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sdreport.schneider-electric.com
Registration Document 2015
Financial and Sustainable Development
Annual Report
Access to energy in Nigeria
and everywhere: Everyone
deserves a seat at the table.

Table of contents

  • Page 1
    Access to energy in Nigeria and everywhere: Everyone deserves a seat at the table. Financial and Sustainable Development Annual Report Registration Document 2015 sdreport.schneider-electric.com

  • Page 2
    ... 225-100-3 of the French Commercial Code (Code de commerce)** 287 8. Stock market data 287 9. Investor relations 289 150 151 165 167 175 8 Annual Shareholders' Meeting AFR 291 292 4 Business review 1. 2. 3. 4. 5. AFR 177 178 180 186 186 186 1. Report of the board of directors to the Combined...

  • Page 3
    ...the corporate website at www.schneider-electric.com, Finance section. The Business and Sustainable Development Report is available at www.schneider-electric.com, Sustainable Development and Foundation section. Annual Financial and Sustainable Development Report 2015 This Registration Document was...

  • Page 4
    ... Global Services, the IT service of Telvent and Telvent Transportation, to focus on our core businesses and optimize our portfolio. Update: Schneider is On-Customers at the center 2015 marked the first year of our Schneider Is On program. We are glad to see a solid start with strong execution...

  • Page 5
    ..., I am also proud that Schneider Electric meets the Advanced level requirements of the United Nations Global Compact. digitization, more innovation, and more simplicity on a global scale, with a local touch. We also work actively on a better return on the capital we employ, as we focus on margin...

  • Page 6
    ... growth opportunities in products, services and software. We should also benefit from our cost savings actions highlighted in our company program: in addition to EUR1 billion productivity gain over 2015-2017, we upgrade our gross support function cost savings target to EUR600 million over 3 years...

  • Page 7
    ... Executive Vice-President, Technology 4 Olivier Blum Executive Vice-President, Global Human Resources 5 Annette Clayton Executive Vice-President, Global Supply Chain 6 Hervé Coureil Executive Vice-President, Information Systems 7 Daniel Doimo Executive Vice-President, Global Solutions Businesses...

  • Page 8
    ...â- Chairman of the committee (1) Secretary to the Board of directors (2) Senior VP Internal Audit (3) Chief Human Resources Officer (4) Chief Global Strategy Officer Statutory auditors Principal auditors Ernst & Young and others Mazars 6 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC XA VIE...

  • Page 9
    ...global leadership and delivered solid results, Infrastructure turned the corner improving its profitability, and Industry showed great resilience despite a challenging market. Services and Software continued to grow. From a geographic standpoint, Western Europe resumed growth, new economies outside...

  • Page 10
    ... charges. All elements net of tax. (5) Cash provided by operating activities less change in working capital less net capital expenditure. (6) Cash conversion based on net income adjusted for business disposals impact and Pelco impairment. 8 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 11
    ... at the Annual Meeting of April 25, 2016, for payment on May 9, 2016. To the best knowledge of the company Caisse des Dépôts et Consignations (CDC) holds ~6% of voting rights Of which 3.8% held through the WESOP (World Employee Share Ownership Plan) 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 9

  • Page 12
    ... category for the state-of-the-art customized prefabricated data center scalable installed at Sagrada Familia, Barcelona, Spain. The Schneider Electric integrated prefabricated data center solution enables site operators to manage the church's security and effectively control the millions of...

  • Page 13
    ... Investor Statement on Climate Change, was jointly managed by Crédit Agricole CIB and Natixis. The objective of this bond issue is to finance Schneider Electric's R&D programs dedicated to technologies enabling the Group's customers to achieve tangible CO2 savings. This is the first corporate...

  • Page 14
    ... business standards and practices, ensuring long-term that create value and long-term relationships with key stakeholders including customers, employees, suppliers, regulators and investors. On November 5, Schneider Electric is recognized as a global leader for the 5th year in a row its actions...

  • Page 15
    ... long-term financial targets for attractive shareholder returns 24 4. Company history and development 4.1 History 4.2 From Power & Control to Energy Management 4.3 Recent external growth 4.4 Change management through company programs 25 25 25 26 27 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 13

  • Page 16
    ..., MARKETS AND BUSINESSES GROUP STRATEGY AND MARKET OPPORTUNITIES > 1. Group strategy and market opportunities Schneider Electric, the global specialist in energy management and automation with operations in over 100 countries, brings together its expertise and solutions to make sure that Life is...

  • Page 17
    ... few years, and analysts expect the renewable sector to account for up to 50% of new capacity additions by 2030. Schneider Electric is supporting the development of new battery storage technologies and in 2015 announced EcoBlade, a smart and scalable energy storage solution for all customer needs...

  • Page 18
    .... Supporting the digital transformation of customers and partners The convergence of operational technology (OT) and information technology (IT) creates many new opportunities for customers. It makes their life easier, increases productivity, creates new business models that provides new value...

  • Page 19
    ...338 employees in new economies and, during 2015, our new economies-based purchasing and manufacturing costs accounted for approximately 54% of our industrial costs. Schneider Electric is well positioned to support the medium term needs of new economies in Asia, Africa, the Middle East, Latin America...

  • Page 20
    ...is derived from sales in businesses where Schneider Electric enjoy as 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...

  • Page 21
    ..., centralized building management systems, space optimization solutions, access control, video cameras and security monitoring equipment. The IT Business: Number 1 Worldwide in Critical Power and Cooling The IT Business specializes in critical power products and solutions for data centers and other...

  • Page 22
    ... to reduce investment costs and optimize maintenance and operating costs. Schneider Electric's non-residential customers include endusers, property developers, design firms, systems integrators, panel builders and installers, electrical equipment distributors and building management companies. In...

  • Page 23
    ... access control and security products. Schneider Electric assists its distributors in advising their customers and helping them to benefit from technical innovations. To maintain a high performance network, the Group works hand in hand with distributors on supply chain issues, technical training...

  • Page 24
    ...window management systems, recharging equipment for electric vehicles and renewable energy solutions. In order to strengthen a relationship based on mutual trust and added value, Schneider Electric partners actively with contractors, providing technical training and support. To maximize our business...

  • Page 25
    ... Group provides integrated solutions and high performance systems, software and services to oil companies and EPCs, from production to processing and supply chain; 2.5 Competitive landscape The main global competitors of Schneider Electric, by technology, are: • discrete and process automation...

  • Page 26
    ...any tax advantages related to Invensys that ar not included in the income statement. (3) Includes industrial productivity and gross savings on support function costs. (4) Share buyback including share buyback in order to cover employees share plans. 24 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 27
    ...-strategic assets, such as its public works individuals. This strategy led Schneider Electric to conduct a number of strategic acquisitions both in mature countries and in new economies targeting companies offering complementary products and solutions. 4.2 From Power & Control to Energy Management...

  • Page 28
    ... and commercial sectors. Schneider Electric finalized the sale in December 2015; • In October 2014, Schneider Electric announced the sale of the entire shareholding in Custom Sensors & Technologies (« CST ») to private equity groups The Carlyle Group and PAI Partners. Schneider Electric has...

  • Page 29
    ... new offers in our Buildings & Partner business across all businesses; • continued to increase OEM conversions by leveraging our innovative OEM solution offer; • Planet & Society Barometer reached 6.33/10. (1) Before inï¬,ation and reinvestment. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 30
    ...opportunity in industrial systems. It enables significant increase in the number of measure and control points and, as a consequence, allowing for maximum energy efficiency and optimized asset availability and performance. Since 2000, Schneider Electric has invested in research programs to develop...

  • Page 31
    ...data processing and transmission and up to data storage and analytics to present actionable dashboards to our customers. • Analytics for planning and control for electrical networks (Infrastructure Business), HVAC in buildings and data centers (Buildings & Partner and IT Businesses) or industrial...

  • Page 32
    ... into pre-fabricated power solutions which can be delivered ready to connect on-site, enabling cloud data centers to be reliably designed, built and commissioned in a matter of weeks vs. months or years. Additionally, expansion of the Group 30 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 33
    ... While the deployment of technology platforms has allowed reductions in both cost and lead time of bringing new products to market, this new complexity requires an upgrade of development methods and tools. Schneider Electric's NextGen PLM program optimizes its Information Systems with a redefined...

  • Page 34
    ..., customer needs and new market segments. The work is shared at three levels: Managing a portfolio of partnership opportunities The mission of Aster Capital is to purchase minority interests in innovative start-ups in the fields of energy and the environment based in Europe, Israel, North America...

  • Page 35
    ... power and cooling technologies for data centers as well as non-IT applications. Each of these business segments manages its R&D, marketing and sales teams and is responsible for its global results. A number of back-office functions such as Finance, Human Resources, IT systems and Global Marketing...

  • Page 36
    ... Quality and Value Analysis programs across the Group. By deploying these optimization methods globally and sharing best practices, the Group intends to raise the operational performance of all its plants to the same high standard. Schneider Electric's sites and products meet the strict requirements...

  • Page 37
    ...reduce the release time to customers; basic logistics offering, customized according to type of channel; industrial planning customized according to customer segment development of the services offering, in line with our customers' installed base; 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 35

  • Page 38
    ...and business performance. As part of the new company program to optimize Purchasing, the Group is continuing to pursue its plan, launched several years ago, to seek to source its purchases from the top-performing suppliers (« recommended » suppliers) and aims to increase local sourcing in the new...

  • Page 39
    ... are generally beyond our control, and to manage them as effectively as possible. 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...

  • Page 40
    ... OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES RISK FACTORS Regarding cyber-security, a specific investment program has been launched to develop specific capabilities. Specialists embedded in the main development teams/centers are involved from the early phases of the design to make products...

  • Page 41
    ... At the end, we want our employees to feel accountable for their development and success at Schneider Electric. During 2015 further steps were taken to reinforce the active management of talent at all levels and in all parts of the company. A state-of-the-art talent management system was introduced...

  • Page 42
    ... performance of its plants and industrial activities, as well as in a review and follow up of possible environmental risks. In 1992, Schneider Electric issued a formal environmental policy. This policy is designed to improve production processes, promote eco-design, and integrate customer...

  • Page 43
    ... and their terms and conditions are described in note 24 of Chapter 5. Equity risk Exposure to equity risk primarily relates to treasury shares but remains limited. The Group does not use any financial instruments to hedge these positions. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 41

  • Page 44
    ... of the Group. The business reputation of Schneider Electric could also be negatively impacted. To prevent these risks, Schneider Electric has implemented quality procedures at the level of design, development and production of its produvcts, systems and solutions. In case of product returns, the...

