Annual and Extraordinary Shareholders’ Meeting May 6, 2004 |

Annual and Extraordinary Shareholders’ Meeting May 6, 2004

May 072004
Rueil Malmaison, May 7, 2004 – Schneider Electric shareholders met in Annual and Extraordinary Meeting yesterday, primarily to hear the reports of the Board of Directors and approve the financial statements for the year 2003. The Meeting was chaired by Henri Lachmann, Chairman and Chief Executive Officer.

The Chairman reviewed the highlights of 2003:

- A return to organic sales growth, supported by the initial benefits of the growth plans.

- Stepped up implementation of the productivity plans and manufacturing base optimization, driving a nearly one-point increase in gross margin.

- Sustained strong operating margin, at 11.5% of sales despite a very significant currency effect.

- A 3% increase in net income to €433 million and a record free cash flow of €1 billion.

- Creation of new growth platforms through high-quality acquisitions: T.A.C in building automation, Clipsal in wiring devices and MGE UPS Systems in secured power.

- Implementation of a new organization, with the appointment of a Chief Operating Officer, Jean-Pascal Tricoire.

Shareholders approved the proposed resolutions, which concerned:

- Approval of the 2003 financial statements.

- Payment of a net dividend before tax credit of €1.10 per share, up 10% over the previous year. It will be payable as from May 10, 2004.

- Election as directors of Caisse des Dépôts et de Consignations, represented by Jérôme Gallot, and Chris C. Richardson.

- Re-election as directors of Daniel Bouton, Thierry Breton, Willy Kissling and Piero Sierra, and of Alain Burq, director representing employee shareholders.

- Re-appointment and appointment of Statutory Auditors.

- Change in the bylaws to allow for the appointment of one or two non-voting directors.

- Financial authorizations given to the Board of Directors to buy back shares, cancel the shares bought back, issue shares to employees who are members of an employee stock purchase plan and grant executives and employees options to purchase new or existing shares of the Company.

The quorum was 45.6% and the resolutions were adopted with a majority vote of between 81.3% and 99.8%.

Commenting on the outlook for 2004, Mr. Lachmann emphasized that Schneider Electric was particularly well placed to benefit from the worldwide economic recovery, leveraging its unique strengths in the industry, forefront positions in Europe, the United States and emerging markets, and stepped up growth plans.

The growth in sales and continued gains from the efficiency plans should drive a significant increase in operating income in 2004, despite the sharp increase in raw materials prices.

Schneider Electric intends to leverage the high potential of its accessible markets, by implementing an aggressive growth strategy, combining innovation with differentiation. Its financial strength is enabling it to invest heavily in research and development to continuously enhance its offerings, and to continue the implementation of its targeted acquisition strategy into high-growth potential businesses.

The presentation made to the Annual Shareholders’ Meeting and the related audio comments will be posted on the Schneider Electric website: Click here

Second quarter 2004 sales and first-half 2004 results will be announced on July 29, 2004.

Schneider Electric is the world’s power and control specialist. Through its world-class brands, Merlin Gerin, Square D and Telemecanique, Schneider Electric anticipates and satisfies its customers’ requirements in the residential, buildings, industry and energy and infrastructure markets. With 74,300 employees, Schneider Electric generated sales of €8.8 billion in 2003 through 13,000 outlets in 130 countries.

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