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9
1 / Business Presentation
Business Presentation
1
Background
Schneider Electric is an international company that
designs, manufactures and sells products, solutions
and services for Electric Distribution and Automation
& Control. We make installations safer, monitor equip-
ment and protect people with a lineup devised to save
energy, enhance performance and make our cus-
tomers more competitive.
Through our three worldwide brands–Merlin Gerin,
Square D and Telemecanique–powerful local brands
and a portfolio of specialist brands, we serve four main
markets: Energy & Infrastructure, Industry, Buildings
and Residential.
A world leader in automation and electricity manage-
ment, we reported revenue of 11.7 billion in 2005
and had 88,670 employees in 130 countries.
Schneider Electric fully owns Schneider Electric
Industries SAS, which in turn owns virtually all of our
French and foreign subsidiaries. Schneider Electric’s
capital base was simplified considerably between
1981 and 1995.
1836-1980: the gradual creation
of a conglomerate
Schneider Electric’s history is a rich tapestry woven
from the achievements of Schneider, founded in 1836
in France; Square D, founded in 1902 in the US; Mer-
lin Gerin, founded in 1920 in France; and Teleme-
canique, founded in 1924 in France.
In 1836, Adolphe and Joseph-Eugène Schneider
acquired steel founderies in Le Creusot, France. They
founded Schneider & Cie in 1838. From that point until
the mid-twentieth century, the Company steadily built
a presence in heavy mechanical engineering and
transportation equipment, with interests in shipbuild-
ing, railroad equipment and bridge and tunnel build-
ing. By the end of the nineteenth century, Schneider
had also established a position in electricity. Gradual-
ly, it became a huge, highly diversified conglomerate.
1981-2001: refocusing
and building on electricity
From 1981 to 1997, the Company refocused on elec-
tricity and pursued a strategy of acquisitions in Electri-
cal Distribution and Automation & Control, bringing in
Merlin Gerin and Telemecanique in 1988 and Square D
in 1991.
At the same time, it pulled out of a number of busi-
nesses, including steel, machine tools, shipbuilding,
railways and private telephone systems. The refocus-
ing process was completed in 1997 with the sale of
building and public works company Spie Batignolles.
In 1999, the Company acquired Lexel, Europe’s sec-
ond largest supplier of ultra terminal distribution prod-
ucts and systems. This was followed in 2000 with the
acquisitions of Crouzet Automatismes, a French
leader in electronic control and small automation
devices, and Positec, a European leader in motion
control.
The Company gained a global scope through organic
growth and acquisitions. It has pursued significant
expansion programs, notably in China, where it estab-
lished an important foothold through joint ventures
starting in the late 1980s.
In 2001, Schneider Electric made a public offer to pur-
chase ultra terminal leader Legrand in exchange for
shares as part of a proposed merger project. When
the offer closed in July 2001, the Company held
98.1% of Legrand.
In an initial decision dated October 10, 2001, the
European Commission vetoed the merger, and in a
second decision dated January 30, 2002, it ordered
the two companies to separate. As a result, Schneider
Electric sold its interest in Legrand to the KKR-Wendel
Investissement consortium even though the Court of
First Instance of the European Communities overruled
the Commission’s decisions on October 22, 2002.
2002-2005 : an assertive strategy of strong
growth through targeted acquisitions
Since 2002, Schneider Electric has pursued an
assertive strategy of organic growth and acquisitions
to enhance its geographic coverage, broaden its line-
up and expand its potential accessible markets.
As part of this strategy, it has kept up a quick pace of
acquisitions in ultra terminal distribution, industrial and
building automation and electricity management.
These service-intensive activities are not particularly
cyclical and offer high growth potential.
At the same time, the Company withdrew completely
from high voltage in 2004 when it sold its remaining
40% interest in VA Technologies.
In ultra terminal, major acquisitions include Clipsal,
leader in ultra terminal distribution in the Asia-Pacific
region, in 2003, and Juno Lighting, America’s leading
manufacturer of track and recessed lighting for resi-
dential and commercial buildings, in 2005. Schneider
Electric now ranks second worldwide in this market.