Investors presentation

November 2011

Disclaimer
All forward-looking statements are Schneider Electric managements present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

04 07 16 25 28

Overview Strategy and business update Finance presentation Outlook Appendices

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Schneider Electric - Investor Relations Investors Presentation November 2011

Overview

Schneider Electric the global specialist in energy management

Balanced geographies H1 2011sales billion sales
(last twelve months)
North America 23% Western Europe 33% Asia Pacific 26%

of sales in new economies

(last twelve months)

Rest of World 18%

people in 100+ countries

Diversified end markets FY 2010 sales

Utilities & Infrastructure Industrial & machines Data centres Non-residential buildings Residential 9% 17% 30% 20% 24%

of sales devoted to R&D

Schneider Electric - Investor Relations Investors Presentation November 2011

On a comparable basis with 12- months of Areva D

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A responsible commitment
supporting Schneider Electrics sustainable growth
Sustainable and responsible business
Ethics and responsibility

Engage
all our people

Environmental protection
Green Premium products

Measure
our commitment
Planet & Society Barometer (June 2011)

Access to energy
BipBop programme

Gain
People & communities development
Health & Safety and engagement Schneider Electric Foundation

recognition
In 2 ethical stock indexes: - Dow Jones Sustainability Stoxx (Europe) Index - Aspi Eurozone

Schneider Electric - Investor Relations Investors Presentation November 2011

Strategy and business update

Strong sales and EBITA increase in H1 despite inflation and investment for growth
+10.2% +14%
Portfolio

H1 organic growth, driven mainly by Industry and new economies. Strong reported growth, +21% EBITA* up 14% - growth and efficiency offset strong inflation headwinds and investments to tap future growth Strategic acquisitions to strengthen the business portfolio
in particular solutions (on track to add > 1bn of sales), India & Latin America

Investments & customer

Organic investments in geographical coverage & skills Customer 1st approach temporarily penalized working capital
* Before acquisition and integration costs

Well positioned to grow in energy efficiency, smart grid and new economies
Schneider Electric - Investor Relations Investors Presentation November 2011 8

Strong investments in solutions in H1 to deliver superior growth

Solutions - Share in Group sales
+20%

Sales organic growth

Group Solutions

35% 30%

+14%
+4pts vs Group

+10% +0%

Services: 10%

(10%) (20%)

2008

H1 2011

H1 2009

H2

H1 2010

H2

H1 2011

Investment in Software technology Architecture by market segment Commercial & execution competencies Services ramp-up
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Schneider Electric - Investor Relations Investors Presentation November 2011

Approaching 40% of sales in new economies

Sales in new economies Sales in new economies
(Last 12 months to June 2011)

1.1*
billion sales
2008 2006
Latin America Middle East Africa Asia * Excluding Elektroshield TM Samara consolidated with the equity method (2010 sales: 0.4bn) Eastern Europe

LTM June 2011

4.0 1.3 1.8

38% of sales in new economies

Investment in Geographical coverage Commercial presence Local R&D and offer development

Solutions & services ramp-up

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Schneider Electric - Investor Relations Investors Presentation November 2011

New economies continued to be a powerful growth engine of the Group

Organic growth in new economies

H1: +17%
+17% +16% +15% +12%

New economies Mature countries H1: +7%

+1%

-9% -14% -14%

34% Q1 Q2 Q3 2009 Q4 Q1

37% Q2 Q3 2010 Q4

38% Q1 Q2 2011

% of Group sales

Schneider Electric - Investor Relations Investors Presentation November 2011

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Local for local innovation to boost growth in new economies

Power
LV switchboards and trip unit energy meters

Energy
MV Switchgear for China

Easy to assemble and install low voltage switchboards and enclosures for diffused residential and building markets Competitive trip unit developed completely in China with advanced features like remote energy measurement and control

Adapted design to new Chinese standards

Prisma IPM

Targeting an improvement of our market share to utilities and expansion in the private market
FBX range

Micrologic E

Industry
Motion Control for Asia

IT
Small systems for India

New high performance servo drives to conform to Asian standards with lower installation time Wide range of application in textile, plastic, printing, packaging machinery

