The ratings reflect France-based Schneider Electric S.A.'s above-average business profile, supported by solid competitive positions, extensive geographic diversity, and efficient cost management; strong financial structure; and ability to generate solid free cash flow. These strengths are tempered by the cyclicality of most of Schneider's end markets, however, as well as the expectation of future share buybacks and an acquisitive strategy. With sales of €4.2 billion over the first half of 2003, Schneider Electric is a major player worldwide in electrical distribution, industrial controls, and automation. Sales were flat vis-à-vis first-half 2002, as weak economic conditions in industrial investments and nonresidential building construction in mature markets (about 75% of sales combined) were offset by strong growth in Asia. Funds from operations
