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Schneider Electric SA 2012
Registration Document
Schneider Electric SA
Financial and Sustainable Development
Annual Report
The ‘Refuge du Goûter’, the historical last shelter before the
summit of Mont Blanc, has been completely refurbished to become
a net-zero building equipped with the most innovative energy
management solutions from Schneider Electricâ„¢. It is a dramatic
example of how Schneider Electric collaborates with external
partners to take sustainable development to new heights.
Registration
2012
Document
Headquarters:
35, rue Joseph Monier - CS 30323
F-92506 Rueil-Malmaison Cedex (France)
Tél. : +33 (0) 1 41 29 70 00
Fax : +33 (0) 1 41 29 71 00
www.schneider-electric.com
Incorporated in France,
governed by a Management Board
and Supervisory Board,
with issued capital of EUR 2,221 ,668 ,05 6
Registered in Nanterre, R.C.S. 542 048 574
Siret n°: 542 048 574 01 091
Schneider Electric SA

Table of contents

  • Page 1
    ... Financial and Sustainable Development Annual Report Registration Document Schneider Electric SA The 'Refuge du Goûter', the historical last shelter before the summit of Mont Blanc, has been completely refurbished to become a net-zero building equipped with the most innovative energy management...

  • Page 2
    ... the financial statements 246 List of securities held at December 31, 2012 247 Subsidiaries and affiliates 248 The Company's financial results over the last five years 2 50 7 General presentation 1. 2. 3. 4. 5. 6. 7. of Schneider Electric SA 2 51 3 Corporate governance 111 1. Supervisory Board...

  • Page 3
    ... Document All of Schneider Electric's regulated information is available on the corporate website at Financial and Sustainable Developement Annual Report 2012 www.schneider-electric.com, Finance section. The Business and Sustainable Development Report is available at www.schneider-electric.com...

  • Page 4
    ... presence by integrating our operations into three hubs, by main geographies. We also globalized our supply chain in order to strengthen partnerships with our suppliers, and drive efficiency of the supply chain on a whole different scale. 2 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 5
    ...CHAIRMAN OF THE MANAGEMENT BOARD Schneider Electric also welcomed on board the companies we had recently acquired, and made sure these new teams would find their place at Schneider Electric, and build all the necessary bridges to develop a growth and cost advantage for our customers. We stepped up...

  • Page 6
    ... a Board of Directors (Conseil d'Administration). The Board is attached to the continued success of the Group and its good governance. It endeavours to respect two key principles: to maintain a strong and stable leadership and to guarantee the independent control in the management of the company. It...

  • Page 7
    ... to slightly up adjusted EBITA margin for the year 2013. * Adjusted EBITA: EBIT before amortization and impairment of purchase accounting intangibles and impairment of goodwill, and before Restructuring charges and Other operating income & expenses. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 5

  • Page 8
    ... User Business Group 13 Clemens Blum Executive Vice-President, Industry 14 Daniel Doimo Executive Vice-President, IT * Member of the Management Board. ** President and CEO, Custom Sensors & Technologies Inc. 15 Éric Pilaud Executive Vice-President, CST** 6 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 9
    ... Member of Supervisory Board for the "Schneider Actionnariat" and "Schneider Énergie Solidaire" Mutual Funds Non-voting Member Claude Bébéar Corporate Director Willy R. Kissling* Corporate Director Secretary of the Board Philippe Bougon Remuneration, Appointments and Human Resources Committee...

  • Page 10
    ...other operating income and expenses (one time items such as capital gains/losses, pension gains/losses, acquisition costs, impairments). (2) The 2011 figures were restated for the item disclosed in note 1.2 of the consolidated financial statements. 8 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 11
    ... by strict working capital control and better inventory management through the deployment of Tailored Supply Chain, a key initiative of the Connect program. Indeed, stock reduction represented a contribution of EUR210 million. 08 09 10 11 12 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 9

  • Page 12
    .... Ownership structure on December 31, 2012 3.7% CDC Group 4.4% Employees 7.5% Capital Research & Management Company (1) 1.5% Treasury shares 82.9% Public (1) To the best knowledge of the Company. Share price against CAC 40 index over five years Schneider Electric share 70 60 50 40 CAC 40...

  • Page 13
    ... placed its first USD800 million bond issue due 2022 in the United States. This bond offering gives Schneider Electric access to the large US dollar funding sources and further extends its average debt maturity at favorable market conditions. The coupon rate for this bond is 2.95 percent...

  • Page 14
    ... at the Annual Shareholder's meeting to be held on April 25, 2013. The Group will adopt a single board structure with a Board of Directors (Conseil d'Administration), provided it is approved by shareholders. Employees On March 29, 2012, Schneider Electric announced the launch of a capital increase...

  • Page 15
    ... markets and businesses 1. Our strategy and market opportunities 2. Businesses, end-markets and customer channels 3. Company history and development 4. Research & development 5. Organisational simplicity and efficiency 6. Risk Factors 14 18 22 2 7 30 33 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 16
    ...OVERVIEW OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES OUR STRATEGY AND MARKET OPPORTUNITIES > 1. Our strategy and market opportunities Schneider Electric, the global specialist in energy management with operations in over 100 countries, leverages its portfolio to make energy safe, reliable, ef...

  • Page 17
    ... STRATEGY AND MARKET OPPORTUNITIES A smarter grid combines smarter supply (the efficient integration of renewable energy sources, ï¬,exible distribution), smarter demand (energy-efficient sites and homes, connected to the grid), and demand response to balance the two. Schneider Electric is active...

  • Page 18
    ... in energy management to meet growing customer needs and challenges. We estimate that nearly 90% of our revenue is derived from sales in businesses where we enjoy a number one or two market position. We design products and solutions that we believe offer the best levels of safety, reliability...

  • Page 19
    ... OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES OUR STRATEGY AND MARKET OPPORTUNITIES user base. Our diverse market access channels, which require only minor capital investment, help to ensure that we are not dependent on a limited number of large customers. Success in our industry requires strong...

  • Page 20
    ... LifeSpace products (including wiring devices, network connectivity, home and building controls and cable management systems), renewable energy conversion and connection, and electrical vehicle charging infrastructure. Partner business is responsible for integrated solutions in following end-markets...

  • Page 21
    ... investment costs and optimize maintenance and operating costs. Our customers in this sector include end-users, property developers, design firms, systems integrators, panel builders and installers, electrical equipment distributors and building management companies. Within this market, targeted...

  • Page 22
    ...the Group to access a number of different markets. with distributors on supply chain issues, technical training and marketing. Internet tools now occupy a dominant position for sales, and above all, provide up-to-date information. Through the eShop, distributors can link Schneider Electric's product...

  • Page 23
    ... a dedicated program for multi-site and/or global OEMs that enhances their ability to offer superior solutions on an international level. Other large end-users and global strategic accounts Schneider Electric also addresses customers directly in a number of end-markets, including but not limited to...

  • Page 24
    ... OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES COMPANY HISTORY AND DEVELOPMENT 2.5 Competitive landscape The main global competitors of Schneider Electric, by technology, are: • Low-voltage electrical distribution & Renewables: ABB, Siemens, Eaton, Legrand; • Critical power & cooling for...

  • Page 25
    ... a leader in outsourced energy services and sustainable development services for industrial and commercial enterprises and institutions. • increasing its solution expertise; • growing its presence in new economies; • gaining market shares to reinforce its global leadership. • In April 2011...

  • Page 26
    ...and staff development (1 Team). The program also includes strategic initiatives to strengthen Schneider Electric's leading position on its market: a global leader in energy management, becoming a leading provider of high value-added solutions. During the course of the program, solutions increased as...

  • Page 27
    ... of its business models in order to be a leader in products and in solutions, and to adapt the different dimensions of the customers and partners experience with Schneider Electric when they interact with the Group: - Engaged individuals: support employee development via training, empowerment and...

  • Page 28
    ... STRATEGY, MARKETS AND BUSINESSES COMPANY HISTORY AND DEVELOPMENT Connect: Key financial targets for 2012-2014 With Connect, Schneider Electric expects Group performance to reach a new level of excellence by 2014. Key targets Services growth Solutions profitability Industrial productivity Support...

  • Page 29
    ... solution is developed in several reference architectures that address the main issues of each segment. These reference architectures offer customers implementation with controlled risk and accelerated achievement of targeted operational and financial results. 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 30
    ...at the end of 2012. HOMES is the largest European program addressing energy efficiency of buildings. Schneider Electric led the program for four years, with a budget of EUR88 million bringing together 13 academic, technology and usage specialist partners. The integration of the developed technology...

  • Page 31
    ...has developed an intelligent solution to optimize energy consumption of residential buildings through dynamic management of heating and air conditioning while maintaining a level of comfort. The investment in this American company was supported by the interest of the LifeSpace North America division...

  • Page 32
    ... end-market segments. This organization was designed in order to support our two business models: products and solutions. Selling products requires clear technological leadership, while selling solutions requires close customer relationships and a deep understanding of end users' needs. • Partner...

  • Page 33
    ...management structure; it also centralizes hedging operations for all subsidiaries. 5.2 A more modular approach to information systems In 2012, Schneider Electric launched a 3-year strategic IT plan in line with the Company strategy and Connect company program. The IT Strategy for Schneider Electric...

  • Page 34
    ..., Schneider Electric has re-balanced and optimized its manufacturing and supply chain resources. In Western Europe, the United States, Japan and Australia, adaptation plans continued to be deployed with a focus on specializing production and supply chain units and reducing the number of sites. Group...

  • Page 35
    ...to the Group's business Schneider Electric operates worldwide, in competitive and cyclical markets The worldwide markets for the Group's products are competitive in terms of pricing, quality of products, systems and services, development and introduction time for new offers. Schneider Electric faces...

  • Page 36
    ... for Schneider Electric. We closely track the results of the quarterly surveys conducted in more than 80 countries among all types of customers. Improvement targets are set for each country, backed by specific action plans and progress monitoring procedures. developed and led at Group level...

  • Page 37
    ...of actively promoting diversity, in terms of both gender and nationality with hiring practices and setting up of online communities for employee engagement, retention and collaboration. The Group's human resources strategy is designed to create a motivating working environment. A "Cool Site" program...

  • Page 38
    ... OVERVIEW OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES RISK FACTORS cases where they were committed in the past by companies or businesses that were not part of the Group at the time. Schneider Electric may also be exposed to the risk of claims for breaches of environmental laws and regulations...

