APC 2005 Annual Report Download - page 17

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15
An ambitious
growth strategy
We intend to actively pursue a strategy designed to
enhance our growth potential and reduce the cyclical
nature of our businesses by investing heavily in inno-
vation, expanding in high-growth countries (notably
emerging markets and the United States), and devel-
oping strongly in energy management, industrial and
building automation, ultra terminal distribution and
services.
Profitable, lasting global growth
The world leader in Electrical Distribution and number
two worldwide in Automation & Control, we operate
around the world and access our markets through a
diverse range of channels. This is one of the factors
that sets our business model apart from the competi-
tion.
To widen our lead and strengthen our market share,
we have implemented an assertive strategy with three
priorities set by our new2company program for 2005-
2008:
Speed growth and innovation.
Enhance operating efficiency and competitiveness.
Promote employee involvement.
Ambitious objectives
In line with these priorities, we have set the following
objectives for 2005-2008:
Organic revenue growth of more than 5%.
An operating margin of between 12.5% and 14.5%
throughout the business cycle.
A 2% to 4% improvement in ROCE over 4 years.
A payout rate equivalent to 50% of net profit and an
optimized balance sheet with a debt-to-equity ratio of
30% to 40% in the next two years.
The new2
company program:
from good to great
In January 2005, Schneider Electric introduced its
new2company program, which reaffirms our commit-
ments to stakeholders and our ambition to be:
A great company to do business with.
A great place to work.
A great investment.
A great world partner.
new2focuses on three priorities for which we have
identified significant potential for improvement.
Speed growth and innovation
With our resolute commitment to growth, we intend to
capitalize on our commercial excellence, boost inno-
vation and new products, and develop new, high-poten-
tial activities that are less cyclical than our core busi-
nesses. These include industrial and building automa-
tion, energy management, ultra terminal distribution
and services.
Our annual average growth target for these new activ-
ities is 8%, with 15% growth for services.
Enhance operating efficiency
To become more efficient and effective every day in all
areas, we will deliver outstanding customer service;
re-balance our manufacturing base and supply chain
to be closer to customers, drive growth and improve
competitiveness; and deploy a global IT system aligned
with our units’ shared processes.
Develop our people and promote employee
involvement
We have launched new programs to attract and devel-
op talent, unleash entrepreneurship and improve
workplace health and safety.
In this last area, we want to reduce the number of
days lost due to work accidents by 20%. To achieve
these goals, we have begun to implement three-year
competency plans in each unit, collect 360-degree
feedback for all managers, and enlarge Schneider
Electric University’s curriculum to new areas.
We have promised to inform all employees quarterly
about the progress plans put into place in response to
employee satisfaction surveys.
We have also promised to spotlight corporate social
responsibility by reviewing our social and environmen-
tal performance every three months.
6
Business Presentation
5