APC 2001 Annual Report Download - page 5

Lastly, to be even more responsive, we refocused our
organization during the year and formed a smaller,
more proactive Executive Committee.
All of these moves helped us weather the challenging
business environment better than most of our
competitors. Our operating margin for 2001 stood
at 11.4%, while net cash provided by operating
activities represented 9.8% of sales. Our free cash
flow jumped to 538 million from 243 million
the year before. As a result, debt held virtually stable
in 2001, giving us a conservative debt-to-equity
ratio of 27% at year-end.
In preparation for the divestiture of our interest
in Legrand, the Board of Directors decided to set
aside a 1.4 billion loss provision for our Legrand
shares. Although the provision had a negative
impact on reported earnings, it has no effect
whatsoever on cash or the balance sheet.
To highlight our confidence in your Company’s
financial strength and outlook, the Board of Directors
will recommend that shareholders approve a return
of capital in lieu of a dividend, corresponding to a
payment of 1.3 per share. The payment does not
give rise to a tax credit, but it is not considered
as taxable income in France.
In 2002, we anticipate stable sales in a situation of
market contraction. However, our proactive
response to the business environment should feed
through to a slight increase in operating income.
Henri Lachmann
Chairman and Chief Executive Officer
Annual Report 2001 ●Chairman’s Message 2•3
At the beginning of January, we launched
the NEW2004 program with ambitious targets
for the next three years. These include achieving
organic growth two points above the market every
year and adding 1 billion in sales from acquisitions,
increasing the gross margin by one point a year
and widening the operating margin to 14% in 2004.
The key challenges here will be to sharpen
our customer focus; ensure customer satisfaction
through quality products and services; sustain inno-
vation; globalize our lineup, methods and processes;
deepen our people’s commitment and develop
our community responsibility.
More than ever, electricity is the energy of the future
and a source of immense potential for our Company.
Our mission is to give the best of the New Electric
World to everyone, everywhere, at any time.
Our ambition is to be the worldwide
leader in Power & Control.
On behalf of everyone here at Schneider Electric,
I invite you to accompany us on the exciting
adventure offered by NEW2004, a program
of growth and efficiency to build and conquer
the New Electric World of tomorrow.
Henri Lachmann
Chairman and Chief Executive Officer