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16
3. The new2
company program:
from good to great
Schneider Electric’s ambitious growth strategy is being de-
ployed within the framework of the new2(New Electric
World) company program for 2005-2008.
Through new2, the Group has reaffirmed its ambition to be
a great company to do business with, a great place to
work, a great world partner and a great investment.
To achieve these goals, Schneider Electric has set ambi-
tious targets for 2005-2008.
Customers
A very satisfied customer rate of 44% at end-2008 (tar-
get raised following surveys).
Dissatisfied customer rate down to 4% by end-2008.
At the end of 2007, the rate of very satisfied customers
came to 42%, while the percentage of dissatisfied cus-
tomers stood at 5%.
Employees
Reduce the number of days lost due to work accidents
by 20% per employee per year. At end-2007, the lost-time
injury rate was down 16%.
Develop competencies through three-year plans.
Produce a quarterly report on progress plans imple-
mented in response to employee satisfaction surveys.
Planet and society
Improve the Group’s social, environmental, societal and
corporate governance performance to 8/10 by end-2008.
At December 31, 2007, the barometer showed a rating of
7.62.
Since 2005, the Group has tracked its sustainable devel-
opment performance according to ten indicators. The re-
sults are posted online at:
www.barometer.schneider-electric.com.
Shareholders
In light of the success of the new2company program's ac-
tion plans, Schneider Electric has set new financial targets
for 2007-2008:
Achieve organic revenue growth of more than 6%.
Deliver an EBITA (EBIT before amortization of purchase
accounting intangibles) margin of between 13% and 15%
throughout the business cycle. In 2007, the margin stood
at 14.8%.
Improve return on capital employed (ROCE) after tax by
two points between 2004 and 2008. ROCE improved by
1.3 points in 2007 to 11%.
Pay out 50% of net profit before goodwill to sharehold-
ers. The recommended dividend for 2007 corresponds to
this rate.
The Group also puts a heavy emphasis on services and
has enhanced its presence in markets that are less sensi-
tive to economic cycles, such as Infrastructure and Data
Centers and Networks.
Schneider Electric is investing heavily in innovation and
technology, with more than 4% of revenue devoted to R&D.
At the same time, it is internationalizing its R&D resources
and moving them closer to customers to innovate faster
and more effectively.
2/ Enhanced competitiveness,
globally and locally
Schneider Electric’s new business model also involves
simplifying to be faster and more responsive. The Group
now produces close to customers to ensure top quality
service. This very finely networked organization also allows
each country to take advantage of best practices and lead-
ing-edge solutions and deploy them quickly.
To support this multi-local approach, the Group is rational-
izing its back office operations (purchasing, supply chain,
inventory and IT), developing continuous improvement pro-
grams for processes and deploying a single IT system for
all units worldwide.
Between 2004 and 2007, production in emerging markets
rose from 18% to 40% of total output thanks to the trans-
fer of 787 million worth of production costs over three
years. All together, productivity gains amounted to 0.9 bil-
lion between 2005 and 2007.
3/ A stimulating professional
environment
For Schneider Electric, the commitment and involvement of
120,000 team members worldwide is what makes the dif-
ference in a fiercely competitive global marketplace.
Human resources evaluation and management resources
are being harmonized worldwide so that all team members
can fully express their potential and help execute Group
strategy.
Schneider Electric is enhancing its forward-looking man-
agement, deploying skills-set plans to match new needs,
increasing investment in training and stepping up programs
with schools and universities to attract talent. The Group is
committed to creating attractive and stimulating work envi-
ronments, fostering all types of diversity, flattening the hi-
erarchy and developing profit sharing programs. In 2007,
the Group carried out a share issue as part of an employee
stock purchase plan.
As part of its commitment to sustainable development, the
Group is applying a global program to improve workplace
health and safety and promote diversity.