Document

Document
Schneider Electric SA
Annual Report
We
do more
more with
with electricity.
el
We do
Schneider
has changed its name to
Schneider Electric...
Schneider is powered by the reputations of its four international
brands—Merlin Gerin, Modicon, Square D and Telemecanique.
To highlight their membership in the same corporate family, we have
changed our name to Schneider Electric. Our Company is totally
focused on its two highly complementary core businesses,
and this new name more clearly expresses our identity
as a world leader in the electrical industry.
me to
d our na
change
ic
ution,
er Electr
l distrib
Schneid
of the
electrica
and
demark
er
l control
The tra
’s
Schneid
industria
industry
l
Groupe
re
ica
mo
on
electr
leader
called
automati
ovative
is now
tric.
t.
most inn
up
er Elec
efficien
mmed
Schneid
o given
w be su
no
als
er,
n
ve
ak
ca
d
They ha
cuit bre
logo an
global
The cir
single
to our
in one
r,
ognition
cto
s.
rec
nta
the co
ic
countrie
rds.
in 130
two wo
able log
brands
gramm
the pro
have
ese are
why we
er,... Th
That’s
controll
com
the
ic.
of
ctr
eider-ele
just a few
that
ww.schn
we offer
http://w
products
king
te to ma
contribu
.
ore with
We do m
electricity
In 1998,
serving our customers
130 countries around the world,
Schneider Electric’s 61,000 team members
achieved sales of FF 50 billion
in
in
electrical distribution, industrial control and automation
and generated a
22%
increase in net income to
(in euros)
Sales
Net income
€
FF 2.7 billion.
7.6
0.4
billion
billion
Schneider Electric in 1998
Innovation,
steady growth,
creation of value.
7
9
11
13
A word from the Honorary Chairman
Interview with the Chairman
Board of Directors and Corporate Management
Schneider 2000+
15
Schneider Electric in 1998
17
19
21
23
25
Schneider and its shareholders
Financial highlights 1995-1998
Two core businesses
The importance of innovation
Local manufacturing
27
Meeting your needs, day after day
29
31
33
35
Construction
Industrial production
Electric power
Infrastructure
37
Schneider Electric worldwide
39 Schneider in Europe
41 Schneider in North America
43 Schneider in Asia, Latin America,
Africa, Middle East and the Pacific
45
Meeting your needs,
day after day
Performance,
safety, comfort,
and customer
satisfaction.
Schneider Electric worldwide
1998 Business review
46 Business review
54 Consolidated financial statements
84 Auditor’s report
on the consolidated financial statements
85 General legal and financial information
108 Resolutions
International presence,
multicultural diversity,
opportunities
in global markets.
7
“We have achieved our goal of making
Schneider what it is today”
During the eighteen years in which I had the
honor of serving as Chairman of your Board
of Directors, we experienced some momentous
changes. Through these changes, Schneider
has been transformed from a conglomerate
of complex, diverse businesses into a well-focused
corporation guided by a clear strategy.
I am proud to be leaving a Company in perfect
shape. We can point to a record of enviable
performance and global leadership in our two core
businesses: electrical distribution--which we have
succeeded in extending to consumer final low
voltage--and industrial control and automation.
All peripheral operations unrelated to our core
businesses have been divested and our refocusing
is now complete.
Another key development has been Schneider 2000,
a strategic Company-wide program that has
enabled us to foster competitive growth in our
units across the world. We have done this by
improving our skills, aiming for total customer
satisfaction, motivating our people and creating
teams with a sense of co-destiny, accelerating
our sales growth, and steadily increasing our
productivity. It is through such efforts that we
can enhance our performance and set our sights
even higher.
We have achieved our goal of making Schneider
what it is today, and I can leave with an easy
mind. I am supremely confident in our
Company’s potential, in its people, and in its
ability to adapt and innovate.
This fine organization, which includes so many
excellent men and women around the world,
will—I am sure—keep building a solid future for
itself while pursuing its goal of exemplary
success.
Didier Pineau-Valencienne
Honorary Chairman
Interview
with the Chairman
“Our goals are
faster growth,
greater responsiveness,
and higher profitability”
>
Your appointment as Chairman
and CEO of the Board coincides
with Groupe Schneider’s name change
to Schneider Electric. Does this signal
a change in strategic direction?
Quite the opposite. Our new name and logo
mark the completion of a vital process:
Schneider’s strategic refocusing on electricity.
This task was achieved under the leadership of
Didier Pineau-Valencienne with an admirable
clarity of vision and skill. I wholeheartedly
endorse my predecessor’s strategy of expansion
and profitable growth. Indeed, that strategy is
proving its worth every day through our results,
and I fully intend to pursue it. This doesn’t
mean, of course, that we can’t do better.
The changes I’m planning will not concern what
we’re doing, but rather how we do it.
I’m convinced that some progressive moves--and,
where needed, a few breaks with the past--will
strengthen our strategy’s long-term viability,
not weaken it.
> What are the broad outlines
of these changes?
Our goal is to build on our existing achievements
in order to go much farther--and much faster.
Today, we are the leaders in our two complementary core businesses: electrical distribution
and industrial control and automation. We’ve
greatly reduced their exposure to business cycle
ups and downs by achieving a balanced geographic
and market spread and by maintaining comparable,
consistent profitability ratios.
Now we need to change the way we work in
order to speed our growth, respond faster, cut
costs, and improve profitability. We have the
financial resources to do this, as well as the
human potential thanks to our outstandingly
diverse, skilled, and professional workforce.
Interview with the Chairman
9
>
Are you aiming for internal growth
or external growth?
>
We’re going for growth in our core businesses,
wherever it fits our strategy and financial criteria.
To my mind, accelerating our profitable development
is the absolute priority. Matching market growth is
not enough--I intend to make sure that we grow
faster than our markets. We have defined ambitious
yet realistic goals. Within our present scope of
consolidation, our efforts will focus on broadening
our lineup, expanding our geographic market
share, creating new products and services, and
adding to our large corporate accounts worldwide.
Meanwhile, we will seek to acquire healthy
companies that will enhance our product offer
and increase our market share in our two core
businesses.
The initial purpose of Schneider 2000 was to
help us move ahead, become more productive,
and set our sights higher. I fully approve these
goals, and that’s why I feel they should stay on
our agenda beyond 2000. In other words,
Schneider 2000+ will maintain Schneider 2000’s
objectives and take them even farther. Everyone
in the Company needs to buy into these goals,
which place special emphasis on profitable growth,
cost cutting, and changing our habits. Thanks
to all the people at Schneider Electric, we have
the confidence and determination to achieve
these objectives, which will create value for our
shareholders, customers, and employees.
Scheider 2000 is now called
Schneider 2000+: why the plus sign?
>
Does growth require a reduction
in costs?
Definitely. Here too, our goals are ambitious yet
realistic. We will do all we can to trim costs.
Given our sound financial and business
fundamentals, these efforts may come as a surprise,
but I can assure you that they’re indispensable.
The drive will concentrate on structural costs,
and we will achieve savings in the broadest way
possible: all offices, all departments and all
countries without exception will be concerned.
By freeing our enterprise from a number of
physical and organizational burdens, this community-wide effort will give Schneider Electric
the resources it needs for long-term expansion
and profitability.
