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Financial and
Sustainable
Development
Annual Report
Registration Document 2013
Registration Document
Schneider Electric SA
Schneider Electric is committed to the full
energy equation — from efficiency
solutions to energy access. This equation
drives Schneider Electric innovations,
including these portable, solar-powered
lamps for use in off-grid areas. The
company invests in solutions that make
the goal the international community
agreed on in Copenhagen in 2009
achievable and concrete: limit the global
temperature increase to 2° C by cutting
greenhouse emissions. The 21st
Conference of the Parties on Climate
Change in Paris, 2015, will highlight
further discussions of this
imperative.

Table of contents

  • Page 1
    ... to energy access. This equation drives Schneider Electric innovations, including these portable, solar-powered lamps for use in off-grid areas. The company invests in solutions that make the goal the international community agreed on in Copenhagen in 2009 achievable and concrete: limit the global...

  • Page 2
    ... Overview of the Group's strategy, markets and businesses 1. Schneider Electric strategy and market opportunities 2. Businesses, end-markets and customer channels 3. Ambitious long term financial targets for attractive shareholder returns 4. Company history and development 5. Research & Development...

  • Page 3
    Registration Document 2013 Financial and Sustainable Development Annual Report All of Schneider Electric's regulated information is available on the corporate website at www.schneider-electric.com, Finance section. The Business and Sustainable Development Report is available at www.schneider-...

  • Page 4
    ... share improved by 3% to EUR 3.43 in 2013 and should continue to increase in 2014. Business continued to grow through the supply of an enlarged portfolio of energy management solutions and efficiency technologies to enable our customers to reach new levels of energy, process and safety. Our global...

  • Page 5
    ... as well as in the key end-markets of oil & gas, utilities, mining and electro-intensive industries. It also changes radically our size in Russia, which is now Schneider Electric's fourth largest market employing over 11,000 people in 4 industrial sites and further balancing our global presence. The...

  • Page 6
    ... thanks to a number of investments in the new economies, in services and in the supply chain, deployed under the Connect program. In addition, we continued to focus on Support Function Costs, and generated significant efficiency savings in each of the past two years that balanced our significant...

  • Page 7
    ... balance sheet, with a long term credit rating target of A-, we commit to a capital allocation supporting direct shareholder returns. This will start with the stability of the share capital through neutralization of employee and management share plans. Together with progress in growth and efficiency...

  • Page 8
    ...Executive Vice-President, Global Marketing 13 Philippe Delorme Executive Vice-President, Buildings & Partner 14 Daniel Doimo Executive Vice-President, IT 15 Eric Pilaud * President and CEO, Custom Sensors & Technologies Inc. Executive Vice-President, CST* 6 2013 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 9
    ... Executive Vice-President, Global Human Ressources Statutory auditors Principal auditors Ernst & Young et Autres Mazars Alternate auditors Société Auditex M. Thierry Blanchetier * Independent members according to the definition defined by AFEP-MEDEF corporate governance guidelines. 2013...

  • Page 10
    ... weighed down on the performance, leading to a 0.2 point decline in adjusted EBITA margin at current structure and exchange rate basis. 09 10 11 12 13 (1) Adjusted EBITA: EBITA before restructuring costs and otheroperating income and expenses. 8 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 11
    ...28% Western Europe 25% North America 20% 27% Asia Pacific North America 30% Asia-Pacific (1) Spot headcount, including employees under fixed-term and open-ended contracts, at December 31, 2013. Net income (in millions of euros) 1,888 1,720 1,793 1,813 The Group share in net income reached EUR1...

  • Page 12
    ... 40.89 26.50 8,000 7,000 6,000 5,000 4,000 3,000 CAC 40 index 60 50 40 30 20 2,000 10 0 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 1,000 0 12/31/2013 Share price in euros Schneider Electric share Index CAC 40 10 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 13
    ... as part of the BREEAM In-Use program. BREEAM is the BRE (Building Research Establishment) Environmental Assessment Method. It is the world's foremost environmental assessment method and rating system for buildings, with 200,000 buildings with certified 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 14
    ... two years' work by the board and the Remuneration, Nomination and Human Resources Committee. Meeting on April 25, 2013 for the Annual Shareholders' Meeting that adopted the new governance for the company, the board of directors appointed Jean-Pascal Tricoire as Chairman and Chief executive officer...

  • Page 15
    ... products and solutions (developed specifically to meet the needs of disadvantaged populations), technical expertise and experience in providing access to energy gained since the launch of its BipBop program in 2009. On November 18, 2013, Schneider Electric employees supported by the Group...

  • Page 16
    14 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 17
    ... of the Group's strategy, markets and businesses 1. Schneider Electric strategy and market opportunities Businesses, end-markets and customer channels Ambitious long term financial targets for attractive shareholder returns Company history and development Research & Development Organizational...

  • Page 18
    ... energy efficient solutions adapted to the Schneider Electric is a partner that provides products, solutions and systems for all actors of the energy supply chain to ensure that energy is: l safe: protecting people and assets; l reliable: guaranteeing ultra-secure, ultra-pure uninterrupted power...

  • Page 19
    ... traditional "passive" energy efficiency technologies such as building insulation and energy-efficient equipment, "active" energy efficiency means measuring the energy consumption of a site and optimizing its performance and usage through the use of power and automation technologies. One simple...

  • Page 20
    ...over 80,000 employees in new economies and, during 2013, our new economies-based purchasing and manufacturing costs accounted for approximately 50% of our consolidated costs of sales. We believe the strength of our brands, our competitive local supply chain and the development of local marketing and...

  • Page 21
    ... sales in businesses where we enjoy a number one or two market position: low voltage distribution, medium voltage distribution and grid automation, discrete industrial automation and control, critical power and cooling. We design products and solutions that we believe offer the best levels of safety...

  • Page 22
    ...Partner business: Number 1 Worldwide in Low Voltage and Building Automation Low voltage ("LV") products and solutions address the needs of all end markets from buildings to industries and infrastructure to data centers, including protection functions (notably with circuit breakers), power monitoring...

  • Page 23
    ... and operating costs. Our non-residential customers include end-users, property developers, design firms, systems integrators, panel builders and installers, electrical equipment distributors and building management companies. In the context of single-family homes and apartment buildings, our market...

  • Page 24
    ...performance network, the Group works hand in hand 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 e-Shop, distributors can link Schneider Electric's product...

  • Page 25
    ... BUSINESSES, END-MARKETS AND CUSTOMER CHANNELS Contractors To design solutions tailored to end-users' specific needs, Schneider Electric works closely with contractors, small specialists or generalist electricians, large companies that install equipment and systems. These partners bring value...

  • Page 26
    ... shareholder returns Schneider Electric's opportunities, strategy and business positioning have led its management to define ambitious long-term targets for the company. Over the long term, the key priorities remain focused on profitable growth, cash conversion and capital efficiency. 2 sets of...

  • Page 27
    ... opex efficiency measures, the focus on organic growth after a decade of building and improving the portfolio of businesses will allow for the strengthening of the balance sheet and the stabilization of the number of shares (neutralization of management and employee share plans through share buy...

  • Page 28
    ... Management System, supporting the monitoring and management of large electrical distribution networks. Building a global leader in Critical Power l We identified Critical Power as a key technology for our Reinforcing leadership in low voltage distribution and industrial automation and control...

  • Page 29
    ... of productivity savings and increased operational efficiency by reducing our support functions costs to revenues ratio by 1.5 points. 2012: Connect, our new company program Following our successful strategic transformation, we designed and launched Connect, our new company program for the 2012-2014...

  • Page 30
    ... safety at work, develop the Schneider Way. l Connect for Efficiency: this initiative includes the actions aiming at writing a new chapter in the Group's history of profitable and responsible growth. - Industrial Productivity: raise the bar with tailored supply chain and drive significant industrial...

  • Page 31
    ..., 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 functions...

  • Page 32
    ... smart cities, electric vehicles, and promote open standards and interoperability. Collaboration with customers is systematically used to target products and services at the critical efficiency opportunities, industry by industry. As part of its transition towards solutions, Schneider Electric keeps...

  • Page 33
    ... where most companies have reached the limit of the benefits they could extract out of their enterprise level systems (ERP type applications), the ability of these new systematically connecting products to cloud based analytics, Schneider Electric can provide its customers a range of services aimed...

  • Page 34
    ...-wide Business Intelligence applications. 5.5 Market segment specific programs The major effort started in the last years to develop segment specific solutions that reduce the risk and lead time to implement Schneider Electric solutions, while providing accelerated ROI, remains a key priority...

  • Page 35
    ... financial partner in Europe. FibeRio - USD 3 million investment in February 2013 FibeRio is an American company that develops and sells equipment to produce nanofibers based on a unique breakthrough process called Forcespinning®. It is the only nanofiber production system enabling manufacturers...

  • Page 36
    ...THE GROUP'S STRATEGY, MARKETS AND BUSINESSES RESEARCH & DEVELOPMENT 5.8 A continued focus on R&D performance While innovation is the key priority of Schneider Electric's R&D strategy, the continuous improvement of the efficiency of the development chain, from concept to marketable solution, remains...

  • Page 37
    ... between the business lines, in order to ensure these customer's needs are met as fully as possible. In 2014, the key segments will move under the Global Solutions division to serve our customers with multi-business solutions, services and software. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 35

  • Page 38
    ... ERP landscape per country; l working smarter: Leverage a global IT platform to provide an interface accessible anywhere and anytime by end users; l run IT as a business: Clear governance rules to run IT with efficiency, speed and security. 36 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 39
    ... many cases, the Group anticipates future standards. In 1992, Schneider Electric defined a formal environmental policy, which was revised in 2004 to take account of changes both internally and externally. This policy is designed to improve production processes, promote eco-design, integrate customer...

  • Page 40
    ... chain) will be supported by a strengthened IT convergence plan. This digitization of the supply chain fully meets the priorities of the Group's industrial strategy targeting first customer satisfaction while reducing costs for increasing responsiveness and reducing capital employed. 6.4 Purchasing...

  • Page 41
    .... These procedures include quarterly business reviews in which performance and projections are monitored, in terms of activity, action plans, results to date and forecasts, at all organizational levels of the Group (see the section entitled "Internal control and risk management"). The Group also has...

