowledge, install base coverage, developing our AI tools, and of course, leveraging our partner capabilities. The second point is about the digital offer, which is innovative. It's about connecting the customer's assets and generating revenue out of those data.
Taking into account the customer outcome journey, which is what we call the customer practices, that are the way to monetize it. Of course, developing across the different portfolios of the company, synergies and revenue. I'm looking at Craig because on the asset performance management, we are having a very strong relationship and using a lot of the software across the board to manage this synergy. That's going to be faster than. It's a service for you, actually. That's the level of ambition we have. It's a very fast-growing engine, and we are very happy to call now Amit on stage. Thank you very much.
Well, thank you, Frédéric. I think as we set up the stage, just to let you know, the next maybe 20 minutes or so, we thought as we were planning the day today that it might be useful to have a slightly different perspective, which is based on the operations, the regional operations. Okay, that's well appreciated already. May I just invite our colleagues to come by? All right, just let me introduce who we have on the panel here with us. We have three of the operations leaders. Of course, we have more operations leaders, but the others are running the operations, are working at the moment.
You are the lazy ones.
Just thanks for making the time to be here today and almost at shortish kind of a notice, but I thought it was important. Just to introduce Barbara Frei. She's been with the company for a few years. Still continue to be based in Switzerland?
Switzerland, yeah.
Running Europe Operations. Aamir Paul, Country President, Head of Operations for our largest market, which is, of course, the U.S. Christel Heydemann running France, that's the only country in Europe that Barbara doesn't lead, but is led by Christel. Thanks all for making it. What I've done is I've tried to put together some questions, and what I've done, and I'm going to just ask them at random, but the idea has been that we've been hearing from the investors on several questions over a period of time, just try to put them together.
Maybe, Barbara, start with yourself. I think one of the key questions, of course, is that different companies have different sort of operational structures which are applied. More recently, we've seen some companies in our industry as well, which are moving away from regional structures, et cetera. We continue to have the structure that we have. Maybe you can explain to the audience as to what is unique around our structure and why we believe it's the right structure for us.
Jean-Pascal explained it very well also in the morning in his presentation. We are a very integrative organization, and we are really an organization which is aligned to our customers. It's the panel builders, it's the distributors, it's the machine builders. In the market, we try to make or do one phase to the customer. A sales person who is fronting a machine builder is not only selling the industry portfolio, he's selling the whole portfolio. If the machine builder wants to build a new building for his factory, we can also provide the building management system and all these kind of things. We also have gained a lot of cost synergies out of this.
We have a common customer care center, which is taking care of the customers' needs, and we really believe this is the right way to be very strong in front of the customer itself. It's also a good way for people to develop within the company. You do not only focus on one portfolio, you have the whole basket that you can push through our channels and to saturate them, which is an attractive value proposition as an employer. Furthermore, this has also been mentioned this morning, the country president represents the number 1 person of Schneider Electric in the country. If there is a quality issue, if there is a customer issue, it's his or her duty to really go after it and make things work. I think this is really powerful.
That's an interesting point you bring. You're saying that you got the one phase for Schneider in the country level led by the operations. You mentioned quality, Jean-Pascal mentioned in the morning, quality is with global supply chain, for instance. Maybe Amit, if I come to you. Is there any practical confusion in terms of the role of operations, the role of business, the various functions in keeping with what we just discussed?
I think our system requires a degree of collaboration. If you go back to what we talked about today, building on what Barbara Frei said, the role of the operation is to enable the customer. We designed the go-to-market for our geographies, they're not exactly the same, they're built on common structures. Our opportunity is to position the entire portfolio and ultimately own the P&L to deliver profitable growth, which means real-time trade-offs between cost and investment and our pricing strategy. All of that is very clearly with the operation. Now what we do as we get feedback from our customers is we feed in the business strategy, which owns innovation. The business drives the roadmap, the R&D investments, long-term technology, really understanding the micro trends as well as the major trends. Global functions are about expertise.
This is where we hire best-in-class experts, whether it's in market strategy, supply chain strategy, HR, finance, and they create a transversal capability that we all access. Yes, there is a degree of collaboration required, but actually on the ground, the roles and responsibilities are quite clear.
Yeah. That's good to hear. That's normally the answer we're giving to the community here.
Everybody
I'm glad we coordinated.