Henri Lachmann
Chairman and CEO
Board of Directors
and Corporate Management
Executive Committee
Henri Lachmann
Jean-Paul Jacamon
Jean-Paul Saas
Jean-Claude Perrin
Jean-François Pilliard
Chairman
and Chief Executive Officer
Vice-Chairman
and Chief Operating Officer
Executive Vice-President,
Activities and Technologies
Executive Vice-President,
Finance and Control
Executive Vice-President, Human
Resources and Corporate Communication
Honorary Chairman
Didier Pineau-Valencienne
Board of Directors
Chairman and Chief Executive Officer
Henri Lachmann
Vice-Chairman and Chief Operating Officer
Jean-Paul Jacamon
David de Pury
Chairman
Directors
Claude Bébéar
President of the Management
Board of Axa
Robert Jeanteur
Corporate Director
Daniel Bouton
Chairman and Chief Executive
Officer of Société Générale
Gérard de La Martinière
Executive Vice-President,
Holding Companies
and Corporate Functions,
of Groupe Axa
Jean-René Fourtou
Chairman and Chief Executive
Officer of Rhône-Poulenc
Michel François-Poncet
Chairman of the Supervisory
Board of Paribas
Hans Friderichs
Corporate Director
Jean Gandois
Chairman
of Cockerill-Sambre SA
James F. Hardymon
Corporate Director
Henri Hottinguer
Managing Partner of
Hottinguer & Cie Zurich
Audit Committee
Didier Pineau-Valencienne
Vice-Chairman
of Credit Suisse First Boston
David de Pury
Chairman of De Pury Pictet
Turrettini & Co Ltd
James Ross
Chairman of Littlewoods
Organisation
Amaury-Daniel de Seze
Member of the Management
Board of Paribas
Piero Sierra
Corporate Director (Pirelli SpA)
Board Secretary
Philippe Bougon
Michel François-Poncet
Gérard de La Martinière
Didier Pineau-Valencienne
Piero Sierra
Remunerations
and Appointments
Committee
Claude Bébéar
Chairman
Jean-René Fourtou
Michel François-Poncet
Henri Lachmann
Didier Pineau-Valencienne
Auditors
Statutory Auditors
Barbier Frinault
& Autres/Arthur Andersen
Befec-Price Waterhouse
Alternate Auditors
Jean de Gaulle
Dominique Paul
Board of Directorrs and Corporate Management
11
Jean-Louis Andreu
Chris Richardson
Pierre Reveniaud
Marcel Torrents
Executive Vice-President,
International Division
Executive Vice-President,
North American Division
Executive Vice-President,
European Division
Executive Vice-President,
French Division
Executive Committee Corporate Functions
Henri Lachmann
Chairman
and Chief Executive Officer
Jean-Paul Jacamon
Vice-Chairman
and Chief Operating Officer
Jean-Louis Andreu
Executive Vice-President,
International Division
Jean-Claude Perrin
Executive Vice-President,
Finance and Control
Jean-François Pilliard
Executive Vice-President,
Human Resources and
Corporate Communication
Pierre Reveniaud
Executive Vice-President,
European Division
Chris Richardson
Executive Vice-President,
North American Division
Jean-Paul Saas
Executive Vice-President,
Activities and Technologies
Marcel Torrents
Executive Vice-President,
French Division
Geographic Zones
Jean-Pierre Doumenc
General Secretary
Pierre-Yves Ansiau
United Kingdom
Gaël de La Rochère
Controller
Michel Bartenieff
Southeast Asia
Bernard Lancian
Business Development
Jacques Billiard
Africa and Caribbean
Middle East and India
South Korea - Japan
Xavier de Montfalcon
Strategy
Jacques Nicod
Schneider 2000+
Guy de Place
Marketing
Claude Ricaud
Research and Development
Juan Pedro Salazar
Legal Affairs
Massimo Spada
Information Systems
Strategic Business
Segments
Jean-Pierre Chardon
Final Low Voltage
Joël Karecki
Industrial Control
Jean Kieffer
Medium Voltage
Jean-Marc Claisse
South America
Jean-Claude Leblond
High Voltage
Philippe Crolet
Africa and Caribbean
Raymond Sansouci
Automation
Harry Hellawell
China, Hong Kong, Taiwan
Daniel Victoir
Low Voltage Power
Rune Johansson
Germany
Denis Lagrange
Vice-President, European
Division
Guy Lemarchand
Austria – Benelux – Switzerland
Luc Oursel
Italy
Ramon Royo
Iberian Peninsula
Russel Stocker
Pacific
Paul Tribolet
Nordic Countries
Christian Wiest
Central and Eastern Europe –
CIS
Schneider 2000+
Growth, competitiveness and new
Competitive growth
The Schneider 2000 improvement plan was
launched in early 1996 with seven ambitious
objectives: to create value for our customers,
employees, and shareholders, and to be faster,
more efficient, and more global in order to
achieve the ultimate goal of competitive growth.
Today, Schneider is in the midst of profound
change. Halfway into the project, we have
accomplished a great deal, but much remains
to be done. We have explored new growth
paths and tried new experiments, notably
in the area of services. In the years ahead,
our ambition is to do even more, better
and must faster. Fortunately, we have the people
and resources to keep the momentum going.
to grow
our employees,
for our customers,
and our
shareholders...
to be even more global,
more efficient,
and faster.
Seven objectives for Schneider 2000+.
Creating value
for our customers
Schneider Electric has built a solid reputation
on product excellence, which is one key source of
customer satisfaction. But the speed of new product
development, the quality of our service, and the
commitment of our people are just as decisive.
In 1998, we set up help desks in the United States,
France, the Netherlands, and the United Kingdom
in order to handle customer complaints more effectively.
We have focused on listening more carefully to customer
needs, leveraging experience and taking remedial
and preventive action, as well as on continuously
evaluating the value we effectively add to our customers’
businesses—in particular through productivity gains
and time savings.
To work faster, we routinely exchange information on
best practices within the Company. This has translated
into shorter lead times; in the past three years,
we have cut our average product development time in
half. In addition, scorecards have been implemented
to track major projects.
To be more global, we systematically promote cooperation among our Country Organizations to develop
solutions that are better suited to local markets.
Examples of collaborative projects that combined local
skills include the Merlin Gerin Blokset electrical distribution
panelboard, developed by our teams in Brazil,
Indonesia, Colombia and France, and the Merlin Gerin
Trophy circuit breakers, developed by Schneider in
France and the United States.
Help desks play an important role
in resolving customer complaints quickly.
ways of working
Schneider 2000+
13
Creating value
for our shareholders
From Schneider 2000
to Schneider 2000+
All the progress plans we have implemented aim for
competitive growth. This means growth that combines
development and profitability to secure Schneider’s
future and generate attractive long-term returns for our
shareholders. Since 1995, our operating income
has risen 56%.
To achieve our objective of competitive growth,
we have to move into a higher gear and become
even more responsive. The Schneider 2000+ program
will take our initiatives to increase growth
and competitiveness and reduce costs beyond
the year 2000. The program encourages all managers
in all units and all Country Organizations to instill
an approach of continuous improvement within their
teams. This approach will drive the changes that
need to be made to enhance our performance so we
can create value for everyone.
To meet our goals, we will take measures to accelerate
both organic and acquisitions-led growth. We have also
increased our efforts to cut costs so as to free up the
necessary resources for growth and continue improving
profitability.
Creating value for our people
We foster personal initiative, empowerment,
and greater responsiveness at all levels
of our organization. Individual and collective
improvement plans are encouraged within
each unit and throughout the Company.
Each year, the Schneider Dynamic Quality Awards
recognize teams who have initiated projects
that create value for customers, employees
and shareholders.
Our Prosat job satisfaction survey allows us to keep
a close eye on employee needs and expectations.
Managers and their teams devise corrective measures
when necessary. In addition, the Leadership project
helps managers improve their own skills so that they
can lead and manage change.
In the past four years, the Merlin Gerin
Multi 9 circuit breaker plant in Tianjin,
China has doubled productivity,
cut inventory in half and achieved
a negligible reject rate. The project team
received a Schneider Quality Award for its
remarkable results in December, 1998.
An incentive plan that is consistent with shareholder
interests has been developed. We have enhanced
our stock option program, based on return on capital
employed; set up an annual bonus for our top executives,
based on growth in earnings per share; and launched
a new corporate savings plan that represents 1 %
of our issued capital. By linking remuneration to clearly
identified targets, we will also create wealth
for our employees.
Improvement teams foster meaningful discussion and help
nurture cross-cultural understanding and communication.
Schneider Electric
in 1998
Innovating in our core businesses-electrical distribution and industrial
control and automation--to ensure
sustained growth and create value
for our customers, shareholders,
and employees.
