Schneider Electric
Expands In Sensing Challenges and Opportunity
Fort Wayne (U.S.A), May 12th, 2014
CPET 575 – Management of Technology
Presented By: Mohammad Umair Jafri
Professor Paul I-Hai Lin
&
Adeyemo Richard
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Table of Contents
Company History and Background
Case: Questions & Project Schedule
Corporate Vision and Mission
Description of the Group Businesses
Business Model: Products Lines and Services
Innovation and R&D: Serving Growth in Both Markets
Core Technologies and Smart Grids
Smart Grid and Market Potential
Schneider’s Challenge in Smart Grid Business
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1
Table of Contents (Cont)
Other Schneider Electric’s Challenges in Smart Grid
Business Challenges and Risks
Core Technologies and Future Growth Trends
Financial Statements
Conclusion
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Source: www.schneider-electric.com
Company Background and Brief History
Been around for over 178 years ( in 2014)
Origin: French Country, started as iron and steel industry
Inception: Adolphe and Eugene (1836 -1870)
– Iron mine Forges and foundry.
Moving to world market (1870-1918)
– Weapon manufacturing
Uncertainty: 1918-1944
– Involvement in Electricity business.
Source: www.schneider-electric.com
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Company Background and Brief History (Cont.)
 A New World: 1944-1960 : Reconstruction of France and civilian development.
 The Crumbling Empire: 1960-1981: Charles Schneider's sudden death
 Rising to New Heights:1981-2000: Electrical Distribution, Automation and
Control Changed name to Schneider Electric
 Building a New Electric World: 2000 -2009: Introduction of ‘new” electric
world in 2004, Increase in revenue and size doubling
 Make the Most of your Energy: 2009 –Beyond :Global specialist in energy
management; Launch of “ONE” program to enhance the group’s profile across a normal
business cycle
Source: www.schneider-electric.com
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Case Questions & Project Schedule
1) What are SMART GRID and how they are evolving in the Market?
2) How new business modeling in Schneider Electric is adopted to build upon
new ways of reducing electricity consumption and saving cost?
3) How SMART GRID technology can be seen and help in the next 20 years?
4) How can we integrate current SMART GRID technologies to build new,
cloud technologies? i.e. Core Technologies for up coming years.
5) What will be the impact of adopting and strategizing these technologies
on environment and competition amongst various stake holders.
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Question and Project Schedule
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Vision and Mission Statement
“A World where we all can achieve
more while using less of our
common planet.”
“Help people make the most of
their energy, while providing added
value through building services for
energy and security.”
- Annual Report 2013
Source: www.schneider-electric.com
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4
What Jean Pascal has to say:
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Source: www.schneider-electric.com
Description of the Group Businesses
Partner Business Unit (Formerly Power BU).
Energy Business Unit
Industry Business Unit
Information Technology Business Unit
Building Business Unit
Source: www.schneider-electric.com
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Description of the Group Businesses
Source: www.schneider-electric.com
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Business Models: Product Lines and Services
Source: www.schneider-electric.com
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Business Model
Software integration
Interoperability and openness
to third party systems
HVAC control
Green: Make the connection of
Lighting control
Renewable energies
Energy monitoring & control
Motor control
Access control
Security
Critical Power & cooling
Electrical distribution
renewable energy sources easy,
reliable and cost-effective
Efficient & productive:
• Measure and control energy,
automate,
provide relevant
diagnosis
• Manage processes
• Make all the utilities of any
infrastructure more efficient
Reliable: Prevent power outages &
quality variance
Safe: Transform and distribute power
safely
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Innovation and R&D: Serving Growth in Both
Markets
Source: Xantrex Acquisition July 08[online] - Schneider Electric
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Smart grid companies at a glance
•
•
•
•
•
•
ABB
Accenture
Alstom
Cisco
eMeter
Current
Group
• Echelon
• Elster
•
•
•
•
•
•
•
•
GE
GridNet
IBM
Itron
KEMA
Landis+Gyr
S&C
Schneider
• Sensus
• Siemens
• Silver Springs
Network
• Smart Sync
• Structure
• Telvent
• Tropos
• Ventyx
Highly competitive market because of
the potential growth
Schneider’s penetration is low on
Smart meters
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Schneider’s Energy Solutions
•
EcoStruxture
• Residential
•
Energy and infrastructure
• Smart cities
• Industry
• Buildings
• Access to energy
• Smart grid
• Data Centers
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Energy Management Focus
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Smart Grid Solutions
Available products Suits
 Smart generation
 Feeder Automation
 Efficient enterprise
 Substation Automation system
 Demand Response
 Network management software
 Flexible distribution
 Volt-VAR Optimization
 Efficient home
 Power and energy monitoring
system
 Software
 Telemetry and Remote SCADA
system
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Core Technologies in SMART GRID
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SCHNEIDER’S CHALLENGES IN SMART GRID
Slow pilot program: Pilot program in “smart
cities” not completed ontime.
a dozen cities in North America – including Boston, Philadelphia,
New York, Seattle, San Francisco and Toronto – are taking the effort
quite seriously.
 About
 Too
many stakeholders are involved
Financial problem: Lack of resources and financing
is the biggest challenges to get projects off the ground
- Jon Reifschneider, head of the SmartCity initiative for Telvent.
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SCHNEIDER’S SMARTGRID STRATEGY
STRATEGY GROWTH IN SMARTGRID
 Majorly through Acquisition: Example Telvent
Schneider’s vision for smart grid can be
grouped into 5 areas:

