APC 2010 Annual Report Download - page 7

2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 5
2010 marks the return of growth.
How have sales evolved throughout the year?
In 2010, Schneider Electric generated EUR19.6 billion in sales,
up 9.3% on an organic basis, and 24% overall. Thanks to the
acquisitions we made, and particularly the one of Areva Distribution,
we achieved record sales.
This excellent performance resulted from a dynamic that accelerated
over the course of the year: 2% organic growth in the fi rst quarter,
10% in the second, 12% in the third and fourth quarters. This pace
was maintained throughout the year in the new economies (+15%
on average), while the rebound was gradual in the more mature
economies, with 6% growth. All company activities generated
positive growth in 2010.
Did Schneider Electric fi nancial performance also
follow this positive trend?
Thanks to the clear recovery of margins, Schneider Electric posted
record EBITA* of EUR3 billion (before restructuring costs and Areva
Distribution integration costs), or 15.6% of sales.
We benefi ted from the solid rebound of our volumes, but the
2.8point improvement in margin derived primarily for the effi ciency
initiatives set forth in the One company program, in terms of
productivity of the supply chain as well as simplifi cation of the
administrative and sales structures, which generated total savings
of EUR580 million.
Net income increased 109% versus last year, to EUR1.72 billion.
Our strong earnings allow us to propose to the shareholders at the
Shareholders Meeting a dividend of 3.20 euros per share, fully paid
in cash, representing a distribution of 50% of 2010 net earnings.
Did the integration of Areva Distribution meet your
expectations?
The start of Areva Distribution activities within Schneider Electric
exceeded our initial expectations. We achieved continuity of
operations and front offi ce teams were merged in all countries.
Areva Distribution was henceforth combined with the company’s
medium voltage activity and will be consolidated into the new
Energy business beginning in 2011. The action plans rolled-out are
expected to result in EUR120 million in synergies by 2014.
In 2010, Areva Distribution was consolidated from June to
December, over that period generating EUR1.23 billion in sales and
EBITA of EUR85 million (6.9% of sales).
This launch fully meets our expectations for the potential of our
Energy business and for the rationale of this strategic operation.
We are also very confi dent that our other 2010 acquisitions, Cimac,
Zicom, SCADAgroup, Electroshield-TM Samara (50%), Unifl air,
Vizelia and D5X, will also represent a signifi cant strategic contribution
and will create value through the potential growth and the synergies
that their integration into Schneider Electric will generate.
How does 2011 look for Schneider Electric?
We should see another year of strong organic growth in sales. Out
target is 6% to 9% growth, with a positive trend for all activities.
Momentum of Industry and IT businesses is expected to stay solid
and Power should continue to see progressive improvement. With
respect to the activities whose rebound via a growth cycle is slower,
Energy is expected to grow aided by gradually improving utility
end-market while investments made to increase energy effi ciency
should remain a support to the Buildings business.
We also expect the continued improvement of profi tability, with
15.0% to 15.5% EBITA margin, a raise from the 14.5% proforma
level in 2010 including Areva Distribution on a full year basis.
Effi ciency gains and volumes will be key factors, while our price
increases will to a large extent offset the infl ation of raw materials
costs.
Last but not least, Schneider Electric is aiming at preparing the
future, thanks to signifi cant investments in innovation and our sales
network, intended to leverage growth opportunities in the areas of
energy effi ciency, the smart grid and the new economies.
* EBITA: EBIT before amortisation and impairment of purchase accounting intangibles and impairment of goodwill
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Interview with
Emmanuel Babeau
EXECUTIVE VICE PRESIDENT FINANCE,
MEMBER OF THE MANAGEMENT BOARD
INTERVIEW WITH EMMANUEL BABEAU
EXECUTIVE VICE PRESIDENT FINANCE, MEMBER OF THE MANAGEMENT BOARD