Schneider Electric at a Glance February 2015 All forward-looking statements are Schneider Electric...

Schneider Electric at a glance

1

Schneider Electric at a glance

February 2015

Disclaimer

All forward-looking statements are Schneider Electric management’s present expectations of future events and are subject to a

number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking

statements. For a detailed description of these factors and uncertainties, please refer to the section “Risk Factors” in our Annual

Registration Document (which is available on www.schneider-electric.com). Schneider Electric undertakes no obligation to publicly

update or revise any of these forward-looking statements.

This presentation includes information pertaining to our markets and our competitive positions therein. Such information is based

on market data and our actual revenues in those markets for the relevant periods. We obtained this market information from various

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on market data and our actual revenues in those markets for the relevant periods. We obtained this market information from various

third party sources (industry publications, surveys and forecasts) and our own internal estimates. We have not independently

verified these third party sources and cannot guarantee their accuracy or completeness and our internal surveys and estimates

have not been verified by independent experts or other independent sources.

A company with strong foundations, anintegrated portfolio and a global footprint

3

integrated portfolio and a global footprint

We are the global specialist in energy management and automation

€25 billionFY 2014 revenues

~170,000people in 100+

countries

~5%of revenues devoted

to R&D

43%of revenues in Solutions

4Schneider Electric at a glance – February 2015

BALANCED GEOGRAPHIES – FY 2014 revenuesDIVERSIFIED END MARKETS – FY 2014 revenues1

25%North America

19%Rest of World

28%Western Europe

28%Asia Pacific44%

of revenues in new economies

1 Estimated at the end of 2014

Utilities &Infrastructure

Industrial & Machines

Data Centers & Networks

Non-residential & Residential Buildings

27% 26% 14% 33%

With four globally leading and focused businesses

Low Voltage & Building Automation

KEY TECHNOLOGYMedium Voltage Grid Automation

KEY TECHNOLOGY

BUILDINGS &PARTNER

INFRASTRUCTURE INDUSTRY

Discrete & ProcessAutomation

KEY TECHNOLOGY

IT

Critical Power &Cooling

KEY TECHNOLOGY


FY 2014 REVENUES

€10.8 billion (43%)

WORLDWIDE POSITION #1

GLOBAL COMPETITORS

ABB, Eaton, Legrand, Siemens

FY 2014 REVENUES

€5.3 billion (21%)


GLOBAL COMPETITORSABB, Siemens

FY 2014 REVENUES

€5.6 billion (22%)

WORLDWIDE POSITION #2 (Discrete)#4 (Process)

GLOBAL COMPETITORSABB, Emerson,

Rockwell, Siemens

FY 2014 REVENUES

€3.4 billion (14%)


GLOBAL COMPETITORSEaton, Emerson

We have built two strong and complementary business models

ProductScale = Cost

+Differentiation

+ Strong partners

network

SolutionsStrong segments

expertise+

Solid execution capabilities


network

> Segment expertise

> Growing share of services

> Org. Growth 7pts higher than rest of Group in past 3 years

> Differentiated software

A strong and balanced partner model

A strong solutions offer

> Balanced distribution channels

> Global distribution network

> Strong brand

> Differentiation through innovation and system design

Buildings2

(33% of group revenues)

Industrial and Machines(Discrete and Process)

AUTOMATION SOFTWARE3

(Enabling integration)POWER

(Low and Medium Voltage, Secure power)END MARKETS1

Our portfolio integrates power and automation to deliver complete solutions


(Discrete and Process)(27% of group revenues)

Utilities and Infrastructure(26% of group revenues)

Data Centers and Networks(14% of group revenues)

1 Estimated based on 2014 revenues2 Including residential and non-residential buildings3 Including standalone software

~65%of Group revenues

~35%of Group revenues

Our commercial setup is integrated to supply more to each customer in each country

Low Voltage & Building Automation

Discrete & Process Automation

Critical Power & Cooling

Medium Voltage &Grid Automation

Buildings & Partner

Infrastructure ITIndustry


Deliver value to the customer

Non-residential & Residential Utilities & Infrastructure Industrial & Machines Data Centers & Networks