  • Page 45
    ... in certain older products and work contracts. Although it is impossible to forecast the results and/or costs of these proceedings with certainty, Schneider Electric considers that they will not, by their nature, have significant effects on the Group's business, assets, financial position or pro...

  • Page 46
    ...at the Group level. Cost of insurance programs Property damage and business interruption insurance The global insurance program renewed in July 2014 for a duration of two years was continued in 2015. This is an « all risks except » contract which covers events that could affect Schneider Electric...

  • Page 47
    ... solid framework Ratings and awards 55 57 2. Green and responsible growth driving economic performance 2.1 Overview 5. Schneider Electric, an eco-citizen company 93 58 58 5.1 Access to Energy program 93 98 5.2 The Schneider Electric Foundation 2.2 Smart energy management products and solutions to...

  • Page 48
    ...the Group's employees: principles governing ethics and responsibility; sites and products that respect the environment; employee development; policies that support and develop the communities in which Schneider Electric operates. Schneider Electric uses its global Human Resources policies (see...

  • Page 49
    ... in industry Importance for stakeholders 4,1 Access to energy O Smart grids O Eco-Design O Renewables O Sustainable purchases O Sustainable supply chain O Employee engagement and talent attraction Business ethical standards O Energy efficiency in homes O O Dialog with stakeholders O Developing...

  • Page 50
    ... DEVELOPMENT 15 150,000 underprivileged people trained in energy management 16 1,300 missions within Schneider Electric Teachers NGO 102,884 S 150,000 878 S 1,300 The 2014 performance serves as a starting value for the Planet & Society barometer of the Schneider is On company program between...

  • Page 51
    ... of the Company program. This Committee includes three members of the Executive Committee: Strategy, Human Resources and Global Supply Chain. Four cases may be included from one barometer to the next: The table above shows Schneider Electric's sustainable development performance in 2015. When the...

  • Page 52
    ... corporate brochure (strategy and sustainable development report), new progress plans throughout the Company program as well as during the design of the Planet & Society barometer every three years. (1) Source: CSR Sector Reporting Guide, 2013. 50 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 53
    ...Quality, Customer Satisfaction, R&D, Sales, Eco-design Finance, Board's Secretary, Sustainable Development Financial 2 Purchasing, Environment, R&D, Activities, Sustainable Development Human Resources, Sustainable Development R&D, Activities, Environment Partners Social • Half-yearly employee...

  • Page 54
    ... in remote areas » group, Sustainable Energy for all (Nations unies), Club ER, Alliance for rural electrification. France: supporting partner of the Social Business/Enterprise and Poverty Chair at HEC. Smart grids Smart cities Access to energy 52 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 55
    ... and coordinate the EIC's efforts to tackle environmental issues. The Group also participates in the Advisory Committee for Energy Efficiency (ACEE) created in 2013. Social policy Education 2 Ethics Biodiversity Philanthropy Standardization 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 53

  • Page 56
    ...> Support awareness > Safety SERE Committee > Foundation Foundation's Executive Committee & SE Teachers Board > Access to energy A2E Committee > Environment Environment Committee > Sustainable purchasing Global Purchasing Committee & business reviews with recommended suppliers > HR HR Committee...

  • Page 57
    ... members of the Executive Committee in charge of Human Resources, Global Supply Chain and Strategy have met two to three times per year with the Sustainable Development Director to monitor and steer the Group's action plans in this area. • social responsibility, specifically with the Schneider...

  • Page 58
    ... industrial processes, reinforce product eco-design and incorporate Group customers' concerns for environmental protection by providing them with 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 59
    ... 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. In the Ipreo report SRI Leaders Index Winter 2015-2016, Schneider Electric was listed as 12th (equal) for...

  • Page 60
    ... development with the greatest possible number of its suppliers. For this section, four key performance indicators have been set in the Planet & Society barometer for the duration of the Schneider is On program (2015-2017): Objectives for year-end 2017 1. 100% of new large customer projects...

  • Page 61
    ...(¤720) million Cash Variation ¤513 million Revenue distribution to our stakeholders Investments * Borrowings, share issues and sale of treasury stock. (1) Including ¤373 million in R&D. (2) Including ¤155 million for long term pension assets. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 59

  • Page 62
    ... of Schneider Electric's business strategy. Our customers - companies, citizens, governments - all want to reduce their costs and environmental impact while constantly improving the reliability, safety and performance of their homes, buildings, sites and equipment. In order to insure that energy ef...

  • Page 63
    ... from 13% of total energy production in 2011 to 18% in 2035 - representing an 83% increase. Schneider Electric serves and connects power plants and large buildings to the electricity grid, provides equipment to turbine manufacturers and supplies the residential end-market through its network of...

  • Page 64
    ... manufacturing of new products over the last years. However, since the beginning of the 2000s, the first devices containing SF6 gas sold by Schneider Electric are starting to reach their end-of-life. The objective is to develop commercial offers that allow customers to dispose of their end-of-life...

  • Page 65
    ...severity of the action plan. 2 Promotion of a continuous improvement process based on the ISO 26000 standard A statement on the importance of sustainable development is made to each major supplier of Schneider Electric by its Group purchasing pilot after the latter has been trained in the approach...

  • Page 66
    ... now part of the standard purchaser curriculum; and more advanced training allows employees to learn how to question recommended suppliers during the business reviews (whether assessed by a third party or not). For off-limit situations, Schneider Electric favores a practical training approach, based...

  • Page 67
    ... added to employment contracts of new employees to ensure that they are aware of this document from the time they join Schneider Electric. Moreover, in 2015, managers were requested to sign a letter of acknowledgment to comply with and promote Our Principles of Responsibilty. At the end of 2015, 15...

  • Page 68
    .... It provides Executive Committee members with information on trends that, for example, integrate the Company strategic program. Executive Level Executive Committee Strategic Corporate Level Operational Responsability & Ethics Committee Define, explain & communicate the rules Fraud Committee...

  • Page 69
    ..., an e-learning module and fact sheets are available on a dedicated collaborative space. 2015 was marked by a step-up in training actions with awarenessraising sessions for top management and the Marketing, Purchasing, Human Resources and IT functions. Schneider Electric believes that the global...

  • Page 70
    ... to environmental performance This chapter deals with the environmental impact of the Group's global supply chain and logistics activities (its « Global Supply Chain »). The products, services and solutions offered by Schneider Electric which help reduce the environmental impacts of its customers...

  • Page 71
    ... functions' processes, such as purchasing, investment, manufacturing, logistics, acquisition, Human Resources management, etc. While improving the strategic alignment of our environmental journey with our corporate strategy and Schneider is On program, we meanwhile strive to address key risks and...

  • Page 72
    ...site is accessible by all employees and expanded continuously to inform everyone at all levels about our ongoing programs, best practices, results, goals and upcoming deadlines. In June 2015, Schneider Electric organized its annual 'Global Environment Day' event involving tens of thousands of Group...

  • Page 73
    ...,000 SKUs (stock-keeping units) and available in a smartphone App-enabled solution; • commissioning of renewable (solar in most cases) energy and lighting sources on some of our key manufacturing and commercial sites, enabled by Schneider Electric solutions; • further development of CO2 quanti...

  • Page 74
    ... Schneider Electric solutions, and purchasing renewable energy when it is available locally. 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 75
    ..., while the investment required was close to zero (no special equipment was required, and a professionalization of the staff on the program was conducted). As part of the new three-year company program Schneider is On and the Planet & Society barometer, it has been decided to renew the CO2 transport...

  • Page 76
    ...products are marketed. Schneider Electric has made this effort a reality with the Green Premium ecoLabel by making Product Environmental Profiles (PEP) and end of life instruction guides (EoLi documents) available to its customers. 2) Product design Since early 2015, the design teams working on new...

  • Page 77
    ...the « End-of-Life Instruction » (EoLI). As part of the development of new Schneider Electric offerings, Green Premium is an integral part of the design and development process as critical deliverables for marketing product offers. As part of its new 2015-2017 company program, Schneider Electric is...

  • Page 78
    ... assessments also help the Group identify areas for improvement. For more information on the Schneider Electric global action plan relating to PEP and to end-of-life instructions, see the Eco-design and Green Premium chapter on pages 74-75. Schneider Electric's desire to reduce its environmental...

  • Page 79
    ... systems are increasingly being designed to take into account new risks of malfunctions or emergencies, such as fires. In 2015, Schneider Electric conducted its annual review of pollution risks at all manufacturing sites as part of ISO 14001 monitoring. No major incidents were reported in 2015...

  • Page 80
    ... to adapt to developments within the company. Schneider Electric encourages each employee to actively manage their own career in collaboration with their line manager, their HR manager and using the digital tools provided. This allows each employee to play a key role in their own performance and in...

  • Page 81
    ... The resulting action plans have improved the processes and procedures involving working at heights, job site safety, electrical safety, and the safe working on customer worksites, which has led to consistent, global application of these practices. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 79

  • Page 82
    ... Schneider Electric Senior Leadership team and is distributed to all employees through the new SERE intranet. Training and communication have also been improved through the use of webinars covering safety related training topics, performance reports, and action plan updates. The Global Safety Lead...

  • Page 83
    ... of Schneider Electric. The Group is working to become the « best company » to work for, and constantly strives to provide the environment and motivation for its employees to take control of their own career progression, through access to training and development and the latest job opportunities...

  • Page 84
    ... 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. It is now established as a global...

  • Page 85
    ... appropriate opportunities for personal and professional growth ». In 2015, the Group redefined its training strategy around three components: • a culture of inclusive training by pursuing its goal of one day training per year and per employee; 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 83

  • Page 86
    ... centered on communities with common topics of interest such as New Hires, Action Learning Project Teams, Corporate leadership programs etc. New groups were also launched such as that for Front Line Managers. « 3E » program The 3E program was implemented to collect existing individual development...

  • Page 87
    ... development. It is also instrumental in reaching the Group's objective of one day of training per employee per year, which is part of the Planet & Society barometer. My Learning Link is also used to deliver online training programs to Schneider Electric customers. In 2015, the Partner Relationship...

  • Page 88
    ... roles. Learning Solutions design the relevant development paths to up-skill candidates for critical roles and competencies as well as supporting effective on boarding and integration of external talents into the Schneider Electric business. Action plans Approach Schneider Electric's Strategic...