15
Photos from Schneider Electric’s international advertising campaign.
>
Tracking the major trends in our markets,
responding quickly, securing the skills and resources
for the future, cutting our costs to become even more
competitive--these are our daily challenges.
>
To respond faster, we are strengthening our global
presence by setting up subsidiaries, upgrading our
production facilities, forming joint-ventures, and acquiring
companies that offer a good strategic fit. This is a carefully
planned, long-term approach that enables us to seize
opportunities and build lasting solutions. Schneider Electric
has achieved a healthy balance in its global operations
and sales to industries with different cyclical patterns.
Today, we derive 40% of our revenues from renovation
and maintenance, two activities that are relatively immune
to business cycle fluctuations.
>
Everything we do is focused on creating value--first,
for our customers, by establishing collaborative
relationships of trust through our technologies, services,
and competitiveness; second, for our people, because our
performance is closely tied to their skills and commitment;
third, for our shareholders, because our competitive growth
and profitability help ensure a sustainable return
for their investment.
Schneider Electric
and its shareholders
Schneider share/CAC 40 index
Share
(in euros)
€
Trading Volume
(number of shares)
--- 800,000
70 ---
60 ---
51.68
--- 600,000
50.60
50 ---
49.82
--- 400,000
40 ---
36.57
30 ---
--- 200,000
25.69
2/1/96
31/12/96
31/12/97
31/12/98
■ Share price in euro
■ Schneider share
■ CAC 40 index
(base: Schneider Electric share price on January 2, 1996)
Market data, Schneider SA shares (Paris)
FF
Outstanding
Value at
Dec.31,1998
Value at
March 15,1999
Shares (in French francs)
153 417 118
339.00
331.91
Shares (in euros)
153 417 118
51.68
50.60
Fully diluted shares outstanding: 165,365,908
The share
■
Ranks 26th among the CAC 40 stocks
■
Accounts for 1.3% of the index’s total value
■
Included in the Euro Stoxx 50 index
■
Market value
At December 31, 1999: FF 52 billion (€ 7.9 billion)
15/03/99
Shareholder base
At December 31, 1998
8.2 %
4.2 %
Shareholders’
pact*
69.0 %
France
Employees
4.8 %
2.7 %
19.0 %
Treasury stock Intragroup cross
shareholdings
Rest of world
11.0 %
Mutual funds
USA
20.0 %
31.0 %
Other institutional
shareholders
Shareholders
outside
France
7.0 %
UK
10.3 %
12.8 %
Europe excl.
France and UK
Individual shareholders
* Axa 4.7%
AGF 1.4 %
Paribas 2.1 %
Rising profitability that benefits shareholders
2.71 €
17.77
€
1.15 €
7.54
6.50
15.12
5.0
€
A commitment
to building closer
relations with
shareholders
4.0
8.31
Minitel
3615 CLIFF
9.69
Letter to shareholders:
two issues a year
95
96
97
98
95
96
97
98
Net earnings per share
Dividend per share
(in French francs, after amortization
of goodwill)
(in French francs, excluding tax credit)
Changes in the shareholder base
A Sicovam study ended December 31, 1998 revealed a 45% increase in the number
of shareholders in and outside France. Individuals represent 91% of our more than
141,000 shareholders and hold around 18 million shares or 12.8% of the capital.
Some 9,000 French institutional investors hold 38% of our shares while 1,000 foreign
investors hold more than 30%. Schneider employees (21,000 people, including
3,000 outside France) hold 4.2% of the capital through various mutual funds.
Schneider
shareholders’ guide:
4th edition
Internet
www.schneider-electric.com
Find out all about
Schneider Electric’s news,
financial performance, etc.,
and check the share price
in real time.
Our press releases
are also available at:
www.prline.com
Schneider Electric and its shareholders
17
Financial highlights
1995 to 1998
€ 7.6 bn
50.0
€
47.4
44.2*
42.4*
Steady growth in sales:
up 5.5% between
up 18% between
95
96
97
1997 and 1998
1995 and 1998
98
(FF billion)
* Pro forma restated for Spie Batignolles
€ 0.9 bn
5.6
€
5.0
3.9*
3.6*
A significant increase in operating income:
up 12.6% between
up 56% between
95
96
97
1997 and 1998
1995 and 1998
98
(FF billion)
* Pro forma restated for Spie Batignolles
48 %
29 %
Very low indebtedness:
12 %
7%
95
96
97
Debt-to-equity ratio
(
Net debt
Shareholders’ equity
)
98
FF 1.6 billion
FF 7.8 billion
in 1998
in 1995
Financial highlights
19
1998 sales by Geographic Zone:
19 %
France
the balanced geographic
spread of our sales is a source
of stability.
31 %
Europe
20 %
Rest of world
30 %
North America
€ 0.4 bn
2.7
€
2.2
1.4*
0.8*
Substantial growth
in net income:
up 21.9% between
up 328% between
95
96
97
1997 and 1998
1995 and 1998
98
(FF billion)
* Pro forma restated for Spie Batignolles
€ 2.71 bn
17.77
€
15.12
8.31
9.69
Net earnings per share has more than
doubled over the past three years:
up 17.5% between
up 214% between
95
(FF)
96
97
98
1997 and 1998
1995 and 1998
2 core businesses
Electrical distribution and industrial control and automation
Schneider Electric is one of the few global
suppliers with an offering that meets all
international standards requirements, notably
IEC (Europe) and NEMA (North America).
Work rank
Electrical distribution
(
High Voltage
n°
4
Medium Voltage
n°
2
Supplying electricity with
complete safety--from the power
plant to the home, from high
voltage to consumer
final low voltage.
Industrial control
and automation
Controlling, monitoring,
protecting, and supervising
machinery and networks
in industrial processes,
infrastructure, and buildings.
(
Low Voltage
Industrial Control
n°
1
n°
1998 Sales
FF 3.7 billion
€ 0.6 billion
FF 8.7 billion
€ 1.3 billion
FF 21.3 billion
in FF billion
€ 3.2 billion
in € billion
1
FF 15.7 billion
Automation
n°3
€ 2.4 billion
2 core businesses
21
Products
Sales by Geographic Division
High Voltage: switchgear and equipment, from 72 to 800 kV: conventional and
metal-clad substations, power transformers, circuit breakers, disconnectors, and
custom transformers for high voltage generation, transmission, and distribution.
■
■
■
■
Sales
(in FF billion)
International Division 73%
European Division 15%
French Division 11%
North American Division 1%
12.4
10.7
11.2
9.8
Medium Voltage: switchgear and equipment for HV/MV and MV/LV distribution,
from 1 to 52 kV: circuit breakers, fuse switches, overhead switchgear, outdoor
and indoor substations, and digitized protection and control/monitoring units and
systems. Transformers for power generation, transmission and distribution, from
50 to 1,700 kVA and 1 to 800 kV. Assemblies and systems for transmission and
distribution applications.
Low Voltage Power: installation equipment and systems: power and motor
control switchboards. Low voltage switchgear: power circuit breakers, moldedcase circuit breakers, switches, insulation detectors and residual current relays,
computer equipment and software, installation management, and LV/LV transformers. Prefabricated busbar trunking: lighting (25/40 A), low and medium power
and high power (16 - 5,000 A). Power factor correction and LV/HV harmonic filter
compensator systems.
■
■
■
■
Industrial Control: power protection and control: contactors, from 6 to 2,750 A,
overload relays, motor circuit breakers. Speed drives: soft starters and variable
speed drives for AC and DC motors. Human-machine interface: pushbuttons,
indicator lights, operating terminals, and safety accessories. Machine equipment:
sensors, detectors, photoelectric cells, lifting and handling accessories, identification systems. Machine enclosures and accessories: motor control centers,
enclosures, assembly accessories and connection systems. Additional automation
functions: electromechanical relays, instrument and control relays.
