APC 2015 Annual Report Download - page 182

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC180
BUSINESS REVIEW
4REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS
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2. Review of the consolidated
financial statements
2.1 Review of business and consolidated statement of income
Changes in the scope of consolidation
Acquisitions& divestments occurred during the year
On December11, 2015, Schneider Electric announced that it had
obtained all required regulatory approvals and subsequently fi nalized
the sale of Juno Lighting, LLC («Juno») to Acuity Brands,Inc. for
a consideration of approximately USD385million (EUR343million).
The transaction generated a capital loss of EUR163million recorded
as Other operating expense.
On December14, 2015, Schneider Electric announced that it has
signed an agreement to sell its Transportation Business, to Kapsch
Traffi cCom AG. The Transportation business generated revenues
of EUR134 million in 2014 and is currently consolidated under
the Infrastructure business of Schneider Electric. The terms of the
agreement refl ect a purchase price of about EUR35million on a
cash-free, debt-free basis. The agreement is conditioned upon the
satisfaction of certain regulatory conditions and on other customary
closing conditions. The transaction is expected to close in the
coming months. The transaction would generate an impairment
of EUR100million that was recognized at December31, 2015 as
Other operating expense.
No signifi cant acquisition occurred during 2015.
Acquisitions& divestments occurred in 2014
withsignificant effect in 2015(1)
On January17, 2014, the Group took control of Invensys group.
Invensys is fully consolidated, mainly in the Industry business,
since January2014, except for its Appliance division (divested in
June2014) reported as discontinued operation over the fi rst half
of 2014.
On October 1, 2014 the Group fi nalized the sale of Custom
Sensors & Technologies (CST) and the Group has reinvested
approximately USD100million alongside CST management to hold
a shareholding of 30% of CST. CST was reported in the Industry
B usiness of Schneider Electric. The CST activity was reclassifi ed
as discontinued operations in Group’s consolidated fi nancial
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 for by the equity method.
Changes in foreign exchange rates
Changes in foreign exchange rates relative to the euro had a
material impact over the year. This positive effect amounts to
EUR1,949million on consolidated revenue and to EUR254million
on Adjusted EBITA(2).
Revenue
On December 31, 2015, the consolidated revenue of Schneider
Electric totalled EUR26,640million, an increase of 6.8% at current
scope and exchange rates compared to EUR24,939 million on
December31, 2014.
This variance breaks down into an organic decrease of -1.0%
and a positive exchange rate effect of 7.8%, primarily due to the
appreciation of the US dollar and Chinese yuan against the euro.
(1) Dates disclosed correspond to dates on which control takeover of the entities was acquired.
(2) Adjusted EBITA (Earnings Before Interest, Taxes, Amortization of Purchase Accounting Intangibles) is earnings EBITA before amortization
andimpairment of intangible assets from acquisitions, impairment of goodwill, other operating income and expenses and restructuring costs.
restructuring costs and before other operating income and expenses, which includes acquisition, integration and separation costs.
2.2 Changes in revenue by operating segment
The Buildings & Partner business generated revenues of
EUR11,859million, or 45% of the consolidated total. This represents
an increase of +10.3% on a reported basis and an increase of
+0.4% on a like-for-like basis. Buildings& Partner observed organic
growth across all regions except Asia Pacifi c. North America was
slightly up, driven by the growth in the construction market in the
US , helped by new product launches and increased cross-selling
and a recovery in Mexico. In Western Europe, Spain, Italy and the
U.K. grew, France performed well thanks to strong execution, while
Germany was down mainly due to a high base of comparison. Rest
of the World was up thanks to good project execution in the Middle
East and strong growth in Africa and Central Europe. Asia Pacifi c
was penalized by a weak construction market in China, despite
growth in the rest of the region.
The Industry business generated revenues of EUR5,696million, or
21% of the consolidated total. This represents an increase of +2.6%
on a reported basis and a decrease of -4.9% on a like-for-like basis.
Organic growth was impacted by strong headwinds from Oil& Gas
and China. Western Europe was fl at, as the growth in Spain and