  • Page 39
    ... to receivables, payables and cash ï¬,ows, which are primarily hedged by means of forward purchases and sales. Depending on market conditions, risks in the main currencies may be hedged based on cash ï¬,ow forecasting using contracts that expire in 12 months or less. Schneider Electric's currency...

  • Page 40
    ... submitted its indictment to the examining magistrate on December 18, 2012. In this indictment, 14 French companies, including Schneider Electric Industries, were referred to the court. The examining magistrate's ruling is expected in 2013. 38 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 41
    ... the development of our services and solutions. This program, which aims to provide cover for damages to work and equipment for projects taking place at our clients' premises, was renewed for one year on April 1, 2012. Liability insurance A new insurance program offering coverage and limits in line...

  • Page 42
    ... level. • outside North America, a reinsurance captive company based in Luxembourg offers damage and civil liability coverage capped at EUR19 million per year; Cost of insurance programs The cost (including tax) of the Group's main insurance plans, excluding premium paid to captives, totaled...

  • Page 43
    ... performance 3. Schneider Electric's Commitment to Environmental Performance 4. Committed to and on behalf of employees 5. Schneider Electric, a responsible corporate citizen 6. Methodology and audit of indicators 7. Indicators 42 52 60 70 83 92 99 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 41

  • Page 44
    ... program in France), local economic development (social investment funds and entrepreneurship support). Schneider Electric works to share this vision with its partners (see pages 56-57), starting with its suppliers by encouraging as many of them as possible to sign the United Nations Global...

  • Page 45
    ...the company program and during the establishment of the Planet & Society Barometer every three years. Please see also the list of the Group's primary external sustainable development commitments on page 50. (1) Source: CSR Sector Reporting Guide, 2013. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 46
    ...Quality, Customer Satisfaction and Eco-design Investor Relations and sustainable development Partners Purchasing, Energy Efficiency & Solutions and sustainable development Social Technical Human resources R&D and Activities and Environment Institutional Sustainable development, Purchasing and...

  • Page 47
    ... major ethical stock market indices choose Schneider Electric 8. 300 sites recognized "Great place to work - Cool sites" * 7.6 pts 344,441 7.8% 3 - 3 - Safety Engagement Diversity Training Access to Energy Communities People 9. 10. 11. 12. 13. 14. 30% reduction in the Medical Incident Rate (MIR...

  • Page 48
    ... reduction indicator in 2009-2011); the rate of staff working on ISO 14001 sites (5); the number of countries that have established an SF6 gas recovery pathway (6); employees trained in energy management solutions, and the number of entrepreneurs supported in the creation of their activities in...

  • Page 49
    ... members a common reference point. This document outlines the Group's commitments to all of its stakeholders: the Company's employees, its economic partners (mainly clients and suppliers), shareholders, the community and the planet. In 2009, the Group updated Our Principles of Responsibility to set...

  • Page 50
    ... Committee's powers were formally extended to issues of corporate social responsibility (refer to p. 275). • defining Schneider Electric's sustainable development strategy and rolling out action plans at Group level with the concerned entities; • developing and managing Schneider Electric...

  • Page 51
    ... architects are developing the solutions its customers want today and designing the solutions of tomorrow. The Executive Sustainability Committee Since 2010, the three members of the Executive Committee in charge of global Human Resources, Global Supply Chain Management and Strategy and Innovation...

  • Page 52
    ... this fund. La Poste and Hermès joined them in 2012. Schneider Electric's team BipBop supports Livelihoods on project energy access issues. Participation in Rio+20 Schneider Electric actively participated in the Rio+20, the United Nations Conference on Sustainable Development. The main partner of...

  • Page 53
    ... specialist ratings agencies and by a number of ethical fund managers indicate the Company's performance in its sector. The evaluations and awards underline external recognition of the Group's sustainable development programs. 2 Ethical stock market indices A key performance indicator was set in...

  • Page 54
    ...of members of the Supervisory Board, Management Board and Executive Committee. This chapter covers two subjects: • products and solutions for fighting climate change: energy efficiency, renewable energies, electric vehicles, smart grid, product end-of-life recovery services, etc.; • business...

  • Page 55
    ... suppliers in line with ISO 26000 for Global Supply Chain. • The EcoXpert indicator, measured for the first time this year, reached its goal; the Suppliers indicator was launched in the last quarter of 2012, after working on the approach and the measurement method; Schneider Electric was con...

  • Page 56
    ... their homes, buildings, sites and equipment. Schneider Electric therefore provides an innovative and competitive portfolio of products, systems, services and software to help its customers further optimize their energy management. • products: dimmer switches, timers, heating and air-conditioning...

  • Page 57
    ... 13% of total energy production in 2010 to 18% in 2035 - representing an 83% increase. Schneider Electric serves and connects power plants and large buildings to the electricity grid, provides equipment to turbine manufacturers and supplies the residential market through its network of partners and...

  • Page 58
    ... Austria, Belgium, Spain and the United Kingdom (since 2011). In 2012, Schneider Electric structured this process around the "EoL6" program, which is intended to expand the SF6 end-of-life product recovery offers. The indicator continues to be monitored and two new countries have joined the project...

  • Page 59
    ... by Group values, the Responsibility & Ethics Dynamics program forms the basis of common references. Schneider Electric's mission therefore takes its meaning from engaging with individuals and organizations in order to help them get the most from their energy. 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 60
    ... and control. In particular, the Governance Committee must ensure coherence with the Group's strategic plans. It provides Executive Committee members with information on trends that, for example, implement the company change program. One a year Twice a year Upon Request • a detailed questioning...

  • Page 61
    ... effective; • and on the other, on the level of perception of Our Principles of Responsibility by position within the Company. Since 2012, these lessons are driving us to integrate communication into the Schneider Electric University training programs and to use supplementary action for the job...

  • Page 62
    ... Connect company program: Context and aims Schneider Electric does not produce nor distribute energy. It conceives and builds electrical products and proposes integral solutions for a number of market segments. The great majority of these products are installation components for energy management...

  • Page 63
    ... sharing resources including directives, application guides, an intranet site and databases. The Transport Director, within Global Supply Chain Management, is in charge of measuring and reducing freight CO2 emissions at Group level. To educate all employees on environmental issues, e-learning...

  • Page 64
    ... containing SF6 gas sold by Schneider Electric reached their end-of-life at the start of 2000. The objective was to develop commercial offers that allow customers to dispose of their end-of-life, SF6 containing devices, in order to completely extract the gas and recycle it. (1) Source: Carbon...

  • Page 65
    ... of the Executive Committee member in charge of Global Supply Chain. In 2011, Schneider Electric worked on defining its new carbon emission reduction targets for the 2012-2014 period within the scope of the company program. The Group's approach is based on measuring, controlling and reducing...

  • Page 66
    ... Intranet site that provides information on progress and the results obtained as part of Schneider Energy Action. The program resulted in the following achievements in 2012: • to optimize the number of data centers and their energy management using Schneider Electric products and solutions...

  • Page 67
    ... of 2012. 3.3 Eco-Design • reduce management costs of end-of-working-life installations for the customer by optimizing recycling. In order to continue and strengthen its commitment to sustainable development and to be the first to supply its customers with all the environmental information that...

  • Page 68
    ... information available, Schneider Electric's target was to consolidate this in 2012 with 65.5% of global product sales made through Green Premium offers, based on 2011 sales. The Check a Product website was checked worldwide on average more than 3,000 times per month and more than 6,000 reference...

  • Page 69
    ... Program This technological innovation program aims to make plastic parts less hazardous to health and the environment in order to offer products and solutions today in accordance with the principles of sustainable development. In effect, plastic is present in almost all Schneider Electric products...

  • Page 70
    ... used in Europe, 100% in Asia and 60% in North America comes from recycled material. With regard to metals that Schneider Electric purchases on global markets, these include recycled material from recovered waste. A UNEP (United Nations Environment Program) report was published in 2011 addressing...

  • Page 71
    ... event of malfunctions or emergencies, such as fires. In 2012 Schneider Electric conducted its annual review of pollution risks at all manufacturing sites as part of ISO 14001 tracking. No major incidents were reported in 2012. Discharge into the water and air Because Schneider Electric is mainly...

  • Page 72
    ... management of employee relations; • HR Operations handles the logistics and administrative responsibilities relating to payroll, sourcing, mobility and training programs, mainly through shared service centres designed to optimize efficiency and costs. 70 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 73
    ... and easily provide employees with access to thousands of eLearning and other training courses so they can further their own individual career development. Supply Chain; R&D; Global Functions; Lines of business. Highlights of 2012 • Implementation of a company-wide digitization program which...

  • Page 74
    ... Training and communication continue to be key components of the Health & Safety program at Schneider Electric. We are committed to providing awareness level and task specific training for our employees and contractors to ensure a strong knowledge base to work safely. In 2012, additional global...

  • Page 75
    ...at site level. Approach Schneider Electric is working to become the "best company" to work for, as rated by its employees, and conducts a survey of employee satisfaction every quarter. The Group also is looking to establish a strong name as an employer and is communicating around its Employer Value...

  • Page 76
    ... or customized supply chain, etc., demand ongoing adaptation and skills enhancement. Training, therefore, is at the heart of Schneider Electric's Human Resources policy. Approach Schneider Electric global Talent Acceleration program is designed to increase the Group's talent pool and develop...

  • Page 77
    ... partnered with the Solutions & Strategic Customers Department and the business leaders to develop the Energy & Solutions University, in order to accelerate the development of strategic skills in solutions and services. Certifying career paths are offered to employees (account managers, sales...

  • Page 78
    ...close cooperation with business leaders. In addition to Solutions & Leadership skills development, Schneider Electric has initiatives in key functional areas such as: • Global Supply Chain (GSC): The Global Supply Chain Academy was set up to provide every supply chain professional the opportunity...

  • Page 79
    ... all levels of the Company, ensuring that professional development is based on equality. In 2011, the people review process was extended to all Schneider Electric entities, including latest acquisitions, enabling the Company to use a single process 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 77

  • Page 80
    ... • on-line training program dedicated to the promotion of diversity, launched globally in 2009. Gender balance In its diversity policy, Schneider Electric lays particular emphasis on equal career management for men and women as the best means to develop the values and skills required to meet the...

  • Page 81
    ... training certificate) to engineering degree level. The Company aims at recruiting 20 persons with disabilities each year: 15 on work-study contracts (learning and/or professional development) and five persons on a fixed-term contract. • constantly working for improvement using a measurement...

