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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
    ...Independent Director 4. Special report from statutory auditors 5. Draft resolutions 306 307 314 320 Trends in Schneider Electric's core markets Review of the consolidated financial statements Review of the parent company financial statements Review of subsidiaries Outlook Persons responsible for...

  • Page 3
    ... 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 filed with...

  • Page 4
    ... 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 fields such as Advanced Distribution Management Systems (ADMS), Building Energy Management Software and Microgrid Controls. We...

  • Page 5
    ... of Global Compact France, 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...

  • Page 6
    ... our solid balance sheet, this enable us to set a progressive dividend policy with no year-on-year decline, and we have recently increased our share buyback to a total of EUR1.5 billion over the period 2015-2016, reï¬,ecting our confidence in the future prospects of the Group. Invensys joined the...

  • Page 7
    ... Vice-President, Industry 16 Philippe Delorme Executive Vice-President, Buildings & Partner 17 Hal Grant Executive Vice-President, IT 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 8 Emmanuel Lagarrigue Executive Vice-President, Strategy 9 Chris Leong Executive Vice-President, Global Marketing 5

  • Page 8
    ... 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 R LÉ O BE TS...

  • Page 9
    ... growth remained contrasted by region and by business. Building & Partner and IT strengthened their 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...

  • 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
    ... the top 15 for the first time this year, jumping 12 spots from its 2014 ranking. On October 15, Schneider Electric announced that independent analyst firm Verdantix had named the company a leader in its 2015 Green Quadrant® Building Energy Management Software report. This is the second year in...

  • Page 13
    ...ficient Energy Management Application. Corporate Social Responsibility On January 23, Schneider Electric announced that Corporate Knights had ranked it as one of the 100 most advanced companies in the world in the field of sustainable development. Schneider Electric ranked 9th in the global list...

  • Page 14
    ...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 and strategies in response to climate change and...

  • 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
    ... 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 On for its customers...

  • Page 17
    ... opportunities for new services. In energy management, operational technology (OT), the world of physical equipment control, is converging with information technology (IT), the world of information processing. Products are now connected and can be remotely controlled and optimized. This results...

  • Page 18
    ... and the environment. With the recent acquisition of Invensys, Schneider Electric enjoys a strong position both in discrete and process automation and is well-placed to address these challenges. We leverages the Group extensive software capabilities to help customers in key industries, such as...

  • Page 19
    ... BUSINESSES GROUP STRATEGY AND MARKET OPPORTUNITIES continuous innovation, Schneider Electric engineers products and solutions that help them unlock this potential. Schneider Electric builds native connectivity into its product offerings, delivers a full range of digital services to help customers...

  • Page 20
    ... in energy management and automation We are developing best-in-class technology in energy management and automation to meet growing customer needs and challenges. We estimate that nearly 80% of our revenue is derived from sales in businesses where Schneider Electric enjoy as number one or two market...

  • Page 21
    ... brand, and Safety Systems (under the Triconex brand), as well as a strong industrial software offer for manufacturing operations management (Wonderware), modeling/simulation (SimSci) and asset management (Avantis). Schneider Electric operations are organized in four businesses: Buildings & Partner...

  • Page 22
    ... 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 the context of single-family...

  • Page 23
    ... and service capabilities and segment-specific expertise. We market and sell our solutions through direct partners, such as contractors and system integrators, or directly to larger customers. Product business model We believe our products offer best-in-class technology, strong channel access to...

  • Page 24
    ...access to a powerful platform covering all areas of automation, from field control to Manufacturing Execution Systems (MES). Electricians & DIY stores Electricians design and perform electrical installations, primarily in residential and small non-residential buildings. Schneider Electric supports...

  • Page 25
    ... addresses customers directly in a number of end-markets, including in particular: • in Utilities, the Group serves companies producing, delivering, and/or selling electricity to customers; • Water & Waste Water includes customers across the entire water cycle, from water resources to water...

  • 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
    ... a key player in the oil, gas and mining industry, as well as to develop energy efficiency and smart grid. • We grew our presence in new economies with the acquisition of Delixi in China, Conzerv in India (2009) and Steck group in Brazil (2011). 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 25

  • Page 28
    ... OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES COMPANY HISTORY AND DEVELOPMENT • With the acquisition of Telvent in 2011, a Spanish software company with a strong presence in North America, we became global leader in ADMS, (Advanced Distribution Management Systems), supporting the monitoring...

  • Page 29
    OVERVIEW OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES COMPANY HISTORY AND DEVELOPMENT 4.4 Change management through company programs Schneider is On, Schneider Electric's company program (2015-2020) Schneider is On, Schneider Electric's company program for the 2015-2020 period, is another major...

  • Page 30
    ... OF THE GROUP'S STRATEGY, MARKETS AND BUSINESSES RESEARCH & DEVELOPMENT > 5. Research & Development Innovation is the key to our company's growth. Schneider Electric has had a history of innovations in the past 100 years. During 2015, the Group worked on a new strategic plan for R&D based...

  • Page 31
    ... analytics. Technology anticipation addressed different types of actions: Modeling and simulation Regarding lifetime cost, the design phase of industrial projects plays a critical role in reducing both time and cost of system deployment. Invensys, acquired by Schneider Electric in January 2014, is...

  • Page 32
    ...strategies to take advantage of the IoT, enable operational excellence and improve overall business performance, PlantStruxure and MachineStruxure architectures play a key role in managing convergence between informational technology and operational technology. Schneider Electric Best-In-Class Smart...

  • Page 33
    ... teams are trained, dedicated, accountable • Speed up innovation by practicing Open Innovation with universities, start-up companies, supplier, and customers • Faster with time-boxed projects and empowered teams • R&D investments to be selective, focused on the best growth opportunities, and...

  • 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
    ...is critical 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...

  • Page 36
    ... to increase experience and leverage a significant scale effect around cost and service. Manufacturing and supply chain operations, areas of shared services or expertise (such as finance or Human Resources), information systems, Group Strategy, Technology and global marketing functions are...

  • 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
    ...sized companies. Suppliers are selected for the quality of their products and services, their adherence to delivery deadlines, their competitiveness, their innovative capacity and their commitment to corporate social responsibility (CSR). As a participant of the UN Global Compact, Schneider Electric...

  • Page 39
    ... markets for the Group's products are competitive in terms of pricing, quality of products, systems and services, development and introduction time for new offers. Schneider Electric faces strong competitors, some of whom are larger than we are or are developing in certain lower cost countries...

  • Page 40
    ... the area of energy efficiency solutions. This ability can only result from a strong employee-centric Human Resources strategy and its ability to prepare its workforce for the future through learning and identifying talent within the organization. 38 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 41
    ... to plan for longer-term career development and succession to critical roles in the organization. Our culture of systematically reviewing talent at every level of the organization gives fair opportunity to everyone to progress. The Group's acquisitions and growth ambitions have increased its global...

  • Page 42
    ... and cost control structures to manage these issues and limit the related risks. However, despite the Group's policy of establishing governance structures and contingency plans, there can be no assurance that information systems projects will not be subject to technical problems and/or execution...