Telvent smart grid solution

Acquisition of Invensys
 Increased project around Cities “Smart Cities”
• Smart generation:
• Smart industry:

Ambassador and Odysseus
 Seeking contracts:
• Smarter homes:
• Demand Management and Demand
Response:
• Flexible distribution

Nova Scotia Power Selects Schneider Electric to
Implement Integrated Smart Grid
 Introduces its electric Vehicle
 Schneider Electric Powers up Electric Vehicles with
EVlink Outdoor Charging Stations
 Explore their expertise in automation:

Integrate their existing customer to smart grid
network
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SCHNEIDER’S CHALLENGES IN SMART GRID
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Other Schneider Electric’s Challenges
 Highly Competitive market : Firms with strong reputations are getting
involved
 Late market entry: Acquired Telvent September 1, 2011
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SCHNEIDER’S POTENTIAL GROWTH THROUGH
SMARTGRID
• Energy demand is expected to double by 2050
• Most cities are expected to increase in population
• Energy demand at the time will be focused on efficiency and green energy
Survey Report “76% of Utilities Plan to Procure Grid Data Analytics Software,
Zpryme and Schneider Electric Reports ” by Zpryme and Schneider electric
Partnership with Abengoa “Abengoa has selected a subsidiary of Schneider Electric, Telvent,
to provide the distributed control system (DCS) and solar field control system for its Mojave Solar
Project in US”
Partnership with Areva “PARIS--French nuclear and wind power engineering company
Areva (AREVA.FR) Wednesday said it has picked Schneider Electric (SU.FR) to supply some
equipment for its offshore wind projects”
Schneider’s partnership with IBM: This is aimed at linking buildings from
individual sensors and controls all the way up to the enterprise and fed to the
Smart grid
Cisco Announces Partnership With Schneider Electric: “Together with Schneider Electric Cisco
announced a Canadian partnership that will create new opportunities in the development of smart
buildings and smart communities across Canada, and have a positive impact on the environment by
improving energy efficiency”
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Schneider’s Smart grid Market Potential
 Potential Transformer Upgrade : Annual market for transformer monitoring hardware in the U.S. is
expected to grow from $113 million in 2012 to more than $755 million in 2020.
 China’s adoption of Renewable Energy
 Policy to
reduce GHG emission in China
 Demand
foe energy efficiency in China
 Global adoption and installation of Smart meter : 800 million electric smart meters to be installed globally
by 2020:
 High Interest in ‘Smart Cities’
 A number
of European & the U.S. municipalities have expressed interest in the “SmartCity” offering
 Major focus is on low :
 Most
of Schneider's competitors -- Siemens, Alstom, ABB, GE-- have deep experience in high voltage and
are migrating concepts to the medium-voltage distribution arena
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Schneider’s Smart Grid Market Potential
Smart Meter Deployment
Market shares are shown for the second quarter of 2012 [4].
%
China
73.00
North America
18.00
Europe
6.00
Other
3.00
Source:"SmartGrid Deployment Tracker 2Q12
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Schneider’s Smart grid Market Potential
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Schneider’s Smart grid Market Potential
Source: U.S energy information Administration, Annual Electric Power Industry Report
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Schneider’s Smart grid Market Potential
Smart Grid Market Revenue Will Hit $73 Billion Annually By 2020
Source: Navigant Research
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Strengths and Emerging Challenges
S
O
Strengths
• Worldwide presence with a large customer
base.
• Highly recognize and standardized brand name