  • Page 89
    ... principles (WEP) of UN Women and the Global Compact. • talent review process to detect talent and promote equality and diversity at all levels of the company, ensuring that professional development is based on equality; • recruitment policies, succession planning, and access to training...

  • Page 90
    ... currently being signed. Nationalities Schneider Electric has always promoted cultural diversity and inclusion as a key enabler of its strategy. In 2015, eight nationalities are represented within the Executive Committee. The Group also focuses on diversity of nationalities for Country Presidents...

  • Page 91
    ... Electric has a Benefits and Pension Funds Corporate Committee whose responsibilities are to review Benefits Policy Principles compliance and evolution and to monitor asset return and validate long-term investment strategy both at a corporate and country level. This Committee meets twice a year...

  • Page 92
    ... main zone and Country Presidents (20 in 2015) and to the heads of central functions (Finance, HR and Business Development) in Global Operations. For all the other Country Presidents, it is not a personal objective in their bonus, but it is part of their key objectives for their annual performance...

  • Page 93
    ... taken into consideration by our social reporting system, where local HR teams report the presence of trade unions, works councils and Health and Safety Committees every year. While changing the corporate form of its parent company, Schneider Electric SA, into a European Company (« Société Europ...

  • Page 94
    ... employees. Schneider Electric keeps them informed of internal and external issues impacting the company's results, listens to their concerns and looks for alignment with the company strategy and challenges. Schneider Electric and the Unions review the collective contract every year. In 2015...

  • Page 95
    ... an Access to Energy solutions Business Development Director; • an Offering Creation Director based in Bangalore (India); • a Social Investment Director, who manages the Schneider Electric Energy Access social welfare fund; • a Training Programs Director; • Access to Energy correspondents...

  • Page 96
    ... savings plans. At the end of 2015, 5,000 Group employees in France showed their interest in the Access to Energy program by investing EUR11 million. The aim of the SEEA fund is to promote development while protecting the assets under management. Accordingly, it has adopted strict management rules...

  • Page 97
    ... sustainability in the long term. Schneider Electric sets out to provide comprehensive energy access solutions that support revenue-generating entrepreneurial activities, foster community services or fulfill domestic needs. Products and solutions are developed to meet a range of both individual...

  • Page 98
    ..., several solutions were installed in India and Africa as part of collective electrification projects. Villaya Lampadaires Solaires solutions have been marketed since 2014 to provide public lighting with standalone LEDs in isolated locations. Based on an intelligent energy management system, the...

  • Page 99
    ... energy needs, sizing electrification solutions, mobilization of local partners for installation, and training of maintenance and aftersales service agents. Schneider Electric set up off-grid solar power stations that powered community buildings and charging equipment. All micro-units are managed...

  • Page 100
    ... called Communities days. This week took place in October 2014 and was an important time in the Foundation and Company's history, with The Executive Committee The Schneider Electric Foundation's Executive Committee meets once to twice a year. It is made up of members of Schneider Electric, employee...

  • Page 101
    ... supporting the Access to Energy program to improve energy access in new economies through the development of vocational training in energy management trades for the most underprivileged. To facilitate the integration and professional training of these young adults, the Schneider Electric Foundation...

  • Page 102
    ..., practical works, equipment installation, finding of an occupation, instructor training, optimization of standards, etc.); • volunteer missions with associations and entrepreneurs: - that have benefited from the support of the Schneider Electric Energy Access social welfare investment fund, or...

  • Page 103
    ...: development of skills among young people without jobs who have left school and college; scholarships for deserving These initiatives are consolidated at the level of the Schneider Electric Foundation and are taken into account in the different reports and indicators. 2015 REGISTRATION DOCUMENT...

  • Page 104
    ...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 by the local economic and political authorities. 102 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 105
    ...contract or a skills-qualification or diploma training, of which more than 50% in work/study programs. The «100 opportunities-100 jobs» system was implemented for the first time in Chalon-sur-Saône in 2005, and by the end of 2015 more than 3600 young people had been assisted. The 3-year renewal...

  • Page 106
    ... ensure a fair calculation of the savings, the actual consumption of a site is normalized versus the baseline year. This normalization is based upon a site-specific model enabling climate and changes in production levels to be taken into account. 104 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 107
    ... Activities involved in energy management are included in the program. The Green Premium scope for 2015-2017 covers all four Schneider Electric Businesses: Industry Business (including former Invensys), IT Business, Infrastructure Business (including Areva former), Partner Business (including North...

  • Page 108
    ...turnover of Access to Energy program to promote development for underprivileged people This indicator tracks the growth rate of the Access to Energy program's annual turnover, based on the actual 2014 turnover. It covers the sales in Africa, Asia and South America of all products and solutions which...

  • Page 109
    ...professional training programs in energy management dedicated to underprivileged people, the objective is to enable these people to acquire skills to pursue a career that offers them, as well as their families, the means for a decent standard of living. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 110
    ... conditions in the workplace List of agreements signed with unions or employee representatives regarding health and safety in the workplace Work accidents, particularly their frequency and their seriousness...as well as occupational illnesses e) Training Training policies implemented Total number...

  • Page 111
    ...-corruption actions taken Measures taken towards consumer health and safety e) Other actions taken towards human rights, within the scope of this third indicator Pages 93-97, 102-103 93-97, 102-103 50-51 98-101 63-64 63-64 68 74-75, 14 46, 65-67, 92 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 112
    ... and as a member of the network of one of the statutory auditors of the company Schneider Electric SE, we present our report on the consolidated social, environmental and societal information established for the year ended on December 31, 2015, presented in chapter 2 of the management report, and on...

  • Page 113
    ... LPT2 (India), Middletown (United States), Foxboro Neponset (United States), Lexington (United States), Universal Enclosures Capellades (Spain), Sarel (France), Manisa (Turkey), HR Services France (fixed-term and permanent contract personnel). 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 111

  • Page 114
    ... Indicators Schneider Electric provides readers two pieces of information so that environmental performance can be compared from one year to the next: 7.1 Environmental indicators The indicators below have a Group scope. They illustrate our industrial and logistics sites' environmental consumption...

  • Page 115
    ... DEVELOPMENT INDICATORS Group sites consumption, emissions and waste Current Scope GRI Indicators Number of participating sites Total employees G4-EN23 G4-EN23 G4-EN23 G4-EN23 G4-EN8 Waste produced (in t) of which hazardous waste(1) Waste produced per employee (in t/p) Waste recovered (in t) Share...

  • Page 116
    ... 6. 100% of new large customer projects with CO2 impact quantification 7. 120,000 tons of CO2 avoided through maintenance, retrofit and end-of-life services The 2014 performance serves as a starting value for the Planet & Society barometer of the Schneider is On program between 2015 and 2017...

  • Page 117
    ... (MIR) 2. One day training for every employee every year 3. 64% scored in our Employee Engagement Index 4. 85% of employees work in countries with Schneider gender pay equity plan 2015 17% â-² 85.6% â-² 61% â-² 57% â-² 2014 79% 61% - The 2014 performance serves as a starting value for the Planet...

  • Page 118
    ...ficant countries)(2) France United States of America China India Mexico Spain Germany Brazil Australia Indonesia United Kingdom Russia Breakdown of workforce by gender(2) Men Women G4-10 G4-10 G4-LA1 G4-LA1 G4-LA1 G4-10 G4-10 G4-10 G4-10 116 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 119
    .../34 years > 34 years G4-10 G4-10 G4-LA1 Breakdown of workforce by function(2) Marketing Sales Services and projects(6) Support Technical Industrial Direct variable costs (cost of employees under production or business costs)(7) Hires(4) Breakdown by type of contract Permanent contract Fixed-term...

  • Page 120
    ... UP UP UP G4-LA1 G4-LA1 G4-10 20.1% 79.9% 61.3% 24.5% 7.5% 6.7% 18.5% 81.5% 63.2% 21.7% 10.1% 5.0% 18.4% 81.6% 59.6% 26.9% 4.1% 9.3% G4-10 118 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 121
    ...80% 2013 44% 51.3% 69.1% 265 UP UP G4-LA5 G4-11 G4-11 G4-LA5 Health and Safety Committee Number of collective agreements Employees covered by collective bargaining agreements Employees represented by Health and Safety Committees 127 83.3% 75.1% 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 119

  • Page 122
    ... Russia Breakdown of hours by training type(2) Health, safety and environment Technical Languages IT Products, Solutions and Services Management and Leadership Personal Development Others Breakdown of costs by category(2) White collar Blue collar 120 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 123
    ...not taken into account in the calculation. (5) The data relates to 96% of the Group's workforce at the end of December 2015 (annual survey). (6) Part of the VDC services on total workforce: 13.5% in 2015; 12.1% in 2014; 11.5% in 2013. VDC, variable direct costs are Schneider Electric employees whose...

  • Page 124
    ... 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. 5,461,023 955,859 4,426,120 79,044 3% 72%* 12% 13% 1,967,488 35,000 122 2015 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 125
    ...-end 2017 1. x5 turnover of Access to Energy program to promote development 2. 150,000 underprivileged people trained in energy management 3. 1,300 missions within Schneider Electric Teachers NGO 2015 x2.07 â-² 102,884 â-² 878 â-² 2014 73,339 460 2 The 2014 performance serves as a starting value...

  • Page 126
    2 SUSTAINABLE DEVELOPMENT INDICATORS 124 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 127
    ... of Group Senior Management 164 excluding executive directors Transactions in Schneider Electric SE shares by corporate officers during the 2015 financial year The board of directors Membership of the board of directors (by 31st December 2015) Proposal to the Annual Shareholders' Meeting on...

  • Page 128
    ...vis employees, customers and partners, in France and abroad; • provisions to ensure accurate information and effective functioning by the board of directors, in particular the appointment of a Vice-chairman independent lead director, the principle of holding an executive session at each meeting...

  • Page 129
    ... of a member, the board may co-opt a new member. This appointment is then subject to ratification by the next Shareholders' Meeting. Throughout their term, pursuant to the internal regulations, each director must hold at least 1,000 Schneider Electric SE shares. Director Jean-Pascal Tricoire...

  • Page 130
    ...the French Commercial Code. She was appointed by the Annual Shareholders' Meeting on the recommendation of the supervisory boards of the FCPEs. Self-assessment of the board of directors The AFEP/MEDEF corporate governance guidelines for listed companies provide that the board of directors must make...