Structured commercial setup in each country to drive cross selling and maximize coverage

We are a technology company with a long-termcommitment to innovation

979

1,058

1,119

1,212

R&D INVESTMENT

> ~5% of sales devoted to R&D

AN ECOSYSTEM FOR OPEN INNOVATIONA TECHNOLOGY COMPANY

> c. 11,000 R&D engineers, c. 10,000 application and software engineers

> 20,000 patents active or in application worldwide, >500 filed in 2014

> With recognized innovations

Partnering with 50+best-in-class public and private organisations

Leading global projects

Homes, Minalogic,


774 764 818

979

2008 2009 2010 2011 2012 2013 2014

> With recognized innovations projects for Intelligent buildings, renewables,

Boosting StandardisationZigbee, IEC, NEMA

Minalogic, Smart

Electricity

Funding start-upsAster Capital fund

Demand response, software

breakthrough

Recognized highest ranking DCIM solution in Gartner Magic Quadrant (Oct 2014)

M580: World’s first ePAC with built-in ethernet

Machine Solution – Next Controller Generation

CIRCULAR ECONOMY

CLIMATE + POVERTY (Sustainability offers)

> Towards zero waste to landfill> New projects designed with Schneider ecoDesign WayTM

A MEASURED COMMITTMENTCLIMATE > Schneider Electric energy efficiency

> Transportation CO2 efficiency

> Achieve a score of 8/10 at the end of 2017

Sustainable development is an integrated part of our strategy

> Revenues with Green PremiumTM eco-labeled products > CO2 transparency for customers > CO2 avoidance through maintenance, retrofit, end-of-life services> Access to energy program turnover

Planet & Society Barometer 2015-20171 targets:


> Achieve a score of 8/10 at the end of 2017

> Through 16 quarterly-reported indicators

> Starting from 3/10 in January 2015

ETHICS

HEALTH & EQUITY

POVERTY

> Suppliers embracing ISO 26000 guidelines> Ethics & responsibility assessments

> Medical incident rate> One day training for every employee every year> Employee Engagement Index> Schneider Electric gender pay equity plan

> Underprivileged people trained in energy management> Volunteering missions within Schneider Electric Teachers NGO

1 See appendix for details

A significant transformation over the past 10 years

11

REVENUES (Billion € )

ADJUSTED EBITA(Billion € )

FREE CASH FLOW(Average, Billion € )

RETURN OF ASSETS1

(%)

Profitable growth remained at the heart of our transformation

CAGR +9%

24.9 3.5

CAGR +10% 2.0

x2+

36

27

+9pt


Benefit from balanced geography & complementary

business model

Resilient adj. EBITA margin from 13% –16%

Predictable cash generation: over 100% cash conversion from

Net income in past 10 years

Continuing to improve asset efficiency

20142004

10.3 1.3

20142004

0.8

2002-2004 2012-2014 2004 2012-2014

1 Calculated on operational assets = property, plant, and equipment + inventories+ trade receivables – trade payables.

…and generated attractive shareholder returns

ATTRACTIVE RETURNS TO SHAREHOLDERS

(Total shareholder return, %, starting on 16/02/2010, ending 11/02/2015)

80

100

120

140

Eurostoxx Industrials

Schneider Electric

> Focus on profitable growth+120%

+90%


-20

0

20

40

60

80

Jan-14Jan-13Jan-12Jan-11Jan-10 Jan-16Jan-15

Eurostoxx Industrials

CAC40

> Attractive and sustainable dividend policy with 50% targeted payout ratio+60%

+90%

Our supply chain was a key competitive advantage to drive profitability and customer satisfaction

INCREASING INDUSTRIAL PRODUCTIVITY

320

340

FURTHER REBALANCED INDUSTRIAL COSTS

IMPROVED INVENTORY EFFICIENCY

13

15~2pts

INCREASED CUSTOMER SATISFACTION

+13pt


240

260

280

300

Connect ’12-’14

One ’09-’11

New2 ’05-’08

2014

53%

47%

2011

46%

54%

New economies

Mature markets

201422011

Inventory to Sales ratio (%)

