APC 2015 Annual Report Download - page 4

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC2
MESSAGE FROM JEAN-PASCAL TRICOIRE
CHAIRMAN AND CEO
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Message from
Jean-Pascal Tricoire
CHAIRMAN AND CEO
Successes in a challenging environment
In 2015, we continued to demonstrate the robustness of our
business model and delivered record high revenues and profi t in
a challenging environment complicated by the slowdown in China,
and instability of several markets, catalyzed by the fall of oil and
raw material prices. Nevertheless, our revenue reached a new
level of EUR26.6billion, a 6.8% increase. Our adjusted EBITA was
EUR3.6billion, up 5%, our adjusted net profi t was up by 6%, and
we delivered strong growth in cash fl ow up by 20%.
Our Buildings & Partner and IT businesses strengthened their
global leadership and deliver solid results both in growth and
profi tability. Infrastructure business is turning the corner; improving
its profi tability by 50bps. Industry is on track to recover its margin
and shows a signifi cant improvement in H2 despite headwinds from
oil and gas and the impact of China nuclear ramp down.
In line with our commitments to our shareholders, we invested
EUR0.6 billion on share buybacks in 2015, and propose to
accelerate this program to a cumulated total of EUR1.5billion over
2015-2016, and will propose a progressive dividend of EUR2 per
share, an increase of 4%.
Our global footprint and balanced exposure to four markets
continue to be a strong resilience asset: Western Europe resumes
growth; New Economies outside China are up by 4%, as well as
U.S. construction markets. Our growth initiatives are well executed,
achieving good results in a diffi cult market: Services and Industrial
software deliver growth higher than group average across all
businesses, respectively up by +7% for revenues and +6% in
orders .
The 2nd year of Invensys integration is a success . We confi rm
complementarities and synergies with our Industry and
Infrastructure businesses. We have strengthened our leadership
position in operation management software with franchise like
Wonderware, Advantis, SimSci, Oasis, Citec and StruxureWare.
Allsynergies delivering are on track. The success of this integration
demonstrates our capability to bring on board new entities and
drive value from acquisitions.
2015 is also a year in which we strengthen the foundations of our
businesses. We focus by disposing of several non-core assets
such as Juno, Telvent 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 fi rst year of our Schneider Is On program. We are
glad to see a solid start with strong execution. We progress along
the 5axis bringing 5benefi ts for our customers: Do more; Simplify;
Digitize; Innovate and Step up.
Within «Do More», our Services revenues went up by 7%; Orders
from industrial software grew by 6%; Project hit rate & gross margin
at booking improved; Gross Margin deviation between booking and
during execution reduced.
Our « Simplify » initiative delivers industrial productivity of circa
EUR 0.36billion and gross Support Function Cost savings of circa
EUR 0.3 billion, so approximately EUR700  million cost cutting
in a year. We plan to further increase our efforts on Support
Fonction costs optimization as we recently upgraded our target to
EUR600 million over the period 2015 - 2017.
Within the « Digitize » initiative: We released our new company
website which offers a new customer experience. In 201 5, the
number of connected offers has increased by 45% and we are
dedicated to bringing connectivity to a whole new level in 2016.
Within our Innovate initiative: We invest 5% of our revenue
(EUR1.3 billion) into R&D and successfully launched many new
offers aligned with our value proposition across businesses.
We are being recognized as a clear technology leader by industry
analysts covering our markets including Gartner, IDC, ARC,
Navigant and Verdantix, in fi elds such as Advanced Distribution
Management Systems (ADMS), Building Energy Management
Software and Microgrid Controls. We are gaining recognition in
innovative projects and design through numerous awards such as
UX Award for intuitive design, which provides high clarity and fault
tolerance to improve the user experience and increase effi ciency
in industrial production and strengthen our unique position of
delivering the convergence of IT and OT integrated.
Finally, the Step Up initiative focusses on building talent and
fostering employee engagement. We were recognized i n diversity
and inclusion trough a number of initiatives, such as the participation
in the UN Women’s inaugural HeForShe Parity Report, as one of the
10corporate IMPACT Champions.