  • Page 82
    ... fund). A number of information sessions are held regularly on this special purpose fund providing the opportunity for employees in France to share in the ideas and actions of Schneider Electric outlined in its access to energy program called BipBop (see pages 83-87). Investment in this fund totaled...

  • Page 83
    ... the United States as well as with the union that represents the employees at Juno Plant in Chicago. Meetings are held twice a year with the international representatives of these unions to maintain communications and to review business strategies. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 81

  • Page 84
    ...laws, duly represented by outside women leader with legal background). The process of social dialogue also includes employee communication in small groups as well as through Town Hall communication on Company performance, strategy and challenges. In 2011, Schneider Electric Global Supply Chain India...

  • Page 85
    ... been committed to playing an active role in the economic development of the communities in which it has a presence. This is reï¬,ected in the substantial involvement of the Group and its employees in supporting communities, 2 Energy access program Schneider Electric is involved in three...

  • Page 86
    ... solutions Business Development Director; • an Offer Creation Director based in Bangalore (India); • a Welfare Investment Director, who manages the Schneider Electric Energy Access social welfare fund; • a Training Programs Director; • BipBop correspondents in key countries (India, Senegal...

  • Page 87
    ..., 2012, 2,666 Group employees in France showed their interest in the BipBop program by investing EUR4.65 million (see page 80). The aim of the SEEA fund is to promote development while protecting the assets under management. Accordingly, it has adopted strict management rules, such as: • support...

  • Page 88
    ...projects to guarantee their sustainability in the long term. Schneider Electric sets out to provide comprehensive energy access solutions that support revenue-generating entrepreneurial activities, foster community services or meet domestic needs. Products and solutions are developed to meet a range...

  • Page 89
    ...low-cost and eco-design criteria into consideration. The project extends over 42 months and coordinates the expertise of 12 industrial and research partners. It is supported by the French Environment and Energy Management Agency (ADEME). These actions are funded by the Schneider Electric Foundation...

  • Page 90
    ... Governance The Schneider Electric Foundation Board of Directors meets two times per year. It defines and encourages significant strategic directions for the Foundation. It is composed of Schneider Electric managers, employee representatives and important people from outside the Company. Requests...

  • Page 91
    ... site in Grenoble); - who have supported the Energy Access social welfare investment fund, - or who began work after training; • management control, finance, communication, fundraising, management, human resources, technical, etc. For more information visit: www.fondation.schneider-electric.com...

  • Page 92
    ... in France - Support for business creation with Schneider Initiatives Entrepreneurs (SIE) Approach and action plans For more than 15 years, Schneider Electric has supported employee projects in France to create businesses or buy going concerns 90 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 93
    ... the future industrial restructuring plans. Nine local labor markets were involved in 2011 and 2012. These actions result in support for employment, implementation of the Group's involvement policy, SME development aid, support for the energy sector, assistance for learning and other actions desired...

  • Page 94
    ... development indicators to changes in the Group. This document is regularly updated and additional information can be consulted at www.schneider-electric.com/barometer. In keeping with its commitment to continuous improvement, Schneider Electric asked Ernst & Young to conduct a review in order...

  • Page 95
    ... year (2012-2013-2014) by 3.3%, using Schneider Electric solutions. The program is available for all Schneider Electric sites. The internal customer is Global Supply Chain Management. The Energy Management Services teams are the internal provider. In 2012, the program addresses Schneider Electric...

  • Page 96
    ...". It works closely with BipBop (BipBop People) training teams, the Schneider Electric Energy Access fund and the HR function. It develops partnerships with local NGOs (Planet Emergency, ESF, etc.). This indicator was audited by Ernst & Young. One day of training per year per employee The indicator...

  • Page 97
    ... indicates the page numbers of the report in which the various indicators are mentioned. 1° Social information a) Employment Total workforce and breakdown of employees by gender, age and region Hiring and layoffs Remuneration and its development b) Organization of work Organization of working time...

  • Page 98
    ... health and safety e) Other actions taken towards human rights, within the scope of this third indicator 69 68, 99 68 63-64, 100 69 62-65, 100 62-65, 68, CDP 69, 65-67, 50 84-86, 90-91 86-87, 91 43-44 87-90 56-57 56-57 60 65-67, 14 42 96 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 99
    ... the Board of Directors, Pursuant to your request and in our capacity as independent verifier of Schneider Electric S.A., we hereby report to you on the consolidated social, environmental and societal information presented in the management report issued for the year ended 31st of December 2012, in...

  • Page 100
    ...for Environmental and Social information (excluding Safety) are precise and communicated throughout the Group; the collection of information is largely based on an information system and the controls in place at the different levels are effective, • the reporting Guidelines for Safety information...

  • Page 101
    ... 14001 sites cover about 70% of the Group. • one part publishing constant scope indicators; • and another part publishing indicators per employee to correct the changes in the Company's activities. The sites' workforce includes Schneider Electric employees (fixed-term, permanent and work/study...

  • Page 102
    ... emissions on transportation paid by the Group (in tons of CO2e) â-² 2012 audited indicators. Calculation based on a coverage of 81% extrapolated to 100%. Please refer to page 65 for the presentation of this program. 2012 393,765 â-² 2011 497,703 100 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 103
    ... Other key indicator Objectives for year end 2013 1. 12 countries are implementing a recovery process for SF6 gas Please refer to page 56 for the presentation of this program. 2012 10 2011 8 7.2 Social indicators The social indicators count the people with fixed-term contracts, on work...

  • Page 104
    ... region (5) Asia-Pacific Europe North America Rest of the world LA1 Breakdown of workforce by country (the most significant countries) (5) France United States of America China India Mexico Spain Brazil Germany Australia Indonesia United Kingdom Russia LA1 Annual change in workforce by country...

  • Page 105
    ...34 years > 34 years 2 LA1 Breakdown of workforce by function Marketing Sales Services and projects** Support Technical Industrial LA1 Direct variable costs* (cost of employees under production or business costs) Hires (6) Breakdown by type of contract Permanent contract Fixed-term contract LA2...

  • Page 106
    ... Breakdown by Region Asia-Pacific Europe North America Rest of the world Dialogue and social relations Dialogue and social relations LA4-6 Sites stating they benefit from employee representation (2) Unions Works Council Health and Safety Committee LA7 Number of collective agreements (2) 47.6% 50...

  • Page 107
    ... LA7 Number of hours worked of which Schneider Electric employees of which subcontractors LA7 Medical Incident Rate (8) of which Schneider Electric employees of which subcontractors Talent development and training GRI LA10 LA10 2 Indicators Talent development and training Number of training...

  • Page 108
    ... Blue collar Disability (France) Employees with disabilities Direct employment Indirect employment Talent development and training (France) LA10 Breakdown of costs by training type Health, safety and environment Technical Languages and IT Languages IT Solutions Management and Leadership Others 19...

  • Page 109
    ... Europe DONATIONS IN PRODUCTS OR SERVICES FOR A PARTNER/PROJECT OF THE FOUNDATION (in euros) Number of employees involved in the Foundation's actions * Of which Square D/Schneider Electric North America 960,712 3,946,161 440,625 5,347,498 1% 72%* 23% 4% 1,198,916 35,741 2012 REGISTRATION DOCUMENT...

  • Page 110
    ...,546,414 Key performance indicators from the Planet & Society Barometer Objectives for year end 2014 1. 1 million households at the Base of the Pyramid have access to energy 2. 30,000 people at the Base of the Pyramid trained in energy management 3. 300 missions with out via the "Schneider Electric...

  • Page 111
    SUSTAINABLE DEVELOPMENT INDICATORS 2 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 109

  • Page 112
    2 110 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 113
    3 Corporate governance 1. Supervisory Board** 113 2. Organizational and operating procedures of the Supervisory Board** 2 1 1 3. Supervisory Board meetings** 123 4. Supervisory Board committees (members, operating procedures and meetings)** 2 1 5 5. Management Board members 6. Organizational and ...

  • Page 114
    ..., the governance of Schneider Electric SA has been based on a dual structure composed of a Management Board and a Supervisory Board. On December 18, 2012, the Supervisory Board announced its intention to propose to the Annual Shareholders' Meeting of April 25, 2013, to change the mode of governance...

  • Page 115
    .... Each year, the Supervisory Board includes an item on the agenda to review the status of its members, based on a report from the Remunerations, Appointments and Human Resources Committee. Members' directorships and functions in other companies that have business relations with Schneider Electric do...

  • Page 116
    ...of Schneider Electric SA. Note: bold indicates the names of companies whose securities are listed on a regulated market. (1) Directly or through the FCPE. * An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies. 114 2012...

  • Page 117
    ...beginning of 2012. Note: bold indicates the names of companies whose securities are listed on a regulated market. * An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 115

  • Page 118
    ... since May 2010. Note: bold indicates the names of companies whose securities are listed on a regulated market. * An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies. 116 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 119
    ... resigned on February 16, 2013 following his nomination as Minister of Future Creation and Science of South Korea. * An independent member of the Supervisory Board within the meaning of the AFEP/MEDEF corporate governance code for listed companies. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 117

  • Page 120
    ...* Age: 69 Business address: 18, allée du Cloître 78170 La Celle-Saint-Cloud - France 6,856 Schneider Electric SA shares First appointed: 1998/Term ends: 2013 • Previous directorships and functions held in the past five years: Member of the Board of Directors of Cleantech Invest AG; Director of...

  • Page 121
    ...000 Schneider Electric SA shares First appointed: 2007/Term ends: 2014 - Other directorships or functions: President and CEO of AXA Investment Managers Private Equity SA, France; President and CEO of AXA Investment Managers Private Equity Europe SA, France; Chairman of the Supervisory Committee of...

  • Page 122
    ... been Chairman of the Board of Directors of Sanofi since May 2010. Mr. Serge Weinberg* Age: 61 Business address: Weinberg Capital Partners 20, rue Quentin Bauchart 75008 Paris - France 1,144 Schneider Electric SA shares First appointed: 2005/Term ends: 2014 Non-voting member Mr. Claude Bébéar...

  • Page 123
    ... question; • hold at least 1,000 shares of Company stock; • abide by strict rules regarding transactions involving Schneider Electric SA stock (no trading allowed in the 31 days preceding the day following the publication of the annual or interim financial 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 124
    ... documents. Members also have the opportunity to meet informally with key senior executives prior to Supervisory Board meetings. New members of the Supervisory Board attend training and information sessions dealing with the Group's strategy and businesses. For new members of the Supervisory Board...

