Rachel Winter: Schneider Electric is a French company focusing on energy management and industrial automation, which are two very big themes at the moment. Global leaders are currently trying to decarbonise the world economy and that will require a switch away from fossil fuels to electricity, but also, a big reduction in the amount of overall energy that's being consumed, and that's where energy management will come in, and that's a Schneider Electric's area of expertise.
At the moment, a huge amount of energy is wasted because our homes and factories contain so many devices that are on and using power when they don't need to be. Schneider Electric produces electrical components and software that work together to ensure that devices use energy more efficiently, and that could mean switching off these devices when they're not in use, but it could also mean using power at better times. For example, electric vehicles would automatically charge in the middle of the night rather than at peak times when the grid is under more pressure. There are so many elements to Schneider Electric's business model that help it to use energy more efficiently, and we couldn't possibly go through all of them in this video today. But because of its expertise in energy management, Schneider Electric has been recognised repeatedly as one of the most sustainable companies in the world, and that's why so many fund managers are currently very keen to have it as a part of their portfolios.
Over the last week, we've seen a sell-off in growth stocks. So, we've been looking around to try and find some attractive buying opportunities, and one of the companies we've been looking at is called ASML, which is based in the Netherlands, and it makes photolithography equipment for use in the semiconductor industry. Photolithography involves using a light to draw circuit patterns on silicon wafers for use in the semiconductor industry, and it means you can make the smallest and most efficient type of chips available. And as yet, no other company has been able to produce these photolithography machines, which means that ASML currently has a natural monopoly.
It's estimated that there are currently 40 billion connected devices in use today, so that's about 5 for every person on the planet. Over the next 10 years that number is expected to grow to 350 billion or 41 connected devices for every person on the planet. And that means that the semiconductor market and therefore the opportunity for ASML is set to grow significantly. What we're also seeing at the moment is growth in what's called semiconductor nationalism, and that means that major countries around the world are wanting to have control over their own production techniques for semiconductors. They want to control the whole process rather than importing finished chips from other countries, and that means there's likely to be more demand for the machines that ASML is currently producing.
The final company that we're looking at is McDonald's, which is a company that we all know very well. Unlike many restaurants, McDonald's did very well during the lockdown for two different reasons. One was the company's Drive Thru network and the other was that the company has spent the last few years expanding its delivery capabilities and that came in very well during the lockdown. Another thing that McDonald's changed during lockdown was its menu. So, McDonald's has realized that about 70% of its profits came from what it called its core menu.
So, during lockdown, it really slims down its offering, only offering that core menu. And it actually realised that this led to huge gains in efficiency. Its kitchens became more efficient; it was able to serve food more quickly, and that led to big gains in customer experience. So, now that lockdown has ended and the global economy is starting to open once again, McDonald is to some extent continuing with the slim down menu in the hopes that this will continue to make it more efficient. So, McDonald's did do very well during lockdown, but we do believe that now that the global economy is starting to open once again, McDonald's is well-positioned to grow further going forward.
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