Transport is a global supplier of engineering solutions for the railway industry. ... HVAC...

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  • F A I V E L E Y

    a C t i v i t y r E p o r t 2 0 1 4 / 1 5

  • F A I V E L E Y

    onev i s i o n

    CEos message 8

    our Executive Committee 10

    our performance 2014/15 11

    our market 12

    ones t r a t E g y

    shape 15

    Execute 16

    Create 17

    Develop 18

    grow talent 19

    a solid platform for growth 20

    onep o r t f o l i o

    access & Mobility 22

    Brakes & safety 24

    Energy & Comfort 26

    services 28

    China 30

  • ASIA-PACIFIC

    22%

    Sales by geographic region

    EUROPE

    61%

    REST OF THE WORLD

    1%

    AMERICAS

    16%

    ASIA-PACIFIC

    27%EUROPE

    61%

    AMERICAS

    12%

    Workforce by geographic region

    SERVICES

    42%

    BRAKES & SAFETY

    24%

    Sales by division

    ACCESS & MOBILITY

    14%ENERGY

    & COMFORT

    20%

    A worldwide partner

    55 sites INCLUDING:

    51 COMMERCIAL SITES

    44 PRODUCTION & MAINTENANCE SITES

    12 CENTRES OF COMPETENCE

    OVER

    5,700EMPLOYEES IN 24 COUNTRIES

    1,048 MILLIONSALES

    Europe

    Asia-PacificAmericas

    Centres of Competence

    Commercial sites

    People

    Production and maintenance sites

    22 21

    12 3,518

    19 14

    1,540 10 9

    698

  • Faiveley Transport is a global supplier of engineering solutions for the railway industry. With some

    5,700 employees in 24 countries, the Group comprises five operating Divisions; three of which are

    product-based, one is a provider of services and another is devoted solely to China, the worlds biggest

    market for high-speed railways. At a product level, our Divisions are Brakes & Safety, Energy & Comfort,

    and Access & Mobility. All our Divisions work together as One Faiveley, and believe in our three core

    values of being Reliable, Passionate and Collaborative. We also share a common vision of the Groups

    future, which is set out in a comprehensive mid-term plan: Creating Value 2018.

    V i S i O n

  • Door leaf inspection after painting Saint-Pierre-des-Corps, France.

    Reli ableWE ARE ACCOunTABlE

    AnD TRuST WORThy PARTnERS.

    WE CAn BE COunTED On.WE DEliVER OuR COMMiTMEnTS

    WiTh inTEGRiT y.

  • Collab orativeWE WORk AS A GlOBAl TE AM.

    WE ShARE OuR knOWlEDGE

    AnD BEliE VE in OuR

    COllECTiVE COnTRiBuTiOn.

    WE l iSTEn TO AnD

    RESPECT E ACh OThER.

    HVAC components assembly Shanghai, China.

  • Passi onateWE ARE PASSiOnATE ABOuT R AilWAyS.

    WE BuilD On ThEM TO ADDRESS

    OuR CuSTOMERS nEEDS

    CRE ATiVEly AnD SWiF Tly.

    PASSiOn AnD E xPERTiSE ARE

    ThE Pill ARS OF OuR CR AF T.

    Overhaul of an SW4distributor Amiens, France.

  • Activity report 2014/15 FAiveley trAnSPort 9FAiveley trAnSPort Activity report 2014/15 8

    O n e V I S I O n

    Stphane Rambaud-meaSSon, Chief exeCutive offiCeR of faiveley tRanSpoRt and ChaiRman of the management boaRd, diSCuSSeS the 2014/15 finanCial yeaR and the CompanyS StRategiC plan, CReating value 2018.

    What is your assessment of 2014/15?

    One of the most striking achievements

    was the strong recovery in our order intake:

    we reached a backlog of 1.877billion,

    a testimony to the renewed confidence

    of our customers in Faiveley Transport.

