The ratings on Schneider Electric S.A. reflect the French group's strong business profile, which is 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 is the cyclicality of most of Schneider's end markets, as well as the group's acquisitive strategy and generous dividend policy. Schneider is one of only a few global players in the electrical distribution, industrial controls, and automation industries, where it 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