95
96
97
98
21.3
19.9
■
■
■
Final Low Voltage: public distribution switchgear: connecting circuit breakers,
pole-top circuit breakers. Modular switchgear and installation systems: enclosures, protection for circuits (circuit breakers) and people (circuit breakers with
earth-leakage protection), control/monitoring equipment. Building safety and
control systems: fire detection. Building management systems and automation
devices for commercial and residential buildings. Distributed switchgear and
consumer final low voltage installation systems: switches, sockets, and waterproof
installation systems.
European Division 36%
International Division 27%
French Division 21%
North American Division 16%
■
North American Division 44%
European Division 25%
French Division 16%
International Division 15%
17.8
15.6
95
96
97
15.1
■
■
■
■
European Division 39%
North American Division 27%
French Division 20%
International Division 14%
13.1
95
98
15.7
13.9
96
97
98
Automation: compact, modular and multi-functional PLC platforms; PLCs for
complex automation architectures and specific functions; remote I/Os. Numerical
controllers, axis and spindle motors and associated speed drives. Specialized
programming, operating, piloting, and supervision software and applications.
Field bus communication networks. Industrial programming and interface terminals.
Note: The sales figures in the above table and on pages 29-43 include only sales from the electrical activities.
The value of innovation
Investing in innovation
With more than 3,000 engineers and technicians
at development centers in twenty countries,
Schneider Electric has the skills to create
a global lineup and adapt it to local markets.
Almost 400 people in our research laboratories
are working on anticipation programs to meet
tomorrow’s needs in cooperation with outside
laboratories and partners, so that Schneider
retains control over the technologies that
drive its product performance.
We devoted FF 2.6 billion to R&D in 1998,
with a focus on new technologies and on ease
of installation and use so that we can deliver
even more value to users, integrators,
and distributors. At Schneider Electric, we
know that R&D and innovation play a crucial
role in our competitiveness.
The new Merlin Gerin NG 125
range of circuit breakers and
switches for electrical distribution
combines safety, uninterrupted
service, ease of operation,
and compact size.
Launch: November 1998.
Merlin Gerin Digipact,
for managing electricity
in commercial and residential
buildings. Dedicated to electrical
distribution control, Digipact
addresses such user priorities as
energy consumption management,
cost savings, and uninterrupted
service.
Launch: June 1998.
In 1998, we launched 13 new product ranges
in electrical distribution and industrial
control and automation.
Anticipating technological
breakthroughs
New polymers, superconducting materials and
contact materials all open the door to technological
breakthroughs. We conduct feasibility studies with
outside laboratories to pave the way for industrial use
of new products and processes.
Industrial architectures and automation systems are
being profoundly modified by high-performance
electronics, the emergence of global communication
network standards and widespread use of the
Internet. These changes offer important opportunities
for us to enhance our products and services.
Telemecanique Tego Dial, the
installation solution for humanmachine interface. Tego Dial
combines all the standard functions
in a personalized configuration
for machine-integrated operator
terminals.
Launch: February 1999.
Telemecanique Tego Power,
the installation solution for motor
starters. With its CAD software
and standard modular components,
Tego Power makes implementation
easy and flexible.
Launch: May 1999.
The value of innovation
23
Telemecanique Altivar 58,
the latest in our range of speed
drives, to regulate motor drive
and improve production rates.
Launch: March 1998.
Momentum is the latest addition to the
Modicon/Telemecanique distributed
input/output range. Thanks to their modular
design, these devices make it easy to build
distributed architecture automation systems
at low cost.
Launch: September 1998.
Transparent factory
More and more, customers want to simplify the link
between automation, manufacturing and business
(ERP) systems. With the Transparent Factory program,
the future architecture of industrial automation systems,
Schneider Electric has anticipated this growing
demand by using open communication standards
and software integration standards (such as Microsoft’s
OLE). Schneider Electric was the first to put Internet
technology into its automation devices while
maintaining their performance and reliability.
Testing in the dielectric laboratory
in Grenoble, with currents
exceeding one million volts.
Integrating information
technologies
In our businesses, information technologies make
it possible to offer new functions and new services.
For example, the integration of powerful signal
processing systems and communication interfaces
in equipment allows operators to enhance the reliability
and performance of their networks while reducing
operating costs.
Schneider Electric’s services
Our remote support and maintenance services offer
extensive inspection, diagnostics, and remedial
action capabilities. Customers can directly access
a Frequently Asked Questions (FAQs) database
on our Internet site where they will often find
the solution to their problem among the 15,000 case
studies available.
Test laboratories
Thanks to our longstanding policy of developing
and investing in skills, Schneider boasts worldclass
testing laboratories. These facilities fine-tune
and certify all our products. Their approval certificates
are recognized by certification authorities, worldwide.
More environmentally friendly
and efficient methods
We have integrated environmental impact tools in our
CAD systems to foresee and reduce the environmental
impact of our products throughout their life cycle. This
is one of the areas in which we’re working to improve
our design methods and product performance.
Local manufacturing
A major asset for our customers
Local manufacturing is a policy our customers appreciate, and it is often
a decisive factor in their buying decision. Schneider Electric is truly a local
supplier; with more than 150 plants on every continent, we produce 60%
of our output outside France.
China: Beijing
Australia: Benalla
Czech Republic: Pisek
USA: Asheville
Turkey: Izmir
Europe
North America
Latin America
More than 80 production facilities:
The Asheville, North Carolina plant
produces twenty-six ranges
of Square D industrial control
components such as contactors,
starters, pushbuttons, and
sensors. The plant, which employs
600 people, is one of Schneider’s
33 production units in North
America.
Schneider operates four plants in
Brazil: Jurubatuba and Carmo do
Rio Verde, near São Paulo, for
industrial control and automation;
Sumaré for medium and low voltage
electrical distribution; and Itajai for
high voltage equipment.
The pilot plan in Meliana (Spain) employs 300 people who manufacture earth-leakage protection switches
and sub-assemblies for eight other plants throughout the world. The extremely delicate assembly process
requires an exceptionally clean environment. In the past two years, a total quality improvement plan has
yielded improvements in plant methods.
The new plant in Pisek (Czech Republic) supplies contactors, overload relays, and pushbuttons to the CIS
countries and markets worldwide. It employs 400 people.
In France, the Dijon-Épirey plant manufactures Telemecanique motor circuit breakers for the global market.
The facility--one of our 44 manufacturing units in France--employs 490 people and operates seven days a week.
In Carros, 400 team members are involved in producing programmable logic controllers.
In Argentina, our new 10,000
square-meter complex in Mataderos
handles medium and low voltage
equipment manufacturing, logistics,
services, and production
of Merlin Gerin Multi 9 units
for all Mercosur countries.
Our goal is to set up production facilities as close as possible to our users, so
that our systems and equipment are immediately available and fully compliant
with local standards and practices.
Schneider Electric is also deeply committed to environmental protection.
By the end of 1999, more than two-thirds of our production facilities will be
ISO 14001 certified. Most of our units already have ISO 9000 certification.
In the past three years, we have undertaken a major program to upgrade our
plants and enhance productivity, particularly in Europe.
Spain: Meliana
Indonesia: Cikarang
France: Dijon-Épirey
France: Carros
Middle East
Asia
Australia
In Izmir (Turkey), 260 people make
Merlin Gerin medium and low
voltage equipment, including
Masterpact circuit breakers and
Blokset, Prisma, Masterbloc and
SM6 panelboards. From Izmir,
Schneider Electric supplies not
only the Turkish market but
neighboring countries as well.
We have 15 manufacturing units on-line in Asia. In China, seven jointventure plants in Beijing, Tianjin, Shanghai and Guangzhou are dedicated
to the production of industrial control components and equipment for
medium and low voltage electrical distribution.
At its production facilities in
Benalla and Mount Waverly,
Schneider manufactures low and
medium voltage distribution
switchboards, as well as medium
voltage transformers.
In Batam (Indonesia), Schneider has been producing Telemecanique
industrial control components in a joint venture with Toshiba since 1992.