  • Page 131
    ... of the strategy committee. The renewed board would have: • 13 members; • a 75% share of independent directors (excluding consideration of Magali Herbaut in accordance with the calculation methods used in the AFEP/MEDEF corporate governance guidelines for listed companies); • a percentage of...

  • Page 132
    ... Electric SE shares First appointed: 2007/Term ends: 2016 • Currently: Vice-Chairman independent lead director of Schneider Electric SE and Chairman of the Governance and Compensation Committee, member of the Strategy Committee. - Other directorships at a listed company: Director of NICE-Systems...

  • Page 133
    ... Age: 67 years Business address: 3, rue Charles-Lamoureux 75016 Paris, France 1,000 Schneider Electric SE shares First appointed: 2011/Term ends: 2016 Directorships and other functions • Currently: Director of Schneider Electric SE and member of the Strategy Committee. • Currently: Director of...

  • Page 134
    ... a partner at BDGS Associés law firm. Note: bold indicates the names of companies whose securities are listed on a regulated market. * An independent director within the meaning of the AFEP/MEDEF Corporate Governance Code for listed companies. 132 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 135
    ... GOVERNANCE THE BOARD OF DIRECTORS Magali Herbaut Age: 44 years Business address: Schneider Electric Industries SAS 2 Chemin des sources 38240 Meylan, France 5,478 (1) Schneider Electric SE shares First appointed: 2012/Term ends: 2017 Jeong H. Kim* Age: 55 years Business address: Jurie Holdings...

  • Page 136
    ...* Age: 55 years Business address: CNH Industrial N.V., 6900 Veterans Boulevard, Burr Ridge, Illinois 60527, United States 1,000 Schneider Electric SE shares First appointed: 2014/Term ends: 2018 Directorships and other functions • Currently: Director of Schneider Electric SE, and member of the...

  • Page 137
    ... Age: 72 years Business address: 18, allée du Cloître 78170 La Celle-Saint-Cloud, France 6,856 Schneider Electric SE shares First appointed: 1998/Term ends: 2017 Directorships and other functions • Currently: Director of Schneider Electric SE and member of the Human Resources and CSR committee...

  • Page 138
    ...years Business address: Klosterrisvej 63100 Hornbæk, Denmark 1,000 Schneider Electric SE shares First appointed: 2014/Term ends: 2018 Directorships and other functions • Currently: Director of Schneider Electric SE and member of the Audit and Risk Committee. • Currently: Director of Schneider...

  • Page 139
    ... Business address: Corporate Perspectives, LLC 485 Park Avenue New York NY 10022, USA 1,000 Schneider Electric SE shares First appointed: 2007/Term ends: 2016 Directorships and other functions • Currently: Director of Schneider Electric SE; Member of the Governance and Compensation Committee...

  • Page 140
    ... officer and a member of the Executive Committee of Danone. Note: bold indicates the names of companies listed on a regulated market. * An independent director within the meaning of the AFEP/MEDEF Corporate Governance Code for listed companies. 138 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 141
    ... the method of exercising the Senior Management of the Company; • authorize the issue of bonds; • decide on the allocation of options or free/performance shares within the limits of authorizations given at Annual Shareholders' Meetings; • appoint executive corporate officers and also remove...

  • Page 142
    ... new directors, training and information programs may be organized on the Group's strategy and businesses. They are defined on a case by case basis. However, they generally involve a work session with the Strategy Director, meetings with members of the Executive Committee and visits to sites which...

  • Page 143
    ... directors the opportunity to meet not only members of the Executive Committee in charge of the subjects presented, but also the members of their teams. In 2015, three of these sessions were organized. They covered Schneider Electric's policies relating to Human Resources, CSR and IT/cyber-security...

  • Page 144
    ... of the United States, the technology sector, industry and the Group's businesses, • approved the rules relating to the compensation of the corporate officers (determining the level of achievement of their personal objectives in 2014 and setting the rules for their 2015 compensation: fixed part...

  • Page 145
    ... Committee on the work of this committee, which met three times during the year. The board has been informed of the moves and changes of competitors of Schneider Electric. 3 3.3 Activities and results On the basis of the report of the Audit and risks committee, the board of directors reviewed...

  • Page 146
    ... methods used for drawing up consolidated and corporate accounts, as well as checking that significant operations on Group level have been dealt with appropriately and that rules relating to the scope of consolidation have been complied with, 144 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 147
    ... and to their networks, - review of the external audit plan, - proposal on the renewal/appointment of statutory auditors at the end of their current terms; 4) corporate governance: Activities in 2015 In 2015, the Audit Committee met five times. The average duration of the meetings was three hours...

  • Page 148
    ...on corporate governance; • developments in the legislative and regulatory environment. The committee also met jointly with the Human Resources and CSR committee to review and make proposals to the board of directors on changes to the long-term incentive plans. The attendance rate of directors who...

  • Page 149
    ... management on: • the review of the policy of male/female equal opportunities and compensation; • the overview of the 2015 global employee shareholding plan; • the discovery report by Olivier Blum at the end of his first few months as Executive Vice-President of Global Human Resources...

  • Page 150
    .... The attendance rate of members of the committee was 94%. It reported on its work to the board at the February 18, April 21 and October 28, 2015 meetings. • the preparation of board of directors' strategy days which were held in Boston in June; 148 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 151
    ... of Custom Sensors & Technologies SAS, representative of Schneider Electric Industries SAS on the supervisory board of Schneider Electric Energy Acces; Member of the Steering Committee of Aster Capital Partners. 3 • Previous directorships and functions held in the past five years: Member of...

  • Page 152
    ... from these two companies for the last two functions. Emmanuel Babeau is CEO of Invensys Ltd, a position for which he receives compensation. Magali Herbaut has a work contract with Schneider Electric Industries SAS. The members of the board of directors hold 0.06% of the share capital and 0.07% of...

  • Page 153
    ... return for shareholders; and mission that Schneider Electric assigned to itself to become a major player of sustainable development. Fixed and target variable parts for Executive Committee members Therefore, criteria were used to define variable part of Group Senior Management's compensation...

  • Page 154
    ... of the Schneider is On company program (customer satisfaction rate, solutions development, employee development) and CSR; - 20% based on the achievement of their measurable personal goals; • Align with shareholder interests. To enable alignment with shareholders' interests, grant of a long-term...

  • Page 155
    ... million in the 2015 accounts for corporate officers. It will generate substantial savings for the company, and in turn for its shareholders, linked i) to the fact that the level of supplementary payments set by the board of directors results in a 42% reduction in the gross value that the bene...

  • Page 156
    ... year 2015 (1) EUR78,000 Amounts paid/due for fiscal year 2014 ...year are paid at the beginning of the following year. (2) Non-voting member. (3) Ms. Herbaut, who is also employed by a Group subsidiary, receives compensation for such employment. 154 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 157
    ... per year. The board provided that Léo Apotheker and Henri Lachmann could, in the performance of their missions as Vice-Chairman lead director use certain means of the Group's management and, as a result, receive the services of an assistant, use an office at the company headquarters, and use the...

  • Page 158
    ..., services development, products sales growth, systems growth margin as well as trends in the Planet & Society baromete; Year 2016 As part of the long-term incentive plan for 2016, the board of directors agreed on an allocation of 18,000 performance shares under plan 25 and 42,000 shares under plan...

  • Page 159
    ... rate of 103% on a base 100; • for Individual objectives (25%), which are precise and as far as possible quantified objectives, the board of directors set the variable part to 21.25% of fixed part, i.e. an achievement rate of 85% on a base 100. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 160
    ...of performance shares is subject to: Fixed part The board of directors set the 2016 total fixed annual compensation for Emmanuel Babeau, Deputy CEO, at EUR605,000. The fixed part, which has been unchanged since 2013, has been increased to account for the Group's evolution and development in order...

  • Page 161
    ... year. Vesting of these shares is subject to the attainment of performance conditions. (2) The valuation of free shares corresponds to a measurement carried out in application of IFRS 2 and not compensation actually received during the financial year. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 162
    ... form of an allocation of 39,000 free shares under plans 19 and 20. Mr. Tricoire's travel and business expenses are covered by the Group. Mr. Tricoire may use the cars made available to Group Senior Management with or without chauffeur services. 160 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 163
    ... in the Group No stock options or share purchase options were granted during the 2015 financial year. Performance shares and free shares granted during the financial year to each executive director Performance/free shares were allocated in 2015. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 161

  • Page 164
    ... stock options or share purchase options during the financial year by each executive director Plan no. Jean-Pascal TRICOIRE Emmanuel BABEAU 33 Plan date Number of options exercised 12/21/2009 30,190 Exercise price 37.68 Exercise date 02/20/2015 162 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 165
    ... (see registration document 2013 page 295). The Shareholders' Meeting of May 6, 2014 approved Mr. Babeau's new status. However, Mr. Babeau having been brought to resign from his employment contract with Schneider Electric Industries SAS, the board of directors of February 18, 2015 renewed Mr...

  • Page 166
    ... Industrial Operations - Information Systems - Strategy - Marketing - Global Human Resources - Technology - Global Solutions; organic growth; operating margin level; cash conversion rate; customer satisfaction. • Executive Vice-Presidents of Operations: Global Operations - North America...

  • Page 167
    ...to his employment contract with Schneider Electric Industries SAS at the level of Schneider Electric SE. The board of directors, on that occasion, aligned Mr. Babeau's status fully with that of Jean-Pascal Tricoire (see pages 314 to 317). The Annual Shareholders' Meeting, on April 21, 2015, pursuant...

  • Page 168
    ...the supervisory board in 2012 subject to a number of adjustments primarily related to new recommendations of AFEP/MEDEF Code; • adopted the status of Mr. Emmanuel Babeau, holder of a work contract with Schneider Electric Industries SAS. The Annual Shareholders' Meeting on May 6, 2014, pursuant to...

  • Page 169
    ... for ensuring that, at the level of each unit: Senior Management Senior Management is responsible for designing and leading the overall internal control system, with support from all key • the identification and control of risks is performed; 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 167

  • Page 170
    ... integrate newly acquired businesses in the Group reporting process; • an intercompany reconciliation procedure manual; • account closing schedules and instructions. The Management Control and Accounting unit monitors the reliability of data from the subsidiaries and conducts monthly reviews of...