    Sales passed the billion-euro mark

    for the first time in the companys history,

    at 1.048 billion, and we delivered 46 million

    more in free cash flow than the previous year

    to reach 63.6 million. Finally, our Group

    Operating Profit was right on forecast at

    95.3 million. That said, we know there is still

    room for improvement in our profitability.

    it was a good year overall, characterized

    by real improvements in project execution

    and quality, a much improved relationship

    with our main customers and changes

    in our organization and governance.

    internally, What Were the years major activities?

    The main topic on the agenda was to improve

    customer satisfaction; and that can only be

    achieved by having a competitive offer and by

    delivering on all contractual targets, on time

    and on quality. We have now rebuilt our

    project management processes, governance

    and teams in many areas, with the result that

    our customers are clearly more satisfied and

    we are winning more orders. We adapted our

    Faiveley Worldwide Excellence program (FWE)

    so that it more closely reflects our business

    model of small-batch, highly engineered

    products to order. integrated in FWE, our

    improved Faiveley Management System (FMS)

    is supporting the harmonization of all our

    processes whilst providing a strong foundation

    for operational excellence.

    Our new shared ERP* platform is also

    a key enabler of FWE and it was rolled out

    in several sites last year. As a company,

    we moved from being a site-based

    organization to having three global

    product-line Divisions plus one Services

    Division and one regional Division in China,

    with full responsibility for their P&l, product

    strategy, industrial footprint and customer

    base. Clearly, this was a significant change.

    What Were the years highlights in terms of contracts?

    We have been successful in almost all

    our regions and in all segments, with a high

    volume of small and mid-sized orders

    a positive year, a promising future

    and we intend to at least maintain those

    positions. We are already a market leader

    in innovation, but we want to be a leader

    in quality, customer satisfaction and project

    execution. We also want Faiveley Transport

    to be a place where teams and individuals

    can develop and be part of exciting projects.

    What Will be involved in deploying this plan?

    in terms of delivery, the milestones will be

    highly visible. So, for example, our industrial

    footprint in Europe will be a lot more

    balanced between east and west, thanks

    to a new plant we are building in Plzen,

    Czech Republic. We are also looking

    to make our global footprint more competitive

    over the long term. At a product level,

    we will be delivering new technologies such

    as the Faiveley neoflexx Disc, which is

    already well-received by the market,

    and ESP4C, our compact door operator.

    As part of the Faiveley Worldwide Excellence

    program, our new ERP* system will be

    deployed at 12major sites by the end

    of 2015/16, with 12sites also being certified

    as FWE-compliant by the end of 2016/17.

    in financial terms, our sales target

    is 1.3billion for 2017/18, with a

    Groupoperating profit margin of 11%-12%

    and a cumulated free cash flow over 3 years

    of at least 110 million.

    hoW Would you describe the prospects for faiveley transport?

    We have a solid, motivated team in place,

    with new management and new leadership,

    and an experienced team at operating

    level that is fully committed to delivering.

    Our plan is pragmatic, and designed

    for impact. We are very positive about

    our market: there is a good market

    in Original Equipment and a very good one

    in Services. Taken together, we believe

    that everything is in place to create value.

    * Enterprise Resource Planning.

    which spreads our risk in terms of contract

    execution and proves we can win contracts

    in all geographies. We also saw repeat

    orders from previous major platforms

    in Western Europe and secured some major

    new orders, such as the 45 million contract

    in Singapore, where we have a joint venture

    with our customer SMRT. We have also been

    very successful in Services by being proactive

    in addressing our installed base and proposing

    new added-value services. Delivering parts

    on time and helping customers to make

    the most of their assets is key to this

    continued success.

    the rail sector has undergone massive changes over the last decade. hoW does this affect faiveley transport?

    The industry is moving from a Western

    Europe-centric customer base to a global one,

    where Asia and specifically China has

    a major role. By far the largest car builder,

    by virtually every parameter, is Chinese.

    We therefore need a strategy and a footprint

    that is compatible with this customer base

    and it is one reason why we created a

    dedicated China Division. We need to be close

    to our customers, and to understand their

    needs. Other changes in the industry involve

    safety standards, technical requirements

    and reliability levels, whi