  • Page 42
    ...used by Group management to monitor operations and assess synergies deriving from acquisitions. Impairment tests are performed at the level of the cash generating unit in 2013 (CGU), i.e the Partner, Infrastructure, Industry, IT, Buildings and CST businesses. Details on asset impairment are provided...

  • Page 43
    ... are currently or were previously members of the Group. This exposure exists even if we are not responsible for the breaches, such as in cases where they were committed in the past by companies or businesses that were not part of the Group at the time. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 44
    ... aimed at enhancing commercial and supply chain efficiency. In view of these projects' complexity, extensive functionalities and their worldwide deployment, the Group has set up dedicated governance and cost control structures to manage these issues and limit the related risks. However, despite...

  • Page 45
    ... 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 flow forecasting using contracts that expire in 12 months or less. Schneider Electric's currency hedging policy is to protect our subsidiaries...

  • Page 46
    ...any of these regulations or standards or their applicability to the Group's business could lead to lower sales or increased operating costs, which would result in lower earnings and profitability. Our products are also subject to multiple quality and safety controls and regulations, and are governed...

  • Page 47
    ..., during the last 12 months have had, a material effect on the financial position or profitability of the company and/or the Group. 1 Insurance policy Schneider Electric's general policy for managing insurable risks is designed to defend the interests of employees and customers and to protect the...

  • Page 48
    ... outside North America, a captive reinsurance company based Erection all risk insurance An erection all risk insurance program was set up on April 1, 2011 in order to cover the development of our services and solutions. This program, which aims to provide cover for damages to work and equipment for...

  • Page 49
    ... performance Schneider Electric's commitment to environmental performance Committed to and on behalf of employees Schneider Electric, an eco-citizen company Methodology and audit of indicators Indicators 48 2. 60 3. 70 4. 80 5. 94 105 113 6. 7. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 50
    ...corporate commitment means dynamic societal and environmental responsibility, based on the Group's employees: l responsible, ethical governance; l sites and products that respect the environment; l employee development; l policies that support and develop the communities in which Schneider Electric...

  • Page 51
    ... in industry and building, sustainable cities, smart grids, sustainable innovation, access to energy, eco-design, sustainable purchases, employee engagement and attraction. The Planet & Society Barometer, over the period 2012-2014, partly covers the issues identified as significant by this review...

  • Page 52
    ...provides the global performance of the Barometer. Departments directly affected by the improvement plans (Human Resources, Environment, Access to Energy, etc.), each represented by a project leader, implement measures to the corporate development objectives; community around sustainable l share...

  • Page 53
    ... the plans. This project leader works directly with local managers in their respective areas. The table above shows Schneider Electric's sustainable development performance in 2013. When the barometer was launched on January 1, 2012 the global rating was 3.00/10. At the end of 2013, the company had...

  • Page 54
    ... proposed by Gimélec (1) a trade union of electrical equipment manufacturers, control systems and related services. Customers Civil Society Buildings, Industry, Infrastructure and Energy Non-Governmental Organizations, Media, etc. Groups & Professional Unions, Consortiums, JV, etc. Contractors...

  • Page 55
    ... 2 Social Technical Human Resources R&D and Activities and Environment Institutional Sustainable Development, Purchasing and Influence According to subject and audience, Foundation and BipBop Program Sustainable Development Civil society All 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 53

  • Page 56
    ...) and IMS-Entreprendre pour la Cité. Lastly, the Group participates in work conducted by CSR Europe, notably in the area of occupational health. Smart cities Access to energy Diversity Social policy Biodiversity Standardization Miscellaneous 54 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 57
    ... willing to attend some events or give some of their time. The first measurement also showed that Employee Engagement Index is 5 points higher for Sustainability Fellows than the average of the company, and recommendation score 10 points higher. 2 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 55

  • Page 58
    ... > Purchasing > Investor Relations BOP > Access to Energy (BipBop) > Human Resources > Foundation > Ethics All Employees (Sustainability Fellows) Business > Implement relative action plans > Support awareness B I P External Stakeholders 56 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 59
    ... 2010, the three members of the Executive Committee in charge of global Human Resources, Global Supply Chain and Strategy have met two to three times a year with the Sustainable Development Director to monitor and steer the Group's action plans in this area. Human Resources organization (see page...

  • Page 60
    ...ww/frwww.schneider-electric.com/isr/ww/fr product eco-design and incorporate Group customers' concerns for environmental protection, while providing product and service solutions. It applies to the Group and is accompanied by global action plans. Social The Group's Human Resources policies cover...

  • Page 61
    ... by the leading 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. Other indices In 2013, Schneider Electric was part of the...

  • Page 62
    ...end customers or through networks of partners, therefore without any control over their final destination and end-of-life processing. To limit the impact of its end-of-life products, Schneider Electric has established a system to recover equipment containing SF6, a powerful greenhouse gas. The Group...

  • Page 63
    ...314 million Cash Variation ¤1,990 million Revenue distribution to our stakeholders Investments * Borrowings, share issues and sale of treasury stock. (1) Including ¤326 million in R&D. (2) Including ¤65 million for long term pension assets. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 61

  • Page 64
    ... meet its environmental targets in 2035. Schneider Electric is one of the first companies to have taken a strong position in support of energy efficiency by developing efficient and competitive offerings for all its large end-markets. Offerings Schneider Electric promotes "active" energy efficiency...

  • Page 65
    ... 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 Offerings Our hands-on, bottom-up approach to urban efficiency combines solutions to all key systems of a city, integration...

  • Page 66
    ... system. Recovery service for equipment containing SF6 Since 2009, Schneider Electric has been looking to create SF6 gas recovery processes for end-of-life products in Europe and Asia. SF6 is a gas used as an insulator and/or breaker in medium voltage devices. SF6 is an extremely powerful...

  • Page 67
    ... a sustainable development process. A key performance indicator was defined in the Planet & Society Barometer for the duration of the 2009-2011 One program: at the end of 2011, more than 50% of Schneider Electric purchases were from suppliers who had signed the 10 Principles of the Global Compact or...

  • Page 68
    ...-electric.com/sites/corporate/en/group/ sustainable-development-and-foundation/social-commitments/ conflict-minerals.page Furthermore, Schneider Electric launched an update in 2013 to the carbon impact analysis of company purchases (as part of the Group carbon footprint). Schneider Electric has used...

  • Page 69
    ... At the end of 2013, more than 50,000 employees participated in the module: 94% rate it as good or excellent. This training is ranked number one in the Top 10 e-learning modules. Once a year Executive Level Executive Committee Board Once a year Corporate Level Upon request (at least once a month...

  • Page 70
    ... procedures and directives that should be readily available to all Group employees. The operation of networks formed on the subject of ethics and responsibility is a priority for 2014. l working with the Principles of Responsibility Advisors to forge 68 2013 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 71
    ... been developed for a number of functions, such as the Purchasing function; l in France, Schneider Electric is involved in defining ethical 2 standards as part of the Business Ethics Commission of Gimélec, a grouping of manufacturers of electrical equipment, control systems and related services...

  • Page 72
    ...Schneider Electric's commitment to environmental performance This chapter deals with the environmental impact of the Group's industrial activities. The products and solutions offered by Schneider Electric which help reduce the environmental impacts of our customers' activities are described in part...

  • Page 73
    ... 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 modules have been developed...

  • Page 74
    ... solutions. efficiency programs was included in the performance incentives of the Executive Committee member in charge of Global Supply Chain. After the success of the company program 2009-2011, Schneider Electric worked on defining its new carbon emission reduction targets for the 2012-2014 period...

  • Page 75
    ... Electric products and solutions; l to over all sites as a result of the Energy Action audits. The Schneider Energy Action program uses Schneider Electric energy service activities to identify opportunities in key areas which are HVAC (Heating, Ventilation, and Air Conditioning), certain equipment...

  • Page 76
    2 SUSTAINABLE DEVELOPMENT SCHNEIDER ELECTRIC'S COMMITMENT TO ENVIRONMENTAL PERFORMANCE The virtualization goal for the end of 2014 is to be greater than 80 percent across the entire region covering 25 sites. l In Asia Pacific, customized power option settings have been l aligning Air/Sea Ratio ...

  • Page 77
    ...-design of their products and services by supplying all the appropriate information; l 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...

  • Page 78
    .... The EoLI program integrates the idea of recycling into the design of products in order to promote recovery of end-of-life materials. Schneider Electric has developed a design rules guide in order to optimize end-of-life costs and the potential recycling rate of its products. These practices...

  • Page 79
    ..., climate change and resource scarcity while addressing environmental issues with its suppliers and its manufacturing processes and logistics, Schneider Electric consolidated its Eco-design strategy in line with its Environment policy in 2012. Schneider Electric, by enforcing its EcoDesign...

  • Page 80
    ... to a new reporting system, the detailed water usage is reported. Here is the breakdown of the Group water use: Action plans ISO 14001 certification of Group sites As soon as the ISO 14001 environmental management standard was published in 1996, Schneider Electric decided to certify its sites. For...

  • Page 81
    .... The Group has developed design tools for managing thermal and electrical constraints so that it can optimize the amount of materials required in production. Each device's Product Environmental Profile (PEP) lists the materials used. To facilitate end-of-life processing, Schneider Electric chooses...

  • Page 82
    ... The Group motivates its employees and promotes involvement by making the most of diversity, supporting professional development, and ensuring safe, healthy working conditions. Human Resources play a key role in supporting the development of Schneider Electric in the changing context of its activity...

  • Page 83
    ... basis in programs, mainly through shared service centers designed to optimize efficiency and costs. Since 2012, the Group has created a more coherent HR Business Partner (HRBP) structure for front offices at a country level. With this step, all HRBPs supporting front office businesses reported to...

  • Page 84
    ... and Communication Training and communication are key components of the Health & Safety program at Schneider Electric. The Group is committed to providing awareness level and task specific training for its employees and contractors to ensure a strong knowledge base to work safely. In 2013, a new...

  • Page 85
    .... By constantly defining the "essence" of Schneider Electric, careers can be enhanced and potential delivered in line with corporate objectives and values. tools to manage motivated employees and provides Human Resources to play a strategic role in building a thriving global organization. It...

