The ratings on France-based Schneider Electric S.A. reflect the issuer'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. Schneider is a major worldwide player in electrical distribution, industrial controls, and automation. These industries enjoy above-average characteristics, with the limited number of global players enjoying well-entrenched positions, strong barriers to entry, and a weak capital intensity. Economic conditions remained challenging in 2003, amid sluggish levels of industrial investments and nonresidential construction in