  • Page 171
    ...the corporate Management Control and Accounting unit reviews the operations of the Operating Divisions on a monthly basis. 3 9.3 Distributing information: benchmarks and guidelines The main internal control benchmarks are available to all employees, including in the Group's employee portal. Global...

  • Page 172
    ...records and business agents); • operating processes (Purchases, Sales, Logistics, etc.); • accounting and financial related cycles; • Human Resources and Information Systems cycles. The Key Internal Controls are available to all units on the Group employee portal and shared depository, along...

  • Page 173
    ... - start of contract in April 2015). It brings its methodology to develop emergency plans (evacuation plans, crisis management plans, business continuity plans, etc.) and coordinates the corporate crisis team (SEECC - Schneider Electric Emergency Coordination Center) each time that it is activated...

  • Page 174
    ... Key Internal Controls during audit assignments; • reviewing the audited unit's internal control self-assessment and related action plans. • the Sustainable Development Department created a new Corporate tool (named « Dora » - provided by « Global Navex » an US based software company) used...

  • Page 175
    CORPORATE GOVERNANCE INTERNAL CONTROL AND RISK MANAGEMENT The audit assignments go beyond the Key Internal Controls, and include an in-depth review of processes and their effectiveness. Internal Audit also reviews newly acquired units to assess their level of integration into the Group, the level ...

  • Page 176
    ... control and risk management procedures relating to the preparation and processing of accounting and financial information The professional standards require that we perform the necessary procedures to assess the fairness of the information provided in 174 2015 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 177
    ... Schneider Electric Practice To allow the Audit committee to comprise directors who are not French residents, meetings of the committee pertaining to the review of annual and semestrial accounts are held on the day before the Board meeting and not two days prior to the meeting. However, the Company...

  • Page 178
    3 CORPORATE GOVERNANCE APPLICATION OF THE AFEP/MEDEF CORPORATE GOVERNANCE GUIDELINES 176 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 179
    ... 1.1 1.2 1.3 2.1 Business review Trends in Schneider Electric's core markets Industries and machine manufacturers Non residential and residential buildings Utilities and Infrastructures 2.9 Operating income (EBIT) 183 184 184 184 184 184 178 178 178 179 2.10 Net financial income/loss 2.11 Tax...

  • Page 180
    ... ELECTRIC'S CORE MARKETS > 1. 1.1 Trends in Schneider Electric's core markets overcapacities and high level of debt. Companies preferred to restore the balance sheet, or to reduce selling prices (due to increasing competitive pressure). In China, industrial production and manufacturing investment...

  • Page 181
    ... most of the year, to eventually start a gradual decrease of 0,1mb/d per month. Increased productivity and cost cuttings and previous upstream investments have enabled many operators to continue producing, despite the low barrel prices. Saudi Arabia continues its race for market share. Iran now...

  • Page 182
    ... the Industry Business of Schneider Electric. The CST activity was reclassified as discontinued operations in Group's consolidated financial statements from January to September 30, 2014 (for EUR24 million net income). From October 1, 2014 and for full year 2015, the 30% of CST share is accounted...

  • Page 183
    ...of revenues for the year ended December 31, 2015 (2.3% for the year ended December 31, 2014). Total research and development expenses, including capitalized development costs and development costs reported as cost of sales (see note 4 to the Consolidated Financial Statements) increased by 5.0% from...

  • Page 184
    ...in Adjusted EBITA. As a percentage of revenue, EBITA decreased to 10.5% in 2015 compared with 12.7% in 2014, in line with the lower Adjusted EBITA margin and with losses on sales of business, impairments and restructuring costs higher than in 2014. 182 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 185
    ..., integration and separation costs). Buildings & Partner business recorded an adjusted EBITA margin of 18.0% for the year ended December 31, 2015, up 0.2% compared to 17.8% for the year ended December 31, 2014, thanks to better support function costs control. Industry business recorded an adjusted...

  • Page 186
    ...-months from CST business, sold on October 1, 2014, as well as the corresponding gain on sale. There were no segments reported as discontinued activities in 2015. 2.13 Share of profit/(losses) of associates The share of profit of associates increased from EUR14 million for the year ended December...

  • Page 187
    ... change in working capital requirement generated EUR117 million in cash in the year ended December 31, 2015, compared to EUR107 million consumed in the year ended December 31, 2014, mainly thanks to the cash-in of trade receivables. In all, net cash provided by operating activities increased by 11...

  • Page 188
    ... year. Current loss amounted to EUR141 million in 2015 compared to a current loss of EUR144 million in 2014. In 2014, Schneider Electric SE invoiced to Schneider Electric Industries SAS a EUR442 million consideration for the use of the Schneider Electric brand, recognized as non-recurring income...

  • Page 189
    ... 5. Notes to the consolidated financial statements 193 Other comprehensive income 2. Consolidated statement of cash flows 3. Consolidated balance sheet 194 190 191 6. Statutory auditors' report on the consolidated financial statements 249 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 187

  • Page 190
    ... 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. 188 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 191
    ... not to be recycled in income statement TOTAL COMPREHENSIVE INCOME FOR THE YEAR Attributable: • to owners of the parent • to non-controlling interests The accompanying notes are an integral part of the consolidated financial statements. 5 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 189

  • Page 192
    ... non-cash adjustments Net cash provided by operating activities Decrease/(increase) in accounts receivable Decrease/(increase) in inventories and work in process (Decrease)/increase in accounts payable Other current assets and liabilities Change in working capital requirement Total I - Cash ï¬,ows...

  • Page 193
    ... expenses Current financial assets Cash and cash equivalents Total current assets TOTAL ASSETS The accompanying notes are an integral part of the consolidated financial statements. 17 18 19 15.3 20 3,035 6,002 1,700 41 2,999 13,777 42,577 5 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 191

  • Page 194
    ... TOTAL EQUITY AND LIABILITIES The accompanying notes are an integral part of the consolidated financial statements. 22 23 2,025 1,659 3,684 24 24 16 25 5,919 216 6,135 1,195 147 11,161 4,284 2,151 23 24 900 1,297 1,495 10,127 42,577 192 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 195
    ... in treasury shares Share-based compensation expense Other Dec. 31, 2014 Profit for the year Other comprehensive income Comprehensive income for the year Capital increase Exercise of stock options Dividends Change in treasury shares Share-based compensation expense Other DEC. 31, 2015 561,958...

  • Page 196
    ... statements for the financial year ended December 31, 2015 were drawn up by the board of directors on February 16, 2016. They will be submitted to shareholders for approval at the Annual General Meeting of April 25, 2016. The Group's main businesses are described in chapter 1 of the registration...

  • Page 197
    ... reported in the Industry business of Schneider Electric. The CST activity was reclassified as discontinued operations in the Group financial statements from January 1 to September 30, 2014 (for EUR24 million net income). From October 1, 2014 and for full year 2015, the 30% CST stake is accounted...

  • Page 198
    .... 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, appraised externally for...

  • Page 199
    ... future cash ï¬,ows that will be generated by the tested assets. These future cash ï¬,ows are based on Group management's economic assumptions • buildings: • machinery and equipment: • other: 20 to 40 years; 3 to 10 years; 3 to 12 years. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 197

  • Page 200
    ... CONSOLIDATED FINANCIAL STATEMENTS and operating forecasts presented in forecasts over a period generally not exceeding five years, and then extrapolated based on a perpetuity growth rate. The discount rate corresponds to the Group's Weighted Average Cost of Capital (WACC) at the measurement date...

  • Page 201
    ... 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). Defined contribution plans Payments made under defined contribution plans are recorded in the income statement, in the year of payment...

  • Page 202
    ...end-of-year rates of foreign currency payables and receivables, in accordance with IAS 21 - The Effects of Changes in Foreign Exchange Rates. Put options granted to minority shareholders In line with the AMF's recommendation of November 2009 and in the absence of a specific IFRS rule, the Group...

  • Page 203
    ...the Industry business since January 2014, except its Appliance division (divested in June 2014) reported as discontinued operations over the first half of 2014. In accordance with IFRS 3 revised, Schneider Electric valued the assets acquired and liabilities assumed at their fair value on the date...

  • Page 204
    ...reported in the Industry business of Schneider Electric. The CST activity was reclassified as discontinued operations in the Group financial statements from January 1 to September 30, 2014 (for EUR24 million net income). From October 1, 2014 and for full year 2015, the 30% CST share is accounted...

  • Page 205
    ... Europe Revenue by country market Non-current assets 6,929 10,017 of which France 1,711 1,739 North America 7,268 9,213 of which USA 6,083 8,591 AsiaPacific 7,599 4,771 of which China 3,892 1,596 Rest of the world 4,844 1,235 Total 26,640 25,236 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 206
    ..., general and administrative expenses Depreciation and amortization DEPRECIATION AND AMORTIZATION EXPENSES Moreover, the net amount of impairment of non-current assets totaled EUR482 million. (203) (757) (554) Full year 2014 (484) (141) (625) 204 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 207
    .... Note 7 Restructuring costs Restructuring costs totaled EUR318 million over the period. They mainly relate to industrial and support function reorganizations in all geographies. Note 8 Amortization and impairment of purchase accounting intangibles Full year 2015 Full year 2014 (259) (259...

  • Page 208
    ... Income tax expense Whenever possible, Group entities file consolidated tax returns. Schneider Electric SE has chosen this option for the French subsidiaries it controls directly or indirectly through Schneider Electric Industries SAS. 10.1 - Analysis of income tax expense Full year 2015 Current...

  • Page 209
    ...Partner Industry IT Infrastructure TOTAL Square D goodwill was allocated to each business in proportion to operating income: 5,797 6,234 3,302 2,448 17,781 Dec. 31, 2014, net 5,678 5,365 3,120 2,570 16,733 5 Partner Square D Company 82% Industry 18% 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 210
    ... million and corresponds mainly to the Purchase Price Allocation of the Invensys group. Invensys goodwill has been allocated to the Industry CGU. Goodwill generated by acquisitions in 2014 totaled EUR3,177 million and corresponds mainly to the Invensys group. Impairment tests performed on all the...

  • Page 211
    ... on intangible assets other than goodwill and others TOTAL* * Includes amortization & impairment of intangibles assets from purchase price allocation for EUR277 million for the year 2015 and EUR259 million for the year 2014 (disclosed in note 8). 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 209

  • Page 212
    ... Dec. 31, 2015 APC (IT) PELCO (Buildings & Partner) Clipsal (Buildings & Partner) MGE (IT) TAC (Buildings & Partner) Juno (Buildings & Partner) Digital (Industry) Invensys - Triconex and Foxboro (Industry) Other NET The migration of the Group's brands towards the Schneider Electric brand (One Brand...