  • Page 86
    ...our employer branding activity. Flagship program: Go green in the City Launched in 2011 by Schneider Electric, Go Green in the City is an annual international business case challenge for university business and engineering students around the world to find innovative solutions for energy management...

  • Page 87
    ... media tools to build collaborative learning groups are active. These groups are centered on communities with common topics of interest such as New Hires, Action Learning Project Teams, Corporate leadership programs etc. Digital learning: Some academies such as the Global Supply Chain or the Offer...

  • Page 88
    ... managers on My Learning Link. In 2013, an extensive review of leadership competencies was initiated. This review will define the Schneider Electric Leadership Brand which will be launched in 2014. was set up to provide every professional within the GSC function the opportunity to learn and develop...

  • Page 89
    ... business leader, the human resource business partner and the finance controller. This collaboration enables a high quality translation of the business strategy into the most important workforce priorities and ensures financially sustainable decisions. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 90
    ... developed to support Schneider Electric's diversity policy: l people review process to detect talent and promote equality and diversity at all levels of the company, ensuring that professional development is based on equality. In 2011, the people review 88 2013 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 91
    ... main pillars: programs supporting women's professional development and programs educating leaders. Gender balance In its diversity policy, Schneider Electric places particular emphasis on equal career management for men and women as the best means to develop the values and skills required to meet...

  • Page 92
    ... members (Purchasing Department, Employment Management Department, Occupational Health Department, Communication Department, corporate partners and specialist agencies) with local rollout by "Disability Officers". In France, Schneider Electric recruits through work-study programs for positions...

  • Page 93
    ... cause. Human Resources have defined its roadmap to meet this objective and it plans to be fully compliant by 2015. In addition, immediate action has been taken to establish cover for employees in all countries with no cover or which are classified as high risk by Schneider Electric Global Security...

  • Page 94
    ... system, where local HR teams report the presence of trade unions, works councils and Health and Safety Committees every year. Action plans in major localizations European Works Council (EWC) Schneider Electric senior management and the employee representatives of the European countries set...

  • Page 95
    ...terms on wages and benefits for the next four years (valid until 2014). 2 Social dialogue in the United States In North America, regular communication takes place with both union and non-union employees on key business topics and trends affecting their jobs. Company officials meet on a semi-annual...

  • Page 96
    ... its energy access program BipBop, Schneider Electric wants to play a major role in helping people at the "Base of the Pyramid" to gain access to electricity. (1) Schneider Electric is involved in three specific areas: l Business (Investment): manage an investment fund for business development in...

  • Page 97
    ... spread equally between France and India: l a BipBop solutions Business Development Director; l an Offering Creation Director based in Bangalore (India); For this section, three key performance indicators were set in the Planet & Society Barometer for the duration of the Connect Program (2012-2014...

  • Page 98
    ...development rather than return. The fund is an important partner of SEEA and is particularly active in the microfinance sector. LVD Énergie (formerly Solasyst) is a company of "La Varappe" employment opportunity group based in Aubagne, France. The company specializes in renewable energies solutions...

  • Page 99
    ...activities, foster community services or meet domestic needs. Products and solutions are developed to meet a range of both individual and community needs across the energy chain, from lighting systems and charging equipment to decentralized small power plants and water pumping systems. Action plans...

  • Page 100
    ..., the partnership aims to support farmers, electrify remote villages, promote the production and intelligent management of energy for the "Enchanted Farms" of the association, and train and support local entrepreneurs in the field of energy access. 98 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 101
    ... of equipment and/or skills. Access to energy Since 2009, the Foundation has been supporting the BipBop (Business, Innovation and People at the Base of the Pyramid) program to improve access to energy in new economies through the development of vocational training in energy management trades for...

  • Page 102
    ... global level yet has a close and enduring human dimension. It also boosts the vitality of the people who take part. On each site, the representatives are chosen based on previous voluntary work and are issued with an official letter of appointment (valid for two years), signed by their line manager...

  • Page 103
    ...organization at the start of 2012 resulted from the desire of Schneider Electric and the Foundation to do more to support voluntary work of Schneider Electric current and retired employees in the teaching and professional training programs. The main objective was to provide a new contribution to the...

  • Page 104
    .... In 2013, the North America Foundation provided USD3.5 million of funding to various charitable and community organizations, employee match and employee giving programs, and to programs in which employees worked significant hours of volunteer service; l Pelco by Schneider Electric, the Group entity...

  • Page 105
    ... future industrial restructuring plans. Nine local employment pools were involved from 2011 to 2013. 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 106
    ... to learn more about companies providing jobs for the unemployed and involve them in our purchasing policy. Employment clauses are included on new (or renewal) processes, especially in the purchase of services and the construction of new sites, based on the example of the public markets, in order to...

  • Page 107
    ...Global Human Resources Division and the Group's Global Supply Chain Management. Energy is managed with the Group's own solutions, Resource Advisor and Energy Operation. Data reliability checks are conducted at the time of consolidation (review of variations, inter-sites comparison, etc.). The Safety...

  • Page 108
    ... customer is Global Supply Chain Management. The Energy Management Services teams are the internal provider. In 2013, the program addresses Schneider Electric's 204 most energy intensive sites (based on energy consumption in 2012). By 2014, it will include all sites larger than 5,000 m². In case...

  • Page 109
    ... people review process at Group level. This indicator was audited by Ernst & Young. celebrate and interact beyond simple business; l develop services relating to everyday life for our employees; l test the solutions and products we sell in order to better One day of training per year per employee...

  • Page 110
    ...". It works closely with BipBop training teams (BipBop People), the Schneider Electric Energy Access fund and the Human Resources. It develops partnerships with local NGOs (Planet Emergency, ESF, etc.). This indicator was audited by Ernst & Young. 108 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 111
    ... and measures taken to improve the efficiency of their use Energy consumption and the measures taken to improve energy efficiency and the use of renewable energies Land use 78, 113 79 72-74, 114 79 79, 113-114 79, 113 80 70-71, 78, 113 71, 67, 119 80 42 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 112
    ...-corruption actions taken Measures taken towards consumer health and safety e) Other actions taken towards human rights, within the scope of this third indicator66-68, 93 69 75-77, 16 66-68, 93 65-66 65-66 52-53 99-102 95-99, 102-104 95-99, 102-104 110 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 113
    ..."). Based on this work, and given the limitations mentioned above we confirm the presence in the management report of the required CSR information. (1) ISAE 3000 - Assurance engagements other than audits or reviews of historical information. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 111

  • Page 114
    ... absence of certain information taking into account, if relevant, professional best practices formalised in the industry guide for CSR reporting of the Gimélec (Electrical Equipment, Control-Command and Associated Services Industries Group), dated February 22nd 2013. We consider that the sample...

  • Page 115
    ... environmental performance can be compared from one year to the next: l one part publishing constant scope indicators; l and another part publishing indicators per employee to correct 2 the changes in the company's activities. The sites' workforce includes Schneider Electric employees (fixed-term...

  • Page 116
    ...site. Two sites taken into account in 2012, four sites in 2013. In 2012, Schneider Electric started to make change in methodology to distinguish the water used for consumption and water used for cooling (and returned to the environment). Schneider Electric plans to expand this differential reporting...

  • Page 117
    ... and/or subcontractors on site are indicated by footnotes. The calculation methodology of the absenteeism rate varying from a country to the other, in this domain Schneider Electric communicates at Group level the number of lost days and the number of hours worked (Safety data). The comments on...

  • Page 118
    ...LA1 Annual change in workforce by country (the most significant countries) France United States of America China India Mexico Spain Germany Brazil Australia Indonesia United Kingdom Russia (5) -1% +2% +1% +3% +13% -9% -3% +7% -3% +9% -5% +269% 116 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 119
    ...34 years > 34 years LA1 Breakdown of workforce by function Marketing Sales Services and projects** Support Technical Industrial LA1 LA2 Direct variable costs* (cost of employees under production or business costs) Hires (6) Breakdown by type of contract Permanent contract Fixed-term contract 67...

  • Page 120
    ... LA4-6 Indicators Sites stating they benefit from employee representation (2) Unions Works Council Health and Safety Committee 2013 44% 51.3% 69.1% 265 2012 47.6% 50% 76.7% 315 2011 52.4 56.5% 81% 316 LA7 Number of collective agreements (2) 118 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 121
    ...35.7% 14.3% 36.8% UA UA UA 12.4% 20% LA10 Breakdown of hours by category (2) White collar Blue collar* LA10 Breakdown of hours by training type (2) Health, safety and environment Technical Languages IT Solutions Management and Leadership Others 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 119

  • Page 122
    2 SUSTAINABLE DEVELOPMENT INDICATORS GRI LA10 Indicators Breakdown of costs by training type Health, safety and environment Technical Languages IT Solutions Management and Leadership Others (2) 2013 12.7% 16.6% 17.9% 5.3% 6.5% 22.6% 14.2% 76.1% 23.9% 59.5% 68% 2012 7.9% 27.8% 16% 1.5% 5.1% 24...

  • Page 123
    ... Europe DONATIONS IN PRODUCTS OR SERVICES FOR A PARTNER/PROJECT OF THE FOUNDATION (in euro) Number of employees involved in the Foundation's actions * Of which Square D/Schneider Electric North America 3% 58%* 34% 5% 1,164,753 38,633 5,323,970 1,224,970 3,843,732 255,268 2013 REGISTRATION DOCUMENT...

  • Page 124
    ...Pyramid trained in energy management 3. 300 missions with via the "Schneider Electric Teachers" NGO 2013 695,685 â-² 32,602 â-² 228 â-² 2012 344,441 10,517 66 2011 - The 2011 performance serves as a starting value for the Planet & Society Barometer Connect program between 2012 and 2014. â-² 2013...

  • Page 125
    SUSTAINABLE DEVELOPMENT INDICATORS 2 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 123

  • Page 126
    2 SUSTAINABLE DEVELOPMENT INDICATORS 124 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 127
    ... of Group Senior Management Regulated agreements and obligations Internal control and risk management** Application of the AFEP/MEDEF corporate governance guidelines** 127 136 138 3. 4. 140 144 5. 6. 145 7. 146 158 160 8. 9. 10. 169 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 125

  • Page 128
    ... and provides for the collective operation. This limit on the number of management board members was incompatible with the managerial organization implemented by Jean-Pascal Tricoire, which provides for a managerial line of more than ten managers in order to be closer to customers and employees. In...