20142011

Net satisfaction score on deliveryAverage productivity per year (EURm)

1

1 2014 estimated2 Excluding Invensys

Targets for long-term profitable growth

15

We target 3 to 6% organic growth across the economic cycle

SOME SHORT-TERM UNCERTAINTIES

LONG-TERM DRIVERS OF OUR BUSINESS

> Oil & Gas Capex investmentsMATURE MARKETS

NEW ECONOMIES


We target 3% to 6% organic

growth across the cycle

> Currency volatility

> Geopolitical uncertainties

+> More Energy Management> More Digitization> More Automation

> Renovation

> Digitization> Efficiency

> Urbanization

> Industrialization> Digitization

We confirm our 13-17% long-term adjusted EBITA range and target a margin improvement over the next 3 years

GROWTH PROFILE AND EFFICENT BUSINESS MODEL WITH LEVERS ON MARGIN

Positive

WE REITERATE OUR TARGETED 13-17% ADJUSTED EBITA RANGE THROUGH THE ECONOMIC CYCLE

13,9%14,5%14,7%

14,3%

15,4%

Organic growth Negative Mix

GR

OS

S M

AR

GIN

POSITIVE IMPACT NEGATIVE IMPACT


Positive Net pricing1

Productivity

SFC savings 201420132012201120102009

13,0%

Inflation

Reinvestment

GR

OS

S M

AR

GIN

SF

C

1 Net price: Price less raw materials

Industrial productivity and cash efficiency are a key focus

> c. €1bn productivity targeted in

Sales Inventory & Operations Planning maturity

Enhance Purchasing++


> c. €1bn productivity targeted in 2015-2017

> Further increase cash efficiency

Transportation and Network optimization

Footprint rebalancing

Quality Value Engineering

+

++

We target €400m-500m support function cost savings from simplification initiatives by 2017 before reinvestments

€400-500m SAVINGS1 THROUGH SIMPLIFICATION AND EFFICENCY

> Optimize R&D efficiency & solution execution> Mutualize back-office functions> Simplify our management set-up.> Increase focus and prioritization

26.425.8

26.4

New 225.6%

One

WE TARGET A REDUCTION IN SFC/REVENUES RATIO DURING THE COMPANY PROGRAM


> Increase focus and prioritization> Increase sales force efficiency

c. €200m SAVINGS REINVESTED ON CORE GROWTH INITIATIVES

2013

23.3

2012

23.1

2011

23.3

2010

24.1

20092008

24.7

2007 2014

23.5

25.4

2006

25.8

2005

> Services and software> Segment expertise> Expand coverage in key geographies> Brand Development> Digitization

One24.6%

Connect23.3%

SFC to Revenue ratio (%)

2

2 SFC excluding Invensys for Connect1 Before inflation and reinvestment

Restructuring costs of c. €700m-900m for 2015-2017Restructuring costs for Connect (2012-2014) amounted to c. €550m

Continued focus on delivering attractive shareholder return

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attractive shareholder return

We will continue to optimize our portfolio and consider the disposal of non-core/ non-strategic businesses

WE HAVE OPTIMIZED OUR PORTFOLIO IN 2014 WITH THE DIVESTMENTS OF NON-CORE BUSINESSES

> We will continue to review the portfolio and contemplate potential disposal of non-core / non-strategic businesses


APPLIANCE BUSINESS

c. €900m cash generated through disposals

> The disposal of potential non-core/ non-strategic assets might generate a capital loss or asset impairment of up to several hundred millions Euros

> Potential capital losses or asset impairments if any would be adjusted in the dividend calculation

We reaffirm our long-term capital structure target of A- with flexibility to move to BBB+ on a temporary basis

OBJECTIVE TO INCREASE THE DEBT MATURITY

2 000

1 500

TAKING ADVANTAGE OFLOW COST OF FINANCING

> Current bonds duration stands at c. 4 years > Attractive financing market conditions

Yield to maturity(in %)

