The ratings on Schneider Electric S.A. ("Schneider") reflect Standard&Poor's Ratings Services' view of Schneider's "strong" business risk profile and "intermediate" financial risk profile. The ratings are supported by what we view as Schneider's sound competitive positions, extensive geographic diversity, efficient cost management, and ability to generate robust free operating cash flow (FOCF). These strengths are tempered, however, by the cyclical nature of most of Schneider's end markets and what we see as management's acquisitive strategy and generous dividend policy. Schneider is bearing the brunt in 2009 of the increasing negative effects of the global economic downturn. In the first half of the year, its sales decreased by 17.9% organically year on year (a 13.3% decline if we include
