The ratings on France-based Schneider Electric S.A.--a major worldwide player in electrical distribution, industrial controls, and automation--reflect the group's strong competitive positions, extensive geographic diversity, and efficient cost management. These strengths are tempered, however, by the cyclicality of most of Schneider's end markets, as well as its currently weak credit measures. Amid very challenging market conditions, Schneider's turnover reached €4.58 billion at end-June 2002, a 7.9% drop like for like compared with the same period in 2001. Sales were hit hard by a sharp slump in the industrial-investment and nonresidential-building sectors, which in total account for about 75% of sales. Markets in North America (30% of sales) and Europe (50%) proved especially weak. The group's EBITDA (after restructuring charges) thus