  • Page 213
    ... property, plant and equipment restated in the statement of cash ï¬,ows were as follows: Cash impact Depreciation of property, plant and equipment Impairment of property, plant and equipment TOTAL Dec. 31, 2015 426 6 432 Dec. 31, 2014 414 4 418 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 211

  • Page 214
    ... Full year 2014 163 7 170 Minimum payments Less than one year Between one and five years Five years and more TOTAL COMMITMENTS Discounting effect Discounted minimum payments 108 281 229 618 (29) 589 Discounted minimum payments 106 272 211 589 212 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 215
    ... Energy Efficiency (2) FCPR Aster II (part A, B and C) FCPR Growth FCPR SESS and Livelihoods Raise Fundation Others Total unlisted AFS TOTAL AVAILABLE FOR SALE FINANCIAL ASSETS (1) Companies purchased in 2014 and consolidated in 2015. (2) Sold in 2015. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 216
    ... 31, 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The fair value of investments quoted in an active market corresponds to the stock price on the balance sheet date. NVC Lighting investment was acquired in July 2011 in the framework of a partnership that gives Schneider Electric an exclusive...

  • Page 217
    ... months past due Three to four months past due More than four months past due ACCOUNTS RECEIVABLE, NET 5,082 432 203 99 69 117 6,002 5,048 397 199 105 70 172 5,991 6,115 241 119 6,475 (473) 6,002 5 Dec. 31, 2014 6,037 213 119 6,369 (378) 5,991 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 215

  • Page 218
    ...In addition, the Group takes out substantial credit insurance and uses other types of guarantees to limit the risk of losses on trade accounts receivable. Changes in provisions for impairment of short and long-term trade accounts receivable were as follows: Full year 2015 Provisions for impairment...

  • Page 219
    ...market conditions. Changes in share capital Changes in share capital since December 31, 2013 were as follows: Cumulative number of shares Capital at Dec. 31, 2013 Exercise of stock options Employee share issue Capital increase Capital at Dec. 31, 2014 Exercise of stock options Employee share issue...

  • Page 220
    ... for the year. 21.5 - Share-based payments Current stock option and stock grant plans The board of directors of Schneider Electric SE 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...

  • Page 221
    ...the stock, the grantee must generally be an employee or corporate officer of the Group. Vesting is also conditional on the achievement of performance criteria; • the vesting period is two to four years; • the lock-up period is zero to three years. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 222
    ... generally conditional on the achievement of annual objectives based on financial indicators. In respect of subscription vesting conditions for current stock option and performance shares plans, Schneider Electric SE has created 1,629,391 shares in 2015. Change in the number of performance shares...

  • Page 223
    ... classic plan. 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...

  • Page 224
    ... Total amount subscribed Total number of shares subscribed (millions of shares) Valuation assumptions Interest rate available to market participant (bullet loan) (1) Five year risk-free interest rate (euro zone) Annual interest rate (repo) (a) Value of discount: between and (b) Value of the lock-up...

  • Page 225
    ..., the rate applied in the calculation of the interest income (previously expected return on plan assets) is the discount rate at the beginning of the period. The discount rate is determined on the basis of the interest rate for investment-grade (AA) corporate bonds or, if a liquid market does not...

  • Page 226
    ...in the income statement in the year of payment and are in full settlement of the Group's liability. Defined contribution plan payments total EUR93 million in 2015, compared with EUR83 million in 2014. Healthcare coverage for North American employees represents 67% of this obligation. The main bene...

  • Page 227
    ... Interest cost (effect of discounting on obligation and plan assets ) Interest income NET COST RECOGNIZED IN THE STATEMENT OF INCOME 47 (35) (27) 404 (340) 49 4 61 (36) 29 Full year 2014 Of which SE USA 49 1 (61) 408 (351) 46 3 (4) 54 (37) 16 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 225

  • Page 228
    ... BENEFIT OBLIGATION AT END OF YEAR Plans changes occurred in France, the United Kingdom and the United States. Actuarial gains and losses have been fully recognized in other reserves. They stem mainly from changes in financial actuarial assumptions (primarily discount rates) used to measure...

  • Page 229
    CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Full year 2015 Of which SE USA 5. Funded status Projected benefit obligation Fair value of plan assets Surplus/(Deficit) Effect of the asset ceiling Deferred items: Unrecognized past service cost...

  • Page 230
    ... product liability. Provisions for customer risks also integrate the provisions for losses at completion for some of long term contracts, for EUR129 million. (d) Environmental risks These provisions are primarily funded to cover cleanup costs. 228 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 231
    ... of long-term debt SHORT-TERM DEBT TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES CASH AND CASH EQUIVALENTS (SEE NOTE 20) NET DEBT 81 431 150 669 164 1,495 7,630 (2,999) 4,631 Dec. 31, 2014 760 112 461 212 750 350 2,645 7,672 (2,650) 5,022 5 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 229

  • Page 232
    ...SE 2018 Schneider Electric SE 2019 Schneider Electric SE 2020 Schneider Electric SE 2021 Schneider Electric SE 2022 Schneider Electric SE 2023 Schneider Electric SE 2025 TOTAL 669 1,016 747 498 497 597 731 793 1040 6,588 Dec. 31, 2014 750 656 1,008 746 497 496 597 655 5,405 Effective interest rate...

  • Page 233
    CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Schneider Electric SE has issued bonds on different markets: - EUR500 million worth of bonds issued in July 2010, at a rate of 3.625%, maturing on July 20, 2020, • in the United States, through...

  • Page 234
    .... 31, 2015 Breakdown by category Available-forsale financial assets 128 128 - Fair Value Assets Available-for-sale financial assets Other non-current financial assets TOTAL NON-CURRENT ASSETS Trade accounts receivable Other receivables Current financial assets Marketable securities Derivative...

  • Page 235
    ... Value Assets Available-for-sale financial assets Other non-current financial assets TOTAL NON-CURRENT ASSETS Trade accounts receivable Other receivables Current financial assets Marketable securities Derivative instruments - foreign currencies Derivative instruments - interest rates Derivative...

  • Page 236
    ... Group uses derivative instruments to hedge its exposure to exchange rates mainly through futures and natural hedges. Furthermore, some long term loans and borrowings granted to the affiliates are considered as net investment according to IAS 21. 234 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 237
    ... rates through hedging programs relating to receivables, payables and cash ï¬,ows, which are primarily hedged by means of forward purchases and sales. Depending on market conditions, risks in the main currencies may be hedged based on cash ï¬,ow forecasting using contracts that expire in 12 months...

  • Page 238
    ...customers any such increased 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...

  • Page 239
    ... Management during the last three financial years. Performance shares were allocated under the 2015 long-term incentive plan. Since December 16, 2011, 100% of performance shares and/or stock options are conditional on the achievement of performance criteria for members of the Executive Committee...

  • Page 240
    ... consequences of a current dispute in Belgium involving former senior executives and managers of the Group. Note 30 Subsequent events At the date of financial statements approval by the board of directors, there is no material subsequent event. 238 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 241
    ... o/w Schneider Electric SE o/w subsidiaries Related services o/w Schneider Electric SE o/w subsidiaries Audit sub-total Other legal, tax services TOTAL FEES 4% 240 240 3% 873 86% 14% 100% 8,012 27 8,039 100% 100% 23,449 2,663 26,112 5 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 239

  • Page 242
    ... companies The main companies included in the Schneider Electric Group scope of consolidation are listed below. % Interest Dec. 31, 2015 Europe Fully consolidated Schneider Electric Austria GmbH Schneider Electric Power Drives GmbH Eurotherm GmbH Invensys Systems GmbH Schneider Electric Energy...

  • Page 243
    ... STATEMENTS % Interest Dec. 31, 2015 Scanelec SAS Schneider Automation SAS Schneider Electric Energy France SAS Schneider Electric France SAS Schneider Electric Holding Amérique du Nord SAS Schneider Electric Industries SAS Schneider Electric International SAS Schneider Electric Manufacturing...

  • Page 244
    ...assurance SA American Power Conversion Corp (APC) 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 Logistic Centre B.V. Schneider Electric Manufacturing The Netherlands...

  • Page 245
    ... Schneider Electric Buildings UK Ltd Schneider Electric IT UK Ltd Schneider Electric Ltd Serck Control and Safety Ltd M&C Energy Group Ltd Samos Acquisition Company Ltd BTR International Ltd BTR Property Holdings Ltd Imserv Europe Ltd Invensys Controls UK Ltd Invensys Holdings Ltd Invensys Systems...

  • Page 246
    ... Schneider Electric Holdings Inc. Schneider Electric Investments 2, Inc. Schneider Electric Motion USA, Inc. Schneider Electric USA, Inc. SE Vermont Ltd SNA Holdings Inc. Square D Investment Company Summit Energy Services, Inc. Telvent DTN, LLC Telvent USA, LLC Veris Industries LLC AST North America...

  • Page 247
    ...CONSOLIDATED FINANCIAL STATEMENTS % Interest Dec. 31, 2015 Invensys LLC Invensys Systems Inc. Siebe Inc. Stewart Warner Corporation Foxboro Controles SA Indusoft, Inc. InStep Software, LLC Schneider Electric Software, LLC Asia-Pacific Fully consolidated Schneider Electric IT Australia Pty. Limited...

  • Page 248
    ...IT Business India Private Ltd Schneider Electric President Systems Ltd Luminous Power Technologies Private Ltd Luminous Renewable Energy Solutions Private Ltd Schneider Electric India Private Ltd Schneider Electric Infrastructure Limited Eruotherm India Private, Ltd Invensys Development Centre India...

  • Page 249
    ... Process Systems (Thailand) Co., Ltd Clipsal Vietnam Co. Ltd Schneider Electric IT Vietnam Ltd Schneider Electric Vietnam Co. Ltd Invensys Vietnam Ltd Accounted for by equity method Sunten Electric Equipment Ennovation System Control Co., Ltd Fuji Electric FA Components & Systems Co., Ltd (sub-group...

  • Page 250
    ... Schneider Electric Pakistan (Private) Limited Schneider Electric Peru SA Invensys Process Systems del Peru SA EPS Electrical Power Distribution Boards & Switchgear Ltd Telvent Saudi Arabia Co. Ltd AMPS Invensys Saudi Arabia Co., Ltd Schneider Electric South Africa (Pty.) Ltd Uniï¬,air South Africa...