8

10

12


1 000

1 500

500

0201720162015 >201920192018

Bonds (EURm) by maturity (Dec-2014) Bonds benchmarks

0

2

4

6

Feb

08

Jun

08O

ct 0

8F

eb 0

9Ju

n 09

Oct

09

Feb

10

Jun

10O

ct 1

0F

eb 1

1Ju

n 11

Oct

11

Feb

12

Jun

12O

ct 1

2F

eb 1

3Ju

n 13

Oct

13

Feb

14

Jun

14O

ct 1

4F

eb 1

5

iBoxx.EUR.Corporates.A.7-10 years

iBoxx.EUR.Corporates.BBB.7-10 years

We take opportunity of historical low financing conditions to increase debt maturity and lower average cost of debt

Confirming c.100% FCF conversion target1, FCF to be used in dividend, share buybacks and value-creating bolt-on M&A

STRONG FCF CONVERSION

+


FLEXIBILITY TO BENEFIT FROM LOW COST OF FINANCING

> Progressive dividend> €1.0-1.5bn share buyback in next 2 years2

> Bolt-on M&A in our core businesses with strong EPS accretion and return on investment

1 Net income conversion in FCF across the cycle target2 Including share buyback for neutralization of employees share plans

+

We target strong EPS growth in the next company program

ORGANIC GROWTH AND EFFICIENCY INITIATIVES

EBITA growth

+


SHARE BUYBACKS (€1.0 to 1.5bn in next 2 years)

Reduce share count STRONG EPS GROWTH

ACCRETIVE BOLT-ONS Strong EPS accretion

+

We set a progressive dividend

2,5

3,0

3,5

50

60

70

1,921

> Dividend payout targeted at c.50%, based on the Net income excluding one-offs such as capital gains or losses and, or asset impairments


1,871,871,701,60

1,03

0,0

0,5

1,0

1,5

2,0

0

10

20

30

40

14

1,921

131209 1110

gains or losses and, or asset impairments

> Progressive dividend policy with no year-on-year decline

Payout (% Basic EPS) right-axis

Dividend per share (€) left-axis1 Dividend proposed and to be approved in Annual General meeting on Apr 21,2015

We confirm our goal of improving ROCE but move targets by one year due to FX impact in 2014

15.0%

12.9%c.12%

11.7%Adjusted

for FX10.9%

Organic growth

KEY DRIVERS FOR ROCE IMPROVEMENT WE FOCUS ON ROCE IMPROVEMENT


> We aim to come back to ROCE pre-Invensys level (c. 12%) by 2015/2016

> 1.5-2pt1 improvement in ROCE by 2016/2017

> Medium-term target range confirmed

11.0%

Medium-term range

2016/2017 target

12.4%

2015/2016 Target

2014

11.0%

2013 proforma

Capitaloptimization

Efficiency

1 From 2013 proforma level of 10.9%

Help people make the most of their energy SM

27

©2014 Schneider Electric. All Rights Reserved.All trademarks are owned by Schneider Electric Industries SAS or its affiliated companies or their respective owners.

Help people make the most of their energy

Appendix

28

10% energy savings

10% CO2 savings from transportation

Towards zero waste to landfill for 100 industrial sites

100% of new projects with Schneider ecoDesign WayTM

80% of product revenue with Green PremiumTM eco-label

100% of new large projects with CO2 impact quantification for customers

120,000 tons of CO avoided through maintenance, retrofit and end-of-life services

10%

10%

100

100%

80%

100%

120,000

Target 12/2017

8/10

Our Planet & Society barometer 2015-2017

29

120,000 tons of CO2 avoided through maintenance, retrofit and end-of-life services

x5 turnover of Access to Energy program to promote development for underprivileged people

100% of recommended suppliers embrace ISO 26000 guidelines

All our entities pass our internal Ethics & Responsibility assessment

30% reduction in the Medical Incident Rate (MIR)

One day training for every employee every year

64% scored in our Employee Engagement Index

85% of employees work in countries with Schneider gender pay equity plan

150,000 underprivileged people trained in energy management

1,300 missions within Schneider Electric Teachers NGO

120,000

x5

100%

100%

30%

85%

64%

85%

150,000

1,300

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