The Cikarang plant, ISO-9001 certified since 1997, is dedicated
to electrical distribution, miniature circuit breakers, and medium and low
voltage distribution switchboards.
Local manufacturing
25
Meeting your needs,
day after day
Performance, safety,
and ease of use-a chain of skills to ensure
total customer satisfaction.
27
Did you know that Schneider Electric is involved in so many areas of your daily life ?
>
Schneider Electric is involved in two core businesses
to serve four main markets: construction, industrial
production, electric power (transmission and distribution),
and infrastructure. Schneider Electric also means a major
distributor network that offers our products around the world
to customers, systems integrators, and product users.
>
Schneider Electric has a tightly woven network of
distributors with 7,400 outlets worldwide. More than 70%
of our standard-price catalog products are sold through
professional distributors. At Schneider, a close relationship
with the customer is a key part of our marketing strategy.
For this reason, we always take the marketing aspect into
account when we develop new products. By integrating
more and more related services, we are strengthening our
close relationship with distributors so that we can serve
their customers better.
To address each market’s specific features and meet
contractor and end-user expectations, a distributor needs
to be extremely professional and have the necessary skills
to understand the catalog’s technical content. We select
our distributors on these criteria. In many countries where
distribution is in the development stage, Schneider is deeply
involved in helping its distributors obtain the skills they
need. We have devoted considerable energy to training in
this area. In addition, we share information (increasingly by
e-mail) to keep distributors continuously informed about
product availability and technical data.
Everywhere we operate, we have set up solid partnerships
to provide customers with the service they expect.
Together, Schneider Electric and its distributors offer the
entire Schneider Electric catalog along with the corresponding technical support, and provide the most appropriate
solutions at the best cost.
>
Systems integrators--who include panelbuilders,
contractors, OEMs, and others--play a key role
in Schneider Electric’s business strategy. These partners
are valued for their expertise in implementing products
and related services, and in providing end-users with
the solutions that best meet their needs. When customers
evaluate the quality of a machine or system, they make
a close connection between Schneider’s products
and the systems integrator’s performance.
>
We pay special attention to our major international
customers. The Schneider Global Business Development
network addresses their needs, providing the skills to
manage megaprojects on a global scale. SGBD’s teams
assess the customer’s specific requirements and tap our
Company wide resources to offer prompt, consistently
effective solutions.
The construction market
Industrial, commercial and residential buildings
Providing a safe, comfortable
environment, managing electrical
distribution and saving energy
Market sales
FF
22.7billion
€
The construction market involves all aspects of power distribution,
management, and optimization for residential buildings (including singlefamily homes and apartment buildings), commercial buildings (offices,
hotels, hospitals, shopping centers, etc.), and industrial buildings.
3.5billion
This is largely a local market, governed by standards and practices that differ
substantially from one country to another. Our customers are building
owners, prime contractors, systems integration engineers, panelbuilders,
electrical contractors, and electrical equipment distributors.
Construction market
sales as a % of total
We offer a complete lineup of Merlin Gerin and Square D low voltage
equipment (circuit breakers, enclosures and cabinets, prefabricated busbar
trunking), medium voltage distribution equipment, building management
and safety systems, and Square D and Telemecanique components
and equipment for control and automation systems.
46%
Strengths
Schneider Electric is world leader in the main areas
of power distribution and control systems for buildings.
Our leadership rests on a strong international presence
and a wide-reaching network of partners. That’s why
we can offer scaleable, user friendly, customized
solutions for both sectors of this specific market.
For residential buildings, the goals are to make life
more comfortable and pleasant for residents, enhance
the safety of people and property, optimize electricity
consumption, and automate heating, air conditioning,
and lighting.
For commercial and industrial buildings, the focus is on
distributing electrical power, protecting people and
equipment, increasing user comfort, guaranteeing
uninterrupted service, reducing operating costs, and
facilitating future improvements.
Local standards and practices traditionally play
a decisive role in the construction market.
Schneider Electric products and solutions are readily
available through our worldwide distribution network,
and are installed by local contractors. These partners’
expectations have a considerable impact on our offering.
Outlook
Schneider Electric’s construction market is closely
linked to the renovation sector, which can account
for as much as 70% of the market in certain countries.
This explains the relatively non-cyclical pattern
of demand.
We hold strong positions in commercial and industrial
building applications, but there is room for gains in
the residential sector.
Schneider Electric is in the process of acquiring Lexel,
Europe’s second largest manufacturer of products
for consumer final low voltage. This move will bolster
our positions in the residential and commercial market.
Demand here is being shaped by socio-economic
and demographic trends--notably the spread of home
offices, the increasing use of information highways,
and the aging of the population. In the medium term,
and especially in the industrialized countries, these
changes will significantly modify the needs for housing
and workspace. Automation will be engineered into
a growing number of applications, while demand for
telecommunications and security systems will expand.
The construction market
29
No more wet towels
It’s been a long, gray, rainy day. Time for a nice hot
shower. Nothing like it to “recharge your batteries”.
You reach out to grab the towel--and it’s toasting hot.
Now you’re feeling great.
Question
Schneider Electric doesn’t make towels, radiators,
or bathrooms. But do you realize that, without Schneider,
you’d probably enjoy your shower a lot less?
1
Explanation
If you cheered up so quickly, it’s because the towel’s
temperature felt perfect on your skin. In fact, it’s not just the
towel that’s at an ideal temperature. Your apartment and your
entire building are too. Comfort and safety enhance the quality
of life for building residents. Schneider helps offer these
advantages by supplying the construction industry
with completely reliable equipment for power distribution and
management. We also provide products with multiple functions
capable, for example, of making smart decisions to external
temperature or of detecting a water leak or even intrusion
by trespassers.
2
Demonstration
■ Your building--like so many shopping centers, hotels, hospitals, and other facilities--is fitted
with Schneider switchgear and equipment.
■ It may be equipped with an Isis building management system designed for apartment and office
buildings. This control system supervises installation operation, optimizes energy consumption,
operates and automatically controls all the building equipment and processes incoming data
from detection devices.
■ Your personal safety is also guaranteed by the new generation ID’clic circuit breakers with
earth leakage protection, designed to protect people in the home.
3
Benefits for the building industry
■ The security of choosing products that are fully reliable, quick to install, and easy to reconfigure.
■ Satisfied, loyal customers.
■ Opportunities for business diversification, particularly into remote surveillance.
4
Benefit for you
You get enhanced quality of life and peace of mind at all times.
The industrial production market
Optimizing flexibility, safety
and competitiveness in production
Market sales
FF
Schneider Electric serves a particularly broad range of customers in this
market, covering all industries from food and beverages to steel, automobiles,
and chemicals. We leverage the synergy of our Modicon, Square D,
and Telemecanique brands to develop modular and scaleable automation
solutions.
13.8 billion
€
2.1 billion
For industrial and commercial facilities, Schneider also handles such utility
functions as cogeneration, water treatment, and environmental management.
Around the world, Schneider Electric works in partnership with leading
multinational corporations, systems integrators, OEMs, electrical contractors,
and distributors. Our shared goal is to devise flexible, competitive
manufacturing processes.
Industry market
sales as a % of total
28%
Strengths
Our success in this market rests on three strengths:
our vast catalog of products and services, our global
expertise, and our highly skilled people.
These strengths enable us to offer consistent solutions
for electrical systems and process automation that
are always fully tailored to the specific requirements
of each industry. This means that we can ensure total
compliance with our customers’ targets for flexibility,
profitability, performance, and uninterrupted service.
Each of our partners and customers can count on
individualized service, from automation architecture
and engineering advice to network design, international
support for OEMs, operator training, maintenance
contracts, software subscriptions, installation audits,
equipment diagnostics, and more. Schneider Electric
equipment and systems comply with international
standards such as IEC, NEMA, JIS, and UL. They are
built to withstand highly diverse and sometimes
extreme industrial environments anywhere
in the world.
Outlook
The global industry market is enjoying sustained
growth in many sectors. The packaging industry,
for example, is booming in regions with high living
standards, and this growth is fueling demand
for automated machinery.