Okay. Christel, maybe bring you in. I think another topic which is quite central to what we've been discussing this morning, which is really around the two businesses and the cross-selling, right? The fact that synergetic portfolio, it cross-sells into the end markets. Can you tell us from the ground level, how much of this is actually playing out? How does this really differentiate us and help the customers on the ground?
cross-selling is really an everyday reality for us, actually, we don't call it cross-selling. We call it saturating customers with whatever we can sell to them. Obviously, we have a lot of what we would call here cross-selling across our energy management portfolio. Low voltage and medium voltage, it's a no-brainer. This is massive saturation of customers with those technologies. Beyond the energy management portfolio, I think Peter mentioned that and Jean-Pascal in his presentation this morning, our industrial customers, they need our help. They're moving toward a world that's more digital and that's more efficient and with less carbon impact. Our energy management capabilities and our industrial and process understanding are critical. It's really about energy and process efficiency, as we've said this morning. This is very true.
More and more, because of that digital transformation, they need more data. They have more data that they need to store. They also need more secure power. There's a lot of opportunities as well to continue to saturate customers with the entire portfolio. Ultimately, we also have our segment approach, especially for large electro-intensive customers, oil and gas, mining, water, wastewater treatment, et cetera. Those customers, they consume our entire portfolio. Again, we are really trying to saturate them. Last but not least, that's been mentioned this morning, our distributors. They have one relationship with us, and we maximize what we can offer to them, and they want to maximize what they do with us across the entire portfolio.
Would that resonate in your zone, for instance, as well? Same comments around the cross-selling?
Absolutely. Besides going then to a machine builder and selling in principle whatever is in the drivetrain, we now can also talk with him about services. What can we provide you if additional services by providing you a machine advisor? That, of course, is a very powerful weapon and a clear differentiator in the market.
Interesting. I think that's a good segue to maybe to the next question. You mentioned advisor in the context of machine advisor, but take it broadly and the question around digital. Digital transformation is probably high on the minds of most customers. We've spoken a lot about EcoStruxure. Tell us from an operational level, how is EcoStruxure really embedded within your operational teams on the ground? Do the people see it as a key differentiator to add value to customers?
Absolutely. In the last two years, we spend a lot of time with our sales force to upskill them, to bring them up to speed. What is the values we can sell through the EcoStruxure platform? It took some time so to be really able to pitch this, but what is really the big advantage, it's a clear differentiator also to get to the C level. Before we were talking to the technical director, we were talking to the engineering team about the contactor. Now we talk with them about digitization, and the CEO is very much interested to meet us, and the Chief Digital Officer or the CFO, depending on the structure of the company. This gives us a much better access to the, let's say, wallet of those customers, which is clearly an advantage to our competition.
A new sort of go-to-market approach, thanks to EcoStruxure as well.
Absolutely.
The ability to cross-sell more business as well.
Our sales force is very much motivated by this.
Yeah.
It's something very attractive to sell.
Interesting. Christel, maybe come back to you. Linking back to the point around the sales force and the topic of digitization. One of the big challenges around running the operations, practically is around getting the right talent, retaining the right talent in a digital world. That's a question we get from the investors as well that do we have the setup for the new digital world? Tell us that practically on the ground, how is Schneider thinking about this, and how are you preparing for it?
Sure. First we have our global function, Schneider Digital, who really owns our digital transformation and all our digital program. We really rely and work with them on a day-to-day basis. They hire people, and obviously they are great pool of talents that then we can pull into other parts of the company. That's the first one. Second, to attract talent, I believe it's been said this morning, but we really have a strong and unique differentiation in the market thanks to our sustainability commitments. That's even stronger, I would say, with younger generation. They want to know that they're working for a company that cares about the future, that cares about the next generations. This is something that we've been doing not just as other companies recently.
We've been doing that consistently over the past years, that's really, we see that to attract people, that's unique. When it comes to innovation and making sure that we're equipped with the technology skills, there I would also insist on what again, we've said this morning, our multi-hub and our regional setup because this is key. Speed in a digital world is the essence. Leveraging our multi-hub approach to really work close to customers and with this agile setup, that's key and again, that's very important for our future moving into a more digital world.
That's interesting. The angle of the multi-hub also being a structure which helps to attract the right talent going forward. Aamir, maybe on that very topic of multi-hub, maybe not from the purpose of or from the context of hiring talent, but really, again, in terms of differentiating back to the operations, you are running North America and the U.S. Obviously lots of geopolitical. The fact the way that we are structured on a multi-local basis as Jean-Pascal was mentioning this morning, what does that really mean on the ground from an operational standpoint?
Look, I think the fundamental design point is what Christel just said. The underlying thing we're solving for is agility. As someone who's dealt with tariffs on a reasonably regular basis, agility is becoming a really super important element of how we operate. I think the underlying thesis is simply this. If the geography is big enough, the role of the organization is to push as much of the resources as close to the customer as possible. Because as the speed of things change, the adaptability and responsiveness has to happen close to the customer. The balancing equation of that is leverage of cost and scale and talent. If we hire the right type of engineering talent, we can create these hubs. You heard about R&D hubs.