  • Page 129
    ... the board may co-opt a new member. This appointment is then subject to ratification by the next Annual Shareholders' Meeting. Throughout their term, pursuant to the internal regulations, each Director must hold at least 1,000 Schneider Electric SA shares. Directors are appointed for four-year terms...

  • Page 130
    ... of the board of directors and Chief executive officer Jean-Pascal Tricoire Vice-chairman Lead Director Henri Lachmann Age: 50 Business address: Schneider Electric 35, rue Joseph-Monier 92500 Rueil-Malmaison, France 179, 155 (1) Schneider Electric SA shares First appointed: 2013/Term ends: 2017...

  • Page 131
    ... shares First appointed: 2011/Term ends: 2015 Directorships and other functions l Currently: Directorships and other functions l Currently: Director of Schneider Electric SA. - Other directorships at a listed company: Member of the supervisory board of Steria; Director of the company NICE-Systems...

  • Page 132
    ... SA shares First appointed: 2011/Term ends: 2016 Age: 67 Business address: Arjil, 84 Avenue d'Iéna 75116 Paris, France 1,000 Schneider Electric SA shares First appointed: 2005/Term ends: 2014 Directorships and other functions l Currently: Directorships and other functions l Currently: Director...

  • Page 133
    ...). She managed the Electrical Wiring business in the LifeSpace Business Unit for the EMEAS region between 2009 and 2012. Since 2013, she has been in charge of the same activity on a global scope, and now is part of the Partner Retail Division. Mrs Herbaut is a member of the supervisory board of the...

  • Page 134
    ... 2015 Age: 69 Business address: Poststrasse n° 4 BP 8808 Pfaeffikon, Switzerland 2,000 Schneider Electric SA shares First appointed: December 12, 2001/ Term ends: 2014 Directorships and other functions l Currently: Directorships and other functions l Currently: Director of Schneider Electric SA...

  • Page 135
    ... ends: 2014 Age: 70 Business address: 18, allée du Cloître 78170 La Celle-Saint-Cloud, France 6,856 Schneider Electric SA shares First appointed: 1998/Term ends: 2015 Directorships and other functions l Currently: Directorships and other functions l Currently: Director of Schneider Electric SA...

  • Page 136
    ... Serge Weinberg* Age: 69 Business address: Corporate Perspectives, LLC 485 Park Avenue New York NY 10022, USA 1,000 Schneider Electric SA shares First appointed: 2007/Term ends: 2014 Directorships and other functions l Currently: Age: 62 Business address: Weinberg Capital Partners 20, rue Quentin...

  • Page 137
    .... Age: 78 Business address: GIE AXA 25, avenue Matignon 75008 Paris, France 528 Schneider Electric SA shares First appointed: 2004/Term ends: 2014 Directorships and other functions l Currently: Non-voting member of Schneider Electric SA. - Other functions at a listed company: Non-voting member of...

  • Page 138
    ...; planning documents and the l approve the report drawn up by the Chairman of the board of directors as provided for in article L. 225-37 of the French Commercial Code; l decide on the use of authorizations granted at Annual Shareholders' Meetings, more particularly for increasing Company...

  • Page 139
    ... and businesses of the Group. Schneider Electric has adopted an Ethics Code for members of the board of directors and employees of the Group designed to prevent insider trading. Under the terms of these provisions, both Directors and employees are barred from trading Company shares and shares in...

  • Page 140
    ... context of its work the succession of its Based on the report by governance committee or the Remuneration, Human Resources and CSR, the board of directors, established by the Annual Shareholders' Meeting of April 25, 2013, has: l appointed Jean-Pascal Tricoire Chairman and CEO, and Henri Chairman...

  • Page 141
    .... At each meeting, the board also tracked business performance. It also examined the company's financial position. The board was informed of the Group's 2013 objectives. On February 20, 2013, the supervisory board reviewed the 2012 financial statements based on the audit committee's report and the...

  • Page 142
    ... of the Group's internal control system and acknowledges the outcome of entities' self-assessment Responsibilities A cornerstone of the Group's Internal Control system, the Audit and Risk Committee is responsible for preparing the work of the 140 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 143
    ..., after consulting the Chairman and CEO. The Committee shall meet at least three times a year. The Committee may seek advice from any person it feels will help it with its work. The Group Human Resources Director is secretary to the Committee. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 141

  • Page 144
    ... board on: l its 2013/2014 annual schedule; l the review of the performance of members of the executive committee; l the review of succession plans for senior corporate officers and members of the executive committee; Meetings in 2013 The remuneration, appointments and human resources committee...

  • Page 145
    ..., organization and operation of the board of The committee also reported to the board on: l the review of the work of the management board and the directors; l the assessment of the performance of its members; l the review of the draft report from the Chairman of the company's application of...

  • Page 146
    ... and CEO. Emmanuel Babeau Age: 46 Business address: Schneider Electric 35, rue Joseph-Monier 92500 Rueil-Malmaison, France 31,208 (1) Schneider Electric SA shares First appointed: 2009/Term ends: 2015 The Chairman and CEO The board of directors was appointed by the Annual Shareholders' Meeting of...

  • Page 147
    ... no restrictions on the disposal of their Company shares aside from those stipulated in stock option and performance share plans (see page 284 and following) for senior corporate officers and a minimum 1,000 shareholding requirement for Directors. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 145

  • Page 148
    ... reviewed by the Remuneration, Human Resources and CSR Committee and presented to the board of directors. The aims of this compensation policy are to: l motivate and retain Group Senior Management in a highly Company program (customer satisfaction rate, solutions development, employee development...

  • Page 149
    ... rights after 15 years' service. The new plan is contingent upon completing a career in the company with the same flexibility introduced by Social Security in 2004. Therefore, conditional assurance of an income is maintained in case of dismissal or termination, producing the same effects as employee...

  • Page 150
    ... OF GROUP SENIOR MANAGEMENT On this basis, and noting that Jean-Pascal Tricoire waived payment of his attendance fees, attendance fees paid in 2012 and 2013 were as follows: Corporate officers who are not directors Mr LACHMANN Attendance fees Other compensation: Chairman of the supervisory board...

  • Page 151
    ... his knowledge of the Group and its strategy, and the travel that he undertook to that end (China, United States, Spain and Grenoble). (4) Ms. Herbaut, who is employed by a Group subsidiary, also receives compensation for such employment. 3 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 149

  • Page 152
    ...Tricoire, Chairman and CEO/Chairman of the management board (1) Year 2013 Fixed part The supervisory board has set the total fixed annual compensation for 2013 for Jean-Pascal Tricoire, Chairman of the management board, at EUR 900,000. On April 25, 2013, the board of directors increased, as of April...

  • Page 153
    ...period. The shares will be allocated by the board of directors on March 31, 2014. Mr Emmanuel BABEAU, Deputy CEO/Member of the management board (1) Year 2013 Fixed part The supervisory board has set the 2013 total fixed annual compensation for Emmanuel Babeau, member of the management board, at EUR...

  • Page 154
    ... Barometer at the end of 2015, l for 15%, a level of achievement of the ROCE criterion for the period 2014/2015. They are also subject to a lock-up period (see page 284). These shares will be allocated by the management board on March 31, 2013. 152 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 155
    ... during the financial year. Income from these performance shares is subject to the attainment of performance conditions. Summary table of the compensation of each executive director Jean-Pascal TRICOIRE Chairman and CEO/Chairman of the management board Fixed compensation Performance incentive...

  • Page 156
    ... at the end of 2014 Performance conditions Benefits granted to executive directors Payments or benefits may be due in the event of termination or change of function YES NO Work contract Executive directors Jean-Pascal TRICOIRE Chairman and CEO/ Chairman of the management board Emmanuel BABEAU...

  • Page 157
    ...Jean-Pascal TRICOIRE Emmanuel BABEAU 32 Plan date 08/21/2009 Number of options exercised 10,000 Exercise price 31.30 Exercise date 10/28/2013 Performance shares made available for each executive director Number of shares made available during Plan date the financial year and for Group employees...

  • Page 158
    ... Executive Vice-presidents of Operations: Global Operations - North America Operations - China Operations; l the Executive Vice-presidents of Business Sectors: Partner - End-User Business Group - Industry - IT - Customer Sensors & Technologies. 156 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 159
    ... Stock Appreciation Rights (SARs), of which 330,757 Long-term incentive plans Performance shares were granted in 2013. It should be noted that Schneider Electric's practice since 2005 was to implement, in are conditional. Transactions in Schneider Electric SA shares by corporate officers during...

  • Page 160
    ... executives under his work contract and coverage under individual Group accident policies. The contingency coverage and supplementary or insurance coverage are nevertheless subject to performance conditions. Mr Babeau is also covered under the Schneider Electric Industries SAS employee benefit plan...

  • Page 161
    ... from the top-hat pension benefits for senior executives provided under his work contract with Schneider Electric Industries SAS. The General 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...

  • Page 162
    ... rests on Senior Management for Global Functions and 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...

  • Page 163
    ... acquired businesses in the Group reporting process; l an intercompany reconciliation procedure manual; l account closing schedules and instructions. The Management Control and Accounting unit monitors the reliability of data from the subsidiaries and conducts monthly reviews of the various units...

  • Page 164
    ... and updating the Key Internal Controls. Global Functions (Human Resources, Purchasing, Manufacturing, Supply Chain, Information Systems, etc.) Schneider Electric centralizes decision-making and risk management at the corporate level through specific bodies such as the Group Acquisitions Committee...

  • Page 165
    ... 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 board of directors", Chapter 3 Section 2). As a result, product or service purchase and sale contracts may only be signed...

  • Page 166
    ... skills in auditing the security of information systems. After each site audit, a report is issued setting out findings and recommendations for the attention of the persons in charge of the units audited. The corrective actions are monitored. 164 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 167
    ... measures taken in 2013 to improve the Group's control system. Global Functions In 2013, the Global Functions continued to set guidelines, issue instructions and provide support. For example: l in 2013, specific actions have been taken with regard to Our Operating units For internal control...

