APC 2006 Annual Report Download - page 6

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The Company turned in a record-breaking
performance in 2006, with net profit exceeding
€ 1 billion for the first time ever. Was this
a historic year for Schneider Electric?
Yes, Schneider Electric beat all past records with
organic revenue growth of 10.7%. Backed by a
favorable environment, we advanced in all our
markets and all our businesses at a much faster pace
than the world economy, gaining market share along
the way.
Operating margin widened again, by one point to
14.6%. Despite higher raw material prices and the
strong euro’s negative impact on our costs, operating
profit has doubled since 2003 to 2 billion.
These results demonstrate the dynamics of our
business and our efficient business model. Two years
into our new2company program, we are already
ahead of the target.
What’s fueled this acceleration?
To start, a growing number of customers are turning
to us to meet their needs for comfort, productivity,
safety and energy efficiency. Second, we have
exceptionally energetic teams, who are making
growth happen. Third, we’ve expanded our lineup of
products and services and developed new
businesses that allow us to offer even more
comprehensive solutions.
We are one of the only companies in the world with
such a broad and deep portfolio of integrated
solutions and a tight focus on electricity. What’s more,
we benefit from truly global geographic coverage. We
sell our solutions in 190 countries, including in
emerging markets where we are constantly
strengthening our presence.
Lastly, innovation is a major growth driver at
Schneider Electric. Each year, we devote close to 5%
of total revenue to R&D. In the past year, sales of
products from our 40 major innovation programs
increased by more than 50%.
What are you doing to become more efficient?
We’ve made quality and customer satisfaction our
number one priority, and we’re developing ambitious,
innovative programs to meet this priority. At the
same time, we’re engaged on four paths to greater
efficiency. First, we’re moving closer to our customers
by rebalancing our manufacturing and supply chain
base, so that we can be more competitive and
provide quality service.
Second, we’re simplifying our organization to be
more nimble and proactive. Third, we’re rationalizing
our supply chain. And fourth, we’re stepping up our
industrial productivity programs. In all, we achieved
productivity gains of more than 300 million in both
2005 and 2006. This is considerable–and
indispensable given the heavy impact of higher raw
material costs.
How are you supporting your fast pace
of growth on the human resources front?
We spend a great deal of time thinking about
the competencies we’ll be needing in the future.
We’ve hired a large number of people and increased
the resources we invest in training to adapt to
changes in technology, our geographic presence
and our businesses.
We’re also investing in the commitment of
our 105,000 team members in 106 countries.
Their involvement is what makes the difference.
To strengthen this competitive advantage, we’re
giving them a better understanding of our
environment and challenges, bringing them into
closer contact with management and developing
our profit sharing programs.
Lastly, we’re cultivating and enhancing diversity
in preparation for our very fast expansion into a
growing number of regions and activities. That said,
we still have a long way to go to bring in more
women throughout the Company, and particularly
at the executive management level. I am personally
involved in these efforts.
Schneider Electric has a long-standing
tradition of corporate responsibility.
What progress have you made in this area?
We’ve made good progress on eight of the ten
objectives set out in our Planet & Society Barometer.
First of all, I’m proud that we significantly improved
occupational health and safety in 2006.
Interview with
Jean-Pascal Tricoire
Chairman of the Management Board
and Chief Executive Officer