The ratings on France-based Schneider Electric S.A. reflect the group's above-average business profile, supported by solid competitive positions, extensive geographic diversity, and efficient cost management, as well as a strong financial structure and ability to generate solid free cash flow. These strengths are tempered, however, by the cyclicality of most of Schneider's end markets, as well as the expectation of future share buybacks and an acquisitive strategy. With sales of €9 billion in 2002, Schneider Electric is a major worldwide player in electrical distribution, industrial controls, and automation. Economic conditions remained very challenging in 2002, owing to a severe downturn in industrial investments and nonresidential building construction in mature markets (about 75% of sales combined), compounded by negative effects from