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

  • Page 45
    ... of the Public Prosecutor's Department, the judge referred Schneider Electric Industries SAS and 13 other French companies to the criminal court, which rended its decision on June 16 2015, discharging all the companies. However, the Bench appealed on this decision,wich is currently scheduled to...

  • Page 46
    ... AND BUSINESSES RISK FACTORS 7.7 Insurance policy Schneider Electric's general policy for managing insurable risks is designed to defend the interests of employees and customers and to protect the company's assets, the environment and its shareholders' investment. This strategy entails: Transport...

  • Page 47
    ... 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 help fight climate change 60 2.3 Relations...

  • 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
    ..., access to energy, eco-design, sustainable purchasing, employee attraction and engagement, scarcity of resources, raising awareness on sustainability, climate change, and subjects linked to Schneider Electric's major customer projects (energy transition, energy efficiency in industry, in buildings...

  • Page 50
    ... Index 14 85% of employees work in countries with Schneider gender pay equity plan 79% 61% 73,339 460 17% S 85.6%S 61% S 57% S 30% 85% 64% 85% PEOPLE DEVELOPMENT 15 150,000 underprivileged people trained in energy management 16 1,300 missions within Schneider Electric Teachers NGO 102,884...

  • 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
    ... groups Department 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...

  • 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
    ... works to advise 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...

  • Page 56
    ... Global Purchasing Committee & business reviews with recommended suppliers > HR HR Committee, Diversity & Inclusion Committee, etc. All Employees > Sustainability Fellows Webradios > SE teachers > Foundation delegates > Regional CSR Directors 54 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 57
    ... 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 Electric...

  • 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
    ...and energy consumption. Schneider Electric was one of the nine companies listed in the CDLI in 2015. Employers: in 2015, Schneider Electric was one of 50 global companies rated most attractive to engineering students. • World's Most Admired Companies: Schneider Electric ranked seventh place in...

  • Page 60
    ... endof-life processing. To limit the impact of its end-of-life products, Schneider Electric has established a system to recover equipment containing SF6, a powerful greenhouse gas. The Group works in more than 100 countries, with heterogeneous practices, standards and values. Schneider Electric is...

  • 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
    ... products, systems, services and software within a single energy management architecture. Schneider Electric has competitive offerings for energy efficiency, as well as for energy ï¬,ow management of utility grids and industrial processes, security systems, data centers, and of course, buildings...

  • Page 63
    ... This is why Schneider Electric is developing energy management solutions adapted to grid cycles. Finally, the variety of charging environments, whether public or private, individual or collective, requires information and invoicing systems to be put in place for businesses and car service providers...

  • Page 64
    ... architecture for power, security, IT, building and process management systems, integrated mobility management platform, security systems and management, intelligent weather forecasting, energy and environment management information systems. 62 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 65
    ...program: at the end of 2011, more than 50% of Schneider Electric purchases were from suppliers who had signed the 10 principles of the Global Compact or the EICC (Electronic Industry Citizenship Coalition). Since 2012, Schneider Electric has wanted to place itself in a continuous improvement process...

  • Page 66
    ... 26000 standard for all purchasers is 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...

  • Page 67
    ...of Responsibility advisor; 2 • an alert process to guide employees towards the right bodies: 1. contacting one's manager, or 2. using existing internal departments (legal, financial, HR, environment, etc.), or 3. contacting the Group Fraud Committee via the professional alert system (accessible...

  • Page 68
    ...Operational Responsability & Ethics Committee Define, explain & communicate the rules Fraud Committee Detect & manage non compliance Zone Level Principles of Responsability Advisers Awareness Enablers Compliance Officers Investigation Enablers 66 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 69
    ... 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 implementation of a digital strategy must reconcile economic...

  • Page 70
    ... specific training and educational materials have been developed for the attention of a certain number of functions, such as the Purchasing function; the Tender response and project implementation centers; and the Finance Department; • after becoming a member in 2014, Schneider Electric became...

  • Page 71
    ..., 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 changing expectations of our global ecosystem. 2 2015 REGISTRATION DOCUMENT...

  • Page 72
    .... In June 2015, Schneider Electric organized its annual 'Global Environment Day' event involving tens of thousands of Group employees across hundreds of sites, inviting them to celebrate and demonstrate innovations in the areas of CO2 and the circular economy, for innovations both internal to the...

  • Page 73
    ...how, at the same time, we have a massive positive impact against climate change, through our innovations and solutions for our customers. Energy savings In general, Schneider Electric sites are low consumers of energy, compared with other industries. Our industrial activities have a high proportion...

  • Page 74
    ... opportunities in key areas which are HVAC (Heating, Ventilation, and Air Conditioning), certain equipment (such as air compressors), lighting and specific industrial processes. • to optimize the number of data centers and their energy management features, using Schneider Electric products...

  • Page 75
    ... users across the Europe, Iberia, South America and Middle East regions; • transformed the majority of China IT operations into a single managed energy efficient data center, utilizing Schneider Electric's IT Business power solutions; 2 • decommissioned over 1,400 servers globally as part of...

  • Page 76
    ... has for a long time been engaged in a process that protects the environment and the health of people in the treatment and recycling of its products at the end of the life cycle. In the context of the application of the Waste Electric and Electronic Equipment (WEEE) directive, Schneider Electric is...

  • Page 77
    ...information to be provided to customers about the presence and level of Substances of Very High Concern (SVHC) in Schneider Electric products; • has a guide that identifies and locates the sub-assemblies or components that require a particular recycling process, referred to as the « End-of-Life...

  • Page 78
    .... The Group has developed design tools for managing thermal and electrical constraints so that it can optimize the amount of materials required in production. Each device's Product Environmental Profile (PEP) lists the materials used. To facilitate end-of-life processing, Schneider Electric chooses...

  • Page 79
    ... End-of-life instruction for its products, which can be accessed easily by customers on the Internet. Conditions of use and release into soils Virtually all Schneider Electric sites are located in urban or industrial areas and do not affect any notable biotopes. None of the Group's businesses...

  • Page 80
    ... participation; • training is also a priority so that employees have the opportunity 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...

  • Page 81
    ...the Human Resources Department has been structured around three principal roles to better respond to their missions: programs, mainly through shared service centers designed to optimize efficiency and costs. Since 2012, the Group has created a more coherent HR Business Partner (HRBP) structure for...

  • Page 82
    ... and Safety data management system) has been deployed globally from September 2015 and enables us to better track and manage our safety program and to meet or exceed our key performance indicators; • in our commercial organisation, 49 Country Presidents completed 90 customer site safety audits...

  • Page 83
    ...reward employees), Develop (Develop skills and competencies through training and learning culture) and Move on (Foster internal mobility and career planning). Each of these dimensions comes with processes and tools. Schneider Electric brand values Schneider Electric's values are the core principles...

  • Page 84
    ..., and our Care and Connect values. It is also a key element to attract and retain talent at all levels, and in all cultures around the world. The Cool Sites program is creates an environment that fosters innovation, a deeper understanding of 82 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 85
    ... Schneider is On company program initiatives, such as digitization, simplification, growing services business or customized supply chain, etc., also require ongoing adaptation and skills enhancement. Learning and career development is therefore at the heart of Schneider Electric's Human Resources...

