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. Tempering these strengths are the cyclicality of most of the group's end markets, the group's acquisitive strategy, and its expansive dividend policy. Schneider is one of only a few global players in the electrical distribution, industrial controls, and automation industries, and benefits 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 production to focus on R&D and assembly. Low