  • Page 125
    ... the Annual Shareholders' Meeting that the governance of the Group be changed and that an organization with a Board of Directors be adopted (see pages 274 to 277 and 282 to 288) in which M. Jean-Pascal Tricoire would be Chairman and CEO; • renewed the Management Board for a new mandate of 3 years...

  • Page 126
    ... reported on other steps taken, which it also discussed, with regard to monitoring risk management (control of organizational change, industrial risk, purchase risk), prevention of fraud, crisis management, development solutions, information systems security, monitoring of accounting standardization...

  • Page 127
    ... (members, operating procedures and meetings)** In its internal rules and procedures, the Supervisory Board has set out the role, responsibilities and competences of its two committees: the Audit Committee and the Remuneration, Appointments & Human Resources Committee. Their members are appointed by...

  • Page 128
    ... 18, 2012 meetings. - review of investor relations documents concerning the annual and interim financial statements; 2) internal audit, internal control and risk management: Remunerations, Appointments and Human Resources Committee Members The Supervisory Board's internal rules and procedures...

  • Page 129
    ... plan solutions for members of the Management Board and Executive Committee. It examines Human Resource policies and in particular: Meetings in 2012 In 2012, the Supervisory Board's Remuneration, Appointments and Human Resources Committee met five times. The attendance rate by its members...

  • Page 130
    ... corporate positions from 1999 to 2001: Director in charge of Strategic Global Accounts and the "Schneider 2000+" strategic plan. From January 2002 to the end of 2003, he was Executive Vice-President of Schneider Electric's International Division. In October 2003, he was appointed Chief Operating...

  • Page 131
    ... compensation for the last two duties. Service contracts None of the members of the Supervisory Board or Management Board has a service contract with the Company or any of its subsidiaries providing for benefits upon termination of employment. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 129

  • Page 132
    ..., Appointments and Human Resources Committee. The variable remuneration of the Management Board members is determined as follows: • 70% is determined by the Group's overall performance, as measured in terms of operating margin, organic growth, cash 130 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 133
    ..., customer satisfaction rates, corporate social responsibility and people development; • 30% is based on the attainment of measurable individual performance targets. Senior Executives benefit from Performance Shares under the annual long term incentive plan. Since December 2009, stock options...

  • Page 134
    ... CORPORATE GOVERNANCE MANAGEMENT INTERESTS AND COMPENSATION Members of the Supervisory Board The Annual Shareholders' Meeting set total attendance fees at EUR1 million. The Supervisory Board has decided to allocate these fees as follows: • Board members and non-voting members resident in France...

  • Page 135
    ...and Human Resources Committee, at its meetings on December 15, 2011, February 21, 2012 and February 20, 2013, the Supervisory Board set the annual compensation for the members of the Management Board. • individuals: control profitability and cash conversion, implementation of the Connect Company...

  • Page 136
    ... of options to purchase or subscribe shares during the financial year to each corporate officer by the issuer and by any company in the Group No option to subscribe new shares or purchase existing shares was granted during the 2012 financial year. 134 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 137
    ... 03/17/2014 Date of availability 03/18/2016 03/18/2016 Plan 13 Performance criteria 100% of the shares - 2012 and 2013 operating margin excluding restructuring costs and change in the Planet & Society Barometer at the end of 2013 3 Benefits received by members of the Management Board Payments or...

  • Page 138
    ... of the strategy pursued and promoted by him until that time, whether or not in connection with a change in Schneider Electric's shareholder structure as described above, - the Schneider Electric SA and Schneider Electric Industries SAS employee benefit plan, which offers health, incapacity...

  • Page 139
    ... than Management Board members held: • the Executive Vice-Presidents of the Global Functions: Information System, Marketing, Strategy & Innovation, Global Human Resources - Global Supply Chain; • the Executive Vice-Presidents of the businesses: Global Operations - North America Operations...

  • Page 140
    ... GOVERNANCE REGULATED AGREEMENTS Transactions in Schneider Electric SA shares by Senior Management and corporate officers during the 2012 financial year Transactions disclosed in application of article 621-18-2 of the French Monetary and Financial Code Total transaction amount EUR7,210,043 EUR6...

  • Page 141
    ... under his employment contract with Schneider Electric Industries SAS. The Shareholders' Meeting of April 22, 2010 approved this benefit. On February 21, 2012 the Supervisory Board gave the Management Board authorization to change the Top-hat Pension Benefit for the Schneider Group's directors to...

  • Page 142
    ...Operating Divisions defined in terms of businesses, geographical location, logistical or industrial responsibility. The Group's corporate governance bodies supervise the development of the internal control and risk management systems. The Audit Committee has particular responsibility for monitoring...

  • Page 143
    ... and conducts monthly reviews of the various units' primary operations and performance. Global Functions (Human Resources, Purchasing, Manufacturing, Supply Chain, Information Systems, etc.) Schneider Electric centralizes decision-making and risk management at the corporate level through...

  • Page 144
    ... and sales of Schneider Electric SA shares by persons who have access to price-sensitive information in the course of their work (see "Organizational and operating procedures of the Supervisory Board", Chapter 3 Section 2). The main internal control benchmarks are available to all employees...

  • Page 145
    ...of Functions, Business Continuity Plans and Retention of Records); • operating processes (purchases, revenues, inventories, etc.); • accounting and financial cycles; • Human Resources, IT, Legal and Tax cycles. The Key Internal Controls are available to all units on the Group Intranet, along...

  • Page 146
    ... the Group's general guidelines and the Key Internal Controls. Training in Key Internal Controls continued in 2012 for those involved for the first time in the annual self-evaluation process: newly promoted managers and units recently integrated. Operational units, trained by their line management...

  • Page 147
    ... has, to date, made the use of the Group secure payments tool available to 80 subsidiaries; • mapping global risks; • verifying the effective application of Key Internal Controls during audit assignments; • a tool for issuing and managing bank guarantees was also developed to monitor these...

  • Page 148
    ... level of the unit concerned: - audit of the main accounting and operational ï¬,ows, - strengthening of internal control over all ï¬,ows involved, including the implementation of new controls, review of the segregation of duties followed by changes in reporting lines in order to ensure the proper...

  • Page 149
    CORPORATE GOVERNANCE INTERNAL CONTROL AND RISK MANAGEMENT 10.6 Internal control procedures governing the production and processing of consolidated and individual company accounting and financial information • instructions are issued for the closing process, including reporting deadlines, ...

  • Page 150
    ...; • current members still have many years of service to perform before they can receive benefits. Furthermore, the Management Board has changed this plan to conform with the AFEP/MEDEF recommendations. This change has been approved by the annual shareholders meeting on May 3, 2012 (see...

  • Page 151
    4 Business review 1. Trends in Schneider Electric's core markets 150 2. Review of the consolidated financial statements 3. Review of the parent company financial statements 4. Review of subsidiaries 5. Outlook 152 157 157 157 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 149

  • Page 152
    ...signs of recovery at yearend. In China, housing starts decreased in 2012 after several year of tremendous growth. This can be explained by the Chinese government's policy, which aims to restrain developers' activities and to limit housing purchase. 150 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 153
    ... segment, benefiting from continued access to capital markets or from the backing of large Private Equity groups, have accelerated their development. These companies accelerated their international expansion as well to meet growing global demand. 4 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 154
    ...; Review of business and consolidated statement of income Changes in the scope of consolidation On May 4, 2012, Schneider Electric announced that it has signed an agreement to acquire M&C Energy Group ("M&C"), a fast-growing company specialized in energy procurement and sustainability services...

  • Page 155
    ... represented 21.0% for the year ended December 31, 2012 (compared to 20.8% for the year ended December 31, 2011), cost control allowing compensating most of inï¬,ation and investments. Combined, total support function costs, that is, research and development expenses together with selling, general...

  • Page 156
    4 BUSINESS REVIEW REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS Restructuring costs For the year ended December 31, 2012, restructuring costs amounted to EUR164 million compared to EUR145 million for the year ended December 31, 2011. These costs related to industrial and support functions ...

  • Page 157
    ... and good cost control. IT recorded an adjusted EBITA margin of 19.0% for the year ended December 31, 2012, up 2.8% compared to 16.2% for the year ended December 31, 2011, helped by positive volume, price actions, productivity gains, and improved solutions profitability. Buildings recorded an...

  • Page 158
    4 BUSINESS REVIEW REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS Earnings per share Earnings per share increased to EUR3.39 for the year ended December 31, 2012 from EUR3.34 for the year ended December 31, 2011 (taking into account the division of the nominal value of the shares by two, effective...

  • Page 159
    ... for acceleration in the new economies and a slow recovery in North America. Based on current market conditions, the Group targets a low-single digit organic growth in revenues and a stable to slightly up adjusted EBITA margin for the year 2013. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 157

  • Page 160
    4 BUSINESS REVIEW OUTLOOK 158 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 161
    ... statement of cash flows 3. Consolidated balance sheet 4. Consolidated statement of changes in equity 5. Notes to the consolidated financial statements 6. Statutory Auditors' report on the consolidated financial statements 160 162 164 166 167 229 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 162
    ... intangibles) EBITA corresponds to operating profit before amortization and impairment of purchase accounting intangible assets and before goodwill impairment. The accompanying notes are an integral part of the consolidated financial statements. 160 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 163
    ...) on available-for-sale financial assets Actuarial gains (losses) on defined benefits plans Income tax effect of other comprehensive income Other comprehensive income for the year, net of tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR Attributable: • to owners of the parent • to non-controlling...

  • Page 164
    ... of bonds Sale/(purchase) of own shares Increase/(reduction) in other financial debt Proceeds from issuance of shares Dividends paid: Schneider Electric SA Non-controlling interests Total III - Cash ï¬,ows from/(used in) financing activities 162 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 165
    ...AND CASH EQUIVALENTS AT DECEMBER 31 20 3,617 * The 2011 figures were restated for the item disclosed in note 1.2 of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial statements. 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 163

  • Page 166
    ... equipment, net Total tangible and intangible assets Investments in associates Available-for-sale financial assets Other non-current financial assets Non-current financial assets Deferred tax assets Total non-current assets Current assets Inventories and work in progress Trade and other operating...