In North America, and in the U.S. in particular, we have federal standards, we have state standards, and we have city standards. I would love to sit here and tell you they all are incredibly well coordinated. They're not. We have this incredible requirement to adapt really quickly. California and sustainability, for example, in general, will lead the rest of the country by a decade. Because of the fires that happened last year at PG&E, they're now adopting an entirely new protocol for how to deal with the summer issues that they're having. How are we going to respond to that? The ability to be local, to be a local expert with global technology capability is what these hubs afford us to do.
Right. Trying to put a sort of financial angle to that, I guess if each of the big operations are looking to be almost multi-local, that requires resources, allocation of resources. Don't tell us what you can't, but the idea would be that how is that process internally in terms of allocational resources between the different operations work? Is that a challenge? How do you see-
There's no challenge this way.
No, this way.
There's constructive input in other directions. Look, our stakeholders are here, right? We have the three businesses we work with. Our job is to build bottom-up operating plans that look at the cycles of the business, the customers, the segments we're strong in, and say, "Look, this is what we believe is" Understanding macro, understanding micro. The job of the businesses is to look at that globally and allocate capital to the geographies that can best utilize it. That optimization is iterative. It has a degree of constructive tension in it. It's the best way to make sure, in a world where the cycles are changing faster, that the right resources go to the right markets. I think internally in the operations, the goal is simply to make sure that that North Star of profitable growth is always sort of centered to those strategies.
Sort of at a micro level, your two shareholders are the two businesses.
The three businesses, yeah.
Three businesses, correct. Yeah.
All right. Thanks. Maybe another element around the financial part, Barbara, I'm just reflecting on the first answer you gave in terms of the structure that we have. Of course, we talk about everything being more efficient and how we continue to gain efficiency. In the first part, you mentioned that the structure is quite focused on the customer, and it's quite lean. If we were to think about what could be the next level of efficiencies, are there specific areas within the operations where we can drive even further efficiency?
It's a very good point. In principle, specifically in the mature markets, and we're all sitting in mature markets, when you look at Western Europe, France, and the U.S., we look continuously at efficiency gains. Our salary level are high. There is inflation. We have to adapt and be agile to the structure. In the last few years, we were focusing a lot on delayering to become simpler, to become leaner in this area. The next step, from my point of view, is now that we digitize more, that we automate more. We have started to do this in certain areas, but we can do even more. Also working on a strong digital experience for the customer, and I think that will bring us even more efficiency, but on the other side, also a greater customer experience. This I see as the next great step in operations.
Good. It's evolving journey.
Correct. Evolving journey.
sort of a continuous one. Okay. I'm sort of just getting mindful of time, and I think I want to make sure there's enough time for Q&A for everybody. I think before we end, maybe one question, and I can probably give it to all three of you, and really to understand that what is it that, for instance, success means to you in operations? Maybe we go the other way. Christel, if you want to just say, okay, what do you think is success for you in operations?
There's not one criterion, ultimately, we have to take a very balanced view because we're managing, we have different stakeholders and responsibility. Now, being in this room, ultimately, it's financial performance, we need to make sure, our primary role is to deliver growth, absolute value growth, and to make it profitably and sustainably.
Yeah, look, I think in addition to owning the P&L and being accountable for profitable growth, I'd say we talk a lot about customer saturation and customer breadth, I think those two matter a lot. Going deeper with customers we have, understanding their business, understand their challenges, and evolving with them, then using our access to continually get new customers. If we are constantly expanding the number of customers and going deeper with the ones we have, I think that's a great barometer of success.
Barbara, for you?
Yeah, for me, it's people. People and customer. We are dealing with people on a daily basis, one of the success factors, of course, there is the customer Net Promoter Score. That's a good key measure. How are they perceiving the relationship with us? Then the other aspect is, of course, our people. How do we develop our talent? How do we bring them up in our company? How do they talk about us? That's, for me, another big success factor which makes Schneider Electric.
Well, that's interesting. Hopefully, these success factors are all not mutually exclusive,
Correct.
share the same ones,
They are just complementing each other.
Yeah. What I'm hearing is P&L, financial performance. You mentioned around saturating customers, we take that as market share, I could say. You're talking about very important aspect of people and these structures.
Yes.
All right. I think we'll probably stop it at that. Thank you very much for your time. May I just call upon the speakers from earlier today to kick off the Q&A session? Might be a bit cozy.
Bit more chairs here, I think.