  • Page 86
    ... Group's aim is to give all employees the opportunity to draw up a personalized skills and solid career development plan in collaboration with their managers. Organization Global academies The academies' curricula are built using the outcome of workforce planning (see page 86). Schneider Electric...

  • Page 87
    ... online training programs to Schneider Electric customers. In 2015, the Partner Relationship Management (PRM) program was deployed in 10 countries, including a training module that provides our partners with dedicated learning paths based on their area of expertise. Leadership Development The...

  • Page 88
    ... business strategy, focusing on the services business, software, the Global Supply Chain transformation and the digitization transformation, drives the need for identifying critical gaps in the workforce. All action plans serve to make workforce planning part of Schneider Electric's management...

  • Page 89
    ... culture. An e-learning module was launched at the end of 2014 for all employees to better understand diversity; 16,000 employees had completed this module at the end of 2015. Processes and indicators Several global processes have been developed to support Schneider Electric's diversity policy...

  • Page 90
    ... development of professional equality in France in April 2013. Regional agreements are 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...

  • Page 91
    ... of skills. Industry market data is gathered on a country basis via third-party surveys to support compensation decisions. Schneider Electric has built and implemented global job architecture to support and align Rewards and Human Resources programs so that Schneider Electric can develop and move...

  • Page 92
    ... the company, its policy and its financial results. In recognition of its communication efforts, Schneider Electric was awarded the 2013 prize for the quality of information and training for employee shareholders and employee shareholder representatives and the 2014 prize for the best governance...

  • Page 93
    ... the opportunity to be informed of Social dialog in the United States In North America, regular communication takes place with both union and non-union employees on key business topics and trends affecting their jobs. Company officials meet on a semi-annual basis with key international union...

  • Page 94
    ... of every employee. The process of social dialog also includes employee communication in small groups as well as through Town Hall communication on Company performance, strategy and challenges. Child Labor & Human Rights Schneider Electric commits in its « Principles of Responsibility » to...

  • Page 95
    ... its employees' contributions. Created in 2008 and launched in 2009, the Access to Energy program illustrates Schneider Electric's desire to create a virtuous circle combining business, innovation and responsibility. (1) Source: SE4All - Global tracking framework 2015 report. 2015 REGISTRATION...

  • Page 96
    .... This social welfare investment structure, designed by Schneider Electric to promote responsible development, constitutes a response to new French legislation on employee savings plans. At the end of 2015, 5,000 Group employees in France showed their interest in the Access to Energy program by...

  • 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
    ... for 2016. Community energy services: The development of energy services helps bring added value to the users in a community. With its range of charging equipment for the Homaya In-Diya lighting systems, Schneider Electric has extended its offering with solar water pumping solutions and public...

  • Page 99
    ... 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 by an entrepreneur located within the community and trained by Schneider...

  • Page 100
    ... country's culture, to better boost employee morale, and inform them of Foundation activities at their site. Finally, they coordinate the organization of the Schneider Electric Foundation's annual campaign for international mobilization called Communities days. This week took place in October 2014...

  • Page 101
    ... of climate change. The Company invests in emblematic and international programs by making its knowledge, notably in energy systems management, available through donations in resources and/or knowledge. Through its projects and the commitment of its employees, the Schneider Electric Foundation...

  • Page 102
    ... support of the Schneider Electric Energy Access social welfare investment fund, or - that have been established following training (management audit, finance, communications, financing research, management, Human Resources, engineering, etc.). To learn more, see: www.fondation.schneider-electric...

  • Page 103
    ...: support of young people trained in the context of the Schneider Electric Energy Access program so that they can find a job; • electrification: electrification of underprivileged households in remote areas; • Thanks to the volunteer efforts of thousands of employees in North America...

  • Page 104
    ... of experienced managers to long-term missions with SMEs in the Île-de-France or in the Grenoble labor market. These experts are invested in structured and strategic development projects for SMEs; • support for organizations that open the way to the creation of activities and companies (Réseau...

  • Page 105
    ...buildings. In such a dynamic context, after the Future Employment Framework Agreement signed with the Ministry of Labor, Job Training and Social Dialog, Schneider Electric recruited more than 60 young people in 2014, particularly in Production and Logistics. Finally, Schneider Electric has partnered...

  • 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
    ... 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 America offerings...

  • Page 108
    ... the company since end of 2015; new acquisitions are excluded (they are counted 12 months after being incorporated into our HR information system). This includes all training activities: in person, individual or collective, tutored, e-learning, webinars, internal and external; all areas of training...

  • 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
    ... 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 109

  • Page 112
    ... »). Based on this work, we confirm the presence in the management report of the required CSR information. (1) Scope available at www.cofrac.fr (2) ISAE 3000 - Assurance engagements other than audits or reviews of historical information 110 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 113
    ... to the characteristics of the Company, its social and environmental issues, its strategy in relation to sustainable development and industry best practices. For the CSR Information which we considered the most important (1): 2 • at the level of the consolidated entity, we consulted documentary...

  • Page 114
    ... reporting covers about 70% of the Group headcount. • the publication of indicators on a constant scope; • the publication of indicators per employee to correct the changes in activities of the sites. The sites' workforce includes Schneider Electric employees (fixed-term, permanent and work...

  • 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
    ... 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. â-² 2015 audited indicators. * Results measured from 2016 (measurement tools deployed in 2015). Please refer to...

  • Page 117
    ... domain Schneider Electric communicates at Group level the number of lost days and the number of hours worked (Safety data). The comments on the indicators are given in the corresponding chapters and indicated in the tables below. The table below indicates the matching of indicators with the Global...

  • Page 118
    ...(2) Asia-Pacific Europe North America Rest of the world Breakdown of workforce by country (the most significant countries)(2) France United States of America China India Mexico Spain Brazil Germany Australia Indonesia United Kingdom Russia Annual change in workforce by country (the most signi...

  • Page 119
    ...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 contract Breakdown by category White collar...

  • Page 120
    ...contract Fixed-term contract 2015 2014 2013 84% 16% 41% 59% 36% 16% 29% 19% 84% 16% 38% 62% 33% 21% 29% 17% 85% 15% 41% 59% 30% 23% 28% 18% G4-LA1 Breakdown by category White collar Blue collar Breakdown by Region Asia-Pacific Europe North America Rest of the world Resignations(4) Breakdown...

  • Page 121
    ... days of which Schneider Electric employees of which subcontractors G4-LA6 Number of hours worked of which Schneider Electric employees of which subcontractors 2 Dialog and social relations GRI G4-11 Indicators Sites stating they benefit from employee representation(5) Unions Works Council 2015...

  • 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
    ... 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 costs...

  • Page 124
    ... From partners Financial contribution per region (in %) Africa & Middle East America Asia Europe DONATIONS IN PRODUCTS OR SERVICES FOR A PARTNER/PROJECT OF THE FOUNDATION (in euro) Number of employees involved in the Foundation's actions * Of which Square D/Schneider Electric North America. 5,461...

  • Page 125
    ...://energy-access.schneider-electric.com • www.teachers.schneider-electric.org To contact us: Email: [email protected] Mail: Schneider Electric Sustainable Development Department - 35, rue Joseph-Monier, CS 30323 - 92506 Rueil-Malmaison Cedex, France 2015 REGISTRATION...