  • Page 167
    ...190 1,827 23 24 930 291 1,726 8,964 36,156 5 * The 2011 figures were restated for the item disclosed in note 1.2 of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial statements. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 165

  • Page 168
    ... Comprehensive income for the year Capital increase Exercise of stock options Dividends Share-based compensation expense Other December 31, 2012 57 8 555,417 2,222 6,885 (74) 7,657 (48) 57 8 16,642 (8) 174 57 16,816 (1) Of which EUR9 million in connection with the employee share purchase plan...

  • Page 169
    ... by the Management Board on February 18, 2013 and reviewed by the Supervisory Board on February 20, 2013. They will be submitted to shareholders for approval at the Annual General Meeting of April 25, 2013. The Group's main businesses are described in chapter 1 of the Registration Document. TABLE...

  • Page 170
    ... to IFRS 1). Schneider Electric is currently assessing their potential impact on the Group's consolidated financial statements. In accordance with IAS 19 revised in June 2011, the expected return on long term plan assets in 2013 will be equal to discount rate at December 31, 2012 closing date. The...

  • Page 171
    ...FY 2011 restated 1,877 (134) Profit for the year Other comprehensive income for the year, net of tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR Attributable: • to owners of the parent • to non-controlling interests (27) (27) 1,743 1,667 76 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 169

  • Page 172
    ... Decrease/(increase) in inventories and work in process (Decrease)/increase in accounts payable Change in other current assets and liabilities Change in working capital requirement Total I - Cash ï¬,ows from operating activities Total II - Cash ï¬,ows from/(used in) investing activities Total...

  • Page 173
    ... (note 1.14); the valuation of share-based payments (note 1.20); the calculation of provisions for contingencies, in particular for warranties (note 1.21); obligations (note 22). • the measurement of pension and other post-employment benefit 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 171

  • Page 174
    ... Intangible assets (mainly trademarks and customer lists) acquired as part of business combinations are recognized in the balance sheet at fair value at the combination date, appraised externally for the most significant assets and internally for the rest, and that represents its historical cost in...

  • Page 175
    ... impairment are identified on the basis of external or internal information. If such an indication exists, the Group tests the asset for impairment by comparing its carrying amount to the higher of fair value minus costs to sell and value in use; 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 173

  • Page 176
    ...through the Income Statement. Accounts receivable are discounted in cases where they are due in over one year and the impact of adjustment is significant. 1.12 - Non-current financial assets Investments in non-consolidated companies are classified as available-for-sale financial assets. They are...

  • Page 177
    ... Group grants different types of share-based payments to senior executives and certain employees. These include: • Schneider Electric SA stock options; • stock grants; • stock appreciation rights, based on the Schneider Electric SA stock price. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 178
    ..., Schneider Electric gave its employees the opportunity to purchase shares at a discount (note 21.5). • restructuring costs, when the Group has prepared a detailed plan for the restructuring and has either announced or started to implement the plan before the end of the year. 1.22 - Financial...

  • Page 179
    ... options outstanding at the balance sheet date. The dilutive effect of stock options is determined by applying the "treasury stock" method, which consists of taking into account the number of shares that could be purchased, based on the average share price for the year, using the proceeds from the...

  • Page 180
    ...The Group's consolidated financial statements for the year ended December 31, 2012 can be summarized as follows: Number of active companies Parent company and fully consolidated subsidiaries Proportionally consolidated companies Companies accounted for by the equity method TOTAL Dec. 31, 2012 582...

  • Page 181
    .... Share-based payment is presented under "Corporate costs". The Management Board does not review assets and liabilities by Business. The same accounting principles governing the consolidated financial statements apply to segment data. Details are provided in Chapter 4 of the Registration Document...

  • Page 182
    ... Europe Revenue by country market Non-current assets 7,142 7,361 of which France 1,916 1,710 North America 5,208 7,466 of which USA 4,360 7,310 AsiaPacific 5,933 4,413 of which Rest of the China world 2,798 1,095 4,062 811 Total 22,345 20,051 Moreover, the Group follows the share of new...

  • Page 183
    ... year 2012 Impairment losses on assets Gains on asset disposals Losses on asset disposals Costs of acquisitions Pension plan curtailments Others OTHER OPERATING INCOME AND EXPENSES (16) 8 (10) (52) 21 39 (10) Full year 2011 8 (9) (99) 42 50 (8) 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 181

  • Page 184
    ... growth rate; • a 0.5 point decrease of margin rate. Impairment losses totaling EUR15 million were recognized on goodwill relating to two small businesses in Europe sold in 2011. • 7% of assets for a 0.5 point increase of the discount rate; 182 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 185
    ..., Group entities file consolidated tax returns. Schneider Electric SA has chosen this option for the French subsidiaries it controls directly or indirectly through Schneider Electric Industries SAS. 10.1 - Analysis of income tax expense Full year 2012 Current taxes France International Total...

  • Page 186
    ... Buildings ITB Infrastructure TOTAL 3,943 2,244 1,469 3,015 2,233 12,904 Dec. 31, 2011, net 3,906 2,176 1,642 3,061 1,987 12,773 Square D goodwill was allocated to each business in proportion to operating income: Power Square D Company 82% Industry 18% 184 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 187
    ... Reclassification Changes in scope of consolidation and other Dec. 31, 2012 2,621 80 1 84 2,786 4 (56) 2 13 2,749 Other 1,510 54 (8) 46 (25) 338 1,915 4 (50) (16) 11 29 1,892 Total 6,016 296 (57) 151 (36) 450 6,820 315 (141) (100) 17 63 6,974 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 185

  • Page 188
    ...on intangible assets other than goodwill and others TOTAL* * Includes amortization & depreciation of intangibles assets from purchase price allocation for EUR225 million for the year 2012 and EUR208 million for the year 2011 (disclosed in note 8). 186 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 189
    ... 2012 231 11 (1) 2 3 (24) 222 (7) (4) (1) 210 Buildings 1,480 104 (18) 11 33 122 1,732 78 (32) (13) 31 (14) 1,782 Other 832 233 (46) 1 (141) 33 912 262 (111) (4) (127) 10 942 Total 6,221 516 (170) 35 (63) 149 6,688 488 (287) (41) 9 (10) 6,846 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 187

  • Page 190
    ...The depreciation and impairment of tangible assets retreated at statutory cash ï¬,ow were as follows: Cash impact Depreciation of property, plant and equipment Impairment on tangible assets TOTAL Dec. 31, 2012 394 8 402 Dec. 31, 2011 386 (1) 385 188 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 191
    ...follows at December 31, 2012: Discounted Minimum payments minimum payments Less than one year Between one and five years Five years and more TOTAL COMMITMENTS Discounting effect Discounted minimum payments 136 374 214 724 (57) 667 134 350 183 667 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 189

  • Page 192
    ... Total listed AFS II - Unlisted available-for-sale financial assets Citec, SEAT (2) FCPR & SICAV SCL Elements Inc. (1) SE Buildings Energy Efficiency (1) Inversion FCPR SESS Simak (2) SE Venture Others (3) Total unlisted AFS TOTAL AVAILABLE-FOR-SALE FINANCIAL ASSETS (1) Companies purchased in 2012...

  • Page 193
    ...THE CONSOLIDATED FINANCIAL STATEMENTS The investment in AXA was sold in September 2012 for proceeds net of fees of EUR121 million. The fair value of investments quoted in an active market corresponds to the price on the balance sheet date. The revaluation of listed investments over the year has had...

  • Page 194
    ...TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 17 Inventories and work in progress Inventories and work in process changed as follows: Dec. 31, 2012 Cost: Raw materials Production work in process Semi-finished and finished products Goods Solution work in process INVENTORIES AND WORK IN PROCESS AT...

  • Page 195
    ...In addition, the Group takes out substantial credit insurance and uses other types of guarantees to limit the risk of losses on trade accounts receivable. Changes in provisions for impairment of short and long-term trade accounts receivable were as follows: Full year 2012 Provisions for impairment...

  • Page 196
    ... STATEMENTS AT DECEMBER 31, 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 21 Equity 21.1 - Capital Share capital At the Annual General Meeting held on April 21, 2011 Schneider Electric shareholders approved the division of the nominal value of the shares by two. The operation took effect...

  • Page 197
    ...the Group paid out the 2010 dividend of EUR1.60 per share (with a nominal value of EUR4), for a total of EUR856 million. At the Shareholders' Meeting of April 25, 2013, shareholders will be asked to approve a dividend of EUR1.87 per share for 2012. At December 31, 2012 Schneider Electric SA had...

  • Page 198
    ... plans The Board of Directors of Schneider Electric SA and later the Management Board have set up stock option and stock grant plans for senior executives and certain employees of the Group. The main features of these plans were as follows at December 31, 2012: Stock option plans Number of Price...

  • Page 199
    ... CONSOLIDATED FINANCIAL STATEMENTS Stock grants Date of Board meeting 12/21/2006 04/23/2007 12/19/2007 12/19/2007 01/05/2009 01/05/2009 08/21/2009 12/21/2009 12/21/2009 12/17/2010 12/17/2010 07/26/2011 07/26/2011 07/26/2011 12/16/2011 12/16/2011 07/27/2012 07/27/2012 Plan...

  • Page 200
    ... be an employee or corporate officer of the Group. In addition, exercise of some options is generally conditional on the achievement of annual objectives based on financial indicators. In respect of subscription vesting conditions for current stock option plans, Schneider Electric SA has created...

  • Page 201
    ... 11 bis Plan 12 Plan 13 Plan 14 TOTAL 1 5 14 12 11 10 53 Full year 2011 2 2 5 6 16 13 44 21.5.2 Worldwide Employee Stock Purchase Plan Schneider Electric gives its employees the opportunity to become group shareholders thanks to employee share issues. Employees in countries that meet legal and...

  • Page 202
    ...an ordinary, non-revolving personal loan, with a five-year maturity to an individual with an average credit rating. (2) A decline in the interest rate for market participants reduces the lock-up cost and increases the expense booked by the issuer. 200 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 203
    ... rate for market participants reduces the lock-up cost and increases the expense booked by the issuer. (4) In some countries, due to local law, employees subscribe for undiscounted sums while the bank subscribes at a discount to provide the leverage. 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 204
    ... on a decreasing trend from 7.67% in 2013 to 4.5% in 2023. In 2011, the rate of healthcare cost increase is based on a decreasing trend from 8% in 2012 to 4.5% in 2023. The rate in France was estimated at 4% in 2012 and estimated at 4.5% in 2011. 202 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 205
    ... executives guaranteeing supplementary retirement income beyond that provided by general, mandatory pension schemes. The majority of benefit obligations under these plans, which represent 83% of the Group's total commitment or EUR2,550 million at December 31, 2012, are partially or fully funded...