Adapted design to local specificities: atmosphere, lack of grounding, frequent black outs Full range of products launched recently
Motion Lexium 23

BR600CI-IN

Symmetra

Schneider Electric - Investor Relations Investors Presentation November 2011

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Business portfolio strengthened, in line with stated strategic priorities

2011 deals (closed and in-process)
Digilink
Estimated sales 25m

Steck Group
80m

Telvent
750m

Leader & Harvest1

103m

Lee Tech.
104m

Luminous + APW
188m

Summit Energy
46m

New economies Solutions and services

(smart grid, energy efficiency)

Business leadership
Power Energy Industry
1

IT

Buildings

Deals in process but not closed

Boosting growth and shareholder returns

Maintain strict M&A discipline

Targeting quick EPS accretion ROCE above WACC beyond year 3 Maintaining a solid rating: A- or BBB+ if necessary

Schneider Electric - Investor Relations Investors Presentation November 2011

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We accelerated organic and external growth to capture our growth opportunities

Energy efficiency is mainstream

Smart grid is emerging

New economies are driving world growth

2010 2010

Solutions +9% Solutions +9% EcoStruxure EcoStruxure One signature brand One signature brand

Areva Distribution, Areva Distribution, EV infrastructure, EV infrastructure, Renewable energies Renewable energies

New economies +15% New economies +15% Areva Distribution Areva Distribution +Electroshield Samara +Electroshield Samara

2011 2011

Solutions Solutions +14% in H1 +14% in H1

Offer on Offer on Telvent Telvent

+17% +17% in H1 in H1
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Schneider Electric - Investor Relations Investors Presentation November 2011

 while maintaining efficiency on productivity and support function costs

Productivity in m Support function costs in % of sales

H1 10 H1 11
Purchasing Lean Manufacturing Rebalancing Absorption of fixed manufacturing costs Industrial productivity 124 29 42 98 293 117 26 30 60 233
H1 2008 25.3%

26.8% 25.6%
Incl. Areva D.

24.5%

H1 2009

H1 2010

H1 2011

Support function cost/sales ratio incl. Areva D

Efficiency initiatives: on track for FY 2011 targets

Schneider Electric - Investor Relations Investors Presentation November 2011 15

Finance presentation

Solid growth across businesses, coupled with acquisitions, drove total H1 growth to +21%
Analysis of change in Group sales (in m)
Change in Scope Fx +11.4% (1.0%)

Organic +10.2%
Power +8.5% Energy +5.4%

10,336
+20.6%

Buildings IT Industry +7.0% +17.8% +9.8%

% of H1 sales Power Energy Industry IT Buildings

38% 20% 21% 14% 7%

8,571

H1 2010

H1 2011

Schneider Electric - Investor Relations Investors Presentation November 2011

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H1 EBITA before acquisition and integration costs increased 14% to a record 1.4bn
REPORTED FIGURES In m
Sales Organic growth Gross profit Margin % EBITA2 before acquisition and integration costs Margin % 3,499 40.8%

COMPARABLE FIGURES
H1 20101
9,389

H1 2010
8,571

H1 2011
10,336 10.2% 3,965 38.4%

Change
+20.6%

H1 2011
10,336

Change
+10.1%

+13% -2.4pts

3,678 39.2%

3,965 38.4%

+8% -0.8pt

1,243 14.5%

1,413 13.7%

+14% -0.8pt

1,252 13.3%

1,413 13.7%

+13% 0.4ptpt +0.4

1 2

Including Areva D impact on comparable basis since Jan 1, 2010 EBIT before amortization and impairment of purchase accounting intangibles
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Schneider Electric - Investor Relations Investors Presentation November 2011

EBITA increased on strong volume & productivity, offsetting significant inflation headwinds
Analysis of change (in m)
+233 +355 -51
Mix

-253 -84 -91

+46
Price Productivity

1,252
Volume

COGS inflation2 Support Other Change Currency function SFC in scope effects Inflation cost investments