More chairs.
One more? Two more?
Cozy.
Yeah.
Nice. Cozy.
Are we good? Yeah, it's going to be very cozy.
Ali.
It's good now.
Might have found it.
Might have found it.
Two more now.
All right. We're all here. I think we have at least 30 minutes, I would say. In order to just make it fair for everyone, let's keep it to one question. We come back with the questions in the room. Why don't we start right from here. Andrea, you want to take the first question?
Thank you. You've added the comment to your margin target that you can go beyond 200 now longer term and laid out a plan what you're going to do to invest into it. Maybe you could lift a little bit of cover and tell us what you think the full potential is for Schneider Electric in terms of profitability.
It's a very good first question.
Potential is good.
To clarify, the ambition above the 200 basis points that we've been sharing with you guys is beyond 2021. Nothing has changed for the three-year ambition that we've been sharing with you. Yes, indeed, as I said, the ambition is to say, no glass ceiling, to get to 17% is not the end of the journey. It's one step in the journey. As we see us as a more and more high-tech content, digital company, we target to keep increasing the margin. I'm not saying that anytime soon we're going to be on the full software type of P&L. I think that Craig nicely shared with us the ambition of AVEVA to get to 30% one day. There is still a nice leeway of progression in the future beyond 2021. I'm not going to be more explicit, sorry for that.
I think that the ambition and the way we are phrasing it and the way we are sharing the vision with you, I think shows the kind of direction that we want to follow in the coming years.
Thank you.
Maybe I can ask a follow-up. Guillermo Peigneux-Lojo from UBS. More looking into what's going to happen from now until 2021. Yet when we do the numbers on the 200 basis points and allowing for your divestments and potential improvement, we get to a very similar operating leverage on the group on the organic growth. Is that the right way to look at it? Should we see how operating leverage actually changes as your transformation takes place?
Well, I think we're sharing a lot of detail already on the mechanics and how it's going to articulate and the drivers. I let you make your assumption on what's going to be the weight of the various driver and what's going to be the operational efficiencies that drop through and so on.
It's a sum of three factors, right? Through optimization. Growth of higher value or higher margin business. That goes with technology. Productivity, as we always add, and probably pushing to a new level because I was describing the three phases. The phase of build, which was not distractive, but it takes some energy of the company, so losses of energies and integration, generated a lot of costs, which are one-off costs. Not saying that we are not keeping on integrating, that was cost. Now we're in scaling. We can get more traction behind. It's a combination of those three. Frankly, they are all linked together also. When you launch more technology, you have to invest together with it. It generates some cost. It's difficult to spreadsheet exactly.
We want to keep some freedom on the way, ultimately, we're going to deliver.
To be agile, because we don't know exactly what the world of tomorrow will be, being much closer to the market around our hubs allows us to tweak or to adjust in a faster manner.
Thank you.
Thanks, Guillermo. Andreas? It's on the other side there.
Thank you. Andreas Willi from JP Morgan. I have a question for Philippe on energy management. There was a good example with Penn Medicine, which chose a low voltage integrator early on in a big project, and they said they have never done it before. I guess a lot of customers historically have not done it that way. What part of your business today is kind of driven by a decision like that, where somebody says, from a top-down perspective, I am going to choose somebody relatively early on for some of the key low voltage, medium voltage, secure power, part of the project, rather than the traditional way where this is kind of put together later on in the process with lots of people having an influence on it, system integrators, specifiers, and so on. Maybe where that ratio was in the past?
I would say the more we go EcoStruxure, the more there is value in the earlier discussion, which can be with design firms, which can be with end users. Frankly, we see that pretty much across all segments, we do it in data center, we do it in healthcare. I think you have the good example here. We do it in hotel. We do it with Peter in more industrial infrastructure application. On that one, I would say sky is the limit or the limit we have today to go faster is probably our people and the capacity to deploy fast enough people who can drive those discussion. Because when we are in front of either design firms or end users with this combo of energy and process or energy and automation together, we are very unique. That is very exciting.
The size?
The size of the business?
As a rough proxy, how big is that kind of top-down driven?
I would say a lot of our end user-driven business is like this. I think I was giving the magnitude of what the partner business is. By difference, you can probably guess what it is. It's growing.
But-
Sorry. One thing important, which is we have an end user-led business where we go direct. We see, early in the stage, we talk with those end users, we talk with those design firms more and more. In many case, actually, we choose to go with partners, then we transact. We might invoice less, but actually we invoice, say, better because we have a better mix of margin. A lot of the work we've been doing around better system is on the, we call it the transactionalization of our business, which is we drive an end-user-led discussion, then we orchestrate partners. Which by the way, we did with Spendmoth, going through partners but being the orchestrator in the back. In that regard, it's more than, let's say, the straight 30% of the end-user-led business we would have. Bigger than this.
