Our priority today is to manage the daily

The electrical equipment group Schneider Electric is not immune to the crisis. He now warns on its 2008 performance and provides little guidance for 2009, "visibility is greatly reduced. For this year, its objective of organic growth now roughly 5.5 against a fixed cap of about 8 at the end of October. The Group was surprised by the sudden descent of sales in the fourth quarter of 2008, including in emerging countries, where it performs 30 of its turnover. But its operating margin should resist 15 this year, a high level compared to its competitors. The company, traditionally strong in the electrical distribution and industrial control, has diversified its activities in recent years, allowing it to better withstand the difficulties. In 2009, the goal is to keep a good level of margin, regardless of the economic scenario.

Review you lower your annual growth goal

After a year, 2007, where the organic growth of our turnover reached 14 and 25 taking account of acquisitions, we had at the beginning of the year a 6 to 8 growth target. In view of our good performance in the first half an increase of 11, we we were set the top of the range as objective. In the third quarter, growth reached 7, but we have seen mounting uncertainties and we we had shown more cautious in setting a target 8. Now, our objective of organic growth for the whole of the year is around 5.5. As we have witnessed a brutal raid of sales, including in emerging countries, where we are 30 of our turnover.

How is this sudden deceleration

From end of October in all sectors of activity and in all our geographic markets, our customers have decided to give absolute priority to the preservation of cash. Our distributors, in particular, preferred to release that order. Our customers have become extremely cautious. We anticipated a decline in activity, but not as brutal and rapid correction.

Will your margin be impacted

Our margin stand up. Was 15 in 2008, it will be around 15. In so doing, we remain on high historical high over our competitors and Schneider Electric. We maintain our margins in a challenging environment. We are the proof that our diverse model, both in terms of occupations and geographic markets, makes us both more flexible and more resistant. In addition, we have completed our offer. We had two trades electrical distribution and industrial control , we have five now since we have added four years, secure energy, automation and energy efficiency. We have also developed our services business, which now represents 10 of our turnover. In times of crisis, new projects slow but this activity, drawn by the investment of our customers on their installed base, should it progress.

In what position discuss this crisis

In the previous crisis, in 2001, Schneider Electric was one of the companies of the sector profitability had been the least affected. Our margin had dropped 2 points between the peak and the low point. Today, we are entering with a fundamental crisis even stronger, but this crisis is of a different nature.

What is your visibility for 2009

I believe that the visibility is greatly reduced. This crisis is such intensity! Schneider Electric must put themselves in a reactive mode, instead of the forecast. As of September 2007, just after the sub-prime crisis in the United States, we have in place a team to identify and treat our points of structural improvement. The aim: simplify, globalize our workings, rebalance our activities towards the most dynamic countries. Our group has doubled in size in the past four years and we've embedded the complexity. We want to cross the crisis in the best possible way to be able, in out of the crisis, to bounce and seize opportunities. We have not yet given the details of our new business program, which will be announced early next year. Nevertheless, we have already announced a plan to reduce costs of our structures aggregate of 600 million euros by 2011. In addition, much remains us to be done to reduce the complexity of our "supply chain". We still have 200 factories and 135 logistic centres: the potential of simplification remains strong. It is not only to reduce costs. The crisis catalyzes the acceleration of the process.

Do you take action on social problems

We already traditional short-term measures to adapt: hiring freeze, non-renewal of temporary jobs, incentives to take days of RTT... But there are no measures of partial unemployment or plant closings. Our current workforce is of 120,000 people, including approximately 20,000 in France. From France, in the United States for example, we have, already, method layoffs.

For the next year, do you have tracks

We proceed by multiple scenarios, the market is for the moment, unpredictable developments. But, regardless of the scenarios, our priority objective for 2009 remain at the level of operational performance, in the forefront of our sector. Our priority today is to manage the daily. We are of course always attentive to opportunities for acquisitions but it is clear that this is not what we prefer at this time.

What are your financial means to withstand the crisis

We greatly improved our generation of cash and our operating margin. We have no significant credit maturity prior to August 2010. In addition, we maintain the commitment to our shareholders, to the title of the 2008 fiscal year, half of our net income. While the crisis is there but our financial capacity is strong and our model is solid.