More generally, manufacturers are setting up plants
ever closer to their local markets. This phenomenon
explains the powerful globalization trend, which is
gaining momentum. To address this rising demand
for local service, Schneider Electric offers truly
competitive local solutions that provide customers
with the lowest total cost of ownership.
The industrial production market
31
No bottlenecks in the bottling plant
The party’s in full swing.
Your guests, glasses in hand,
are crowding around the buffet.
Question
2
Demonstration
■ Telemecanique Osiris sensors receive a wide range of data on the production line: speed, bottle
count, filling levels, colors, potential defects, and more.
Did you know that Schneider Electric contributed
to the quality of the beverages you’re serving?
■ These data are sent to a Modicon/Telemecanique Premium programmable logic controller, the
“brains” of the entire operation. The PLC analyzes the information and issues orders to the
machines via a fieldbus network, for example. A Telemecanique Magelis programming terminal
tells the PLC which tasks need to be carried out and how they should be coordinated.
1
■ Pump control, machine start-up, and conveyor belt speed regulation are handled by
Telemecanique Altivar 18 speed drives.
Explanation
The fruit juices that your many guests are enjoying have come
off a bottling line. The bottles have all followed the same path:
they’ve been filled, capped, labeled, packed, and palletized.
3
Between each of these operations, they’ve traveled on conveyor
belts. At every step in the process, Schneider products have
controlled the machines, regulated flows, and monitored
packaging quality.
■ Automation of the entire production line.
Benefits for the manufacturer
■ Complete, fully automated synchronization of machinery: no more bottlenecks, no more
breakage, and substantially less noise.
■ Optimized production rates--which means a more profitable facility.
4
Benefit for you
Your drinks are perfect and your party’s a big success.
The electric power market
Generation, transmission, and distribution
Optimizing electric power generation
and consumption
Market sales
FF
€
8.4 billion
Schneider Electric’s main customers in this market are power utilities,
which include not only generating companies, but practically all the electricity
transmission and distribution companies around the world.
1.3
We supply them with a complete range of transformer substations and
control systems for their grids, all the way from power stations (hydroelectric,
fossil fuel, or nuclear) to where electricity is used by consumers
in the residential, infrastructure, and industrial markets.
billion
Electric Power market
sales as a % of total
Thanks to Schneider Electric’s high performance catalog based
on Merlin Gerin and Square D equipment, utilities can optimize
the quality and cost of the electricity they supply to their customers.
We also offer fully customized services for utilities to help them enhance
the reliability of their power grids and benefit from remote operation, training
for operating personnel, and installation audits and renovation.
17%
Strengths
We treat our customers as partners and work hard to
stay close to their reality so we can understand their
needs. This distinctive approach has been the decisive
factor in our international growth.
We have all the solutions customers need for
generation, transmission and distribution of high,
medium, and low voltage power.
The hallmark of the Schneider Electric offering
is flexibility. It’s reflected in our technology, process
engineering (from the supply of basic components
to turnkey projects), services and customer support.
Outlook
After decades of stability, the electric power market
is caught up in a whirlwind of change and is becoming
increasingly competitive at the global level. The situation
is shaped by faster concentration, deregulation
and privatization of producers and distributors.
In addition, small power stations are springing up
closer to consumption areas.
Meanwhile, our customers are adjusting their strategies
and seeking ever more integrated and efficient solutions.
Thanks to the rising use of telecommunications and
network management software, utilities can measure
their customers’ needs in real time and optimize
power distribution. We are continuously adapting our
products and services to meet these new demands
in what has become a fast-moving market.
Alongside the well-established criteria of uninterrupted
service and safety, we are increasingly attentive
to profitability and cost effectiveness, which are now
of crucial importance.
To strengthen our position among the world’s leading
suppliers, we are stepping up our business drive
in Asia, eastern Europe, and Latin America,
which continue to offer major potential despite recent
economic crises.
The electric power market
33
Crossing the street is not a gamble
It’s a dark night. On the brightly-lit avenue,
buses and cars are roaring by. The light turns amber,
then red. The cars stop immediately at the intersection.
The way is clear--you can cross.
Question
Without Schneider Electric, there would still be electricity.
But would your everyday life be as safe?
1
Explanation
When night falls on the city, you expect life to go on--and
you’re perfectly right. Schneider contributes substantially
to your well being and safety. Not by producing electricity,
but by supplying utilities with reliable systems and
high-performance equipment. These products ensure
the efficient control of traffic lights, street and parking lot
lights, electrical road signs, spotlights on buildings, etc.
--in other words, your city’s lights.
In addition to equipment used in generating, transmitting,
and distributing electricity, Schneider Electric supplies grid
supervision systems. These guarantee uninterrupted power
distribution, a source of safety for all.
2
Demonstration
■ Before reaching the terminal points on the grid, electricity is transmitted through power
distribution substations and then through Merlin Gerin or Square D medium/low voltage
transformer substations designed to blend gracefully into the landscape.
■ From high voltage to low voltage, every stage of transformation and distribution
is supervised by grid control systems that ensure consistently optimal operation.
■ Remote supervision of medium voltage grids is provided by a Merlin Gerin Milenium unit,
which allows real-time monitoring and control of key grid facilities, as well as event and
alarm processing.
3
Benefits for the electric power utilities
■ Optimized electric power distribution that ensures uninterrupted service around the clock,
whatever the external situation and environment.
■ Automation of numerous functions to guarantee total safety through instant detection of
any anomalies.
■ The guarantee of optimized management of generation and distribution costs.
4
Benefit for you
You can cross an avenue at midnight without risking your life, because it is lit up as bright as day.
The infrastructure market
Supplying electric power – automating facilities
Ensuring that facilities are safe, reliable
and always running
Market sales
FF
€
Infrastructure projects include airports, road and rail transportation networks,
port facilities, water treatment and distribution systems, and waste conversion
facilities. They all give Schneider Electric excellent opportunities to demonstrate
the efficiency of its automation and power distribution solutions.
4.5 billion
0.7
billion
In these areas, we work with leading international engineering firms,
contracting authorities, prime contractors, OEMs, systems integrators,
electrical contractors, and specialized distributors. Thanks to the wide range
of technical options available with our Merlin Gerin, Modicon, Square D
and Telemecanique equipment, we can design the right solution to achieve
maximum performance and on-site safety.
Infrastructure market
sales as a % of total
In this way, our commitment in the infrastructure market goes well beyond
our project partners, as it directly concerns consumers and users in their
everyday life and travel.
9%
Strengths
Outlook
Our success in this market is unquestionably due to
the synergy of our products and services, as well as
to our highly flexible approach. Thanks to our global
reach, we can help operators make their projects a
success whether they’re involved in large international
sites or small local jobs.
The infrastructure market is inherently complex, due
to the large number of industries involved and the
variety of machines used. Today, the large international
engineering firms that are our traditional partners find
themselves sharing the market with equipment
makers and systems integrators.
There are many types of infrastructure--for example,
road networks, rail systems, airports, and harbors-where productivity and human safety requirements
make it vital to prevent failures. We offer innovative
solutions for this purpose in electrical distribution,
control, automation, and facility supervision.
Our expertise guarantees our customers the strictest
compliance with international standards and local
regulations as concerns passenger safety
and infrastructure availability.
This phenomenon, which is particularly widespread
in emerging economies, represents an opportunity for
Schneider Electric. Our expertise in projects requiring
solid partnerships is based on long experience and
our comprehensive solutions include a broad range
of services. The already extensive changes seen
in this market in recent years will continue with the
increasing trend toward privatization of contracting
organizations—a trend that will make return
on investment an even more pressing concern.
We also provide our partners with a complete range
of customized services such as power grid design
assistance, safety and availability studies,
implementation monitoring, operator training,
remote network administration, on-site technical
support, and more.
There are many sources of growth in both
the industrialized and developing economies.