  • Page 251
    ... of the financial position of the Group as at December 31, 2015 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union. statements, your group carries out intangible asset and goodwill impairment...

  • Page 252
    ...AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS • note 7 to the consolidated financial statements « Restructuring costs » states the amount of restructuring costs recorded in 2015. We verified that, based on currently available information, these costs concern restructuring measures...

  • Page 253
    ... the financial statements 3.2 Accounting principles 255 255 256 Significant events of the financial year 255 7. The company's financial results over the last five years 270 4. Statutory auditors' report on the annual financial statements 266 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 251

  • Page 254
    .... 31, 2015 Net Dec. 31, 2014 Net Non-current assets Intangible assets Intangible rights Property, plant and equipment Land Buildings Other Total intangible assets and property, plant and equipment Financial investments Shares in subsidiaries and affiliates Other investment securities Advances to...

  • Page 255
    ... EQUITY AND LIABILITIES The notes form an integral part of these parent company financial statements. 7.3 (4,512) 52,585 2 9,807,721 8 45 45 9 10 11 6,786,730 80,947 13 6,867,690 997 70,474 3,500 74,971 6,942,661 12 312 158,282 16,909,021 6 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 253

  • Page 256
    ... of fixed asset disposals Provisions, depreciation and amortization Other Non-recurring expenses Net non-recurring income/(expense) Net income tax benefit NET INCOME The notes form an integral part of these parent company financial statements. 254 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 257
    ..., the financial statements for the financial year ended December 31, 2015 have been prepared in accordance with French generally accepted accounting principles. Own shares Treasury stocks are assessed by category (shares in subsidiaries and affiliates, marketable securities), according to the...

  • Page 258
    ... the year, there was no movement in equity shares. The main investments at December 31, 2015 were as follows: Dec. 31, 2014 5,599,974 (114,270) 5,485,704 Additions - Disposals - Dec. 31, 2015 5,599,974 (114,270) 5,485,704 Shares in subsidiaries and affiliates Schneider Electric Industries SAS...

  • Page 259
    ... Shareholders' Meeting dated April 21, 2015, the company proceeded to the share buyback of 10,623,464 own shares for a total amount of EUR600 million. These Schneider Electric SE shares were not allocated to performance shares plans and thus were accounted for as other investment securities...

  • Page 260
    ...,882 - Value - Number of shares 4,676,616 - Treasury shares Gross Provisions TOTAL NET Marketable securities primarily represent own shares held by the company for allocation to coming performance shares plans and, if appropriate, of stock-options. Note 5 Cash and cash equivalent group This...

  • Page 261
    ...Increases 8,812 4,416 (1,744) 11,484 Decreases (450) (2) (900) (2,103) (4,371) 18 (358) 668 (466) (691) (527) (177) (177) (674) (161) 9 (10,362) Dec. 31, 2015 765 1,565 3,660 7,628 203 (371) 2,298 1,751 1,613 1,156 1,103 8,138 4,255 (1,735) 32,029 6 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 262
    ...EUR10 million share capital increase as part of the worldwide Employee Stock Purchase 2,413,939 new shares; Plan with an issuance of 7.3 - Retained earnings Pursuant to the third resolution of the Ordinary and Extraordinary Shareholders' Meeting of April 21, 2015, EUR341 million 2014 profit was...

  • Page 263
    ... year, the company refunded two bonds, for EUR600 million issued in October 2007 and for EUR150 million maturing on January 8, 2015. The company issued in 2015 four bonds for EUR1,850 million: • as part of its Euro Medium Term Notes (EMTN) program, which bonds are traded on the Luxembourg stock...

  • Page 264
    ... 5,695,000 Decrease (6,155,000) (14) (300,000) (6,455,014) Dec. 31, 2015 - In 2015, two promissory notes were issued to BNP for EUR300 million with maturity dates of March 9, 2015 and June 9, 2015. All commercial papers were reimbursed in 2015. 262 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 265
    ... financial income (in thousands of euros) 6 Full Year 2015 (136,783) (3,185) (139,968) Full Year 2014 784 (127,240) (4,249) (130,705) Dividends Net interest income (expense) Other NET FINANCIAL INCOME In 2015, the company did not receive dividends. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 266
    ... available to the company in this capacity totalled EUR1,627 million at December 31, 2015. Note 17 Pension benefit commitment The company had taken commitments towards its executives, active managers and retirees. In 2012, the company had closed the old plan to any new incomer and set up a new plan...

  • Page 267
    ...the board of directors, there is no material subsequent event. 19.2 - Consolidated financial statements Schneider Electric SE is the parent company of the Group and accordingly publishes the consolidated financial statements of the Schneider Electric Group. 6 2015 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 268
    ... with the assignment entrusted to us by your Annual Shareholders' Meeting, we hereby report to you, for the year ended December 31, 2015 on: • the audit of the accompanying financial statements of Schneider Electric SE; As part of our assessment of the accounting principles and methods used by...

  • Page 269
    ...companies D. Investments in foreign companies Total Marketable securities 4,676,616 TOTAL Schneider Electric SE own shares 144,423 144,423 1,092 141,123 6,491,453 Schneider Electric Industries SAS Schneider Electric SE own shares 5,343,544 1,005,694 6,349,238 6 2015 REGISTRATION DOCUMENT SCHNEIDER...

  • Page 270
    ... (aggregate) b) Foreign subsidiaries (aggregate) B. Affiliates not included in Section I: (0-50%) a) French companies (aggregate) b) Foreign companies (aggregate) * Including income or loss in prior financial year. 19,905 8,196 4.8 268 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 271
    ...fit or loss (-) Dividends received by the company during 2015 5,343,544 5,343,544 2,506,389 - 3,348,789 237,764 - 219,894 139,074 - - Holding company (40) - 15,288 - 1,038 - - - - - - 130 21,249 53 2,049 - - - 464 - 6 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 269

  • Page 272
    ... company's financial results over the last five years 2015 2,354,938 588,734,472 2014 2,338,765 584,691,142 2013 2,247,832 561,958,023 2012 2,221,668 555,417,014 2011 2,195,772 548,943,024 Financial position at December 31 Share capital (in thousands of euros) Number of shares in issue Number...

  • Page 273
    ... on the company and its capital 272 5. Employee incentive plans - Employee shareholding 5.1 Profit-sharing plans 5.2 The « Schneider Electric » employee shareholding General information on the company 280 280 280 2. Shareholders' rights and obligations 273 General Meetings (article 19...

  • Page 274
    ... French Commercial Code. They are indicated with a special mention. > 1. General information on the company - electrical equipment manufacturing, electrical distribution and secured power supply, As a European Company (Societas Europaea) with a board of directors (since June 18, 2014), domiciled...

  • Page 275
    ...Shareholders' Meeting, the board of directors may authorize shareholders to fill out and sign these forms electronically through a secure site set up by the Annual Shareholders' Meeting organizer using a process that complies with 2.2 Voting rights This section is included in the Chairman's report...

  • Page 276
    ... owning at least 2.5% of the share capital, subject to compliance with the relevant provisions of the law. These provisions are from the Combined Annual and Extraordinary Shareholders' Meetings of June 27, 1995; May 5, 2000 and April 23, 2009. 274 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 277
    ...5,789,875 shares under the performance shares or stock grant plans (plans 14 ter to 22 ter, excluding plans 15, 15 bis, 17 and 21) relating to shares to be issued and to existing shares or shares to be issued whose type will be determined later; 7 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 275

  • Page 278
    ... 9, 2015, the board of directors authorized the issue of new shares to employees, within a limit of 0.63% of the capital. These capital increases reserved for employees, whether part of the Company saving plan or not, will take place in June 2016; the subscription prices will be set on that date...

  • Page 279
    ... to employees who are members of the company savings plan. (5) At the board of directors' meeting on March 31, 2014, 2.9 million shares were granted under the 2014 long-term incentive plan. The board of directors of March 27, 2015 granted 2.9 million performance shares (0.49% of the capital) as part...

  • Page 280
    ... be acquired: - 10% of the issued share capital as of the date of the Annual Shareholders' Meeting, representing, on the basis of the issued share capital at February 29, 2016, a total of 58,873,559 Schneider Electric SE shares with a nominal value of EUR4, - taking into account treasury stock and...

  • Page 281
    ...the company's knowledge, no shareholders other than Blackrock Inc., 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 December 18, 2015 December 17, 2015 December 8, 2015...

  • Page 282
    ... and the company. In countries where regulations permit, Schneider Electric offers its employees the opportunity to invest during share capital increases reserved to its employees. The Group's last employee share issue took place in July 2015. This operation, without leverage effect, was offered...

  • Page 283
    ...criteria since January 2009. Shares and stock option plans (1) 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...

  • Page 284
    ... COMPANY AND ITS CAPITAL SHARES AND STOCK OPTION PLANS • mandatory investment in Schneider Electric SE shares of 10% of the selling price (net of taxes and contributions) of performance shares grants acquired through plans set up since 2009. These obligations are suspended once the shareholding...

  • Page 285
    ...165,905 44,298 73,930 102,681 (*) The data above are adjusted for the two-for-one split, effective September 2, 2011, and for the adjustment carried out in May 2014 and May 2015. (1) In the role as executive officer at the date of attribution. 7 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 283

  • Page 286
    ... 17, 55 shares under plan 17 bis, 248,203 shares under plan 18 and 3,377 shares under plan 18 bis were cancelled as performance targets were partially met. * The data below are adjusted for the two-for-one share split, effective September 2, 2011. 284 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 287
    ... ON THE COMPANY AND ITS CAPITAL SHARES AND STOCK OPTION PLANS Performance criteria 50% of the shares/100% for the management board - 2011 and 2012(3) operating margin and organic Group sales growth over 2011 and 2012 higher than world GDP average growth over same period No performance conditions 50...

  • Page 288
    ... bought or subscribed is the highest 111,582 Plans 28-30-31-33 Shares awarded to the ten most highly paid employees (excluding executive officers) Number 2015 Performance Shares grant (annual plan allocation of March 27, 2015) 213,000 Plan 21-22 286 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 289
    ...Year 2014 Stock market data In France, Schneider Electric is listed on Euronext Paris (compartment A), where it is traded on a per-share basis under ISIN code FR0000121972. Schneider Electric SE shares are included on the CAC 40 index established by Euronext. 18-month trading data in Paris Number...