+4

+9

-7

1,413

Mix positive on geographies, negative on solutions

SFC organic increase of ~+7% vs. sales at +10%

H1 2010 comparable1
1 2

H1 2011

On a comparable basis including Areva D since 1 Jan 2010 Of which Raw materials: -214, Production labour & other Costs: -39
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Schneider Electric - Investor Relations Investors Presentation November 2011

Most businesses showed EBITA progression, in particular Industry

Sales 10,336m EBITA by business1

Power 159 166

769

821

21.0% 20.9%

-0.1 pt 0.0 pt2

Energy 20% Power 38%

Energy Industry 21% Industry

8.2%2 8.2% 325 436 181 188 17.3% 19.6% 14.4% 13.3%

+2.3 pts -1.1 pt -1.3 pt

IT Buildings 7% IT 14% Buildings 54 57

8.7% 7.4%

1 2

Before acquisition and integration costs Before Corporate costs of 252m in H1 2011 (239m in H1 2010) On a comparable basis including Areva D since 1 Jan 2010
Schneider Electric - Investor Relations Investors Presentation November 2011

H1 2010 H1 2011 m and as % of sales

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Net income up 9%, earnings per share of 3.0*

In m EBITA1 before acquisitions and integration costs Acquisition and integration charges Amortization & impairment of purchase accounting intangibles EBIT Net financial expense Income tax Equity investments Minority interests Net income (group share) Earnings per share*
*
1

H1 2010 H1 2011 Change 1,243 (18) (90) 1,135 (132) (241) 2 (29) 735 2.86 1,413 +14% (41) (98) 1,274 +12% (184) (262) 13 (39) 802 3.00 +9% +5%
Maintained attractive underlying tax rate of 24% Decreased cost of debt more than offset by 56m of negative swing on FX gains/losses Including 16m for Areva Distribution (15m in H1 2010)

Before adjustment for the 2-for-1 share split EBIT before amortization and impairment of purchase accounting intangibles
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Schneider Electric - Investor Relations Investors Presentation November 2011

Free cash generation temporarily limited by high working capital consumption

Analysis of debt change in m
Net debt at opening Operating cash flow Capital expenditure net Change in trade working capital Change in non-trade working capital Free cash flow Dividends Acquisitions net Capital increase Other (Increase) / Decrease in net debt Net debt at June 30
1

H1 2010 H1 2011
(2,812) 1,167 (218) (424) (68) 457 (199) 1 (1,271) 48 (236) (1,201) (4,013) (2,736) 1,146 (329) (772) (204) (159) (852) (642) 30 (111) (1,738) (4,474)

LTM
(4,013) 2,447 (639) (781) 91 1,118 (852) (1,120) 287 106 (461) (4,474)

~62% of dividend payout in 2010 was in shares, at shareholders option

Schneider Electric - Investor Relations Investors Presentation November 2011

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Working capital increase on seasonal effect and inventory build-up to secure revenues
Trade working capital (in bn)
0.4

Excess inventories in H1 in the range of 300m, due to: Raw material safety stocks to minimize potential supply chain disruption caused by Japan natural disaster Extra inventory to ensure customer deliveries and secure revenues

4.75

4.1

(0.1) FX & scope

0.35 Additional inventories Normative (incl. raw impact materials from sales safety stock) rebound and + raw material receivables inflation

Dec 2010

June 2011

Inventory to return to normal level target reduction of about 300m in H2

Receivables1 Inventories2 Payables3

55 days (+3 d) 99 days (+8 d) 65 days (=)

1 2

Days of sales Days of COGS (cost of goods sold) 3 Days of purchases NB Changes are in days vs. June 2010
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Schneider Electric - Investor Relations Investors Presentation November 2011

Balance sheet continued to be very solid

Cash conversion (Free cash flow / net income)

Net debt / EBITDA

191%

1.2x 101% 63% 0.8x

1.2x

2009

2010

LTM June 2011

2009

2010

LTM June 2011

EBITDA of 1,667m in H1

Schneider Electric - Investor Relations Investors Presentation November 2011

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Outlook

Q3 2011 and 9-month sales performance

m
Power Energy Industry IT Buildings Group Q3 2011 2,162 1,174 1,090 882 389 5,697 Q3 2011 1,755 1,576 1,352 1,014 5,697 Organic +7.6% +7.3% +6.6% +12.6% +3.0% +7.7% Organic +0% +15% +9% +10% +7.7% 9M 2011 6,098 3,203 3,317 2,294 1,121 16,033 9M 2011 5,222 4,244 3,743 2,824 16,033 Organic +8.2% +6.4% +13.9% +10.8% +5.6% +9.3% Organic +3% +16% +11% +11% +9.3%
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m
W. Europe Asia-Pacific North America Rest of World Group