Yeah. Just to dissipate any kind of misunderstanding as we are in those, I think it's the vast majority of Philippe business. When you look at a partner, when we go through partners, very often there is a discussion happening at the level of the end user on the project is completely specified.
It's complicated, right? I would say in most of the countries, it's certainly.
Somewhat what's getting more intense is as we go, I think Peter was showing it very well, that pyramid where we started from products, let's say 10, 15 years ago, the more we go high in the food chain with EcoStruxure value proposition, with the best combo, the more meaningful we are for C-level. We have very deep discussion with those CEOs more and more.
Okay. Let's take one at the back, James.
Thanks. It's James Moore from Redburn. My one question is on the central line, which I think you renamed from corporate and holding cost to central functions and digital cost. I know on top of the shared services and the marketing that has always sat in that line, you've put the digital central global cost base. My question is really whether that line item is going to grow faster than group revenue growth over time, as digital is a faster growing part of the company, as opposed to some who might think it's a flat line item.
The answer is yes, you should expect our investment in digital to grow faster than probably even our sales. I think I've been talking about what we intend to do in term of redeployment of our SFCs, therefore, clearly, digital investment is going to be a big beneficiary of this redeployment, and that's going to grow faster than the average SFC, but probably faster than the top line as well. Being itself a big driver of the top line. That is something you should expect for the future. We hear the questioning on, is it relevant to have that amount here as a kind of central investment that we are making? We look at the future, whether if it was becoming too big, probably at certain time, we'll have to make some kind of allocation.
Really, most of it is really servicing the full business of Schneider. To start to split it is, to some extent, a kind of fictitious exercise, but maybe we have to do that, not to give the feeling that we have a very fat corporate, with very heavy cost, which doesn't correspond at all to the reality.
If I can just follow up, I don't know the split of that cost item, I guess the digital might be something like a third. The remaining part of it, things like marketing and the global shared services, is that something that can stay more stable than revenue growth, or would that part of it grow with revenue growth?
Well, I think you have area where we would intend to generate extra productivity or increase productivity dimension, so that should grow at a much lower pace than the average of SFC. Probably the marketing one, for what is central spending on building the brand and building the franchise around Schneider, that is probably something that should grow on average faster. I would say probably not as fast as digital, yeah, I would expect us to continue investing on that line because it makes sense. It create value.
Thank you.
Okay. Thank you.
Let's go with Ben.
Thank you. It's Ben Uglow from Morgan Stanley. Not sure if it's a question for Peter or for Craig, but there were some brands that were acquired as part of the Invensys transaction, Avantis, SimSci, Wonderware, very well-known and let's say famous brands in kind of factory software. We don't hear a lot about how those brands are doing. How are they managed within AVEVA? How is the growth of that original factory software base?
We have very limited time here today, so we were wise in skipping a lot of detail. Monitoring and control would be the category that we would break out in the AVEVA business, which would cover Wonderware and some of the other products that you discussed. That business is about 30% of our total business and is growing mid-single digits. In fact, we've accelerated the growth rate of that business. Now, in terms of going to market to get scale, you have to simplify go to market. That's what we've done. We had a hodgepodge of names, and we've simplified it. Wonderware has some AVEVA branding associated with it, and that's how we connect it. Of course, we're cross-selling. Wonderware fits within monitoring and control. We talked earlier about Asset Performance Management. You heard earlier about massive productivity boosts of that.
There's some products in there called PRiSM. There's others around Dispatch. There are some heritage brands. We've simplified that into Asset Performance Management. That's the fastest growing segment. That's over £100 billion growing at 20%.
A lot of focus.
All right. Take the next question.
Maybe one additional point to that is, since we've brought all of this together, we can use the beautiful franchise of the distribution that we have built on the software side, where now other software packages go through the same distribution channel. That's also accelerating some of the growth that Craig has mentioned.
Right. We go with Gaël.
Thank you. Good morning. Gaël De Bray from Deutsche Bank. I have two questions. I guess one for Philippe and the other one for Peter. For Philippe first, in the past few years, we've talked a lot about cloud and that sort of thing, and hyperscale data centers and the like. Now it seems that we are talking more and more about edge computing. We're getting back closer to the data source, and we're talking again much more about perhaps smaller data centers. I guess 5G, the deployment of 5G, will probably accelerate that trend. The question is, how do you see this basically transforming perhaps the demand for secure power, low voltage and medium voltage going forward? The second question is for Peter, I guess. You've talked about TeSys Island.