  • Page 206
    ... cost Curtailments and settlements Interest cost (effect of discounting) Expected return on plan assets NET COST RECOGNIZED IN THE STATEMENT OF INCOME 48 1 116 (91) 74 3 55 (60) (2) Full year 2011 Of which SE USA 41 1 4 110 (86) 70 2 4 53 (56) 3 204 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 207
    ... relative to the effects of experience totaled EUR445 million as at December 31, 2008. Full year 2012 Of which SE USA 4. Change in fair value of plan assets Fair value of plan assets at beginning of year Expected return on plan assets Plan participants' contribution Employer contributions Benefits...

  • Page 208
    ... other post-employment benefits Changes in provisions for other post-employment and long-term benefits were as follows: Full year 2012 1. Components of net cost recognized in the statement of income Service cost Interest cost (effect of discounting) Expected return on plan assets Past service cost...

  • Page 209
    CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Full year 2012 2. Change in projected benefit obligation Projected benefit obligation at beginning of year Service cost Interest cost (effect of discounting) Plan participants' contribution Bene...

  • Page 210
    ... long term contracts, for EUR36 million. • provisions for disputes over defective products; • provisions to cover disputes related to recalls of clearly identified products. (d) Environmental risks These provisions are primarily funded to cover cleanup costs. 208 2012 REGISTRATION DOCUMENT...

  • Page 211
    ... Short-term portion of convertible and non-convertible bonds Short-term portion of long-term debt Short-term debt TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES 147 368 120 587 504 1,726 8,132 Dec. 31, 2011 190 132 475 217 96 1,110 8,037 5 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 209

  • Page 212
    ...037 24.3 - Bonds Dec. 31, 2012 Schneider Electric SA 2013 Schneider Electric SA 2014 Schneider Electric SA 2015 Schneider Electric SA 2016 Schneider Electric SA 2017 Schneider Electric SA 2018 Schneider Electric SA 2019 Schneider Electric SA 2020 Schneider Electric SA 2022 TOTAL 587 726 749 708 994...

  • Page 213
    ...FINANCIAL STATEMENTS Schneider Electric SA has issued bonds on different markets: - EUR100 million worth of bonds issued in July 2008 indexed to the 10-year Constant Maturity Swap (CMS) rate, due July 31, 2013, • in the Unites States, through a private placement offering following SEC 144A rule...

  • Page 214
    ... Group interest expenses and income and the value of the Group's financial liabilities and assets. Interest rate risk on borrowings is managed at the Group level, based on consolidated debt and taking into consideration market conditions in order to optimize overall borrowing costs. The Group uses...

  • Page 215
    ... and accounts receivable Financial liabilities measured at amortized cost Derivative instruments TOTAL Impact on income and expense 6 30 (331) (38) (333) Impact on Equity Fair value Translation adjustment (60) (73) (133) 9 78 (158) (2) (73) Other - 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 216
    ... long-term debt TOTAL NON-CURRENT LIABILITIES Current liabilities Trade accounts payable Other Short-term debt TOTAL CURRENT LIABILITIES 4,190 112 1,726 6,028 4,190 112 1,742 6,044 4,190 36 1,742 5,968 76 76 6,406 6,406 6,934 6,934 6,934 6,934 - 214 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 217
    ... NET ASSETS AT FAIR VALUE 60 1,720 1,780 Dec. 31, 2011 Level 1 Available-for-sale financial assets Net derivative instruments Marketable securities NET ASSETS AT FAIR VALUE 191 634 825 Level 2 (185) (185) Level 3 105 105 Total 296 (185) 634 745 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 218
    ... Administration TOTAL AVERAGE NUMBER OF EMPLOYEES By region: EMEAS* North America Asia-Pacific * Europe, Middle-East, Africa, South America. The increase in the average number of employees is primarily linked to the 2012 acquisitions. 27.2 - Employee benefits expense Full year 2012 Payroll costs...

  • Page 219
    ... At the end of 2012, Schneider Electric had capitalized total costs for a net amount of EUR91 million. The costs are progressively amortized with effect from 2009, over a seven-year rolling calendar and based on the number of users connected worldwide as the system is deployed. 2012 REGISTRATION...

  • Page 220
    ... auditing o/w Schneider Electric SA o/w subsidiaries Related services o/w Schneider Electric SA o/w subsidiaries Audit sub-total Other services Legal, tax TOTAL FEES 7% 506 506 7% 1,294 98% 2% 100% 7,563 7,563 100% 0% 100% 18,273 212 18,485 218 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 221
    ... FINANCIAL STATEMENTS Note 32 Consolidated companies The main companies included in the Schneider Electric Group scope of consolidation are listed below. % interest Dec. 31, 2012 Europe Fully consolidated Schneider Electric Energy Austria AG Schneider Electric Austria GmbH Schneider Electric Power...

  • Page 222
    ...SAS - S.E.L.F. Schneider Electric France SAS Schneider Electric Holding Amérique du Nord SAS Schneider Electric Holding Europe SAS Schneider Electric Industries SAS Schneider Electric International SAS Schneider Electric Manufacturing Bourguebus SAS Schneider Electric SA (Holding company) Schneider...

  • Page 223
    ... Partner SGBT European Major Investments SA SHL Luxembourg S.Ã r.l. American Power Conversion Corp (A.P.C.) B.V. APC Holdings B.V. APC International Corporation B.V. APC International Holdings B.V. Pelco Europe B.V. Pro-Face HMI B.V. (sub-group) Schneider Electric B.V. Schneider Electric Energy...

  • Page 224
    ...FINANCIAL STATEMENTS % interest Dec. 31, 2012 LLC Schneider Electric Zavod ElectroMonoblock OOO Schneider Electric Buildings (Russia) OOO Lexel Elektromaterialy (SPB) Schneider Electric Equipment Kazan Ltd ZAO Potential ZAO Schneider Electric Schneider Electric Srbija doo Beograd Schneider Electric...

  • Page 225
    ... Gestion SL Accounted for by equity method Aveltys Delta Dore Finance SA (sub-group) Möre Electric Group A/S Electroshield TM Samara (sub-group) North America Fully consolidated Control Microsystems Inc. Juno Lighting Ltd Novasena 1 ULC Novasena 2 ULC Power Measurement Ltd Schneider Electric Canada...

  • Page 226
    ... 2012 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2012 APC America Inc. Schneider Electric IT Corporation APC Holdings Inc. APC Sales & Service Corp. BEI Precisions Systems & Space Co. Inc. BEI Sensors & Systems Company, Inc. Control Microsystems U.S. Inc. Crydom, Inc. Custom...

  • Page 227
    ... Solutions (Shanghai) Co., Ltd Schneider Busway (Guangzhou) Ltd Schneider Electric (China) Investment Co. Ltd Schneider Electric IT (China) Co., Ltd Schneider Electric Low Voltage (Tianjin) Co. Ltd Schneider Shanghai Apparatus Parts Manufacturing Co. Ltd Schneider Shanghai Industrial Control...

  • Page 228
    ... Power Technologies Private Ltd Luminous Renewable Energy Solutions Private Ltd Luminous Teleinfra Ltd Schneider Electric India Private Ltd Uniï¬,air India Private Ltd Schneider Electric Infrastructure Limited PT Clipsal Manufacturing Jakarta PT Schneider Electric IT Indonesia PT Schneider Electric...

  • Page 229
    ...Equipment Fuji Electric FA Components & Systems Co., Ltd (sub-group) Rest of the world Fully consolidated Delixi Electric Algerie SARL Schneider Electric Algerie MGE UPS Systems Argentina S.A. Schneider Electric Argentina SA Telvent Argentina SA Clipsal Middle East APC Brasil Ltda CST Latino America...

  • Page 230
    ... THE CONSOLIDATED FINANCIAL STATEMENTS % interest Dec. 31, 2012 Schneider Electric Maroc Schneider Electric Nigeria Ltd Schneider Electric Oman LLC Schneider Electric Pakistan (Private) Limited Schneider Electric Peru SA Cimac Electrical and Automation W.L.L EPS Electrical Power Distribution Board...

  • Page 231
    ...the Management Board. Our role is to express an opinion on these consolidated financial statements based on our audit. I. Opinion on the consolidated financial statements We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and...

  • Page 232
    ... used by the Group to make these estimates. These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report. 230 2012 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 233
    ...the financial statements 232 234 235 4. Statutory Auditors' report on the financial statements 2 46 5. List of securities held at December 31, 2012 6. Subsidiaries and affiliates 247 248 7. The Company's financial results over the last five years 2 50 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 234
    ... FINANCIAL STATEMENTS BALANCE SHEET > 1. Assets (in thousands of euros) Balance sheet Notes 1.1 Gross A. & D. or Prov. Dec. 31, 2012 Net Dec. 31, 2011 Net Dec. 31, 2010 Net Non-current assets: Intangible assets Intangible rights Property, plant and equipment Land Buildings Other Investments...

  • Page 235
    ... liabilities Current liabilities: Accounts payable - trade Accrued taxes and payroll costs Other 135 42,320 8,689 51,145 Total non-current and current liabilities Deferred income Translation gains TOTAL EQUITY AND LIABILITIES The notes form an integral part of these Company financial statements...

  • Page 236
    ... amount of fixed asset disposals Provisions, depreciation and amortization Other Non-recurring expenses Net non-recurring income/(expense) Net income tax benefit NET INCOME The notes form an integral part of these Company financial statements. 234 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 237
    ... indicated) Significant events of the financial year During the financial year, Schneider Electric SA carried out EUR221 million in share capital increases, as follows: On September 7, 2012, the Company sold its investment in AXA held since November 26, 2009 for EUR122 million for a book value...

  • Page 238
    ...investments at December 31, 2012 were as follows: Shares in subsidiaries and affiliates Schneider Electric Industries SAS Cofibel Cofimines Schneider Electric Japan Holding Other (less than EUR20 million) TOTAL Carrying value 4,344,481 74,647 74,256 3,149 3,721 4,500,254 236 2012 REGISTRATION...

  • Page 239
    .... Schneider Electric SA has not reclassified own shares allocated to this line item as of December 31, 2004. However, since then, all purchases made for allocation to stock option plans have been classified as marketable securities. After the sale on September 7, 2012, of its investment in...

