Schneider, the aggressive
French giant, has posted its 2006 annual results, making it a clear No. 3 in the
automation business, after Siemens and ABB. Here are some highlights:
- Revenues $18B, 18% growth
- Profit: $2.7B, 28% growth
- Organic sales growth: 10.7%
- Average annual organic sales growth (3 years): 9%
- Operating margin: 14.6%, up 1.2%
- Earnings per share: up 31%
- Dividend: up 33%
Schneider reports that growth comes through
geographical coverage, plus R&D and innovation and new businesses. During
2006, organic (non-acquisition) sales growth by geographical region was:
- Europe +9.6%
- North America +7.5%
- Asia Pacific +15.7%
- Rest of World +17.6%
Sales Breakdown: 63% Electrical Distribution;
32% Automation & Control 5% Critical Power (APC acquisition Feb 2007).
Key strengths:
- Leading positions in Power & Control
- Wide geographical coverage with strong local presence
- Capacity to play a consolidation role through acquisitions
Schneider is investing heavily in fast-growth emerging countries:
Eastern Europe, S. America, Africa & the Middle-East, India, China and Asia
Pacific. The contribution of emerging countries to Group sales has grown to 31%
in 2006.
About 5% of revenue is invested in R&D. There are 6,500 R&D team
members in 25 countries, with consolidation in high-tech countries. There are 60
Application Centers in 18 countries, plus R&D partnerships with 50 private
university labs.
Schneider's 2007 Mantras:
- Quality, customer satisfaction (and emotion!) first
- Priority for solutions - Energy Efficiency, Critical
Power
- Automation: strategic and execution shift
Schneider continues to
move aggressively with strong acquisitions. Unlike Siemens and some others, it
doesn't screw them up. The aggressive French giant has no serious market share
in process controls and, if it chooses to, is certainly one of the very few
which has the bucks to accomplish an acquisition of Invensys
(Foxboro/Wonderware). At the very least, look for Schneider to pull off some
good strategic acquisitions in 2007.
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