It seems that with this kind of product, you don't see a great future really for PLCs in the longer term. I was wondering, beyond TeSys, do you see other sort of product devices in the factory floors that could also be used to further displace the importance of PLCs in factories?
Philippe?
One question on the broader picture of secure power. Number 1, on the web giants and the large data center, we see still a pretty strong market dynamic with the web giant and with what we call the colocation, which are actually maybe a smaller type of players, which, by the way, work very closely with web giants. We see a strong dynamism here on that part of the business, which, by the way, is supporting some of our growth. Now, indeed, as we see that 50% of the traffic goes to the edge, we see an opportunity of secure power application close to the loads, which actually is a fantastic opportunity to reinvent what we call our HBN franchise, which are our smaller UPS type of business.
The way we do that is we go after vertical application, where, as you say, there is an opportunity to get the secure power, but actually to combo that with other stuff. Very good example would be retail chains, where you have a need more and more to secure a lot of power usage in the shops. Actually, in those shops, you also need to monitor your energy. You need to control the heating or the cooling, in many cases, the cooling of the fridge and these kind of things. We are working on combos of secure power plus other application, which are made of a reference design that's standardized, that then goes with one cloud application that allows to have a multi-usage type secure power plus other application, giving a lot of feature and a very unique positioning for Schneider, because we come with multiple applications.
All of this is early stage. We see some edge application in banks and this kind of thing where we used to sell UPS, where we now sell more cloud application, and we see an opportunity to expand to more segments in a very capillary way, which then comes very close to our low-voltage business. Early stage, very exciting. A few verticals that are growing very well. We see opportunities in industry in that field too, because some of the, let's say, compute power has to be secured. We're working hard on that. We'll come probably soon with a couple example by vertical, but we see a very good traction here.
Peter, on PLCs?
Yeah. The second question. You've well understood what we're doing with the contactor family, TeSys island. It's the idea to move some of the components in the cabinet into the contactor with the software. That will not be good for any application out there, but it's good for many, many applications. I always will move into the contactor. If you look in my example, what was left over as a PLC is really two or three components. One component is a piece of industrialized hardware. On this industrial is called PLC. The higher value, however, is in the software that runs on this industrial piece of hardware, the PLC. I'm saying these two are not necessarily need to be combined in the PLC hardware and the PLC software. If you think of that, maybe the PLC will be virtualized.
That's the tech term that we're using. Virtualized mean it can run anywhere. Right? With that, maybe that piece of hardware also goes away.
Okay.
Stay tuned on that one.
Take the next question. John.
Hi, it's John Mounsey from Exane BNP Paribas. Maybe one for Jean-Pascal. Obviously, it's now over a decade since you launched EcoStruxure. You've mentioned that. Been investing in it, building it, almost a life's work to create it, and I guess that's ongoing. In more recent years, we start to see maybe some competitors launch strategies which look quite similar, I might point to ABB Ability perhaps. How easy do you think it is for some of your competitors to replicate this strategy now, if it is the right way to go forward, which obviously you believe it must be?
I won't speak about them. I just know it was costly and painful for us. That's all. You just need time, right? We had the demanding vision that if you wanted to go to digital, you needed to have one clear platform for each domain. On ensuring backward compatibility with the past, every company faces it. Nobody has grown completely green roots as only one platform. You have to do that effort. It's huge, in software particularly. A good rule of thumb is that you start the project with one budget, one unit of time, just multiply it at least by two, because it's more complicated than people think. For us, it's done. What does it mean for a customer? That means they can integrate their install base going back in the past five years, 10 years, and integrate them in our software platform.
They can develop applications that will for all of their applications, they don't have five platforms of which deploy applications, and it's an IP-based architecture at every level. Therefore, it's future proof. It's ready for the future. They can start exchanging and benefit from the ecosystem of developers that is now existing on exchange. It multiplies the possibility. It simplifies life because you can integrate the past, prepare for the future, and leverage all ecosystem of other people in the world who work on the same things. Now take my word. It took us 10 years.
All right. Wasi.
I shut up.
At the back there, Wasi, please.
Hi, it's Wasi Rizvi from RBC. Just one on understanding the three-year framework in the context of the longer term. You've given us revenue and margin targets for three years, we're talking about investments and changes to your cost structure over the next four to five years. Almost building on an earlier question, should I think about the next three years as kind of a continuation of some of the operating leverage and some of the mixed trends that we've seen, the real kicker to come from these investments that you're talking about, and I imagine changing 10% of your support function cost takes time for the benefits to come through. Does the real kicker come after that? Is that how I should think about it?