  • Page 168
    ... during audit assignments; l reviewing the audited unit's internal control self-assessment and related action plans. The audit assignments go beyond the Key Internal Controls, and include an in-depth review of processes and their effectiveness. 166 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 169
    ... Group ; cover 90% of the Group's consolidated sales (training managers in internal control practices, defining and implementing remedial action plans if needed). 9.6 Internal control procedures governing the production and processing of consolidated and individual company accounting and financial...

  • Page 170
    ...37 of the French Commercial Code (Code de commerce) for the year ended December 31, 2013. It is the Chairman's responsibility to prepare and submit for the board of directors' approval a report on the internal control and risk management procedures implemented by the company and to provide the other...

  • Page 171
    ... recommendations in its decisions; in other words, its reasoning is based on the number of shares and not on their value. However, the board reserves the possibility to carry out a calculation of consistency in value on a certain length of time. 3 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 169

  • Page 172
    3 CORPORATE GOVERNANCE APPLICATION OF THE AFEP/MEDEF CORPORATE GOVERNANCE GUIDELINES 170 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 173
    4 Business review 1. Trends in Schneider Electric's core markets Review of the consolidated financial statements Review of the parent company financial statements Review of subsidiaries Outlook 172 2. 174 3. 179 179 179 4. 5. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 171

  • Page 174
    .... Most zones have experienced a sequential improvement at year end, including Spain and Italy. In North America, manufacturing companies have benefited from stronger external demand from Europe and China in the course of the year. Companies were also helped by lower energy costs thanks to shale gas...

  • Page 175
    ... China...). In the Oil & Gas market, Schneider Electric is positioned to deliver solutions across all the Oil & Gas value chain, with application focus on energy management and infrastructure optimization. The Invensys acquisition further reinforces Software and Process Automation capabilities, in...

  • Page 176
    ...North America. * Correspond to the dates on which the Group gained control of the acquired companies. (1) Adjusted EBITA is EBITA before restructuring costs and before other operating income and expenses, which includes acquisition, integration and separation costs. 174 2013 REGISTRATION DOCUMENT...

  • Page 177
    ... and development expenses and commercial initiatives for new economies and services, in line with the strategic plan, our support functions costs to sales ratio increased from 23.1% for the year ended December 31, 2012 to 23.3% for the year ended December 31, 2013. 4 Other operating income and...

  • Page 178
    ...million for the year ended December 31, 2012. These costs related to industrial and support functions restructurings. EBITA and Adjusted EBITA We define EBITA as earnings before interest, taxes and amortization of purchase accounting intangibles. EBITA comprises operating profit before amortization...

  • Page 179
    ... the year ended December 31, 2013 totaled EUR77 million, compared to EUR87 million for the year ended December 31, 2012. This represented the share in net income attributable, in large part, to the minority interests of certain Chinese companies. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 177

  • Page 180
    ... 2012, with continuing operational efficiency actions. In all, net cash provided by operating activities increased 3.6% from EUR2,801 million in the year ended December 31, 2012 to EUR2,901 million in the year ended December 31, 2013. Our acquisitions represented a cash outflow, net of cash acquired...

  • Page 181
    ... net profit amounted to EUR10,303 million at December 31, 2013 versus EUR11,229 million at the previous year-end, after taking into account 2013 loss, dividend payments of EUR1,024 million and share issues in an amount of EUR230 million. 4. Review of subsidiaries Schneider Electric Industries SAS...

  • Page 182
    4 BUSINESS REVIEW OUTLOOK 180 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 183
    ... statement of cash flows Consolidated balance sheet Consolidated statement of changes in equity Notes to the consolidated financial statements Statutory auditors' report on the consolidated financial statements 182 184 186 188 5. 189 6. 250 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 181

  • Page 184
    ... accounting 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. 182 2013 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 185
    ...-controlling interests * The 2012 figures were restated for the application of IAS 19 Revised disclosed in note 22 of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial statements. 5 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 183

  • Page 186
    ...-term pension assets Sub-total Total II - Cash flows from/(used in) investing activities Issuance of bonds Repayment 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...

  • Page 187
    ...AT DECEMBER 31 20 5,388 * The 2012 figures were restated for the application of IAS 19 Revised disclosed in note 22 of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial statements. 5 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 185

  • Page 188
    ...368 28 5,528 15,040 36,988 * The 2012 figures were restated for the application of IAS 19 Revised disclosed in note 22 of the consolidated financial statements. The accompanying notes are an integral part of the consolidated financial statements. 186 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 189
    ... disclosed in note 22 of the consolidated financial statements. The Group also decided a reclassification from some trade payables to other current liabilities. The accompanying notes are an integral part of the consolidated financial statements. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 187

  • Page 190
    ...year Capital increase Exercise of stock options Dividends Share-based compensation expense Other Dec. 31, 2012* Profit for the year Other comprehensive income Comprehensive income for the year Capital increase Exercise of stock options Dividends Share-based compensation expense Other** Dec. 31, 2013...

  • Page 191
    ... The Schneider Electric Group's consolidated financial statements for the financial year ended December 31, 2013 were drawn up by the board of directors on February 19, 2014. They will be submitted to shareholders for approval at the Annual General Meeting of May 6, 2014. The Group's main businesses...

  • Page 192
    ...on long term plan assets in 2013 is equal to discount rate at December 31, 2012 closing date. The effect in 2013 is EUR40 million as a reduction of financial income and is also EUR39 million as a reduction of financial income in 2012; the difference between the actual rate and the rate assessed this...

  • Page 193
    ... sheet at historical cost. They are subsequently measured using the cost model, in accordance with IAS 38 - Intangible Assets. 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...

  • Page 194
    ...the IFRS accounts. Development costs for new projects are capitalized if, and only if: l the project is clearly identified and the related costs are 20 to 40 years; 3 to 10 years; 3 to 12 years. The useful life of property, plant and equipment used in operating activities, such as production lines...

  • Page 195
    ... units in 2013, as in 2012, are Partner, Infrastructure, Industry, IT, Buildings and CST CGUs. Net assets were reallocated to the CGUs at the lowest possible level on the basis of the CGU activities to which they belong; the assets belonging to several activities were allocated to each CGU (Power...

  • Page 196
    ...the balance sheet under "Assets held for sale" at the lowest of its amortized cost or net realizable value. Defined benefit plans Defined benefit plans are measured using the projected unit credit method. Expenses recognized in the statement of income are split between operating income (for service...

  • Page 197
    ... sheet date. As part of its commitment to employee share ownership, Schneider Electric gave its employees the opportunity to purchase shares at a discount (note 21.5). plan for the restructuring and has either announced or started to implement the plan before the end of the year. 1.22 - Financial...

  • Page 198
    ...include cash and cash equivalents, comprised of marketable securities, (note 1.20) net of bank overdrafts and facilities. 1.24 - Revenue recognition The Group's revenues primarily include merchandise sales and revenues from services and contracts. 196 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 199
    ... did not require a change in 2013 because the impacts related to changes in fair value recognized as part of the acquisition price were not significant across the Schneider Electric Group balance sheet and income statement. 2.2 - Acquisitions during the year The total amount of acquisitions during...

  • Page 200
    ... businesses are: l Partner (formerly Power), provides low voltage ("LV") products and solutions in all end markets from buildings to industries and infrastructure to data centers, including protection functions (notably with circuit breakers), power monitoring and control, power meters, electrical...

  • Page 201
    ... Other operating income and expenses (of which Costs of acquisition, integration and separation). Revenue related to solutions amounts to 39% of total revenue in 2012. 3.2 - Information by region The geographic regions covered by the Group are: l Western Europe; l North America: United States...

  • Page 202
    ... Pension plan curtailments Others OTHER OPERATING INCOME AND EXPENSES The costs of acquisitions are the costs of acquisition, integration and separation related to major acquisitions in 2012 and 2013. The line "Pension plan curtailments" includes mainly provision releases in the United States, in...

  • Page 203
    ... decrease of margin rate. Note 9 Other financial income and expense Full year 2013 Full year 2012* (21) (84) 12 12 (16) (97) Exchange gains and losses, net Financial component of defined benefit plan costs Dividends received Net gains/(losses) on disposal of assets available for sale Fair value...

  • Page 204
    ... French subsidiaries it controls directly or indirectly through Schneider Electric Industries SAS. 10.1 - Analysis of income tax expense Full year 2013 Current taxes France International Total Deferred taxes France International Total INCOME TAX (EXPENSE)/BENEFIT * Full year 2012* (19) (657) (676...

  • Page 205
    ...THE CONSOLIDATED FINANCIAL STATEMENTS Note 11 Goodwill 11.1 - Main items of goodwill Group goodwill is broken down by business as follows: Dec. 31, 2013, net Partner Industry Buildings IT Infrastructure TOTAL Square D goodwill was allocated to each business in proportion to operating income: 3,717...

  • Page 206
    ...) (149) 4 31 (11) 2 (710) (760) (145) 15 1 (30) (919) (149) (13) 44 16 (1,021) (2,116) (405) 61 38 2 (35) (2,455) (412) 21 92 6 2 (2,746) 204 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 207
    ... Trademarks NET VALUE Dec. 31, 2011 Dec. 31, 2012 Dec. 31, 2013 2,529 2,433 2,246 Software Development projects (R&D) Other Total 211 167 168 809 945 1,053 1,155 974 779 4,704 4,519 4,246 In 2013, change in Intangibles assets mainly related to R&D capitalized development costs for EUR326...

  • Page 208
    ... 21 (4,224) (408) 182 129 9 (32) (4,344) Land NET VALUE Dec. 31, 2012 Dec. 31, 2013 Reclassifications primarily correspond to assets put into use. 185 179 Machinery Buildings and equipment Other Total 948 908 1,047 1,027 442 460 2,622 2,574 206 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 209
    ... 31 2 (41) 23 Dec. 31, 2012 1 45 31 2 (68) 11 Minimum payments Less than one year Between one and five years Five years and more TOTAL COMMITMENTS Discounting effect Discounted minimum payments 4 6 10 5 15 Discounted minimum payments 5 10 15 5 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 207

  • Page 210
    ...shares on March 28, 2013. The impact on the statement of income for December 2013 corresponds to the share in net profit until March 28, 2013. (2) Schneider Electric disposed 10% of the equity interest held in Sunten Electric Equipment on December 27, 2013. 208 2013 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 211
    ... Buildings Energy Efficiency FCPR Aster II (part A and B) (2) Inversion FCPR SESS Others (3) Total unlisted AFS TOTAL AVAILABLE-FOR-SALE FINANCIAL ASSETS (1) Companies purchased in 2012. (2) Included in line FCPR SEV1 in 2012. (3) Gross unit value of less than EUR5 million. Dec. 31, 2012 Fair value...