The industrialized world has an ever greater need
for communication infrastructure in addition to water
and waste conversion facilities. Meanwhile,
in the developing world, the need for ports, airports,
roads, and railroads remains immense.
The infrastructure market
35
Your luggage won’t take a vacation without you
You’ve dreamt so long about this exotic trip...
Now the plane’s landed,
and you’re off to claim your bags.
Next stop: the beach!
Question
Without Schneider Electric, would you have had such
a smooth trip?
1
2
Demonstration
■ The lights on the airfield, in the parking lot, and in the airport buildings get their power supply
through miles of Telemecanique Canalis busbar trunking.
■ The control panels for the departures and arrivals boards are managed by programmable logic
controllers. They display all the required information automatically and in real time.
■ The jetways and escalators are driven by Modicon/Telemecanique Momentum programmable
logic controllers and Telemecanique Altivar 58 speed drives.
■ The electric power distribution for runway lights is handled by Merlin Gerin or Square D
distribution switchboards.
Explanation
When you got to the airport, you left your car in the parking lot
and made your way to check-in. The illuminated board told you
the boarding gate. A jetway took you to the plane and you had
a pleasant flight. Now you’re waiting for your bags, which are
about to come around the carrousel. At each of these stages,
Schneider automated control devices were working around the
clock to make sure all systems were operating properly.
■ The fully automated baggage handling system is also controlled by Schneider Electric.
3
Benefits for the customer
■ Optimized power distribution, ensuring uninterrupted service whatever the external conditions.
■ Automation of numerous machines, reducing the risk of error.
■ Instant detection of any anomaly, ensuring complete security for all vital functions.
4
Benefit for you
Trouble-free baggage claim, which means a great vacation ahead!
Schneider Electric
worldwide
A balanced
international presence
and multicultural diversity:
two strengths for making
the most of global market
opportunities.
37
61,000 people share their experience in 130 countries.
>
Schneider Electric has conquered its global leadership positions by maintaining strong momentum in all its
businesses. Our operations around the world have been
steadily expanding, notably in eastern Europe, China, and
the Middle East.
Throughout our international development, we have focused
on maintaining a balance between fast-growth markets
and mature markets. We believe that this balance will
guarantee steady and sustainable growth.
>
Our goal is to combine the power of an international
enterprise with the responsiveness of a small business. To
this end, Schneider Electric is making the most of computer
networks, speeding the exchange of information
and experience throughout the Company. Greater communication flows allow faster decision making in the Country
Organizations. They also enhance and leverage our skills
networks, thereby optimizing costs.
In the field, these changes have driven a steady increase in
the number of hot lines and help desks. These services give
customers direct access to all the resources they need for
solving whatever type of problem they may encounter.
>
At Schneider, we are convinced that competitiveness
resides in the performance of our people and the quality
of our services. Our Human Resources strategy
is designed to encourage a different way of working in a
multicultural environment, to foster mobility and empowerment,
to develop project-based organization, to share skills and
innovate, to speed the decision-making process and to allow
employees to share in the Company’s success.
Our international mobility program offers employees
the opportunity for career development and growth. It also
lays the groundwork for the future by allowing us to respond
better to continuous change, strengthen our teams’ sense of
co-destiny, share skills and foster a common corporate culture.
We are adjusting our organization to be more innovative,
to work faster and to be more effective. This means that we
need to change the way we do things and challenge ingrained
habits. The Leadership project was created to support
managers in leading change. The objectives are to empower
people to make decisions and express their ideas, encourage
skills development and promote continuous improvement.
Training plays a crucial role in keeping this change process
moving.
Schneider Electric
in Europe
Area sales
FF
24.4 billion
€ 3.7 billion
Of which in France
FF 9.2 billion
€ 3.7 billion
Workforce
35,000
of which France
employees
22,000
A market providing good growth
Schneider Electric’s European Division covers all of western Europe,
including France, as well as eastern Europe. It employs 35,000 people
in more than 25 countries and comprises 84 production facilities
and 2,700 sales outlets. Europe is a particularly demanding market; to keep
sales growing, providers need to offer extremely high-performance solutions.
Area sales
as a % of total
50%
of which
France
Sales in this mature market rose 6.2% in 1998, which is a good performance.
This overall figure does, however, conceal some fairly wide regional disparities.
The Italian, UK, and German markets were stable, whereas Spain
and Portugal gained 19% and central Europe 32%.
19%
Highlights
Harmonizing IT
More flexible logistics
To accelerate communication and optimize costs, we have
launched a large-scale program to harmonize all our internal
information systems. In Spain, Italy, Hungary, the United
Kingdom and Scandinavia this has meant the installation
of a fully integrated system.
Schneider Electric has re-engineered its entire European
logistics organization in order to respond more swiftly
to changing markets, reduce inventories, and cut operating
costs. The objective is to be able to deliver in 48 hours
to almost all European countries starting in 1999.
Upgrading production facilities
Acquisitions
Our European plant renovation program will be completed
in 2000. In the last quarter of 1999, the new unit in Stezzano
(Italy) will replace the Bergamo plant, with twice the capacity.
And, in a few months, we will have finished the total
renovation of our circuit breaker manufacturing facility
in Bulgaria. A new plant for medium voltage products
has opened in Leeds (UK), and the Pisek facility
in the Czech Republic is now operational.
Acquisitions provided us with many opportunities to enhance
our core product ranges in 1998. Examples include Schyller,
an Italian manufacturer of industrial sockets in the 16-125 A
range. We are pursuing this strategy in 1999, as can be seen
in the acquisition under way of Lexel, which will extend our
final low voltage product lineup.
Success stories
UK:
The Millenium Dome
The Millennium Dome in Greenwich, London, is being built to
house the UK’s festivities for the year 2000. Schneider was chosen
to supply 11 kV switchgear, MV/LV transformer substations,
Merlin Gerin LV distribution switchboards and a Square D
PowerLogic power monitoring and control system.
France: Kronenbourg
Scandinavia: Øresund link
Denmark and Sweden will be linked across Øresund Sound
by a 4-km tunnel combined with a 12-km bridge.
This unprecedented infrastructure project, comprising a
four-lane highway and a two-track railroad, is scheduled for
completion by summer 2000. Schneider Electric supplied all
the medium voltage electrical distribution equipment, including
29 Merlin Gerin Prisma G units, six Merlin Gerin Trihal
transformers (315-500 kVA), France Transfo distribution
transformers, and distribution switchboards equipped with
Merlin Gerin Compact NS circuit breakers. The prime
contractor, Øresundskonsortiet, chose Schneider for product
quality and reliability, operating staff training,
and our compliance with specifications.
With its 12 filling lines and an output of six million hectoliters a year, Danone’s Kronenbourg
facility in Obernai is France’s largest brewery. The newest bottling line, "Groupe 63,"
was assembled in partnership with Schneider Electric. We supplied a number of automation
products, including speed drives, programmable logic controllers, industrial control systems,
and operator control panels, as well as related services. The manufacturing constraints
were challenging: fast start-up, minimum failure rate, extreme flexibility. To meet these
specifications, Schneider’s local teams worked in active partnership with Kronenbourg
and the OEMs involved in the project.
Human resources
Sales teams on the move
Our sales engineers now have full remote access to a central database that allows them
to update information on orders, deliveries, requests, etc. before making a field call.
As a result, they can spend more time on customer premises.
French Division continues to give young people a start
Schneider Electric is actively engaged in training, most notably in France, where we welcomed
400 young people in 1998 for work-study programs lasting an average of two years. Since 1994,
3,000 young people have received professional training within the Company.
Schneider Electric in Europe
39
Schneider Electric
in North America
Area sales
FF
€
15 billion
2.3 billion
Workforce
18,000
employees
A commanding position
in all our business segments
Area sales
as a % of total
The North American Division encompasses all of Schneider Electric’s
operations and facilities in the United States, Canada, and Mexico. These
three countries constitute the world’s largest free-trade zone, under NAFTA.