No, I think that's exactly the way you describe it. For the next three years really to deliver the 200 basis points improvement and the overall objective that we've been sharing with you, to a large extent, we've been launching what is going to deliver that, we are working on the driver. We have a pretty good idea of what we want to do with each of them as, hopefully, you've seen today. Beyond 2021, it takes time. First of all, to create the resources to reinvest. First, you need to generate the productivity, then you start reinvesting, we are going for something beyond 2021 with some impact in term of cost structuring as we explain in term of redeployment, it will be neutral.
Hopefully, with some impact on more top-line growth acceleration coming from all the investments that we're going to make, from more margin improvement given evolution of the mix of the business that will start to kick in in 2022 and beyond. I think the plan for 2019, 2021 is pretty clear, and I think we've been describing it. We're going to work in a kind of underlying manner, if you want, for you to start seeing the benefit of the new investment beyond 2021. All right. Let's take one from you, Simon.
Yes, I've got one question on ROCE. When I look at your targets overall, I think the ability for you to take share has been quite well understood, and you've shown it over the past years. Your 200 basis points margin improvement, there's quite a lot in your own hands as well. If I look at your returns, we're still on average, more towards the bottom end of your 11%-15% range. Is it fair to assume that if the margin goes up 200 basis points and you kind of build and integrate phase is done and you're now trying to scale and focus, shouldn't the returns also start moving more towards, let's say, the upper end of that range, or do you think that's unrealistic?
Simon, you won't bring me to a guidance on that, but I would certainly by the direction that you've just been giving, obviously this ambition to improve the margin, we're going to stay very cash generative and we certainly target to improve cash generation as an absolute amount. That's going to mean certainly that the ROCE is going to keep going up. That's an ambition that is going to accompany, if you want, the margin improvement. The margin improvement together with, of course, sustained strong cash generation is ultimately one of the big, if not the biggest driver for the ROCE improvement, to be very clear. All right. Delphine?
Delphine Brault from Oddo BHF. You are targeting 20% of sales in services and software midterm. What part of the growth behind will be organic and what part will be M&A? If M&A, what could be the role of AVEVA?
You want me to take that one?
On services, it's going to be mainly organic growth
As I was explaining during my presentation, the install base knowledge and coverage we have today is extremely far from what we should be having. We have a huge opportunity on that one, and it's mainly a non-recurring growth. For the software. Leave the floor.
As you've seen, AVEVA is a wonderful company that's listed in the FTSE 100. When we did the call after the closing, we said number one focus is on integration and materializing on the synergies. The team has reported on their capital market days. Those have been following a little bit closer. We've added the first acquisition just very recently, a very small tech acquisition, in the area of asset performance management. That's going well. We've built the company for profitable growth as Craig has mentioned earlier.
All right. Peter?
One microphone needs to go.
Yes.
Good morning. It is Peter Roney from Jefferies. You had an interesting chart showing organic growth versus your peers over the last two years. Clearly, you've grown materially faster over the last five or six quarters. If you roll that chart further back in time, another five years or so, I think the chart would look less impressive. There is a long period of growth being very close to peers or even underperforming. What changed in late 2017, 2018? Was it cyclical because you had oil and gas coming back, China is doing better, or was it just taking you a long time to integrate all the acquisitions, get everything performing properly? Long term, your strategic narrative has not really changed in the last five or 10 years. You've been very consistent, but you had this sudden acceleration in growth about five quarters ago.
Maybe you can help us understand what has driven that, how structured it is, and help us understand where it is going from here.
There were some elements of cyclicality, you mentioned a few. Frankly, the biggest thing was what we call selectivity. I know that it was sometimes questioned by Bain or loss of market share. It was really disengaging from parts of the market that we thought were not strategically relevant for the future. While we are doing that, it took a toll on the top line of the company. I think you said it all. There was selectivity, extracting ourselves from many markets. At the end of the day, it was several hundred million EUR that we had to take down. Plus in the cost, because we are first and then we were working on profitability, all the cost of the integration that we mentioned on the digital platform, on creating infrastructure. The delicate balance of integrating, of refocusing on still delivering a correct performance.
What took it on the top line has been really more about selectivity that we had in several subjects. Learning the solutions, right? If I spoke about the three phases, but we are just a product company. I was personally, and I'm still convinced that the future is digital. Because I was coming from facing the customer, and I was saying the future where everything should be connected. When you go into digital, you can't take it just with products anymore. You have to understand the application in our field. You have to be deep with the application of a customer. For us, learning the solution was to bring onboard people of services, segment, architects, software development, integration, 20,000 people that we didn't have in the company.