  • Page 212
    ... work in process INVENTORIES AND WORK IN PROCESS, NET 1,150 273 1,154 368 89 3,034 (204) (8) (152) (10) (5) (379) 1,354 281 1,306 378 94 3,413 Dec. 31, 2012 1,478 323 1,512 67 106 3,486 (200) (8) (169) (13) (7) (396) 1,279 315 1,342 54 100 3,090 210 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 213
    ... at cost Impairment Accounts receivable, net Of which: On time Less than one month past due One to two months past due Two to three months past due Three to four months past due More than four months past due ACCOUNTS RECEIVABLE, NET Accounts receivable result from sales to end-customers, who...

  • Page 214
    ... average cost of capital. The strategy must also ensure the Group has access to different capital markets under the best possible conditions. Factors taken into account for decision-making purposes include objectives expressed in terms of earnings per share, ratings or balance sheet stability...

  • Page 215
    ... a dividend of EUR1.87 per share for fiscal year 2013. At December 31, 2013 Schneider Electric SA had distributable reserves in an amount of EUR7,965 million (versus EUR8,563 million at the previous year-end), not including profit for the year. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 213

  • Page 216
    ... 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, 2013: Stock option plans Date of board meeting 03...

  • Page 217
    ..., 2013 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Stock grants Plan no. 1 2 3 4 5 6 7 8 9 10 11 10 bis 11 bis 12 13 14 13 ter 14 ter 15 16 15 bis 16 bis TOTAL Rules governing the stock grant plans are as follows: l to receive the stock, the grantee must be an employee or Date of board meeting...

  • Page 218
    ... 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 219
    .... Under the classic plan, employees may purchase Schneider Electric shares at a 15% to 20% discount to the price quoted for the shares on the stock market. Employees must then hold their shares for five years, except in certain cases provided for by law. The share-based payment expense recorded in...

  • Page 220
    ... FINANCIAL STATEMENTS As regards the first semester 2013, Schneider Electric offers to its employees the opportunity to purchase shares at a price of EUR50.89 or EUR47.90 per share, depending on the country, as part of its commitment to employee share ownership, on June 5, 2013. This represented...

  • Page 221
    ...a five-year maturity to an individual with an average credit rating. (2) Calculated using a binomial model. (2 (3) A decline in the interest rate for market participants reduces the lock-up cost and increases the expense booked by the issuer. (3 5 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 219

  • Page 222
    ... 3.75% N/A 7.5% 4.6% 4.1% 2.4% N/A 3.6% (1) Corresponding to the 2011 and 2012 rates. (2) Under IAS 19R, the rate applied in the calculation of the interest income (previously expected return on plan assets) is the discount rate of the period. 220 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 223
    ... AAA) corporate bonds. The discount rate currently stands at 3.00% for 10 years duration and 3.30% for 15 years duration in the euro zone, 4.70% in the United States and 4.50% in the United Kingdom. A 0.5 point increase in the discount rate would reduce pension and termination benefit obligations by...

  • Page 224
    ...-employment benefit obligations at January 1, 2012 linked to the recognition of the past services cost unrecognized under IAS 19 (impact of EUR17 million at January 1, 2013, due to the amortizations of the unrecognized past service costs in 2012). 222 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 225
    ...the market value of plan assets and the corresponding assets and provisions recognized in the consolidated financial statements can be analyzed as follows: Dec. 31, 2013 Of which SE USA 1. Reconciliation of balance sheet items Pension assets Provisions for pensions and other post-employment benefit...

  • Page 226
    ...They stem mainly from changes in financial actuarial assumptions (primarily discount rates) used to measure obligations in the United States, the United Kingdom and the euro zone. At December 31, 2013, actuarial gains resulting from changes in financial assumptions on pension and termination benefit...

  • Page 227
    ... benefits for active employees, notably long service awards in France. The healthcare plan amendment to limit the Group's obligations to current and future retirees in the US decreased the benefit obligation of EUR34 million for the full year 2013. 5 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 228
    ... and other post-employment benefits total EUR32 million for the Group compared to EUR11 million at December 31, 2012. Dec. 31, 2013 3. Funded status Projected benefit obligation Deferred items: Unrecognized past service cost PROVISION RECOGNIZED IN BALANCE SHEET * Dec. 31, 2012 IAS 19R (470...

  • Page 229
    .... Provisions for customer risks also integrate the provisions for losses at completion for some of long term contracts, for EUR42 million. identified products. (d) Environmental risks These provisions are primarily funded to cover cleanup costs. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 227

  • Page 230
    ...-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 1,205 147 365 140 717 363 2,937 8,859 Dec. 31, 2012 147 368 120 587 504 1,726 8,132 228 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 231
    ...Dec. 31, 2012 5,993 1,266 204 312 95 14 32 100 116 8,132 24.3 - Bonds Dec. 31, 2013 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...

  • Page 232
    ... CONSOLIDATED FINANCIAL STATEMENTS Schneider Electric SA has issued bonds on different markets: l in the United States, through a private placement offering following SEC 144A rule, for USD800 million worth of bonds issued in September 2012, at a rate of 2.950%, due in September 2022; l as part of...

  • Page 233
    ...26 Financial instruments The Group uses financial instruments to manage its exposure to fluctuations in interest rates, exchange rates and metal prices. 26.1 - Balance sheet exposure Dec. 31, 2013 Breakdown by category Available- Loans and Fair value for-sale account through equity financial assets...

  • Page 234
    ... (2) (6,044) Overall, the financial instruments listed in the balance sheet are accounted at the fair value, except for the bonds for which the amortized cost represents EUR6,645 million compared to EUR6,100 million reflected in the balance sheet. 232 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 235
    ... rate available for the level 1) are directly or indirectly accessible; 3. incoming information non accessible regarding the asset or liability Dec. 31, 2013 Carrying Amount ASSETS Available-for-sale financial assets Marketable securities Derivative instruments LIABILITIES Bonds Other long-term...

  • Page 236
    ...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 flow forecasting using contracts that expire in 12 months or less. Schneider Electric's currency hedging policy is to protect its subsidiaries...

  • Page 237
    ...) (43) (47) (5,025) Net (1,940) 793 498 (432) (353) 166 122 118 (117) (109) (87) 60 38 (20) (17) (16) (15) 44 (1,267) The forward contracts in GBP were mainly subscribed to hedge the purchase of Invensys shares. 5 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 235

  • Page 238
    ... costs, this could have an adverse impact on our financial results. The Group has, however, implemented certain procedures to limit exposure to rising non-ferrous and precious raw material prices. The purchasing departments of the operating units report their purchasing forecasts to the Corporate...

  • Page 239
    ...361 Production Administration TOTAL AVERAGE NUMBER OF EMPLOYEES By region: EMEAS* North America Asia-Pacific * Europe, Middle-East, Africa, South America. 5 The increase in the average number of employees is primarily linked to the 2013 acquisitions. 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 240
    ... Profit-sharing and incentive bonuses Stock options WESOP EMPLOYEE BENEFITS EXPENSE (5,976) (64) (66) (6,106) Full year 2012 (5,924) (59) (57) (6,040) 27.3 - Benefits granted to senior executives In 2013, the Group paid EUR1.25 million in attendance fees to the members of its board of directors...

  • Page 241
    ... solutions integrating power and automation. The transaction will allow the combined entity to have a unique position in industrial and infrastructure end-markets. Invensys reported revenue for continuing operations of £1.8 billion in its Fiscal Year 2013 and has approximately 16,000 employees...

  • Page 242
    ... 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 11% 342 342 4% 1,559 188 1,371 98% 2% 100% 7,736 7,736 100% 100% 18,928 233 19,161 240 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 243
    ... The main companies included in the Schneider Electric Group scope of consolidation are listed below. % Interest Dec. 31, 2013 Europe Fully consolidated Schneider Electric Energy Austria AG Schneider Electric Austria GmbH Schneider Electric Power Drives GmbH Schneider Electric Energy Belgium SA...

  • Page 244
    ...2013 Scanelec SAS Schneider Automation SAS Schneider Electric Energy France SAS 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...

  • Page 245
    ... 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 Netherlands B.V. Schneider Electric Logistic Centre B.V. Schneider Electric Manufacturing The...

  • Page 246
    ... SSR Ltd Newall Measurement Systems Ltd Schneider Electric (UK) Ltd Schneider Electric Buildings UK Ltd Schneider Electric Energy UK Ltd Schneider Electric IT UK Ltd Schneider Electric Ltd Serck Control and Safety Ltd M&C Energy Group Ltd Samos Acquisition Company Ltd Accounted for by proportionate...

  • Page 247
    ... C.V. Adaptive Instruments Corp. Schneider Electric IT America Corp. Schneider Electric IT Corporation APC Holdings Inc. BEI Precisions Systems & Space Co. Inc. BEI Sensors & Systems Company, Inc. Crydom, Inc. Custom Sensors & Technologies, Inc. Juno Lighting LLC Juno Manufacturing Inc. Kavlico Corp...

  • Page 248
    ... Shanghai Apparatus Parts Manufacturing Co. Ltd Schneider Shanghai Industrial Control Co. Ltd Schneider Shanghai Low Voltage Term. Apparatus Co. Ltd Schneider Shanghai Power Distribution Electric Apparatus Co. Ltd Schneider Wingoal (Tianjin) Electric Equipment Co. Ltd Telvent - BBS High & New Tech...

  • Page 249
    ... Systems Private Ltd CST Sensors India Private Limited Luminous Power Technologies Private Ltd Luminous Renewable Energy Solutions Private Ltd Luminous Teleinfra Ltd Schneider Electric India Private Ltd Uniflair India Private Ltd Schneider Electric Infrastructure Limited PT Clipsal Manufacturing...

