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, in addition to 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 the group's acquisitive strategy. With sales of €8.8 billion in 2003, Schneider is a major worldwide player in electrical distribution, industrial controls, and automation. Economic conditions remained challenging in 2003, amid sluggish levels of industrial investments and nonresidential building construction in mature markets (accounting for about 75% of Schneider's sales combined), compounded by the negative effects of the very