When we started to do that, we did that with a certain level of optimism that those guys would manage exactly those solutions as we expected. On some of that optimism was too optimist. We learned, we really learned who was doing it well, who was not doing it well, which segment was promising for the future, which one was not. That learning curve lasted five years, and it was a combination, selectivity, learning the solution, and creating our digital platform, which costed on our top line. When you do all of this, there are that number of things that you can do in a company at the same time, and we've done quite a lot. That moment has been really a moment of intense internal work.
Okay. I think another sort of five minutes. Daniela?
Thank you. Good morning. It's actually a very quick question just in terms of financial reporting. I wonder why do you exclude on your definition of margin, the restructuring expenses? I guess they've been there for a few years. I understand you increase the guidance because you want to grow, have more ambitions for productivity. Wondering if at some point they will fall and they are really exceptional or should we consider them ongoing for executing your plans?
Well, I think, Daniela, for the very reason that we want to give a reference that is really comparable year-on-year. As you rightly said, we have some important variation on the restructuring. We want to make sure that people understand the underlying performance. Depending on the environment, the ambition that we are following, we may accelerate in restructuring. There is a kind of underlying amount of restructuring, and I think we said it, which is probably around EUR 150 million corresponding to productivity and the necessity of adapting our company to a fast-changing world, and that's going to stay. You have some kind of investment, if you want, on the long term to further improve the profile of the company. The number is clear. You have it.
You treat it the way you want to deal with it. I think certainly given the variability of the amount, it's important to take it below the Adjusted EBITA, which we think is a relevant reference, giving visibility and understanding of how things are moving in an underlying way.
Managerially, you can't have disconnect between what we report externally and internally and want people to dare restructuring. That there is no hesitation, right? Putting it there makes that we isolate it, but we discuss it, of course, we budget it, but it's part of a different plan.
All right. I think we'll take one last question. Maybe the second one for Simon, but that'll be the last one.
I've got one more on the cross-selling. You've been obviously talking about this for many years, way more than your competitors. Obviously, if you're looking at your growth profile, it seems to be working. I've got a question how you track and measure this actually internally. Just irrelevant of the growth per se. We can all see that. How do you make sure internally you track and measure it and how do you incentivize your sales on this? I believe historically you have not directly incentivized your sales on cross-selling. Would that be a right way of looking at it and how could you optimize this further?
Well, we were one of the earliest adopters of Salesforce here in Europe and actually, we are probably one of their biggest deployments. That's to follow opportunities, and that's the key tool to follow what you call cross-selling, seeing saturation, serving the customer opportunities. That gives place to regular meetings, regular being very regular in the regions on solution. It's called the solution committee, where people are meeting and they are just seeing how they can play together, how they can really bring the solutions together. It's served by delivery centers. I was speaking about the solution people. People who are able to take over a project, which is a bit more complicated, and project manage it if we want to drive it through partners, or deliver it by ourselves for the few cases that we want to serve by ourselves. We incentivize people on it, yes.
If you are smart anyway, and salespeople are smart, they know where their interest is. If they can be differentiated by bringing the whole breadth of offer, they would do it. If they can help each other, they understand pretty fast that they can help each other, right? You help me one day, I help you the next day. That works. I mean, it's a simple system. There is no system, actually, it's just it works, right? It's really tracked by tools, organized in terms of local teams, and followed up more centrally or regionally for the most important opportunities. Plus, we have an organization in charge of strategic customers of segments, which is led according to segments by Peter and Philippe. They organize a much more systematic approach of some segments. We saw Ben, medical, but there are plenty of other examples.
All right.
Look, this is a way we built the company not because there is a dogma and an ideology, but speak to the customers. Okay? I am setting up a new factory. Before it was pretty simple. It was a bunch of power, bunch of automation, maybe. Now it's all IoT integrated, or maybe it has to be connected through AVEVA to a cockpit of control in their company. Life is complicated. You want to take those modules, which are integrated by themselves. Again, when you go to a customer, this is their first request. I understand that to manage a company, frankly, for me, much more complicated. We are taking over the complexity of a customer inside the company to solve the problem, with partners mostly. At the end of the day, this is what the customer wants.
On simple principle for me, what the customer wants, we better deliver. Does that answer? Yeah.
All right. I think we'll have to stop it at that. I believe we have several questions through the webcast as well. We'll make sure to get back to each one of them through the IR team. Of course, all of you know that you can reach us as well. With that, I think we close the webcast. Thank you all for the morning session. I'll just spend a minute or two, once we disperse from the stage, on the logistics and what needs to happen next. That's the conclusion of the morning session.
Thank you.
Thank you, everyone.