  • Page 250
    ... FINANCIAL STATEMENTS % Interest Dec. 31, 2013 Accounted for by equity method Sunten Electric Equipment Fuji Electric FA Components & Systems Co., Ltd (sub-group) Rest of the world Fully consolidated Himel Algerie Schneider Electric Algerie Schneider Electric Argentina SA Telvent Argentina SA APC...

  • Page 251
    ...CONSOLIDATED FINANCIAL STATEMENTS % Interest Dec. 31, 2013 Cimac Electrical and Control Systems LLC Cimac FZCO Cimac LLC Clipsal Middle East FZC Clipsal Middle East FZCO CLS Systems FZCO Delixi Electric FZE Schneider Electric DC MEA FZCO Schneider Electric FZE Schneider Electric Venezuela SA United...

  • Page 252
    ...and professional auditing standards applicable in France. To the Shareholders, In compliance with the assignment entrusted to us by your Annual Shareholders' Meeting, we hereby report to you, for the year ended December 31, 2013, on: l the audit of the accompanying consolidated financial statements...

  • Page 253
    ...December 31, 2013, for which provisions have been recorded based on an estimate of the costs to be incurred. We also reviewed the data and assumptions 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...

  • Page 254
    5 CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2013 6. STATUTORY AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 252 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 255
    ... the financial statements Statutory auditors' report on the financial statements List of securities held at December 31, 2013 Subsidiaries and affiliates The company's financial results over the last five years 254 256 257 268 5. 269 270 6. 7. 272 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 256
    6 COMPANY FINANCIAL STATEMENTS BALANCE SHEET 1. Balance sheet ASSETS (in thousands of euros) Notes 1.1 Gross A. & D. or Prov. Dec. 31, 2013 Net Dec. 31, 2012 Net Non-current assets: Intangible assets Intangible rights Property, plant and equipment Land Buildings Other Investments Shares in ...

  • Page 257
    ... AND LIABILITIES The notes form an integral part of these Company financial statements. 7.3 973,551 (132,771) 2 10,302,505 8 45 45 9 10 11 6,260,659 317,014 13 1,205,375 7,783,061 441 54,571 18,225 73,237 7,856,298 12 829 112,846 18,272,523 6 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 255

  • Page 258
    ... expenses Net non-recurring income/(expense) Net income tax benefit NET INCOME The notes form an integral part of these Company financial statements. 14 (151,571) 3,089 64,058 67,147 6,486 72,420 371 79,276 15 16 (12,130) 44,143 (132,771) 256 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 259
    ...) Significant events of the financial year During the financial year, Schneider Electric SA carried out EUR235 million in share capital increases, as follows: l the employee share issue carried out on July 11, 2013 as part of the worldwide EUR134 million; Employee Stock Purchase Plan, for...

  • Page 260
    ...The main investments at December 31, 2013 were as follows: Shares in subsidiaries and affiliates Schneider Electric Industries SAS Cofimines Schneider Electric Japan Holding Other (less than EUR5 million) TOTAL Carrying value 4,344,481 139,064 3,149 1,038 4,487,732 258 2013 REGISTRATION DOCUMENT...

  • Page 261
    ...) 48,832 Increases - Decreases - Dec. 31, 2013 48,778 131 (77) 48,832 Other investment securities primarily include Schneider Electric SA shares acquired for allocation on the exercise of certain stock options. Schneider Electric SA has not reclassified own shares allocated to this line item as...

  • Page 262
    ... 26, 27, 28, 29 and 30 has been determined as stock-options plans. The reallocation of Schneider Electric SA shares, initially allocated to these plans has not been decided yet by the board of directors. Note 5 Advances to the Group cash pool This item consists of interest-bearing advances by...

  • Page 263
    ...792 (25) (338) 642 (375) (136) (692) (161) (141) (54) (7,990) Dec. 31, 2013 1,647 23 72 3,315 7,746 16,106 (839) 909 (1,698) 3,196 33 3,135 2,667 1,477 1,452 39,239 6 The increases in this line item were due to the 2013 bond issues (see note 9). 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 261

  • Page 264
    .... Changes in share capital During the financial year, 2,752,071 shares were issued as part of the worldwide Employee Stock Purchase Plan amounting to the EUR11 million in share capital while 3,788,938 new shares were issued on the exercise of stock options, increasing the share capital by EUR15...

  • Page 265
    ... its financial position or income. 8.2 - Pension accruals The company has various obligations towards its 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...

  • Page 266
    ... rate. Schneider Electric SA has issued bonds on different markets: l in the Unites States, through a private placement offering following SEC 144A rule, for USD800 million worth of bonds issued in September 2012, at a rate of 2.950%, due in September 2022; l as part of its Euro Medium Term...

  • Page 267
    ... Current assets Accounts receivable - trade Other receivables Marketable securities Prepaid expenses Debt Bonds Bank loans Other borrowings Amounts payable to subsidiaries and affiliates Interest-bearing liabilities Accounts payable - trade Accrued taxes and payroll costs Other Deferred income...

  • Page 268
    ... of plan 26. (3,397) (8,362) (371) (12,130) Dec. 31, 2012 (7,247) (69,107) 6,244 (70,109) The company also booked a EUR63 million reversal of depreciation of Cofibel investment and a EUR72 million increase in depreciation of Cofimines investment. 266 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 269
    ... financial income July 1, 2014 May 21, 2015 (1,530) (5,698) (7,228) (in thousands of euros) Market value (745) (7,443) (8,189) Note 18 Other information 18.1 - Workforce At December 31, 2013, the company had two employees. 18.3 - Subsequent events On January 20, 2014, Schneider Electric SA...

  • Page 270
    ... attention the following matters: As part of our assessment of the accounting principles and methods used by your company, we verified the appropriateness of the principles and methods used to value shares in subsidiaries and affiliates, as well 268 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 271
    ... Marketable securities 5,946,975 TOTAL Schneider Electric SA own shares (stock option plans 26, 27, 28, 29 and 30) 181,011 181,011 1,092 142,213 4,536,564 Schneider Electric Industries SAS Schneider Electric SA own shares 4,344,481 48,778 4,393,259 6 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 272
    ...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. 896,313 6,455,617 100,00 96,884 13,488 99,82 18,028 27,667 4,8 270 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 273
    COMPANY FINANCIAL STATEMENTS SUBSIDIARIES AND AFFILIATES Book value of securities held Gross Loans and advances provided by the company and still Net outstanding Amount of guarantees given by the company 2013 Revenues (ex. VAT) 2013 Profit or loss (-) Dividends received by the company during ...

  • Page 274
    ...) 459 1,963 1,170 3,936 2,004 (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 May 6, 2014. 272 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 275
    ... Employee shareholding Performance shares and stock option plans Disclosure of information required in accordance with article L. 225-100-3 of the French Commercial Code** Stock market data Investor relations 274 275 277 281 282 6. 283 7. 289 289 291 8. 9. 2013 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 276
    ..., acquiring or otherwise, all activities related to: l electrical equipment manufacturing, electrical distribution and l management of all types of data centers, networks, equipment and other infrastructure; (ii) the acquisition, purchase, sale and use of any intellectual and/or industrial property...

  • Page 277
    ... and proxies held by the shareholder concerned. If the shareholder holds or represents shares carrying double voting rights, the limit may be raised to 15%, provided that the 10% ceiling is exceeded solely by virtue of the double voting rights. 7 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 275

  • Page 278
    ... individual or legal entity that owns or controls (as these terms are defined in article L. 233-9 of the French Commercial Code) directly or indirectly, shares or voting rights representing at least 1% of the total number of shares or voting rights outstanding, or a multiple thereof, is required to...

  • Page 279
    ..., stock grants, performance shares and warrants would be 1.6% of share capital at December 31, 2013. plans (plans 11 to 16bis) relating to shares to be issued and to existing shares or shares to be issued whose type will be determined later; 7 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 277

  • Page 280
    ... authorizations for the issuance of new shares under programs to promote stock ownership among employees participating in the company saving plan (Plan D'epargne d'Entreprise) or employees of non-French companies of the Group in 5 and 6) and above. 278 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 281
    ... performance shares at the end of March 2014 within the limit of 2.9 million shares (0.52% of the capital) as part of the long-term incentive plan for 2014. (7) On the date of the 2013 Annual Shareholder's Meeting, the capital is EUR2,226 million. 7 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 282
    ... meeting 2012 and renewed by the general meeting 2013 between January 1, 2013 and February 28, 2014: - transactions carried out by the company: number of shares acquired: 0, number of shares transferred since the beginning of the program: 638,951. 280 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 283
    ... Group companies, listed above, hold, either directly or indirectly, more than 5 % of Schneider Electric's capital or voting rights. Changes in holdings (for stake equal to or greater than 5 %) Date February 28, 2014 December 19, 2013 November 7, 2013 July 23, 2013 Company Capital Group Companies...

  • Page 284
    ... shares. At December 31, 2013, Group employees held a total of 23.5 million Schneider Electric SA shares through the corporate mutual funds (FCPE) or directly, representing 4.19% of the capital and 6.52% of the voting rights, taking into account double voting rights. Voting rights attached to shares...

  • Page 285
    ... to the achievement of performance conditions. Grant policy As part of its overall staff pay policy, each year Schneider Electric sets up a long-term incentive plan. This plan is based on an annual allocation of performance shares. Stock options, until December 2009, and, for employees who are US...

  • Page 286
    ... to executive directors The supervisory board has set: l a retention target of shares representing three years of base salary for Mr Jean-Pascal Tricoire, and two years of base salary for Mr Emmanuel Babeau. Calculation of the number of shares held is based on Schneider Electric SA shares and...

  • Page 287
    ...,400 (1) Number of options remaining to be exercised after deduction of all cancellations and exercises since plan implementation. (2) Excluding restructuring costs. (3) On the basis of a pre-defined and fixed list of 11 competitor companies. 7 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 285

  • Page 288
    ... to performance conditions) 28 30 31 33 33 (1) In the role as executive director at the date of attribution. Jean-Pascal Tricoire Jean-Pascal Tricoire Jean-Pascal Tricoire Jean-Pascal Tricoire Emmanuel Babeau 161,574 63,000 72,000 100,000 30,000 286 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 289
    ... 2013 As plan 13 As plan 13 As plan 13 As plan 13 50% of the shares/100% for the management board and Executive Committee - 2013 and 2014 (3) operating margin and change in the Planet & Society barometer at the end of 2014 As plan 15 As plan 15 As plan 15 100 9 21/12/2009 1,184 780,190 4 years...

