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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Interview with<br />
2010 marks the return of growth.<br />
How have sales evolved throughout the year?<br />
In 2010, <strong>Schneider</strong> <strong>Electric</strong> generated EUR19.6 billion in sales,<br />
up 9.3% on an organic basis, and 24% overall. Thanks to the<br />
acquisitions we made, and particularly the one of Areva Distribution,<br />
we achieved record sales.<br />
This excellent performance resulted from a dynamic that accelerated<br />
over the course of the year: 2% organic growth in the fi rst quarter,<br />
10% in the second, 12% in the third and fourth quarters. This pace<br />
was maintained throughout the year in the new economies (+15%<br />
on average), while the rebound was gradual in the more mature<br />
economies, with 6% growth. All company activities generated<br />
positive growth in 2010.<br />
Did <strong>Schneider</strong> <strong>Electric</strong> fi nancial performance also<br />
follow this positive trend?<br />
Thanks to the clear recovery of margins, <strong>Schneider</strong> <strong>Electric</strong> posted<br />
record EBITA* of EUR3 billion (before restructuring costs and Areva<br />
Distribution integration costs), or 15.6% of sales.<br />
We benefi ted from the solid rebound of our volumes, but the<br />
2.8 point improvement in margin derived primarily for the effi ciency<br />
initiatives set forth in the One company program, in terms of<br />
productivity of the supply chain as well as simplifi cation of the<br />
administrative and sales structures, which generated total savings<br />
of EUR580 million.<br />
Net income increased 109% versus last year, to EUR1.72 billion.<br />
Our strong earnings allow us to propose to the shareholders at the<br />
Shareholders Meeting a dividend of 3.20 euros per share, fully paid<br />
in cash, representing a distribution of 50% of 2010 net earnings.<br />
INTERVIEW WITH EMMANUEL BABEAU<br />
EXECUTIVE VICE PRESIDENT FINANCE, MEMBER OF THE MANAGEMENT BOARD<br />
Emmanuel Babeau<br />
EXECUTIVE VICE PRESIDENT FINANCE,<br />
MEMBER OF THE MANAGEMENT BOARD<br />
Did the integration of Areva Distribution meet your<br />
expectations?<br />
The start of Areva Distribution activities within <strong>Schneider</strong> <strong>Electric</strong><br />
exceeded our initial expectations. We achieved continuity of<br />
operations and front offi ce teams were merged in all countries.<br />
Areva Distribution was henceforth combined with the company’s<br />
medium voltage activity and will be consolidated into the new<br />
Energy business beginning in 2011. The action plans rolled-out are<br />
expected to result in EUR120 million in synergies by 2014.<br />
In 2010, Areva Distribution was consolidated from June to<br />
December, over that period generating EUR1.23 billion in sales and<br />
EBITA of EUR85 million (6.9% of sales).<br />
This launch fully meets our expectations for the potential of our<br />
Energy business and for the rationale of this strategic operation.<br />
We are also very confi dent that our other 2010 acquisitions, Cimac,<br />
Zicom, SCADAgroup, Electroshield-TM Samara (50%), Unifl air,<br />
Vizelia and D5X, will also represent a signifi cant strategic contribution<br />
and will create value through the potential growth and the synergies<br />
that their integration into <strong>Schneider</strong> <strong>Electric</strong> will generate.<br />
How does 2011 look for <strong>Schneider</strong> <strong>Electric</strong>?<br />
We should see another year of strong organic growth in sales. Out<br />
target is 6% to 9% growth, with a positive trend for all activities.<br />
Momentum of Industry and IT businesses is expected to stay solid<br />
and Power should continue to see progressive improvement. With<br />
respect to the activities whose rebound via a growth cycle is slower,<br />
Energy is expected to grow aided by gradually improving utility<br />
end-market while investments made to increase energy effi ciency<br />
should remain a support to the Buildings business.<br />
We also expect the continued improvement of profi tability, with<br />
15.0% to 15.5% EBITA margin, a raise from the 14.5% proforma<br />
level in 2010 including Areva Distribution on a full year basis.<br />
Effi ciency gains and volumes will be key factors, while our price<br />
increases will to a large extent offset the infl ation of raw materials<br />
costs.<br />
Last but not least, <strong>Schneider</strong> <strong>Electric</strong> is aiming at preparing the<br />
future, thanks to signifi cant investments in innovation and our sales<br />
network, intended to leverage growth opportunities in the areas of<br />
energy effi ciency, the smart grid and the new economies.<br />
* EBITA: EBIT before amortisation and impairment of purchase accounting intangibles and impairment of goodwill<br />
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 5