  • 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
    ... implemented by the company. The sections on governance structure, 1, 2, 3, 4, 7 (Group Senior Management compensation policy, Pension benefits and Compensation of members of the board of directors), 9 and 10, in this section 3, as well as sections 2 (Annual Shareholders' Meetings and Voting Rights...

  • 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
    ...of the board of directors The AFEP/MEDEF corporate governance guidelines for listed companies provide that the board of directors must make a formal self-assessment at least once every three years. Pursuant to its internal regulations, Schneider Electric SE's board of directors annually reviews its...

  • Page 131
    ... guidelines for listed companies); • a percentage of women which will rise to 38% before reaching at least 40% in 2017; and • balanced representation between directors of French origin (54%) and directors of non-French origin (46%). 3 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 129

  • Page 132
    ...directors at December 31, 2015 Chairman of the board of directors and Chief Executive Officer Jean-Pascal Tricoire Age: 62 years Age: 52 years Business address: Schneider Electric 35, rue Joseph-Monier 92500-Rueil Malmaison, France 239,362 Schneider Electric SE shares First appointed: 2013/Term ends...

  • Page 133
    ... 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 Schneider...

  • Page 134
    ... Business address: BDGS Associés 44, Avenue des Champs-Élysées 75008 Paris, France 1,000 Schneider Electric SE shares First appointed: 2012/Term ends: 2016 Directorships and other functions • Currently: Director of Schneider Electric SE, Member of the Audit and Risk Committee and the Strategy...

  • Page 135
    ... 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 LLC7735...

  • Page 136
    ... VicePresident, Global Human Resources. 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. 134 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 137
    ...ed joint-stock company Standard & Poor's Credit Market Services France; Member of the supervisory board of Schneider Electric SA. Experience and qualifications After studying mathematics, Cathy Kopp joined IBM France in 1973. In 1992, she became Human Resources Director at IBM France before being...

  • Page 138
    ... OF DIRECTORS Henri Lachmann Age: 77 years Business address: Schneider Electric 35, rue Joseph-Monier 92500 Rueil-Malmaison, France 108,940 (1) Schneider Electric SE shares First appointed: 1996/Term ends: 2016 Directorships and other functions Lone Fønss Schrøder* Age: 55 years Business address...

  • Page 139
    ... the Advanced Manufacturing program at INSEAD. Mr. Spierkel began his career working for Bell Canada in sales and product development, followed by a period with Nortel Inc. in market research. For four years, he served as Managing Director of Mitel Telecom with responsibilities over Europe and...

  • Page 140
    ... GOVERNANCE THE BOARD OF DIRECTORS Non-voting member Cécile Cabanis* Age: 44 years Business address: 17 boulevard Haussmann 75009 Paris, France 1,000 Schneider Electric SE shares First appointed: October 2015/Term ends: April 2016 Directorships and other functions Honorary Chairman Didier...

  • Page 141
    ... is determined by the Shareholders' Meeting. • approve the corporate and consolidated financial statements; • draw up business reviews and reports for Annual Shareholders' Meetings; 2.2 Internal regulations and procedures of the board of directors The board of directors adopted, on April 25...

  • Page 142
    ... them informed of Group life, the competitive environment and developments in investor consensus and feedback. They also receive a weekly press review, all of the company's press releases, financial analysts' reports and other documents. Members also have the opportunity to meet informally with key...

  • Page 143
    ... covered Schneider Electric's policies relating to Human Resources, CSR and IT/cyber-security. Insider ethics code Schneider Electric has adopted an ethics code for members of the board of directors and Group employees designed to prevent insider trading. Under these provisions, both directors and...

  • Page 144
    ..., at the Annual Shareholders' Meeting on April 21, Gregory Spierkel, who joined the board as a non-voting member in October 2014, was appointed director due to his international experience, his supply chain expertise in a digital environment and his excellent knowledge of information technology. It...

  • Page 145
    ... of the new company program « Schneider is On ». It was informed of the Group's 2015 objectives. It read the quarterly business reports prepared by the Senior Management. At each meeting, the board was also informed of the business market. On February 18, 2015, the board of directors reviewed and...

  • Page 146
    ... of the COB, member of the executive board and Director of Finance, Control and Strategy of the AXA group, and member of EFRAG (European Financial Reporting Advisory Group). He brings to the committee his vast financial expertise and excellent knowledge of accounting standards. In addition to their...

  • Page 147
    ..., whose renewal was presented to the Annual Shareholders' Meeting of April 21, 2015. The Audit Committee reported on its work in 2015 to the board at the February 18, June 29 & 30, July 29, October 28, and December 9, 2015 meetings. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 145

  • Page 148
    ...% of independent directors. • the Company's use of national and international corporate governance practices; • the total value of attendance fees proposed to the Annual Shareholders' Meetings together with their allocation between the members of the board and compensation of the ViceChairman...

  • Page 149
    ... at the end of his first few months as Executive Vice-President of Global Human Resources. The committee also met jointly with the Governance and Compensation Committee to review and make proposals to the board of directors on changes to the long-term incentive plans. It reported on its work to the...

  • 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
    ... Group Deputy Managing Director in charge of Finance in 2006. He joined Schneider Electric in the first half of 2009. Note: bold indicates the names of companies whose securities are listed on a regulated market. (1) Held directly or through the FCPE. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 152
    ...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 the voting rights. Jean-Pascal...

  • Page 153
    ..., variable compensation, long-term incentives and supplementary pension plans. Schneider Electric operates at a global level and its main competitors are international groups. Moreover, most of its Group Senior Management members are based across the world, regardless of their country of origin. For...

  • Page 154
    ... 50% of compensation package of executive officers and members of the Executive Committee. 7.2 Pension benefits This section is included in the Chairman's report to the board of directors. The Group's Senior Management, subject to the French Social Security system, excluding corporate officers...

  • 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
    ...,000 EUR31,178 (1) Attendance fees for the 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
    ... of 18 industrial public companies, whose median turnover is 15 mâ,¬ and median market capitalization is 16 mâ,¬. the Schneider is On company program and on CSR, evaluated among other things through customer satisfaction, services development, key talents development and succession plan, as well...

  • Page 158
    ...• for 15%, in the form of a TSR objective linked to Schneider Electric ranking in a panel of 12 companies by end of 2018. These shares are also subject to a lock-up period. The shares will be allocated by the board of directors on March 23, 2016. 156 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 159
    ... 2015 the 2015 complementary variable payment (paid in March 2016). - for 30%, a component comprising criteria that are in line with the Schneider is On company program and on CSR, evaluated among other things through customer satisfaction, simplification, development and succession plan of key...

  • Page 160
    ... to growth strategy success. • for 20%, a level of achievement of the Planet & Society Barometer at the end of 2018, • for 15%, in the form of a TSR objective linked to Schneider Electric ranking in a panel of 12 companies by end of 2018, 158 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 161
    ... AND COMPENSATION OF GROUP SENIOR MANAGEMENT They will also be subject to a lock-up period (see page 281). The shares will be allocated by the board of directors on March 23, 2016. Complementary payment (see above for the purpose of this payment) Year 2015 Annual component At its meeting of...