  • Page 290
    ... price/ Average weighted price Plans 263,980 EUR 35.99 26-27-28-29-30-31-33 Shares awarded to the ten most highly paid employees (non-executive directors) Number 2013 Performance Shares grant (allocation on March 28, 2013) 188,000 Plan 16 288 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 291
    ... of the ceiling on voting rights when a public tender offer is in process. 8. 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 CAC...

  • Page 292
    ... Schneider Electric share Index CAC 40 MONEP Options on Schneider Electric SA shares have been on the MONEP market sinve December 20, 1996. Ordinary bonds The information is disclosed in note 9 of the company financial statements (pages 264 and 265). 290 2013 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 293
    ... meetings are also an opportunity to discover the Group's businesses, particularly with educational visits. In 2013, visits focused on the energy efficiency and office space optimization solutions as well as on security desk solutions has been implemented. Shareholder documents The company makes...

  • Page 294
    7 INFORMATION ON THE COMPANY AND ITS CAPITAL INVESTOR RELATIONS 292 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 295
    ...report of the board : charter of the Vice-chairman - lead independent director Auditors' special reports Resolutions Appendix to the nineteenth resolution : Draft of the articles of association of Schneider Electric SE, European Company 294 2. 304 305 311 3. 4. 5. 318 2013 REGISTRATION DOCUMENT...

  • Page 296
    ... of EUR1.87 per EUR4 par value share. This dividend represents a distribution rate of 56,7% of the Group's net profit. The dividend will be paid on May 19, 2014 on 579,167,716 shares with dividend rights on January 1, 2013 that made up the capital on January 17, 2014. No dividend will be paid on...

  • Page 297
    ..., the board decided to define more restrictive conditions, given below, for the commitments linked to a departure from the Group. The board therefore decided that Mr Tricoire: 1°) who benefits from the Schneider Electric SA and Schneider Electric Industries SAS employee benefit plan for health...

  • Page 298
    ... same conditions: 1°) the Group employee benefit plan for French executives for health, incapacity, invalidity and death and cover under Group individual accident policies; 2°) compensation in case of involuntary departure; 3°) the retention of his stock options or performance shares in case of...

  • Page 299
    ..., the board set the variable part at 66% of fixed part. plan, to Mr Tricoire in his capacity as Chairman of the management board of Schneider Electric SA. l The 35,000 performance shares were allocated, in the context of the international plan, to Mr Tricoire in his capacity as executive director of...

  • Page 300
    ... benefits top-hat pension plan (article 39) of the Group's senior management subject to the French social security system. See chap. 3-7 of 2013 reference document. Board decisions of 2009, 2012 and June 18 & 19, 2013 Dates of submission to the General Meeting: 2009, 2012 and May 6, 2014 Number...

  • Page 301
    ... holds Schneider Electric shares with a value representing two years of basic fixed compensation. The percentage of capital represented by Mr Babeau's allocation is 0.004%. Annual General Meeting authorization date: April 21, 2011 Resolution number: 21st Date of the management board's allocation...

  • Page 302
    .... 3-7 of the reference document. Board decisions: 2009, 2012 and June 18 & 19, 2013 Dates of submission to the General Meeting: 2010, 2012 and May 6, 2014 Number of resolution in the context of the regulated agreements procedure: 4 Officer and Member of the Group Executive Council of Fiat Chrysler...

  • Page 303
    ... raised Schneider Electric to the rank of a fully global group. In light of the foregoing, Europe, which has become an integrated economic area, has increasingly become a major market for the company and a significant base for its technological innovation and human capital. Your board of directors...

  • Page 304
    ...Electric SA to Schneider Electric SE. Implications for employees The conversion has no impact on the european company's employees, whose employment contracts and all corporate benefits remain unchanged. of the european company provided for in articles L. 2353-1 and following the French Labor Code...

  • Page 305
    ... 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 on which the decision of the management board or its delegate setting the issue price...

  • Page 306
    ... meet the Group's leading managers and make site visits; - the Vice-chairman carries out annual and biennial assessments of the board of directors and, in this context, assess the real contribution made by every member of the board to its deliberations; - the Vice-chairman shall report on his action...

  • Page 307
    ... pension plan applicable to employees of Schneider Electric SA and Schneider Electric Industries SAS, covering sickness, incapacity, disability and death. He also benefits from the supplementary health, incapacity, disability and death cover available to the Group's French senior executives as...

  • Page 308
    ...'s Employment contract or Management agreement subsequent to; - dismissal, non-renewal or resignation as Deputy Chief executive officer in the six months following a material change in Schneider Electric's shareholder structure that could change the membership of the board of directors of Schneider...

  • Page 309
    ...3, 2012 and April 25, 2013. The supervisory board, in its meetings of April 23, 2009 and December 17, 2009, authorised, as described in the second part of our report, Mr. Emmanuel BABEAU to benefit from the defined top-hat pension plan (article 83) designed for company directors, executive employees...

  • Page 310
    ... during work activities. l outsourcing of the new article 39 plan: this outsourcing is mandatory. To this effect, an insurance contract for defined benefit company pensions (article L. 137-11 of the Social security code) was signed on February 23, 2012 by Schneider Electric SA and Schneider Electric...

  • Page 311
    ...The supervisory board, at its meetings held on April 23 and December 17, 2009, authorised Mr. Emmanuel BABEAU to benefit from the top-hat pension plan with defined contributions (article 83) as he is entitled under his service contract entered into with Schneider Electric Industries SAS (in addition...

  • Page 312
    ... hereby report on the proposal to issue ordinary shares or securities giving access to the share capital of the company, with cancellation of preferential subscription rights reserved for: (i) employees and corporate officers of the Schneider Electric Group related to the company under the terms of...

  • Page 313
    ...defined benefits of the top-hat pension scheme for executive corporate officers and their non-compete obligations, and duly notes the information relating to the agreements and commitments made in prior years and approved by the Shareholders' Meeting. 8 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 314
    ... in respect of the 2013 financial year to Mr Jean-Pascal Tricoire as presented in the board of directors' report to the General Meeting: "elements of the compensation due or awarded in respect of the 2013 financial year to Mr Jean-Pascal Tricoire, Chief executive officer, subject to the opinion...

  • Page 315
    ... close of the Annual General Meeting held in 2015 to review the financial statements for the financial year ending December 31, 2014. SIXTEENTH RESOLUTION (Authority granted to the board of directors to buy back Company shares - maximum purchase price per share EUR80) The General Meeting, acting in...

  • Page 316
    ... duration of the ongoing financial year will not be modified owing to the adoption of the European Company statute and the financial statements for said financial year will be prepared, presented and audited under the conditions set forth in the 314 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 317
    ... 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 318
    ... issued pursuant to this Resolution and to reserve the right to subscribe therefor to one and/or another class of beneficiaries with the following characteristics: (i) Employees and officers of companies of the Schneider Electric Group affiliated with the company on the terms and conditions set...

  • Page 319
    ... Ordinary meeting TWENTY-SECOND RESOLUTION (Powers for formalities) The General Meeting confers full powers upon the bearer of a copy or excerpts of the minutes stating these resolutions to accomplish all legal and administrative formalities. 8 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 317

  • Page 320
    ... manufacturing, electrical distribution and secured power supply, - building control, automation and safety, - industrial control and automation, including software, - management of all types of data centers, networks, equipment and other infrastructure; (ii) the acquisition, purchase, sale and use...

  • Page 321
    ... virtue of agreements or financial instruments referred to in point b) of the third paragraph of article L. 233-7 of the French Commercial Code Article 10 All sums remaining due on shares payable in cash are called up by the board of directors. 8 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 319

  • Page 322
    ... forced execution measures laid down by law. Part III. Management of the company Article 11: Composition of the board of directors a) The board of directors has at least three and a maximum of eighteen members. In the event of a merger, this number may be increased within the limits and conditions...

  • Page 323
    ...on the board of directors must be employed under an employment contract that qualifies them to sit for a four-year term and must hold at least 25 Company shares or an equivalent number of units in a mutual fund invested in the company's shares; d) The conditions and procedures for the designation of...

  • Page 324
    ... 6. The board of directors shall adopt its own rules of procedure governing its operation. except for those matters which, by law, can only be decided on by the shareholders in General Shareholders Meetings or by the board of directors. The Chief executive officer shall represent the company in its...

  • Page 325
    ..., the limit set may be exceeded taking into consideration only the resulting additional voting rights, without the total voting rights thereby held exceeding 15% of the total number of the voting rights conferred by the shares in the company. 8 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 323

  • Page 326
    ... the above limitations. These limitations shall not, however, apply to the chairperson of the Meeting using votes by virtue of such proxies. Part VI. Company accounts and allocation of profits Article 21 The company's accounting period lasts one year starting on 1 January and ending on 31 December...

  • Page 327
    ... this address. Where no address for service is given, summonses and services shall be considered valid if served at the Prosecutor's Office at the Tribunal de Grande Instance (High Court) in the place where the company has its registered office. 8 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 325

  • Page 328
    8 SHAREHOLDERS' MEETING STATUTS 326 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 329
    ... 22, 2012, the annual company financial statements and corresponding Auditors' Reports provided in Chapter 6 of the registration document for the ended December 31, 2012, registered with Autorité des Marchés Financiers (AMF) under number D13-0196 on March 21, 2013, the business review provided in...

  • Page 330
    ... Courbevoie Represented by David Chaudat Alternate Auditors Auditex Thierry Blanchetier Ernst & Young et Autres and Mazars are members of the Auditor's Regional Company of Versailles. Appointment expires 1992 2016 2004 2010 2010 2016 2016 2016 328 2013 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 331
    ... 2014 2013 Annual Results Q1 2014 Sales Half Year Results Q3 2014 Sales Investors Relations: Anthony Song Tél. +33 (0)1 41 39 60 84 Fax +33 (0)1 41 29 71 42 Press Contact: Véronique Roquet Montegon Tél. +33 (0)1 41 29 70 76 Fax +33 (0)1 41 29 88 14 www.schneider-electric.com This document was...

  • Page 332
    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 Board of Directors with issued capital of EUR 2,316,847,784 ...