2010Annual Report - Schneider Electric CZ, s.r.o.
2010Annual Report - Schneider Electric CZ, s.r.o.
2010Annual Report - Schneider Electric CZ, s.r.o.
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4 BUSINESS REVIEW<br />
REVIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS<br />
144<br />
EBITAR (1) totaled EUR3,027 million over the 2010 fi nancial year,<br />
compared to EUR2,110 million in 2009, up 43.5% on an actual<br />
basis. The 2010 EBITAR includes a contribution of EUR85 million<br />
in the Areva Distribution business and non-recurring separation and<br />
integration expenses relating to this acquisition for EUR25 million.<br />
After adjustment for these non-recurring items, the Group’s EBITAR<br />
operating margin amounts to 16.2% against 12.8% (also restated for<br />
non-recurring items bound to the United States pension for EUR92<br />
million) in 2009, i.e. an increase of 3.4 points.<br />
The increase in EBITAR can be explained mainly due to an increase<br />
in volumes (EUR630 million) and to industrial productivity (EUR505<br />
million before the impact of the cost of materials). Raw material<br />
infl ation has had a negative impact on EBITAR of EUR184 million,<br />
in addition to price effects (EUR41 million) and geographical<br />
and product mix (EUR 34 million). Finally, exchange rate effects<br />
EBITAR per operating segment<br />
Power achieved an EBITAR margin of 20.1%; excluding the nonrecurring<br />
impact of the US pension plan modifi cation in 2009, this<br />
rate is up 2.7 points compared to December 31, 2009.<br />
Industry achieved an EBITAR margin of 18.8%; excluding the nonrecurring<br />
impact of the US pension plan modifi cation in 2009, this<br />
rate is up 8.9 points compared to December 31, 2009.<br />
IT business achieved an EBITAR margin of 16.9%, up 0.9%<br />
compared to December 31, 2009.<br />
Buildings achieved an EBITAR margin of 10.3%, stable compared<br />
to December 31, 2009 (10.4%).<br />
CST achieved an EBITAR margin of 16.4%, compared with 5.6%<br />
2009, thanks notably to a very strong volume impact from the<br />
automotive and industrial markets.<br />
Distribution, bought from Areva on June 7, 2010, achieved an<br />
EBITAR margin of 6.9% over the seven-month period since its<br />
acquisition and 5.3% over the whole 2010 fi nancial year.<br />
Net financial income/loss<br />
Net financial income/loss is a net loss of EUR347 million at<br />
December 31, 2010, compared to EUR384 million at December 31,<br />
2009.<br />
Net fi nance costs totaled EUR282 million, down EUR15 million<br />
compared to 2009. This decrease is mainly due to a drop in average<br />
Group interest rates on debt (especially regarding bonds).<br />
Exchange gains and losses, including the impact of the Group’s<br />
foreign currency hedges, was a positive effect of EUR25 million in<br />
2010, compared to an expense of EUR1 million in 2009.<br />
(conversion and transaction) have had a positive effect of EUR192<br />
million.<br />
At December 31, 2010, the capitalisation of costs relating to<br />
development projects net of amortisation expenses had a positive<br />
impact of EUR90 million on the operating income, down compared<br />
to 2009 (EUR126 million).<br />
EBIT (Operating income after amortisation and impairment of<br />
intangible assets and acquisitions) comprises EUR96 million of<br />
restructuring costs (compared to EUR313 million in 2009) and<br />
EUR228 million of amortisation and impairment of purchase<br />
accounting intangibles relating to business combinations (compared<br />
to EUR231 million in 2009), of which EUR43 million correspond to<br />
the acquisition of Areva Distribution.<br />
The fi nancial component of pension plan and other post-employment<br />
benefi t costs represents a net expense of EUR49 million compared<br />
to EUR56 million in 2009.<br />
Finally, other net fi nancial expense, in the amount of EUR53 million,<br />
can mainly be explained by a non-recurring expense of EUR36 million<br />
relating to the partial buyback of the 2013 bond bearing fi xed-rate<br />
interest of 6.75%.<br />
(1) EBITAR (Earnings Before Interests, Taxes and Amortisation of purchase accounting intangibles and Restructuring costs) corresponds to operating<br />
profi t before amortisation and impairment of purchase accounting intangible assets from acquisitions, and before goodwill impairment and<br />
restructuring expenses.<br />
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC<br />
Tax<br />
The effective tax rate at December 31, 2010 was 24.0% compared<br />
to 25.0% at December 31, 2009. It is worth remembering that the<br />
statement of income for 2009 presented for comparative purposes<br />
includes an EUR11 million income tax expense reflecting the<br />
recognition of deferred tax on the added value component of the<br />
territorial economic contribution (TEC) introduced in France by the<br />
2010 Finance Act dated December 31, 2009 (see note 1.2 to the<br />
consolidated fi nancial statements).<br />
Share of profit/(losses) of associates<br />
The share of profi t/losses of associates represents income of EUR6<br />
million at December 31, 2010. It principally comprises the share in<br />
net income of the Fuji <strong>Electric</strong> joint venture in Japan (EUR5 million).<br />
Non-controlling interests<br />
Minority interests in net income for fi nancial year 2010 totaled EUR76<br />
million, compared to EUR42 million in 2009. This represents the<br />
share in net income attributable mainly to the minority interests of<br />
certain Chinese companies.