  • Page 240
    ...December 31, 2012, the Management Board determined plans n°26, n°27, n°28, n°29 et n°30 as stock-options plans. The reallocation of Schneider Electric SA shares, initially allocated to these plans has not been decided yet by the Management Board. Note 5 Advances to the Group cash pool This...

  • Page 241
    ... 3,658 Increases 1,654 1,654 Decreases (398) (510) (71) (755) (1,763) (3,632) 721 (53) (328) 618 (348) (140) (693) (830) (36) (8,218) Dec. 31, 2012 2,061 502 142 4,116 9,615 19,975 (1,631) 25 1,247 (2,340) 3,571 169 3,827 2,828 1,618 45,723 6 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 239

  • Page 242
    ...2,952,178 new shares were issued on the exercise of stock options, increasing the share capital by EUR12 million. Own shares The total number of own shares held at the reporting date stood at 8,580,080, representing a net amount of EUR249 million. 240 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 243
    ... current and retired senior executives and managers. During 2012, the Company closed the previous plan to new comers and implemented a new plan with progressing vesting rights based on seniority in the Group and in Executive Committee. The financing of this new plan was externalized to AXA France...

  • Page 244
    ... FINANCIAL STATEMENTS Note 9 Bonds Share capital Dec. 31, 2012 Schneider Electric SA 2017 Schneider Electric SA 2014 Schneider Electric SA 2015 Schneider Electric SA 2017 Schneider Electric SA 2017 Schneider Electric SA 2016 Schneider Electric SA 2013 Schneider Electric SA 2013 Schneider Electric...

  • Page 245
    ...,064 Increase 3,163,500 6 3,163,506 Decrease (3,353,500) (2) (3,353,502) Dec. 31, 2012 68 68 Note 12 Maturities of receivables and payables Total Non-current assets Advances to subsidiaries and affiliates Other investment Current assets Accounts receivable - trade Other receivables Marketable...

  • Page 246
    ... net gain on fixed assets disposals is mainly related to the sale of AXA investment for a EUR11 million gain and on the Schneider Electric SA shares allocation to plan n°26 for EUR17 million. On December 31, 2012, the Company booked provisions for impairment on its investment in Cofibel for...

  • Page 247
    ... 11,395 (3,607) Market value (2,093) (3,367) (13,103) (2,760) 2,283 6,785 (12,257) 6 Note 18 Other information 18.1 - Workforce At December 31, 2012, the Company had two employees. 18.2 - Consolidated financial statements Schneider Electric SA is the parent company of the Group and accordingly...

  • Page 248
    ... financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as at December 31, 2012 and of the results of its operations for the year then ended in accordance with French generally accepted accounting principles. II - Justification...

  • Page 249
    ... companies TOTAL Marketable securities 6,585,926 Schneider Electric SA own shares (stock option plans 26, 27, 28, 29 and 30) TOTAL 199,949 199,949 3,774 152,053 4,549,086 Schneider Electric Industries SAS Schneider Electric SA own shares 4,344,481 48,778 4,393,259 6 2012 REGISTRATION DOCUMENT...

  • Page 250
    ... subsidiaries (aggregate) b) Foreign subsidiaries (aggregate) B. Affiliates not included in Section I: (0-50%) a) French companies (aggregate) b) Foreign companies (aggregate) * Including income or loss in prior financial year. 22,964 38,466 4.8 248 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 251
    ... FINANCIAL STATEMENTS SUBSIDIARIES AND AFFILIATES Book value of securities held Gross Net Loans and advances provided by the Company and still outstanding Amount of guarantees given by the Company 2012 Revenues (ex. VAT) 2012 Profit or loss (-) Dividends received by the Company during 2012...

  • Page 252
    ... 1,963 1,170 3,936 2,004 1,374 (1) Dividends on shares held in treasury on the dividend payment date and the associated withholding are credited to retained earnings. (2) Pending approval by the Annual Shareholders' Meeting of April 25, 2013. 250 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 253
    ... presentation of Schneider Electric SA 1. General information on the Company 2. Shareholders' rights and obligations 3. Capital 4. Ownership structure 252 253 2 55 259 5. Employee profit-sharing - stock ownership 260 6. Performance shares and stock option plans 261 7. Disclosure of information...

  • Page 254
    ... information, registration documents, sustainable development reports, notice of the General Assembly and other documents are also available on the corporate website (http:// www.schneider-electric.com). Schneider Electric SA is a French corporation (société anonyme) with a Management Board...

  • Page 255
    ... to call a General Meeting, the Management Board may authorize shareholders to fill out and sign these forms electronically through a secure site set up by the General Meeting organizer using a process that complies with article 1316-4, paragraph 2, line 1 of the French Civil Code, for example by...

  • Page 256
    ...the balance in the form of a dividend. The Annual Shareholders' Meeting may decide to offer shareholders the opportunity to receive the dividend in cash or in the form of new shares of common stock. Dividends not claimed within five years from the date of payment are forfeited and paid to the State...

  • Page 257
    ... date by the Management Board; • 4,872,550 shares under the performance shares or stock grant plans (plans 6 and 9 to 14 ter) relating to shares to be issued and to existing shares or shares to be issued whose type will be determined later; 7 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 255

  • Page 258
    ... to members of the Employee Stock Purchase Plan (ESPP), within a limit of 2% of the issued capital on the date of the implementation of the authorization. The Combined Annual and Extraordinary Shareholders' Meeting of May 3, 2012 authorized the Management Board to issue new shares under programs to...

  • Page 259
    ... 20, 2013 authorized the Management Board to grant bonus shares within the limit of 0.47% of the capital as part of the long-term incentive plan for 2013. (6) On the date of the 2011 Annual Shareholder's Meeting the capital is EUR2,177 million. 7 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 257

  • Page 260
    ... of shares that may be acquired: - 10% of the issued share capital as of the date of the Annual Shareholders' Meeting, representing, on the basis of the issued share capital at February 28, 2013, a total of 55,612,519 Schneider Electric SA shares with a par value of EUR4, • number of shares and...

  • Page 261
    GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA OWNERSHIP STRUCTURE • transactions carried out pursuant to the program authorized by the Annual Shareholders' Meeting of 2011 and renewed by the Annual Shareholders' Meeting of 2012 between January 1, 2012 and February 28, 2013: - number of shares ...

  • Page 262
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA EMPLOYEE PROFIT-SHARING - STOCK OWNERSHIP > 5. (in millions of euros) Employee profit-sharing - stock ownership Profit-sharing plans Most of the Group's French companies have profit-sharing and other profit-based incentive plans. The amounts paid...

  • Page 263
    ... Management Board, and since December 2011 for members of the Executive Committee, allocations of performance shares are fully subject to the achievement of performance conditions. Performance shares and stock option plans As part of its overall staff pay policy, each year Schneider Electric sets...

  • Page 264
    ... plans 5 and 8, which will become available as of February 23, 2014. • a retention target of shares representing three years of base salary for Jean-Pascal Tricoire, and two years of base salary for Emmanuel Babeau. Calculation of the number of shares held is based on Schneider Electric SA shares...

  • Page 265
    GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA PERFORMANCE SHARES AND STOCK OPTION PLANS Past stock option plans The data below are adjusted for the two-for-one share split, effective September 2, 2011. Plan 23 24 Number of beneficiaries at Plan date inception 05/06/2004 05/06/2004 107 402 ...

  • Page 266
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA PERFORMANCE SHARES AND STOCK OPTION PLANS Details on outstanding options (2012) The data below are adjusted for the two-for-one share split, effective September 2, 2011. Plan 23 24 25 26 27 28 29 30 31 32 33 Plan date 05/06/2004 05/06/2004 05/12/...

  • Page 267
    ... 13 bis 13 ter 07/27/2012 1 625 2 years 2 years 50% of the shares/100% and 3 for the Management months Board and Executive Committee - 2012 and 2 years 2 years 2013 (3) operating margin and change in the Planet & Society barometer at the end of 2013 4 years As plan 13 - - - - 625 14 and 12...

  • Page 268
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA PERFORMANCE SHARES AND STOCK OPTION PLANS Situation of corporate officers (1), broken down by plan (at December 31, 2012) The data below are adjusted for the two-for-one share split, effective September 2, 2011. (in italics, shares still subject to ...

  • Page 269
    ...of the ceiling on voting rights when a public tender offer is in process. > 8. Year 2011 Stock market data In France, Schneider Electric is listed on Euronext Paris (sub-fund A), where it is traded on a per-share basis under ISIN code FR0000121972. Schneider Electric SA shares are included on the...

  • Page 270
    ... (Source: Thomson Reuters) MONEP Options on Schneider Electric SA shares have been traded on the MONEP market since December 20, 1996. Ordinary bonds The information is disclosed in note 9 of the Company Financial Statements (pages 242 and 243). 268 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 271
    ... annual report and a short form; a shareholder's guide; a letter to shareholders; general, economic and financial information about the Group (in the form of press releases and presentations); • a corporate website - http://www.schneider-electric.com/finance/fr. 7 2012 REGISTRATION DOCUMENT...

  • Page 272
    7 GENERAL PRESENTATION OF SCHNEIDER ELECTRIC SA INVESTOR RELATIONS 270 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 273
    ...-Chairman Independant Director 2 2 8 3. Supervisory Board comments on the report of the Management Board and Financial Statements pursuant to article L.225-68 of the French Commercial Code 2 89 4. Auditors' special reports 5. Resolutions 290 2 98 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 271

  • Page 274
    ...paid in 2014, the application for exemption must be submitted at the latest on December 31, 2013 on the basis of the 2012 reference taxable income. Dividend payments made by Schneider Electric SA for the last three years were as follows: Ordinary Meeting Approval of the financial statements - first...

  • Page 275
    ...ve years preceding the event, - the Schneider Electric SA and Schneider Electric Industries SAS employee benefit plan, which offers health, incapacity, disability and death cover; • an amendment to the status of Jean-Pascal Tricoire, approved by the Annual Shareholders' Meeting of May 3, 2012...

  • Page 276
    ... purchase price is set at EUR75. This authorization will not be available during public offer periods. Appointment of a Supervisory Board member - sixth resolutionPlease note that the term of Mr. Gérard de La Martinière expires at the end of the Shareholders' Meeting. It is proposed to renew...

  • Page 277
    ..., regular feedback from the Board on its activities; • sets the agenda of the Board of Directors with the Chairman; • chairs the governance committee which, starting from the evaluation of the functioning of the Board and that of the CEO, 8 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 275

  • Page 278
    ..., secretary of the Board, the human resources director and the strategy director. Board of Directors meetings will be a regular and important forum for exchange between members of the Board of Directors and members of the Executive Committee of the Group. e) Limitation of powers To ensure a robust...