  • 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
    ...OF GROUP SENIOR MANAGEMENT Performance shares made available for each executive director Number of shares made available during the financial year Name Plan no. Plan date Date of availability Acquisition conditions 100% of the shares - 2011 and 2012 operating margin and average revenue growth...

  • Page 166
    ... compensation paid for the 2015 financial year. The objectives for Group results for the financial year in question were: • Executive Vice-Presidents of Corporate Functions: Industrial Operations - Information Systems - Strategy - Marketing - Global Human Resources - Technology - Global...

  • 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
    ... metals risk; • monitoring of Group trade accounts receivable risk and the definition of the hedging policy to be implemented; • the distribution of rules for financial risk management and the security of incoming and outgoing payments; 168 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 171
    ... directors », Chapter 3 Section 2 page 139). Such persons are prohibited from trading the Company's shares at any time if they are in possession of price sensitive information and during specified periods prior to (and until the day of) release of the Group's financial statements and quarterly...

  • 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
    ... 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. The Security Department...

  • Page 174
    ... as control cycles, documentation, scope definition, work programs, etc.); • completed more than 90 on-site inspection missions in 2015 to assess the level of internal control and the adequacy of action plans, issuing the necessary recommendations when needed. • the Security Department issued...

  • Page 175
    ... of statutory and management reporting systems developed to guarantee the completeness of transaction data recorded in the accounts; • given that the Group consolidated financial statements are finalized a few weeks after the annual and half-year balance sheet date, subsidiaries perform a hard...

  • Page 176
    ...Commercial Code (Code de commerce) for the year ended December 31, 2014. It is the Chairman's responsibility to prepare and submit for the board of directors' approval a report on internal control and risk management procedures implemented by the company and to provide the other information required...

  • Page 177
    ... senior manager, particularly when he leaves the company to assert or after having asserted his rights on retirement. Stock options and performance shares The valuation of options and performance shares must not depart from previous business practice. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

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

  • Page 179
    ... operating income and expenses 2.6 Restructuring costs 2.7 EBITA and Adjusted EBITA 2.8 EBITA and Adjusted EBITA by business segment 182 182 182 183 3. Review of the parent company financial statements 186 4. Review of subsidiaries 5. Outlook 186 186 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 180
    4 BUSINESS REVIEW TRENDS IN SCHNEIDER 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 ...

  • Page 181
    BUSINESS REVIEW TRENDS IN SCHNEIDER ELECTRIC'S CORE MARKETS 1.3 Utilities and Infrastructures Electrical Utilities In generation, renewables continued their expansion in 2015, fuelled by on-going cost declines. Wind and solar rapid growth spread to new territories in emerging countries. At the end ...

  • Page 182
    ... financial statements On October 1, 2014 the Group finalized 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 Business of Schneider Electric...

  • Page 183
    ... ended December 31, 2014, an increase of 4.4%. The support functions costs to sales ratio decreased from 23.8% for the year ended December 31, 2014 to 23.3% for the year ended December 31, 2015 reï¬,ecting progress in simplification initiatives. 4 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • 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
    ...including acquisition, 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...

  • Page 186
    ..., 2015, compared to EUR1,772 million for the year ended December 31, 2014, decreasing by 20.6%. 2.17 Earnings per share Earnings per share decreased from EUR3.39 for the year ended December 31, 2014 to EUR2.47 for the year ended December 31, 2015. 184 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 187
    ... year ended December 31, 2014, and represented 3.1% of revenues in 2015 (3.3% in 2014). Free cash-ï¬,ow (cash provided by operating activities net of net capital expenditure) amounted to EUR2,045 million in 2015 versus EUR1,704 million in 2014. 4 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 185

  • Page 188
    ... by working on costs, growing its partner network through the launch of many new integrated offers, accelerating services and software, and increasing selectivity on projects focusing on its sectors of expertise. • Organic revenue growth to be ï¬,at to down low single-digit, impacted by the Group...

  • Page 189
    ...in equity 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...

  • Page 190
    5 CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2015 CONSOLIDATED STATEMENT OF INCOME > 1. Revenue Cost of sales Gross profit EBITA adjusted* Consolidated statement of income Note 3 (in millions of euros except for earnings per share) Full year 2015 26,640 (16,795) 9,845 Full year 2014 24...

  • 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
    ... and work in process (Decrease)/increase in accounts payable Other current assets and liabilities Change in working capital requirement Total I - Cash ï¬,ows from operating activities Purchases of property, plant and equipment Proceeds from disposals of property, plant and equipment Purchases of...

  • 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
    ... 120 29 149 Total 17,593 2,061 790 2,851 1,193 32 Jan. 1, 2014* Profit for the year Other comprehensive income Comprehensive income for the year Capital increase Exercise of stock option plans Dividends Change in treasury shares Share-based compensation expense Other Dec. 31, 2014 Profit for the...

  • Page 196
    ... statements. The Schneider Electric Group's consolidated financial 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...

  • Page 197
    ..., 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1 Accounting Policies 1.2 - Discontinued operations On February 5, 2014, Schneider Electric announced that it has signed an agreement for the sale of the Invensys Appliance division, because this unit is not a core business to Schneider...

  • Page 198
    ... the consolidated financial statements as of the date when effective control is acquired or relinquished. Intra-group balances and transactions are eliminated. The list of consolidated subsidiaries and associates can be found in note 32. The reporting date for all companies included in the scope of...

  • Page 199
    ... related payments are recognized as an expense on a straight-line basis over the lease term. Software implementation External and internal costs relating to the implementation of Enterprise Resource Planning (ERP) applications are capitalized when they relate to the programming, coding and testing...

  • 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
    ... at each balance sheet date. As part of its commitment to employee share ownership, Schneider Electric gave its employees the opportunity to purchase shares at a discount (note 21.5). Defined contribution plans Payments made under defined contribution plans are recorded in the income statement, in...

  • Page 202
    ...fic IFRS rule, the Group elected to retain the accounting treatment for minority put options applied up to December 31, 2009, involving puts granted to minority shareholders prior to this date. In this case, the Group elected to recognize the 200 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 203
    ...financial statements of companies listed in the note 32. The scope of consolidation for the year ended December 31, 2015 can be summarized as follows: Number of active companies Parent company and fully consolidated subsidiaries Companies accounted for by the equity method TOTAL Dec. 31, 2015 603...

  • Page 204
    ...cant across the Schneider Electric Group balance sheet and income statement. On October 1, 2014 the Group has finalized the sale of Custom Sensors & Technologies (CST) and it has reinvested approximately USD100 million alongside investment funds and CST management to hold a shareholding of 30% of...

  • 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
    ... THE CONSOLIDATED FINANCIAL STATEMENTS Dec. 31, 2014 Western Europe Revenue by country market Non-current assets 6,758 9,848 of which France 1,644 1,761 North America 6,321 8,981 of which USA 5,239 8,748 AsiaPacific 7,076 4,544 of which China 3,705 1,532 Rest of the world 4,784 1,172 Total...

  • Page 207
    ... Full year 2015 Full year 2014 (259) (259) Amortization of purchase accounting intangibles Impairment of purchase accounting intangibles AMORTIZATION AND IMPAIRMENT OF PURCHASE ACCOUNTING INTANGIBLES The migration of the Group's brands towards the Schneider Electric brand (One Brand project) has...

