APC 2002 Annual Report Download - page 9

2 - Operations
Schneider Electric is one of the world’s leading manufacturers
of equipment for electrical distribution, industrial control and
automation, with operations in 130 countries, 192 production
sites, 150 service centers and some 13,000 sales outlets
through its distributors. In 2002, the Company generated total
sales of  9,060 million with an average weighted workforce of
74,814 employees. As the world’s Power & Control specialist,
Schneider Electric is involved in all stages of the electrical
transmission and distribution process, offering products,
equipment and services to control, monitor, protect and
supervise machines and installations in industry, infrastructure,
and industrial, commercial and residential buildings. Operations
are divided into three geographic divisions: Europe, North
America and International. The financial statements and
quarterly sales reports are also presented by division, in
keeping with French generally accepted accounting principles.
Schneider Electric primarily operates under the Merlin Gerin,
Square D and Telemecanique brand names. These brands’
high global recognition and excellent reputations are a critical
strength for the Company. Square D is extremely well-known
in the United States, where it generates most of its sales, while
Telemecanique and Merlin Gerin are flagship brands in France
and the rest of Europe.
3 - Strengths
Significant specialization and market share. Schneider
Electric is the only company worldwide focused exclusively
on electrical distribution, industrial control and automation.
This specialist profile has allowed us to win market share
and penetrate new markets around the globe. The Company
ranks among the world leaders in low voltage switchgear
and equipment and holds forefront positions in medium
voltage and industrial automation.
Solid reputation. Merlin Gerin, Telemecanique and Square D,
with their strong reputations for quality and safety, are among
the most powerful brands in our industry. Because using
electricity always carries some risk, we have put together
ahighly professional lineup that has won over a wide array
of loyal customers around the world. We have successfully
leveraged this reputation to attract new customers, sell
considerable volumes (including replacement products)
and develop a broad range of innovative products, equipment
and services for consumers worldwide.
Growth potential. Based on a vast study to assess the
power and control needs of end users in our core markets
(residential, buildings, industry, energy and infrastructure), we
estimate our potential market at around 210 billion. We have
seen high demand for increasingly intelligent products that can
communicate with each other or be operated remotely via the
Internet.
Strong partnerships with distributors. We market a
significant percentage of our products through distributors to
reach a broad customer base. We have close partnerships
with large international distributors, as well as with local
distributors, wholesalers and non-specialized retailers.
Global presence. Schneider Electric has operations
worldwide to support its increasingly international business. We
benefit from a strong presence in most of our main markets. In
continental China, for example, we have expanded rapidly from
sales of  91 million in 1995 to  547 million in 2002. This
global coverage gives us three major competitive advantages,
by allowing us to 1) seize market opportunities as they arise
and maximize our sales, 2) reduce our exposure to economic
cycles in our local markets, and 3) serve multi-national
companies who require product platforms that can be
deployed anywhere in the world.
International lineup. Increasingly, we work to develop
and patent products that can be sold worldwide. Merlin Gerin
low voltage circuit breakers and Telemecanique contactors,
for example, are sold in virtually all our main markets and,
like other global products, enjoy a solid reputation for reliability
and technological excellence. In addition, we try to standardize
base components as much as possible. Product design and
esthetics are then adapted to suit local requirements. This
internationalization strategy allows us to reach a maximum
number of markets while optimizing production costs.
4 - Strategy
Electrical distribution, industrial control and automation will play
a growing role in the 21st century. A new era has dawned in
which electricity, automation and communication technologies
are converging. Smart buildings, with electrical devices that
can be remotely programmed and monitored and that can
communicate with each other and users via the Internet, are
Business Presentation
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