APC 2007 Annual Report Download - page 74

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This good export trend led to high capacity utilization rates
in Europe, prompting companies to increase their invest-
ments to enhance productivity and expand capacity.
Growth in Japan and the United States was slower, on the
other hand, reflecting more moderate corporate capital
spending in those countries.
Automation is playing an increasingly important role in
making industrial companies more efficient. Greater effi-
ciency is key to reducing per-unit energy consumption.
Mining, metalworking and other energy-hungry industries
are turning more and more to automation solutions such as
advanced industrial control processes and Manufacturing
Execution Systems (MES) to cut down on their consump-
tion. There is strong demand to converge and integrate en-
ergy and smart management systems in manufacturing
processes using open technologies like Ethernet. This in-
tegration, along with related services and technologies,
helps companies reduce their energy use and investment
expense while maximizing productivity.
Original Equipment Manufacturers (OEMs) are looking for
end-to-end solutions that help them innovate, grow their
business and gain a competitive edge. This is leading to
closer, more upstream partnerships in machine develop-
ment.
OEMs are replacing electromechanical and mechanical
components with electronic automation technologies that
incorporate software. Automation enhances productivity
by reducing line downtime between product changes and
improves end-product quality and traceability. This is a
growing concern for manufacturers, notably of consumer
goods.
Energy and infrastructure
During the year, the energy market was shaped by rising
oil prices and their impact on electricity prices, and by
growing demand for electricity in emerging markets. Sup-
ply security (notably during peak periods), transmission
grid interconnection capacity and the development of elec-
tricity generation from renewable sources were again a key
focus.
In addition, environmental issues have become a major
concern for the entire industry, both for producers, who
want to limit CO2emissions, and for consumers, who want
to use energy as efficiently as possible.
Energy markets were deregulated in all countries of the
European Union during the year, whereas North America
lagged behind.
Global demand for more reliable and better quality supply
has prompted regulators and other government agencies
to invest in more effective distribution grids.
Oil and gas investments in the Middle East, Russia, China
and North America remained very strong as oil prices
climbed upwards.
Demand for drinking water and wastewater treatment con-
tinued to rise sharply around the world. This basic need is
still far from being served in many developing countries.
Growth was again very strong in China and the rest of
Asia.
The Middle East continued to invest in seawater desalina-
tion units to meet growing demand for drinking water. At
the same time, European environmental protection laws
have encouraged investment in water treatment facilities
in Europe.
Data centers and networks
The market was busy in all major regions, due primarily to
the digitalization of all economic sectors worldwide. This
has sharply increased bandwidth use and the need to
modernize, expand and build data centers while ensuring
reliability, high density and scalability.
At the same time, growing environmental concerns about
data center energy use have created new opportunities in
energy efficient cooling solutions.
Consolidated
financial statements
Business and Statement
of Income highlights
Changes in the scope of consolidation
The Group made several acquisitions in 2007 that en-
hanced its position in Critical Power & Cooling Services
and Building Automation and Security.
The dates given below correspond to the dates on which
the Group gained control of the acquired companies.
On February 14, 2007, the Group finalized the acquisition
of American Power Conversion (APC), the world leader in
Critical Power & Cooling Services. By combining APC with
its subsidiary MGE-UPS, Schneider Electric has become
the global benchmark in this area.
On May 25, 2007 the Group signed an agreement to ac-
quire Ritto GmbH & Co KG, a German firm that designs,
manufactures and markets door stations and intercom sys-
tems for the residential and small tertiary buildings market.
On July 31, 2007, the Group acquired automation com-
pany Atos Automação Industrial Ltda. in Brazil, as well as
two distributors of TAC building automation products –
Grant in Ireland and Yamas in the United States.
On October 17, 2007, Schneider Electric finalized the ac-
quisition of Pelco, a worldwide leader in the design, devel-
opment and manufacture of video security systems.
These companies have been fully consolidated from their
respective acquisition dates.
The following companies acquired in 2006 and consoli-
dated on a full-year basis in 2007 had an impact on the
scope of consolidation in relation to 2006:
Silicon Power Corporation (Crydom), consolidated as
from February 15, 2006
AEM SA, consolidated as from March 1, 2006
Citect, consolidated as from April 1, 2006
Electrical South, consolidated as from April 1, 2006
OVA G. Bargellini SpA, consolidated as from May 1, 2006
Merten GmbH & Co. KG, consolidated as from June 1,
2006
SSBEA and Moduline, consolidated as from July 1, 2006
IBS, consolidated as from August 1, 2006
Applied Controls Tech., consolidated as from August 11,
2006
Napac, consolidated as from September 4, 2006
Va Tech Elin EBG Electronik, consolidated as from Sep-
tember 26, 2006