APC 2007 Annual Report Download - page 17

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Description of the Company and its businesses
Automation & Control
Schneider Electric gained world leadership positions in
human-machine interface (HMI) with the 2002 acquisition
of Digital Electronics Corporation in Japan, and in au-
tomation solutions for packaging machines with the 2005
acquisition of Elau AG in Germany.
In 2006, it expanded its lineup of high power speed drives
with the acquisition of Austria’s VA TECH ELIN EBG Elek-
tronik. The Group also broadened its industrial automation
portfolio with the acquisition of Citect, an Australian man-
ufacturer of Supervision Control and Data Acquisition
(SCADA) solutions and Manufacturing Execution Systems
(MES).
Schneider Electric offers the most comprehensive lineup of
customized sensors in the market after bringing in Hyde
Park Electronics, the North American leader in ultrasonic
sensors, in 2003; Kavlico and Dinel, manufacturers of
sensing and optoelectronics devices, in 2004; and US-
based BEI Technologies, in 2005.
Installation systems and control
Schneider Electric now ranks second worldwide in instal-
lation and control thanks to the acquisitions of Clipsal, the
Asia-Pacific market leader, in 2003; Juno Lighting, Amer-
ica’s leading manufacturer of trac and recessed lighting, in
2005; and Clipsal Asia, Merten (Germany), OVA Bargellini
(Italy), AEM S.A. (Spain) and GET (UK), in 2006. In 2007,
the Group enhanced its presence in Germany and ex-
panded its lineup in by acquiring Ritto GmbH & Co KG.
Building Automation and Security
The Group is a major player in this market. In 2003, it ac-
quired Sweden’s TAC, which was joined in 2004 by Tour
Andover Control and Abacus Engineered Systems in the
US. ABS (Advanced Buildings Systems) EMEA, which op-
erates in Europe and the Middle East, came on board in
2005, followed by IBS (US and Asia) in 2006.
In 2007, Schneider Electric enhanced the security side of
the business by acquiring Pelco Inc., the world leader in
video security systems.
Energy management and metering
In 2005, Schneider Electric acquired Canada’s Power
Measurement Inc., a leader in metering systems, software
and services for managing energy supply and consump-
tion.
Critical Power & Cooling Services
In 2004, Schneider Electric became the European leader
in critical power with the acquisition of MGE UPS Systems
in France. In October 2006, it made a friendly offer to pur-
chase all outstanding shares of American Power Conver-
sion (APC), the global market leader. The transaction,
which was approved by competition authorities and by
APC’s shareholders, was finalized on February 14, 2007.
The new Business Unit is a major player in critical power
and cooling services, offering the world’s broadest portfo-
lio of products, solutions and services.
2. An ambitious
strategy to balance
the acquisitions
portfolio and generate
long-term growth
Electricity is an extremely attractive global industry. The
world has huge electrification needs, whether for renovat-
ing grids in mature countries or developing them in emerg-
ing countries (1.6 billion people have no access to
electricity). Demand for electricity is expected to double be-
tween now and 2030, according to the International En-
ergy Agency.
At the same time, automation is expanding everywhere, at
home and in the workplace, while skyrocketing fossil fuel
prices and growing awareness of the need to curb pollut-
ing emissions are driving enormous demand for energy
savings.
Lastly, demand for ultra pure, ultra secure power keeps ris-
ing, particularly in electronics, information technology, In-
ternet services and healthcare.
Worldwide, Schneider Electric is deploying an assertive
strategy to take advantage of these many growth opportu-
nities. As part of this strategy, the Group has entirely trans-
formed its growth profile over the past six years.
Backed by its leadership in electrical distribution and au-
tomation, Schneider Electric has developed unique posi-
tions in new, fast-growing businesses such as critical
power and cooling services, energy efficiency and serv-
ices. It has also enhanced its presence in markets that are
less sensitive to economic cycles, such as Infrastructure
and Data Centers.
The Group offers a unique lineup that covers the entire in-
stallation lifecycle, meets local requirements and complies
with international standards.
Assertive repositioning of the business portfolio has pro-
foundly changed the Group’s growth profile. This has al-
lowed Schneider Electric to deliver strong, lasting growth
and a higher operating margin.
Three strategic priorities
1/ A balanced business portfolio
The Group has completed its drive to broaden and balance
the business portfolio both geographically and by market.
The percentage of total revenue generated in emerging
markets rose from 18% in 2001 to 32% in 2007. Schneider
Electric is now the only Group in the world with solutions
for energy efficiency (measuring consumption, identifying
savings and deploying appropriate solutions), automation
(control, monitoring and onsite or remote management)
and critical power (pure, uninterrupted electricity).
As a growth and profitability driver, customer satisfaction is
an integral part of Schneider Electric’s organization and
operating structure. Backed by an increasing number of
partnerships with end users and other customers, the
Group constantly innovates and invents solutions that meet
manufacturers’ and individuals’ needs for performance, re-
liability and energy efficiency.