  • Page 290
    ... ON THE COMPANY AND ITS CAPITAL STOCK MARKET DATA Five-year trading summary 2015 Average daily trading volume on the Paris stock exchanges (NYSE Euronext): • Number of shares (in thousands) • in million euros High and low share prices (in euros) • high • low Year-end closing price (in euros...

  • Page 291
    ...'s guide; letters to shareholders; information on financial results, corporate governance and strategic updates through specific press releases available in a dedicated section on the corporate website: www.schneiderelectric.com/finance/ 7 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 289

  • Page 292
    7 INFORMATION ON THE COMPANY AND ITS CAPITAL INVESTOR RELATIONS 290 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 293
    ... to performance conditions, as the case may be 317 4.3 Statutory auditors' report on the authorization to grant options to subscribe for or to purchase shares 318 4.4 Statutory auditors' report on the issuance of shares or securities giving access to capital reserved for members of the Company...

  • Page 294
    ... Industries SAS. In effect, your company, which has EUR10 billion in equity, opts to leave at the level of Schneider Electric Industries SAS, which owns all of the entities which form the Group, any dividends and financial income that the latter receives from its own subsidiaries in order to allow...

  • Page 295
    ...Article 39) for corporate executive officers, and leave them to deal personally with building up their additional pension. For this purpose, the board of directors authorized complementary payments (see below) whose amount set by the board leads to reducing by half (52%) the gross value of what the...

  • Page 296
    8 ANNUAL SHAREHOLDERS' MEETING REPORT OF THE BOARD OF DIRECTORS TO THE COMBINED ANNUAL AND EXTRAORDINARY SHAREHOLDERS' MEETING We draw your attention to the fact that total compensation and payments to Mr. Jean-Pascal Tricoire and Mr. Emmanuel Babeau for the year 2015 include exceptional, non-...

  • Page 297
    ...(i) in line with the Schneider is On company program (25%), evaluated amongst other things through customer satisfaction objectives (5%), services development (10%), development and succession plan of key talent (10%) as well as (ii) corporate social and environmental responsibility assessed through...

  • Page 298
    ... EUR17 million in the 2015 accounts for corporate officers. It will generate substantial savings for the company, and in turn for its shareholders, linked i) to the fact that the level of complementary payments set by the board of directors leads to reducing by half (52%) the gross value of what Mr...

  • Page 299
    ... last 12 months of service). (See Section 3-7 of the 2015 Registration Document). Board decisions of 2009, 2012, and June 18-19, 2013. Dates of approval by the Annual Shareholders' Meeting: 2009, 2012 and May 6, 2014 By decision of the board of directors' meeting of February 18, 2015, Mr. Tricoire...

  • Page 300
    ... EUR17 million in the 2015 accounts for corporate officers. It will generate substantial savings for the company, and in turn for its shareholders, linked i) to the fact that the level of complementary payments set by the board of directors leads to reducing by half (52%) the gross value of what Mr...

  • Page 301
    .... The percentage of capital represented by Mr. Babeau's share allocation is 0.004%. Date of authorization by the Annual Shareholders' Meeting: April 25, 2013. Resolution number: Sixteenth. Date of the award decision by the board of directors: March 27, 2015. 4) Performance shares â,¬473,928 for...

  • Page 302
    ... French executives in the Group against risks of illness, incapacity, disablement and decease. Providence compensation and complementary cover are subject to performance conditions. Board decisions of 2009, 2012, 2013 and February 18, 2015. Dates of approval by the Annual Shareholders' Meeting: 2009...

  • Page 303
    ... as statutory auditors for the company the firms Ernst & Young et Autres and Mazars, as well as re-electing the alternate auditors, whose terms of office are due to expire at the Annual Shareholders' Meeting to approve the 2015 annual accounts. 8 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 301

  • Page 304
    ...long-term incentive plans, all shares allocated to senior corporate officers of the company and to members of the Executive Committee will be subject to performance conditions. For other beneficiaries, the performance criteria will be on at least 302 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 305
    ... was 3/10 on january 1, 2015. New performance criteria On the report of the Human Resources & CSR and Governance & Compensation Committees, the Board of Directors decided to review the performance conditions in order to bring them more in line with shareholders' long term interests. Accordingly, it...

  • Page 306
    ... 2013, the Annual Shareholders' Meeting authorized the board of directors to grant options to corporate officers and employees of Schneider Electric SE and its subsidiaries and affiliates, as defined in Article L. 225-180 of the French Commercial Code, within the limit of the number of options...

  • Page 307
    ... - Twenty-first and Twenty-second Resolutions Schneider Electric is convinced of the importance of developing the company's employee shareholder base and issues new shares to employees each year. As of December 31, 2015, employees held 3.8% of the capital. We remind you that the Twentieth and...

  • Page 308
    ... well informed about its business performance. As such, the Vice-Chairman Independent Lead Director is kept informed of current events and the performance of the Group through weekly exchanges and monthly meetings with the Chairman and CEO. He has met all members of the Group Executive Committee. In...

  • Page 309
    ...Chairman may request any document or item of information useful to enlighten the board of directors when preparing its meetings. Internal regulations of the board of directors of Schneider Electric SE Schneider Electric refers to Governance Code (April 2010). The present internal regulations have...

  • Page 310
    ... authority granted at annual general shareholders meetings, more particularly for increasing company capital, redeeming the company's own shares, carrying out employee shareholding operations and cancelling shares, - authorize the issue of bonds, 308 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 311
    ... as promptly as possible. In order to provide members of the board of directors with complete information, visits to sites and customers shall be organized for them. Members of the board of directors shall have the right to meet main company executives. They shall inform the Chairman serving as CEO...

  • Page 312
    ...order to hedge stock option plans (eg: hedging of shares subscribed upon exercise of options). Members of the board of directors shall refrain from carrying out any transaction involving company's listed shares during the 31 days before the day following publication of annual or half-yearly accounts...

  • Page 313
    ...included in legal control of accounts; • it monitors the efficiency of internal control and risk management systems. For this purpose: - it shall examine the organization and resources used for Internal Audit, as well as its annual work program. It shall receive summaries of reports produced on...

  • Page 314
    ..., • the company's use of national and international corporate governance practices, • the total value of directors' fees proposed at annual general shareholders meetings together with their allocation amongst members of the board of directors. 312 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 315
    ...conditions of organization and operation of the board of directors. Their purpose is not to replace the articles of association. They may not be relied upon by shareholders or third parties for use against members of the board of directors, the company, or any company in the Schneider Electric Group...

  • Page 316
    ... on regulated agreements To the Shareholders, In our capacity as Statutory Auditors of your company, we present below our report on regulated agreements and obligations. Our responsibility is to report to you, based on the information provided, on the main terms, conditions and the reasons for the...

  • Page 317
    ... • dismissal, non-renewal or resignation as 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; - Stock Options, Free Shares or Performance Shares Mr. Jean-Pascal TRICOIRE...

  • Page 318
    ... entitled to accumulate his non-compete compensation with payments from a pension plan. In all other cases, (Involuntary Severance, resignation not meeting the above conditions), the Board of Directors shall rule, within a period to not exceed eight days from the date of departure of the interested...

  • Page 319
    ... be granted annually to corporate officers of the Company under and pursuant to this authorization shall not account for a percentage greater than 0.03% of the Company's share capital at the date of this Shareholders' Meeting. Your board of directors proposes that, on the basis of its report, it be...

  • Page 320
    ... examination of the conditions for the issue that would be decided, we have no matters to report as to the methods used to determine the issue price for the shares or the equity securities to be issued provided in the board of director's report. 318 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 321
    ... 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 right reserved for: (i) employees and corporate officers of the Schneider Electric Group related to the company under the terms of...

  • Page 322
    ...French Commercial Code, hereby issues a favorable opinion on the elements of compensation due or awarded in respect of the 2015 financial year to Mr. Jean-Pascal Tricoire as presented in the board of directors' report to the Shareholders' Meeting. 320 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 323
    ... the board of directors' report, hereby resolves to re-elect the company Ernst & Young et Autres as Statutory Auditor for a term of six financial years, expiring at the close of the Shareholders' Meeting to be held in 2022 to review the financial statements for the financial year 2021. 8 2015...

  • Page 324
    ... a term of six financial years, expiring at the close of the Shareholders' Meeting to be held in 2022 to review the financial statements for the financial year 2021. EIGHTEENTH RESOLUTION (Authority granted to the board of directors to buy back Company shares - maximum purchase price per share...

  • Page 325
    ...granted annually to corporate officers of the Company under and pursuant to this authorization shall not account for a percentage greater than 0.03% of the Company's share capital on the date on which this General Meeting is being held; TWENTIETH RESOLUTION (Authorization to the board of directors...

  • Page 326
    ... the share capital on the date of this Shareholders' Meeting (excluding adjustment), (ii) the options shall have a term of between five and 10 years, and (iii) the total number of the options granted to corporate officers of the company and to members of Schneider Electric's Executive Committee in...

  • Page 327
    ... Schneider Electric Group affiliated with the Company on the terms and conditions set forth in Article L. 225-180 of the French Commercial Code and Article L. 3344-1 of the French Labor Code and the registered office of which is located outside France; (ii) and/or OPCVM mutual investment funds...

  • Page 328
    ... RESOLUTION (Powers for formalities) The Annual Shareholders' Meeting confers full powers upon the bearer of a copy or excerpts of the minutes confirming these resolutions for purposes of accomplishing all legal and administrative formalities. 326 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 329
    ...Auditors' reports provided in Chapter 6 of the registration document for the year ended December 31, 2014, registered with Autorité des Marchés Financiers (AMF) under number D15-0169 on March 19, 2015; • the management report provided in Chapter 4 of the registration document for the year ended...

  • 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. 2010 2010 2016 2016 1992 2004 2016 2016 Appointment expires 328 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 331
    ... 2016 Mai 9, 2016 Shareholders' Annual Meeting (Paris) Dividend payment INTERNET www.schneider-electric.com April 21, 2016 July 28, 2016 Financial releases February 17, 2016 2015 Annual Results Q1 2016 Sales Half Year Results October 27, 2016 Q3 2016 Sales YOUTUBE SchneiderCorporate (https://www...

  • Page 332
    ...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 EUR2,354,937, 7,888 888 EUR2,354,937 Registered in Nanterre, R.C.S. 542 048 574 Siret n°: 542 048...