  • Page 208
    ..., 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 taxes France International Total...

  • 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
    ...210 42 (93) 2,567 Total 7,026 396 (28) 567 7 329 8,297 396 (80) 548 (32) (199) 8,930 2,606 261 (9) 2,858 1 (1) 249 3 (104) 3,006 The 2013 figures were restated from discontinued operations and change in consolidation method disclosed in note 1. 208 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • 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
    ..., 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 project...

  • 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
    ... 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 access to NVC...

  • Page 217
    .... 31, 2014 1,391 291 1,247 416 87 3,432 (196) (7) (182) (12) (8) (405) 1,195 284 1,065 404 79 3,027 Note 18 Trade accounts receivable Dec. 31, 2015 Accounts receivable Notes receivable Advances to suppliers Accounts receivable at cost Impairment Accounts receivable, net Of which: On time Less than...

  • Page 218
    5 CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Accounts receivable result from sales to end-customers, who are widely spread both geographically and economically. Consequently, the Group believes that there is no significant concentration ...

  • Page 219
    .... Schneider Electric's capital management strategy is designed to: • ensure Group liquidity; • optimize its financial structure; • optimize the weighted average cost of capital. The strategy must also ensure the Group has access to different capital markets under the best possible conditions...

  • Page 220
    ... 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 plans were as follows at December 31, 2015: Stock option plans Number...

  • Page 221
    ..., 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 219

  • Page 222
    ... 7,210,075 For performance shares to vest, the grantee must be an employee or corporate officer of the Group. In addition, vesting of some performance shares is conditional on the achievement of annual objectives based on financial indicators. 220 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 223
    ...bis Plan 22, 22 bis and 22 ter TOTAL 5 4 17 16 21 1 14 19 97 Full year 2014 7 8 16 20 15 20 86 21.5.2 Worldwide Employee Stock Purchase Plan Schneider Electric gives its employees the opportunity to become group shareholders thanks to employee share issues. Employees in countries that meet legal...

  • Page 224
    ... TO THE CONSOLIDATED FINANCIAL STATEMENTS Full year 2015 Non leveraged plans Plan characteristics Maturity (years) Reference price (euros) Subscription price (euros): between and Discount: between and Amount subscribed by employees Total amount subscribed Total number of shares subscribed (millions...

  • Page 225
    ...2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 22 Pensions and other post-employment benefit obligations The Group has set up various post-employment benefit plans for employees covering pensions, termination benefits, healthcare, life insurance and other benefits, as well as long-term...

  • Page 226
    ...THE CONSOLIDATED FINANCIAL STATEMENTS Payments made under defined contribution plans are recorded 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...

  • 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
    ... 31, 2014. Full year 2015 Of which SE USA 4. Change in fair value of plan assets Fair value of plan assets at beginning of year Interest income Plan participants' contribution Employer contributions Benefits paid Actuarial gains/(losses) recognized in equity Changes in the scope of consolidation...

  • Page 229
    ... 1 44 512 5 At December 31, 2015, actuarial gains relative to experience effects on healthcare costs, life insurance and other post-employment benefits totaled EUR40 million for the Group compared to EUR19 million of gains at December 31, 2014. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 227

  • Page 230
    ..., 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Dec. 31, 2015 3. Funded status Projected benefit obligation Deferred items: Unrecognized past service cost PROVISION RECOGNIZED IN BALANCE SHEET (480) (480) Dec. 31, 2014 (512) (512) Note 23 Provisions Economic risks Dec. 31, 2013* Long-term...

  • 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
    ... FINANCIAL STATEMENTS AT DECEMBER 31, 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 24.1 - Breakdown by maturity Dec. 31, 2015 Nominal 2015 2016 2017 2018 2019 2020 2021 2022 2023 and beyond TOTAL 1,495 1,202 774 499 499 597 731 1,833 7,630 184 154 112 80 71 56 40 25 722 - Dec. 31, 2014...

  • Page 233
    ... 2015 Debt related to acquisitions Debt on Luminous valuation Other OTHER NON-CURRENT LIABILITIES 125 22 147 Dec. 31, 2014 15 130 39 184 5 The debt on Luminous valuation corresponds to the Group commitments on the minority interest (26%) in Luminous. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC...

  • Page 234
    5 CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 26 Financial instruments The Group uses financial instruments to manage its exposure to ï¬,uctuations in interest rates, exchange rates and metal prices. 26.1 - Balance sheet exposure Dec...

  • Page 235
    ...Short-term debt Trade accounts payable Other Derivative instruments - foreign currencies Derivative instruments - interest rates Derivative instruments - commodities Derivative instruments - shares TOTAL CURRENT LIABILITIES 5 (*) Overall, the financial instruments listed in the balance sheet are...

  • Page 236
    ...31, 2015 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 26.2 - Fair value hierarchy Financial assets and liabilities can be classified at the fair value following the hierarchy levels below: 1. market value (non-adjusted) on active markets, for similar assets and liabilities, which the company can...

  • Page 237
    ... 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 or less. Schneider Electric's currency hedging policy is to protect its subsidiaries against...

  • Page 238
    ... designated as cash ï¬,ow hedge under IFRS standards, of which: Dec. 31, 2015 Carrying amount Nominal amount (13) (158) Dec. 31, 2014 (11) (271) 26.3.4 Share-based payment Schneider Electric shares are hedged (cash ï¬,ow hedges) in relation to the Stock Appreciation Rights granted to US employees...

  • Page 239
    ... Related parties with significant influence No transactions were carried out during the year with members of the supervisory board or management board. Compensation and benefits paid to the Group's top senior executives are described in note 27.3. 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 237

  • 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
    ... 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 Belgium SA Schneider Electric NV/SA Schneider Electric Services International SPRL Summit Energy...

  • Page 243
    ... THE CONSOLIDATED FINANCIAL 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...

  • Page 244
    ...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 B.V. Invensys Systems...

  • Page 245
    ... 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 (UK) Ltd Eurotherm Ltd (UK) Spiral Software Ltd Accounted for by equity...

  • Page 246
    ... Group Services Mexico Invensys Systems Mexico SA Adaptive Instruments Corp. Schneider Electric IT America Corp. Schneider Electric IT Corporation American Power Conversion Holdings Inc. Juno Lighting, LLC Juno Manufacturing, LLC Lee Technologies Puerto Rico, LLC Schneider Electric IT Mission...

  • 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
    ...Schneider Electric Manufacturing (Wuhan) Co. Ltd Delixi Electric Ltd (sub-group) Schneider Equipment and Engineering (Xi'an) Co., Ltd Invensys Automation & Controls Systems (Shanghai) Co., Ltd Shanghai Foxboro Co., Ltd Shanghai Invensys Process System Co., Ltd FSL China Clipsal Asia Holdings Limited...

  • Page 249
    ... Vietnam Ltd Accounted for by equity method Sunten Electric Equipment Ennovation System Control Co., Ltd Fuji Electric FA Components & Systems Co., Ltd (sub-group) Foxboro (Malaysia) Sdn Bhd Rest of the world Fully consolidated Himel Algérie Schneider Electric Algérie Invensys Systems Algérie...

  • 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
    ...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 tests at least once...

