If you're hungry for power, this company can help. Schneider Electric is a leading global manufacturer of equipment for electrical power distribution and for industrial control and automation. The company helps power generators distribute electricity; designs automation systems for the automobile and water treatment industries; builds electric networks and utility management systems for energy, water treatment, oil and gas, and marine applications; and manages electric power in residential, industrial, and commercial buildings. It sells its products to the construction, electric power, industrial, and infrastructure markets.
Schneider Electric operates through five operating segments. The Power segment, accounting for 37% of sales, serves industrial and office buildings, as well as residences, through operations that include low voltage equipment, installation and control systems, renewable energy, and electric vehicle charging. Infrastructure, 22% of sales and formerly operating as Energy, focuses on medium voltage operations, including disconnectors, circuit breakers, and transformers.
The Industry segment, representing 20% of sales, supplies industrial firms and OEMS with products that include programmable logic controllers, automation platforms, contactors, overload relays, and motor circuit breakers. The company's smallest segments are Information Technology, accounting for 14% of sales, and Buildings, 7% of sales. Information Technology provides critical power and cooling services, especially for finance and other information technology companies. Focused on technical building management, Buildings aids in the lowering of energy use and maintenance expenses, among other services.
Deriving about two-thirds of its sales from outside Western Europe, Schneider Electric distributes its products in some 190 countries.
Leveraging organic growth and acquisitions and focusing on areas with strong economies and on its energy management business, Schneider Electric increased its revenue 14.3% at current scope and exchange rates in 2011 compared with 2010. Revenue for the power segment rose 7% on an actual basis and 7.6% at constant scope and exchange rates. The segment's uptick was supported in part by strong performance in the manufacturing and infrastructure sectors and more business development in emerging markets. Infrastructure headed up about 13% on an actual basis, but 7.5% at constant scope and exchange rates. The segment did well with oil and gas and mining and metals, as well as infrastructure in emerging markets.
Industry revenue enjoyed an uplift of 10.5% on an actual basis and 10.4% at constant scope and exchange rates. Machine manufacturing in emerging markets, drive systems for the mining, oil and gas, and cement markets, energy efficiency, and industrial services helped boost the segment's results. Benefiting in part from demand for data centers, the Information Technology sector's revenue surged about 18% on an actual basis and 10.3% at constant scope and exchange rates. Meeting demand for advanced and installed base services, security systems, and energy efficiency, Buildings' revenue was raised 10.7% on an actual basis and 4.8% at constant scope and exchange rates. Net income rose 6% in 2011 compared with 2010, reaching a record level.
The company's Connect strategy, which is being implemented from 2012 to 2014, includes four main elements: Connect to Customers, Connect Everywhere, Connect People, and Connect for Efficiency. Connect to Customers targets opportunities for partners and distributors and improvements in the supply chain to meet the unique manufacturing and delivery needs of customers. Connect Everywhere is tasked with developing business for electric vehicle charging, home automation, and carbon management in mature markets and with seeking opportunities in second-tier cities in emerging markets.
Connect People is focused on workforce development, including cross-business opportunities. Connect for Efficiency intends to use information technology and other functions to increase production and and to leverage research and development, which now represents 5% of sales, for product growth. Connect takes off from the One strategy, implemented between 2008 and 2011 to organize the company around one brand served by customer segments. One was intended to position the company for opportunities in emerging markets and for more demand for energy efficiency.
In 2011 Schneider acquired Telvent GIT for about €1.4 billion ($2 billion) to expand its holdings in Spain and diversify its product line. The same year Schneider acquired US-based Summit Energy, a provider of energy procurement services that complement Schneider's energy auditing and monitoring offerings. The company offers services that include energy efficiency projects, risk advisory planning, supply analysis, contract negotiation, and utility bill auditing.
Additionally in 2011 Schneider acquired India-based Luminous Power Technologies to tap growth in demand in the country for inverters and secured power products. Also in 2011 Schneider acquired Uniflair, a manufacturer of precision cooling systems and other products used to cool building data centers and telecommunications facilities. The deal strengthens Schneider's presence in Europe and expands its reach in China and India. Uniflair is joining Schneider's Building segment. – less