Schneider Electric - Investor Relations Investors Presentation November 2011

2011 outlook
Price increases should end up in line with the +1% guidance. While the Group also expects strong productivity, the combined effect of more negative mix on gross margin due to higher solutions growth over products and less favorable geographical mix, and stronger than expected inflationary pressures in new economies, is anticipated to reduce its near term profitability by 0.5 to 0.7 point compared to the Groups previous guidance Given the reduced visibility on the near-term economic outlook and in order to drive higher cost efficiency going forward the Group will book additional restructuring charges impacting the margin by a further 0.2 to 0.4

point

Taking into account the year-to-date topline performance, Schneider Electric now expects its 2011 organic growth to fall comfortably within its target range of 6% to 9% The Group now targets an EBITA margin of about 14%, before acquisition and integration costs and consolidation impact of 2011 acquisitions 2011 is expected to be another year of growth of the EBITA before acquisition costs and restructuring
Schneider Electric - Investor Relations Investors Presentation November 2011 27

Appendices

Definitions

EBITDA: EBITA:

EBIT before net depreciation and amortization EBIT before amortization and impairment of purchase accounting intangibles and impairment of goodwill Free cash flow / net income Operating cash flow change in working capital net capital expenditures

Cash conversion: Free cash flow:

Schneider Electric - Investor Relations Investors Presentation November 2011

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Segment information: H1 EBITA

Results breakdown by division
EBITA before acquisition and integration charges 821 166 436 188 54 (252) 1,413 769 159 325 181 57 (239) 1,252 Margin in % of sales Acquisition and integration charges 0 (15) (5) (3) (3) (15) (41) 0 0 (3) 0 0 (15) (18)

million H1 2011 Power Energy Industry IT Buildings Holding Total H1 2010 (comparable ) Power Energy Industry IT Buildings Holding Total
1

Sales

3,936 2,029 2,227 1,412 732 10,336 3,654 1,944 1,882 1,255 654 9,389

20.9% 8.2% 19.6% 13.3% 7.4% 13.7% 21.0% 8.2% 17.3% 14.4% 8.7% 13.3%

1 Comparable: including Areva Distribution in H1 2010 in the Energy business (818 million of sales and 9 million of EBITA)

Schneider Electric - Investor Relations Investors Presentation November 2011

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Segment information: 2010 EBITA

Results breakdown by division
EBITA before acquisition and integration charges 1,660 456 701 453 138 (437) 2,971 1,660 447 701 453 138 (437) 2,962 Margin in % of sales Acquisition and integration charges 0 0 (3) 0 (3) (25) (31) 0 0 (3) 0 (3) (25) (31)

million FY 2010 Comparable Power Energy Industry IT Buildings Holding Total FY 2010 Reported Power Energy Industry IT Buildings Holding Total
2

Sales

7,755 4,341 3,984 2,746 1,402 20,228 7,755 3,693 3,984 2,746 1,402 19,580

21.4% 10.5% 17.6% 16.5% 9.8% 14.7% 21.4% 12.1% 17.6% 16.5% 9.8% 15.1%

2 Comparable: including Areva Distribution over 12 months in the Energy business (1878 million of sales and 94 million o EBITA)

Schneider Electric - Investor Relations Investors Presentation November 2011

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Contacts & agenda

Carina Ho Head of Investor Relations
Tel: +33-1-41-29-83-29 carina.ho@schneider-electric.com

Grgoire Rougnon Investor Relations Manager

Tel: +33-1-41-29-81-25 gregoire.rougnon@schneider-electric.com

22 February

FY 2011 results

Schneider Electric - Investor Relations Investors Presentation November 2011

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Help people make the most of their energy