APC 2003 Annual Report Download - page 47

A number of other acquisitions and technical/techno-
logical partnerships broadened our portfolio in
Electrical Distribution and Automation & Control dur-
ing the year:
■Ilevo
A focus on innovative technologies
We enhanced our position in infrastructure for high-
speed data transmission using Power Line Carrier
(PLC) technology by fully acquiring Ilevo in Sweden.
We also pursued our active approach to innovation
and created a new unit called Schneider Electric
Powerline Communications to help us become the
partner of choice in this area.
■Hyde Park Electronics Inc.
US leader in ultrasonic sensing
This acquisition extends our vast range of photoelec-
tric, inductive and capacitive sensors, allowing us to
meet customer needs more effectively and signifi-
cantly increase our presence in the US industry mar-
ket. Hyde Park Electronics’ sensors will be marketed
under the Telemecanique brand name.
■Leviton Manufacturing
Technological partnership for multimedia network
infrastructure in homes
Schneider Electric (Square D) and Leviton Manufac-
turing Company signed a technological partnership
agreement that will help make us a major player in
the voice-data-image infrastructure market. Leviton
is North America’s largest manufacturer of electrical
and electronic wiring systems.
The NEW2004 program
The program kicked into full gear in 2003 with the
deployment of growth and efficiency plans to achieve
the six NEW2004 objectives: Be More Customer-
Centric, Be Committed to Quality, Be More Global,
Increase our People’s Commitment, Think
Innovation, and Develop Corporate Community
Responsibility.
To drive growth, we continued our strategy of target-
ed acquisitions designed to expand the lineup and/or
our geographic coverage in our core businesses. We
also maintained our commitment to R&D at 5.6% of
sales to bring new, innovative product ranges to the
market.
To increase efficiency, we continued to rationalize
our manufacturing base, closing certain plants in the
US and Europe. We also stepped up deployment of
productivity and performance-enhancing methods
and resources such as Six Sigma, Lean
Manufacturing and Quality and Value Analysis, with
the goal of extending their application across the
Company. So far, more than 100 Six Sigma projects
have been implemented worldwide. The Six Sigma
method, which was initially applied in manufacturing,
is now being used for sales and marketing.
Changes in Schneider Electric’s
organization
I n 2003, Henri Lachmann reorganized the Company’s
General Management team to speed growth,
improve quality, promote faster execution, increase
the number of non-French managers, make the oper-
ating divisions more balanced and consistent and lay
the foundation for strategic redeployment. Jean-
Pascal Tricoire, formerly Executive Vice-President,
International Division, was appointed Chief
Operating Officer and the Operating Divisions were
redefined as follows:
- Europe (excluding Spain and Portugal), led by
Christian Wiest.
- North America, led by Dave Petratis.
- International & Iberia, led by Julio Rodriguez.
- Asia-Pacific, led by Russell Stocker.
The new organization also includes a Strategic
Deployment division, led by Eric Pilaud, central divi-
sions (Customer & Market, led by Michel
Crochon,
Product & Technology, led by Alain Marbach, and
Globalization & Industry, led by Hal Grant) as well as
two functional divisions (Finance & Control - Legal
Affairs, led by Antoine Giscard d'Estaing, and Human
Resources & Communication, led by Jean-François
Pilliard).
3. Research and development
The Company devoted 5.6% of sales to research
and development in 2003.
In the course of conducting its business, Schneider
Electric uses patents, brands and trade names that it
owns or, in certain cases, licenses from third parties
to manufacture products, provide services and mar-
ket its lineup. We also constantly develop new tech-
nologies, products and process and take all the nec-
essary action to protect them with patents. In 2003,
we filed 71 new patent requests (excluding exten-
sions), compared with 95 in 2002. This does not
include patents from our new acquisitions. Over the
past two years, 60% of our patent filings have cov-
ered electromechanical equipment, 30% electronics
and 10% software.
Given the nature of our current products and ser-
vices, we estimate that our business does not
depend significantly on any single patent or set of
patents or related licenses, nor does it depend on
any single brand or trade name.
Although our brands and trade names are intimately
linked to our products and services and play a key
role in marketing our lineup, we do not consider that
the risk of their false or unauthorized use is signifi-
cant. Schneider Electric’s main global brands are
Merlin Gerin, Telemecanique and Square D.
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