  • Page 279
    ...has managed the Electrical Wiring activity in the Business Unit LifeSpace for the EMEAS region. This responsibility was extended to the global level in 2013 in the Partner Activity. Ms. Herbaut has been a member of the Supervisory Board of Schneider Electric SA representing the employee shareholders...

  • Page 280
    ... least equal to the weighted average price for the Company's shares over the three trading days preceding the date on which the share or share equivalent issues were decided by the Management Board. They may be issued with a maximum discount of 5%. 278 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 281
    ... GDP plus three points throughout the cycle, as follows: • 100% of the shares granted to the Company's senior corporate officers and to members of the Executive Committee, in the framework of the Group's annual long-term incentive plans, 8 279 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 282
    ... 2011, the Shareholders' Meeting authorized the Management Board to grant options to corporate officers and employees of Schneider Electric SA and its subsidiaries and affiliates, as defined in article L. 225-180 of the French Commercial Code, within the limit of the number of options granted...

  • Page 283
    ... to employees who are members of the Employee Stock Purchase Plan. At the discretion of the Board of Directors, the issue price will be based on either (i) the opening or closing price of the Company's shares quoted on the trading day the decision of the Management Board setting the issue price is...

  • Page 284
    ... the Board of Directors at any time. 2. The Chairman of the Board of Directors organizes and manages the Board's works, and reports on these works at the annual general shareholders meeting. 3. The Chairman of the Board of Directors sets the agenda and the schedule for Board meetings with assistance...

  • Page 285
    ... and its committees shall be included in the annual report. - Decide on the use of the delegations of authority granted at annual general Shareholders meetings, more particularly for increasing Company capital, redeeming the Company's own 8 283 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 286
    ...principle of attaining balanced representation between men and women on the Board. - That it appoints persons with the expertise required for developing and implementing Group strategy. - That employee shareholders shall continue to be represented on the Board in compliance with the provisions set...

  • Page 287
    ..., shares held via a Company Mutual Fund essentially invested in Company shares can be taken into account. The Schneider Electric shares that they hold shall either be in purely registered (nominatif pur) or in managed registered (administré) form. 6. Members of the Board of Directors shall...

  • Page 288
    ... authorizations submitted for approval at annual general shareholders meetings. The Audit Committee shall examine all financial and accounting questions and questions related to risk-management submitted to it by the Board of Directors. The Audit Committee shall present the results of its duties...

  • Page 289
    ...• The Company's use of national and international corporate governance practices. • The total value of Directors' fees proposed at annual general Shareholders meetings together with their allocation amongst members of the Board of Directors. Article 11 Remunerations, Human Resources and Social...

  • Page 290
    ... by every member of the Board to its deliberations, - the Vice-Chairman is kept informed of major events in Group life in the context of regular contacts and monthly meetings with the Chairman and CEO, - the Vice-Chairman shall report on his action at Shareholders' Annual General Meetings, - the...

  • Page 291
    ...a Board of Directors composed of the current members of the Supervisory Board and Mr. Jean-Pascal Tricoire, to whom it will transfer the functions of President and Chief Executive Officer. This choice is based on his performance as Chairman of the Management Board, his leadership and the high level...

  • Page 292
    ...plan for members of the Management Board and the signing by your company of an outsourcing agreement for the new plan under the terms of the regulated agreements and obligations. This agreement, presented in the second part of our report, was approved by the Shareholders at the Shareholders' Meeting...

  • Page 293
    ... was agreed with normal insurance contract conditions, under which implementation depends on duration of human life. Its purpose is to guarantee the payment of the annuity installments due as payments under the new plan by contracting companies. 8 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 291

  • Page 294
    ... by the Supervisory Board on February 21, 2012 and approved by the Shareholders' Meeting of May 3, 2012) Because of the abandonment of his employment contract with Schneider Electric Industries SAS on May 3, 2009, Mr. Jean-Pascal Tricoire has a redesigned status which provides that Mr. JeanPascal...

  • Page 295
    ...this Shareholders' Meeting. On the basis of its report, your Management Board proposes to authorize the Board of Directors, for a period of 38 months from the date of this Shareholders' Meeting, to allocate bonus shares, existing or to be issued. 8 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 293

  • Page 296
    ... executive corporate officers of the Company may not exceed each year 0.03% of the capital at the date of this Shareholders' Meeting. On the basis of its report, your Management Board proposes to authorize the Board of Directors, for a period of 38 months from the date of this Shareholders' Meeting...

  • Page 297
    ... cancellation of acquired shares, we have prepared this report in order to inform you of our opinion on the causes for and the terms and conditions of the proposed capital reduction. Your Management Board proposes to delegate to the Board of Directors, for a period of 24 months from the date of this...

  • Page 298
    ...the issue price within the annual legal limit of 10% of share capital; • To delegate to the Board of Directors, with the right of subdelegation, for a period of 26 months from the date of this shareholders' meeting, the authority to determine the terms of an issue of ordinary shares or securities...

  • Page 299
    ... of debt and in the case of issues with cancellation of preferential subscription rights. Signed at Paris-La Défense and at Courbevoie, on March 20, 2013 The Statutory Auditors ERNST & YOUNG et Autres Yvon Salaün Mazars David Chaudat 8 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 297

  • Page 300
    ... and commitments undertaken during previous financial years and approved by the Shareholders at a General Meeting thereof relating to such Plans. Share dividend Retained earnings TOTAL EUR1,039,298,191.58 EUR962,808,515.26 EUR2 ,002,106,706.84 298 2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 301
    ... acquired shares may also be cancelled on the terms and conditions set forth in Articles L.225-204 and L.225-205 of the Code of Commerce and as provided in the Twentieth Resolution approved at this General Shareholders' Meeting. The Management Board may adjust the prices set forth above in the event...

  • Page 302
    ...2. Directors are appointed for four-year terms (renewable). However, the first Directors who were members of the Company's Supervisory Board and who are elected at the Annual General Shareholders Meeting of April 25, 2013 will remain on the Board of Directors until the end of their term as members...

  • Page 303
    ... a new member representing employee shareholders. The selection process for the representative of employee shareholders entering his/her first term on the Board of Directors following a change in the administration and management of the Company, as decided at the Extraordinary General Meeting held...

  • Page 304
    ... 25, 2013 without conditions as to time limits; - at least 2/3 of the Directors are present in person or by proxy. Shareholders and third parties shall be given notice of such choice on the terms and conditions set forth in applicable law and regulations. When general management of the Company is...

  • Page 305
    ... as previously-issued shares, subject to the effective date thereof; NINTH RESOLUTION (Further to the (i) 22nd Resolution approved at the Extraordinary General Shareholders' Meeting held on April 21, 2011 (Capital Increase Reserved to Employees Participating in a Company Investment Plan without the...

  • Page 306
    ..., the Board of Directors may use the options made available under Article L.225-134 of the Code of Commerce and, in particular, place all or part of the shares for which no subscriptions are received via a public offering or a private placement in accordance with the terms and conditions set forth...

  • Page 307
    ... authorization may be used to pay for shares contributed in connection with a public exchange offer initiated by the Company, within the limits and on the terms and conditions set forth in Article L.225-148 of the Code of Commerce; • hereby resolve to grant to the Board of Directors the authority...

  • Page 308
    ... carrying the right to acquire shares of the Company or any of its subsidiaries the issue price of which shall be decided by the Board of Directors in accordance with terms and conditions determined at a General Shareholders' Meeting, or (ii) issuing securities providing for the attribution of...

  • Page 309
    ... day preceding the setting of the issue price, possibly reduced, in both cases, by a maximum discount of 5%. • hereby resolve that the aggregate number of shares granted shall not amount to more than 1.8% of the Company's share capital on the date on which this General Shareholders' Meeting...

  • Page 310
    ... months from and after the date of this General Shareholders' Meeting to undertake a capital increase on one or more occasions at its discretion by issuing shares or securities carrying the right to acquire shares of the Company, on the terms and conditions set forth in Article L.225-180 of the Code...

  • Page 311
    ... this Resolution or setting the issue price under and pursuant to the Eighteenth Resolution approved at this General Shareholders' Meeting; the Board of Directors may set the issue price by applying a discount of a maximum of 20% of the trading price of the Company's shares determined in accordance...

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    ... a Director for a term of one year, equal to the time remaining to run in respect of his term of office as a member of the Supervisory Board, i.e., until the close of the General Shareholders' Meeting to be held in 2014 to consider and act on the financial statements for the financial year ending...

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    ... a Director for a term of one year, equal to the time remaining to run in respect of his term of office as a member of the Supervisory Board, i.e., until the close of the General Shareholders' Meeting to be held in 2014 to consider and act on the financial statements for the financial year ending...

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    ... a Director for a term of one year, equal to the time remaining to run in respect of his term of office as a member of the Supervisory Board, i.e., until the close of the General Shareholders' Meeting to be held in 2014 to consider and act on the financial statements for the financial year ending...

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    ...standards. Executed on 21 March 2013 On behalf of the Management Board Jean-Pascal Tricoire Chairman of the Management Board Schneider Electric SA Pursuant to Article 28 of Commission regulation 809/2004/EC, the following information is incorporated by reference in the present registration document...

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    ... FOR THE REGISTRATION DOCUMENT PERSONS RESPONSIBLE FOR THE AUDIT OF THE FINANCIAL STATEMENTS responsible for the audit > Persons of the financial statements Date appointed Statutory Auditors Ernst & Young et Autres Tour First-1, place des Saisons - 92037 Paris-la-Défense-Cedex Represented by Yvon...

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    ... Calendar Investor relations April 25, 2013 May 7, 2013 Shareholders' Annual Meeting (Paris) Dividend payment Financial releases February 21, 2013 2012 Annual Results April 23, 2013 July 31, 2013 Q1 2013 Sales Half Year Results October 25, 2013 Q3 2013 Sales Investors Relations: Anthony Song...

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    Schneider Electric SA Headquarters: 35, rue Joseph Monier - CS 30323 F-92506 Rueil-Malmaison Cedex (France) Tél. : +33 (0) 1 41 29 70 00 Fax : +33 (0) 1 41 29 71 00 www.schneider-electric.com Incorporated in France, governed by a Management Board and Supervisory Board, with issued capital of EUR 2,...