  • Page 252
    ...fair presentation and its consistency with the consolidated financial statements. Courbevoie and Paris-La Défense, February 16, 2016 The statutory auditors French original signed by MAZARS David Chaudat ERNST & YOUNG et Autres Jean-Yves Jégourel 250 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • 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
    6 PARENT COMPANY FINANCIAL STATEMENTS BALANCE SHEET > 1. Assets (in thousands of euros) Balance sheet Notes 1.1 Gross A. & D. or Prov. Dec. 31, 2015 Net Dec. 31, 2014 Net Non-current assets Intangible assets Intangible rights Property, plant and equipment Land Buildings Other Total ...

  • Page 255
    ...: Current liabilities: Accounts payable - trade Accrued taxes and payroll costs Other Total current liabilities Total non-current and current liabilities Deferred income Translation gains TOTAL EQUITY AND LIABILITIES The notes form an integral part of these parent company financial statements...

  • 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
    ... financial statements (All amounts are in thousands of euros unless otherwise indicated) Significant events of the financial year « Schuldschein » credit line for EUR184 million. Furthermore, Schneider Electric Industries SAS reimbursed a EUR600 million loan. On May 5, 2015, the 2014 dividend...

  • Page 258
    ..., 2015 5,599,974 (114,270) 5,485,704 Shares in subsidiaries and affiliates Schneider Electric Industries SAS Cofimines Schneider Electric Japan Holding Other (less than EUR5 million) TOTAL Carrying value 5,343,544 139,073 2,049 1,038 5,485,704 256 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • 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
    ... 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 item consists of interest-bearing advances by Schneider Electric SE to the Group...

  • Page 261
    PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 6.2 - Bond issue expenses (in thousands of euros) Bond issue expenses Aug. 11, 2005 due 2017 (EUR600 million) Oct. 8, 2007 due 2015 (EUR600 million) Feb. 16, 2007 due 2014 (EUR4,500 million) (bridge loan) May 21, 2008 due 2015 (...

  • Page 262
    ... - Total 10,303 1,228 (1,069) 2 341 10,806 153 (1,098) (53) December 31, 2013 before allocation of net income for the year Change in share capital Allocation of 2013 net income 2013 dividend Other changes during the period 2014 net income December 31, 2014 before allocation of net income for...

  • Page 263
    PARENT COMPANY FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS Note 8 Provisions for contingencies and pension accruals Dec. 31, 2014 15 30 45 (in thousands of euros) Increases - Decreases - Dec. 31, 2015 15 30 45 Provisions for contingencies Disputes Other Management is confident ...

  • 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
    ... to end to the benefit of the top hat executive pension plans, the company reversed a EUR14 million provision in 2015. Note 18 Off-balance sheet commitments 18.1 - Partnership obligations The share of liabilities of « SC » non-trading companies attributable to Schneider Electric SE as partner is...

  • Page 267
    ... 31, 2015, the company had one employee. 19.3 - Subsequent events At the date of financial statements approval by 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...

  • Page 268
    ... 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 your company, we verified the...

  • Page 269
    ... 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 ELECTRIC 267

  • Page 270
    ...held (%) I. Detailed information on subsidiaries and affiliates with a carrying amount of over 1% of the share capital of Schneider Electric SE A. Subsidiaries (at least 50% owned) Schneider Electric Industries SAS 35, rue Joseph-Monier 92500 Rueil-Malmaison, France Cofimines Place du Champs-de...

  • Page 271
    PARENT COMPANY FINANCIAL STATEMENTS SUBSIDIARIES AND AFFILIATES Gross Net Loans and advances provided by the company and still outstanding Amount of guarantees given by the company 2015 Revenues (ex. VAT) 2015 Profit or loss (-) Dividends received by the company during 2015 5,343,544 5,343...

  • Page 272
    ...1,963 4.79 4.74 1.70 2 4,549 1,170 (1) Dividends on shares held in treasury on the dividend payment date and the associated withholding are credited to retained earnings. (2) Pending approval by the Annual Shareholders' Meeting of April 25, 2016. 270 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 273
    ... Ordinary bonds 287 287 288 4. Ownership structure 4.1 Three-years summary of changes in capital 279 279 9. Investor relations 9.1 Person responsible for financial information 289 289 289 9.2 Contacts 9.3 Shareholders' Advisory Committee 289 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 271

  • Page 274
    ... the board of directors and the internal control and risk management procedures implemented by the company. Sections 2 (Annual Shareholders' Meetings and voting rights) and 7, as well as the sections entitled « Governance Structure », Sections 1, 2, 3, 4, 7 (Group senior management compensation...

  • Page 275
    ...' Meeting, no shareholder may exercise, either in person or through a proxy, by virtue of single voting rights conferred by the shares they hold directly and indirectly and by virtue of the proxy votes entrusted to them, more than 10% of the total 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 273

  • 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
    ... to the board of directors at the Annual Shareholders' Meeting of April 25, 2013: 1) to grant existing or new shares to employees and corporate officers of the Company and its affiliates under the provisions of article L. 225-197-1 et seq. of the French Commercial Code, within a limit of 1.8% of...

  • Page 279
    ... long-term incentive plan for 2015. The board of directors of February 16, 2016 decided to grant performance shares at the end of March 2016 up to 3.2 million shares (0.54% of the capital) as part of the long-term incentive plan for 2016. (6) On the date of the 2015 Annual Shareholder's Meeting, the...

  • Page 280
    ...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 own shares at February 29, 2016 (25,308,240 shares), the number...

  • Page 281
    ... To the best of 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...

  • Page 282
    ...of 135 million euros. At December 31, 2015, Group employees held a total of 22.6 million Schneider Electric SE shares through the corporate mutual funds (FCPE) or directly, representing 3.84% of the capital and 6% of the voting rights, taking into account double voting rights. Voting rights attached...

  • Page 283
    ... to Group Senior Management, including executive officers, represented 11.8% of the total attributions in the framework of the 2014 long-term incentive plan. They are of 10.9% in the framework of the 2015 long-term incentive plan. Besides, Schneider Electric exceptionally grants free shares. These...

  • Page 284
    ... 2015. (1) Number of options remaining to be exercised after deduction of all cancellations and exercises since plan implementation. (2) Excluding restructuring costs. (3) On the basis of a pre-defined and fixed list of 11 competitor companies. 282 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • 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
    7 INFORMATION ON THE COMPANY AND ITS CAPITAL SHARES AND STOCK OPTION PLANS 6.4 Past share plans (at December 31, 2015)* Plan 11 bis Plan date 06/26/2011 Number of beneficiaries at inception 1 Number of shares at inception 5,882 Acquisition/ delivery period 4 years Lock-up period - 12 14 ...

  • Page 287
    ... Group sales growth over 2011 and 2012 higher than world GDP average growth over same period No performance conditions 50% of the shares/100% for the management board and Executive Committee - 2012 and 2013 (3) operating margin and change in the Planet & Society barometer at the end of 2013 As plan...

  • 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
    ... 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 of securities traded Month...

  • Page 290
    ...12/2013 24/12/2014 24/12/2015 54.00 58.00 56.00 39.00 63.00 61.00 Share price in euros Schneider Electric share CAC 40 index MONEP Schneider Electric SA shares have been traded on the MONEP market since December 20, 1996. 8.1 Ordinary bonds The information is disclosed in note 9 of the company...