The Division was set up in 1993, and its growth is driven by by Square D’s
reputation in NEMA-compliant electrical distribution and industrial control
products. The Division’s catalog also includes products by Merlin Gerin,
Telemecanique and Modicon, as well as two local brands--Federal Pacific
Electric and Federal Pioneer.
30%
In North America, we have 18,000 employees, 33 production facilities,
and a substantial sales network with 2,500 distributors across the continent.
These strengths and the confidence they generate have won Schneider
a strong position in residential construction, commercial and industrial
buildings, automated process control, the OEM market, and with large
accounts. Our ambitious but realistic strategy relies on four core values:
trust, teamwork, intelligent risk taking, and working for results.
It also encourages all local initiatives to extend our product lineup
and expand our market share. Currently, 20 such projects are under review.
Schneider’s distribution
network in Mexico extends
deep into rural areas.
Highlights
1998: robust growth
In the US and Mexico, 1998 was a good year for Schneider,
with sales rising 6.1% at constant scope of consolidation
and exchange rates. Most of the growth was provided by
electrical distribution, particularly in the residential
construction market.
Mexico: a star performer
In Mexico, Schneider Electric posted outstanding gains
in sales, income, and market share in 1997 and 1998.
Customer confidence in products made in Mexico has also
risen sharply. As a result, our Mexican plants now export
a quarter of their output, mainly to the US.
Premier distributors
In this market, 80% of Schneider products are sold through
a network of distributors. Most of them are exclusive
“Premier Distributors”; 8,000 of their employees have
attended a training program organized by Schneider Electric.
Schneider Electric in North America
41
Success stories
United States: Sears
For the many new standalone Sears stores that open
in the U.S.A, Schneider Electric provides a complete package
of electrical equipment, delivered in one shipment with one
purchase order. Sears chose Schneider because it could offer
a standardized program which improved the design and project
management of the stores while reducing overall costs
and the amount of space required for electrical equipment.
United States: IBM
In 1998, IBM signed a three-year agreement that establishes Schneider Electric as its first
choice for all electrical solutions in the United States. This includes electrical distribution,
industrial control, and automation equipment.
William B. Schaphorst, International Account Manager responsible for the IBM relationship,
had this to say about the agreement: “Industry leaders such as IBM are looking for long-term
benefits from their suppliers. They look beyond short-term, transaction-based gains and are
focusing on what alliances can do to reduce their costs, improve their profitability, build customer
satisfaction and strengthen their market leadership. We’re pleased that our companies together
now can concentrate on product design and application, new standards and processes
that lower overall costs and improve efficiencies.”
Canada:
Toronto Hydro and Hydro Quebec
Schneider supplied the equipment for Toronto Hydro’s
transformer substation in Agincourt and for the auxiliary units
of Hydro Quebec’s Sainte Marguerite 3 hydroelectric plant.
The Agincourt plant supplies power to 200,000 users. The
fully-automated facility includes 23 Federal Pioneer cubicles
fitted with Merlin Gerin MV circuit breakers and 30 overload
relays linked by optical fiber to a supervision center run by
a Modicon/Telemecanique programmable logic controller.
The contract for the 882 MW Sainte Marguerite 3 plant
covers the supply, installation supervision, and start-up of all
medium and low voltage distribution equipments.
Mexico: Daimler Chrysler
To increase output at its Toluca plant in Mexico State, Daimler Chrysler chose Schneider Electric
for the supply of electrical distribution equipment (substations, transformers, prefabricated
busbar trunking, low voltage distribution panels), industrial control products (contactors, motor
controllers, starters, sensors), and automation systems (programmable logic controllers, Magelis
terminals, Fipway network). The contract involves a partnership with four OEMs and two
distributors. All operating personnel will be trained on simulators.
Schneider was selected for its capacity to meet all the technical specifications and for its proven
record as supplier to Chrysler’s facilities in the US, Mexico and Germany.
Human resources
Listening to employees
In 1996 and 1998, all employees were surveyed in a People Poll to measure their job
satisfaction and pride in belonging to Schneider Electric. Following the poll, 35 forums
were held in which 1,300 employees met with corporate management to devise action plans
for the future.
Schneider Electric
Asia, Latin America, Africa, Middle
Area sales
FF
10.0 billion
€ 1.5 billion
Workforce
8 000
employees
Area sales
as a % of total
Continued growth
In Asia, Latin America, Africa, the Middle East and the Pacific, Schneider
Electric’s International Division encounters extremely diverse business
environments. Many countries in these regions qualify as emerging economies.
Their combined needs are therefore enormous, as is their growth potential.
But because the geopolitical situation in these areas can be uncertain,
there is often a latent risk of crisis or recession.
20%
The Division comprises 41 subsidiaries in seven regions, 22 liaison offices,
33 plants, and 2,200 sales outlets. This broad presence enabled the Division
to cushion the effects of the Asian crisis and achieve 9% growth.
Schneider Electric’s strategy is now aimed at greater decentralization.
We want to work closer to our local customers, and we are doing this by
increasing the number of sales and production facilities, fielding more sales
and support teams, and negotiating partnership agreements with the key
players in each region.
Highlights
Birth of Toshiba Schneider Electric Ltd.
Asian crisis
At the beginning of 1999, Schneider and Toshiba strengthened
their already close partnership by setting up a joint venture
under the name of Toshiba Schneider Electric Ltd.
The unit will develop, manufacture, sell, and support low
voltage products for the Japanese electrical distribution
and industrial control markets.
By maintaining strict control over investment commitments
in Southeast Asia, Schneider Electric limited the impact
of the Asian crisis on its business. In addition, the segments
in which we hold leadership positions—such as low voltage
distribution—proved resilient. Our sales in Southeast Asia
and South Korea fell 39%.
Brisk growth in many regions
In spite of the crisis, our financial results are on target.
We owe this performance to our rapid structural and cost
adjustments in response to the business downswing.
Robust growth was recorded in South America (35%),
Africa (17%), the Near East (8%), and northern Asia (7%),
thanks to the invoicing of a large number of contracts
in the high voltage market.
East and the Pacific
Success stories
Turkey:
Sabah, a daily from the Media Holding Company
The Media Holding Company, listed on the Istanbul stock exchange, owns two national
TV networks and more than 25 magazines and newspapers including Sabah, one of the
country’s leading dailies with a print run of 650,000. Schneider Electric renovated
the entire medium and low voltage electrical distribution system for part of the printing
unit and for the newsroom and administrative offices. We won the bid thanks to our
presence in Turkey, our quality/cost ratio, and our high level services and support.
Brazil:
Companhia Siderùrgica Nacional
Malaysia:
the new Kuala Lumpur International Airport (Klia)
Brazil’s largest steel plant wanted to replace its control
system to launch its new steel sheet galvanization process.
The call for bids included two requirements:
fast implementation–20 days–and no break in production.
With its brand new simulation software, Schneider rose
to the challenge.
Airports Berhad, a company that operates five international airports and 14 domestic airports
in Malaysia, has built a new, ultra-modern facility in Sepang, just outside Kuala Lumpur.
The airport has been in operation since July 1998. The customer selected Schneider to supply
the low and medium voltage equipment for this important project, which required 450 project
teams and 25,000 people. The Schneider package included power circuit breakers, contactors,
transformers and prefabricated busbar trunking. We were chosen for the high reliability of our
products, our airport contracting experience, and the efficiency of our local support teams.
All three stages of the process were simulated on screen,
the behavior of each actuator was carefully programmed,
and “virtual” production commenced. By testing and
validating every step before the old system was shut down,
we ensured a trouble-free switchover to the new system
–on time and under the specified conditions.
Human resources
Transferring know-how
Most of our human resources initiatives focus on devolving responsibility and on tailoring career
management to local environments. After providing comprehensive training, we are gradually
substituting local professionals for expatriates at all levels of our organization. The goal is
to create skills centers in each country through ambitious hiring programs.
Schneider Electric Inter national
43
Was this manual useful for you? yes no
Thank you for your participation!

* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project

Download PDF

advertisement