The ratings on France-based Schneider Electric S.A. reflect the group's strong business profile, supported by sound competitive positions, extensive geographic diversity, and efficient cost management. The ratings also take into account Schneider's ability to generate solid free cash flow. These strengths are tempered by the cyclicality of most of the group's end markets, the group's acquisitive strategy, and its dividend policy. Schneider is a major worldwide player in electrical distribution, industrial controls, and automation. These industries enjoy positive characteristics for the ratings: The limited number of global players benefit from well-entrenched positions, strong barriers to entry, and low capital intensity. The group's business has proven resilient in the face of cyclical swings. Schneider outsources a large portion of its components