  • 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 the board of directors' report: internal regulations of the board and charter of the Vice Chairman Lead Independent Director 307 3.1 Internal regulations of the board of directors of Schneider Electric SE 307 313 4.2 Statutory auditors' report on the authorization to make grants of free shares...

  • Page 294
    ...transactions and financial statements for the year 2015, as presented, which show a net loss of EUR52.6 million. This loss is a result of the policy implemented by your company since 2013 to strengthen the company's equity from its whollyowned subsidiary Schneider Electric Industries SAS. In effect...

  • Page 295
    ANNUAL SHAREHOLDERS' MEETING REPORT OF THE BOARD OF DIRECTORS TO THE COMBINED ANNUAL AND EXTRAORDINARY SHAREHOLDERS' MEETING Consultation of shareholders on individual Group compensation of corporate officers - Fifth and Sixth Resolutions In accordance with the recommendations of the AFEP/MEDEF ...

  • 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
    ... holds Schneider Electric shares with a value representing three times his annual fixed compensation. The percentage of capital represented by Mr. Tricoire's share allocation is 0.01%. Date of authorization by the Annual Shareholders' Meeting: April 25, 2013 Resolution number: Sixteenth Date...

  • Page 299
    ... 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 has...

  • Page 300
    ... CEO of Schneider Electric SE. - These 5,425 free shares were granted to under the International plan to Mr. Babeau in his capacity as CEO of Invensys This payment in share allows to correlate one-off lump sum to the company's long-term development through the evolution of its share price and to...

  • Page 301
    .... Babeau holds Schneider Electric shares with a value representing twice his annual fixed compensation. 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...

  • Page 302
    ... of total gross compensation, i.e. including annual complementary payments -- fixed and target variable - over the last 12 months of service). (See Section 3-7 of the 2015 registration document). Board decisions of June 18-19, 2013. Dates of approval by the Annual Shareholders' Meeting: May 6, 2014...

  • 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
    .... As part of the authorization granted at the Annual Shareholders' Meeting on April 21, 2015, Schneider Electric proceeded in 2015 and early 2016 to buy back 12.65 million shares, for a total sum of EUR700 million. Further information on your Company's share buyback programs can be found on page...

  • Page 305
    ... ROCE (calculated mainly to take into account the acquisition of Invensys) was 10.9% and the bracket reï¬,ects the Group's objective to gradually improve the ROCE in a climate of volatile exchange rates, affecting the base of capital employed; 8 303 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 306
    ... In April 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...

  • Page 307
    ... of the Annual Shareholders' Meeting of April 21, 2015, authorized the board of directors to issue shares reserved for employees participating in the Employee Stock Purchase Plan within the limit of 2% of the share capital, and to issue shares reserved for employees of foreign Group companies or...

  • Page 308
    ...the directors. He ensured that there was no conï¬,ict of interest within the board of directors, which he would have been responsible for bringing to the attention of the Chairman. (1) The term of office of Léo Apotheker will be renewed in 2016. 306 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 309
    ... to fulfill their mission. The 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...

  • Page 310
    ... term of office. ARTICLE 2 - Roles and powers of the board of directors 1. The board of directors shall determine company business policies and ensure that they are implemented. Subject to the powers expressly conferred to Annual Shareholders' Meetings and within the limit of the corporate purpose...

  • Page 311
    .... However, for the purposes of checking and controlling annual accounts, consolidated accounts and the management report, the members of the board of directors who attend the meeting ARTICLE 5 - Information for the board of directors Members of the board of directors shall be provided with all the...

  • Page 312
    ... in Company shares can be taken into account. The Schneider Electric shares that they hold shall either be in purely registered (nominatif pur) or in managed registered (administré) form. 8. Members of the board of directors shall inform the financial market authority within the five trading days...

  • Page 313
    ... 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 audits on a quarterly...

  • 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
    ... will preside. An executive session shall be included on the agenda of every board meeting. It is the Vice-Chairman's responsibility to decide whether it should be held or not. It is therefore held as decided by the Vice-Chairman, either directly 8 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 313

  • Page 316
    ... Pay Scheme (1) The Board of Directors in its meeting of February 18, 2015, taking into consideration the fact that the corporate officers of the company are personally responsible for their top-hat pension plan, authorized the supplementary remuneration comprising: an annual component and an...

  • Page 317
    ... party: (2) The Board of Directors in its meeting of February 18, 2015, taking into consideration the fact that the corporate officers of the company are personally responsible for their top-hat pension plan, authorized the supplementary remuneration comprising: an annual component and an...

  • Page 318
    ... Supervisory Board, in its meeting of May 3, 2012, authorized the signature on the same day of an insurance contract for defined benefit company pensions (Article L. 137-11 of the Social Security Code) with AXA France Vie in order to outsource commitments under the closed article 39 plans: - the...

  • Page 319
    ... the board of director's report on the proposed authorization to make grants of free shares. Signed in Paris-La-Défense and in Courbevoie, on March 10, 2016 The statutory auditors ERNST & YOUNG ET AUTRES Jean-Yves Jégourel MAZARS David Chaudat 8 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 317

  • 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
    ... 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 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 321

  • Page 324
    ... or in connection with, debt securities convertible into shares of the Company; • undertaking (for exchange, payment or other purposes) external growth transactions, mergers, spin-offs or contributions (up to a limit of 5% of the share capital); 322 2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

  • Page 325
    ANNUAL SHAREHOLDERS' MEETING DRAFT RESOLUTIONS 5.2 Extraordinary Meeting NINETEENTH RESOLUTION (Authorization to the board of directors to make grants of free shares (on the basis of existing shares or shares to be issued) to corporate officers and employees of the Company or of companies ...

  • Page 326
    ... 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 connection with annual long-term incentive plans shall be subject to meeting performance goals, and that 70% of the options...

  • Page 327
    ... under and pursuant to the Twentyfirst Resolution approved by the Annual Shareholders' Meeting; the board of directors may set the issue price by applying a discount of a maximum of 20% of the trading price of the Company's shares determined in accordance with either of the two methods set forth...

  • 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
    ... revised "Employee Benefits". The statutory auditors' report on the financial statements for the period ended December 31, 2014 contained an observation referring to the change in accounting standards related to pension obligation. March 17, 2016 The Chairman and CEO of Schneider Electric SE Jean...

  • Page 330
    PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND AUDIT OF THE FINANCIAL STATEMENTS PERSONS RESPONSIBLE FOR THE AUDIT OF THE FINANCIAL STATEMENTS responsible for the audit > Persons of the financial statements Date appointed Statutory auditors Ernst & Young et Autres Tour First-1, place des ...

  • Page 331
    ... April 25, 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...

  • Page 332
    ... Headquarters: 35, rue Joseph Monier - CS 30323 F-92506 Rueil-Malmaison Cedex (France) Tél. : +33 (0) 1 41 29 70 00 Fax : +33 (0) 1 41 29 71 00 www.schneider-electric.com Incorporated in France, governed by a Board of Directors with issued capital of EUR2,354,937, 7,888 888 EUR2,354,937 Registered...