and products.
• Widest network of distribution and direct
partner.
• Improving energy efficiency is their key
strategy.
• Built two complementary business model:
Products and Solutions
• Selective consideration of acquisition and, of
investment in companies, joint ventures,
strategic alliance and mergers
Opportunities
• Energy demand is on the increase.
• Prices are rising as demands
• Potential growth in “new economy”. New
economy are the driver of global growth.
W
Weaknesses
• High numbers of present and future competitors.
• Unpredictable circumstances due to diverse
nature of market and location.
• Unfavorable tax structure.
• High investment in R&D
• Company’s expansion is mainly through
acquisition hence high loan possibility
Threats
• Exposure to fluctuations in economic growth
cycle
• Strong competitors
• Unforeseen government regulation changes
• Fluctuations in currency
• Price instability
• Unstable interest rate
• Well established competitors
T
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PESTLE ANALYSIS
Political Factor
• Political disturbances
• Risk from social Unrest
• Compliance to different policy (e.g. Waste Electrical and Electronic Equipment
directive (WEEE) )
Economic factor
• Presence in mixed global economic environment
• Emergence in new economies
• Fluctuations in economic growth
Social Factor
• Social economic and activities are growing due expanding borders
• Promotes cultural diversity
Technological
factor
• Actively contributed to technological development
• Delivers Urban efficiency using technology with trial and tested solutions
Legal factor
• Involved in legal proceedings initiated by the European Commission with regard
to an alleged agreement concerning gas insulated switchgears (“GIS”)
• Claim of GBP15M Launch in London High court by Power Networks
• Claims filed against the Group concerning such issues as contractual demands,
counterfeiting, risk of bodily harm linked to asbestos in certain products and
work contracts
Environmental
factor
• Highly dynamic in nature, interaction with both local and international partners
• Work with public organization in charge of electrical and electronic waste
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recycling
Stock YTD Prices
Updated
Source: finance.yahoo.com
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Stock Prices 5 Year Retrospective Analysis
5 Year
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Source: finance.yahoo.com
Revenue Retrospective Analysis
Source: www.schneider-electric.com
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EPS Retrospective Analysis
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Source: www.schneider-electric.com
Cash flow Analysis
Source: www.schneider-electric.com
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Organic Growth vs. Reported Growth
Source: www.schneider-electric.com
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Income Statement by Business
Source: www.schneider-electric.com
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Trusted by Customers World Wide
Americas
Golden Gate Bridge
Yale University
Rockefeller Center
Shedd Aquarium
Héma-Québec
Source: www.schneider-electric.com
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Trusted by Customers World Wide
Asia Pacific
Kuala Lumpur Airport
Sydney Opera House
Two International
Finance Centre
Westin Resort
Source: www.schneider-electric.com
Petronas Towers
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Trusted by Customers World Wide
Europe
The Kremlin
Byblos Bank
Eiffel Tower
Harrods
Sanoma House
Source: www.schneider-electric.com
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Trusted by Customers & Companies World Wide
Petronas Towers
ROCKEFELLER CENTER
Source: www.schneider-electric.com
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THANK YOU
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