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Annual Report 2006-2007
Annual Report 2006-2007
Contents
One Step Ahead
Faiveley S.A.
Limited Liability Company with a Management Board
and a Supervisory Board with a share capital of €12,529,585.
Carrefour Pleyel, 143, boulevard Anatole-France
FR-93285 Saint-Denis Cedex - France
Tel.: +33 (0) 1 48 13 65 00
Fax: +33 (0) 1 48 13 65 54
Faiveley
www.faiveley.com
E-mail: info@faiveley.com
2 The Chairman’s message
4 Governance
5 Shareholder’s Manual
6 Significant events
7 Key figures
8 Strategy
9 Outlook
10 Faiveley’s Worldwide Presence
12 Customer Services
14 Brakes and couplers
16 Air conditioning
18 Electromechanical products
20 Electronic products
22 Research and development
23 Human Resources
24 Industrial coherence
28 Legal structure
29 Faiveley Group
Consolidated Financial Statements
77 Faiveley S.A. parent company
Financial Statements
A comprehensive offer of system solutions
VIDEO SURVEILLANCE
SYSTEMS
AUXILIARY CONVERTERS
PANTOGRAPHS
AND HIGH-TENSION
EQUIPMENT
AIR CONDITIONING
PLATFORM SCREEN DOORS
ON-BOARD ELECTRONICS
COUPLERS
BRAKE SYSTEMS
BRAKE DISCS
INTERIOR DOORS
ACCESS DOORS
MASTER CONTROLLERS
BRAKES AND COUPLERS
THE BROADEST RANGE OF PRODUCTS AVAILABLE ON THE MARKET
AIR CONDITIONING
Faiveley’s systems are fundamental for trains, designed and developed around key imperatives such as
security, reliability, and comfort.
ELECTROMECHANICAL PRODUCTS
ELECTRONIC PRODUCTS
The goal of our on-board equipment, complemented by our platform screen doors, is to achieve ever-fuller
integration. By creating synergies amongst our products and systems, we aim to define more economical,
competitive solutions – positioning Faiveley as the constructors’ and operators’ natural choice for getting
projects off the ground.
Photography credits: B.Collet - Getty Images - G.Liesse - C. Recoura - P. Sautelet - P. Sordoillet - DR.
Design, copywriting and page layout:
Annual Report 2006-2007
Annual Report 2006-2007
Contents
One Step Ahead
Faiveley S.A.
Limited Liability Company with a Management Board
and a Supervisory Board with a share capital of €12,529,585.
Carrefour Pleyel, 143, boulevard Anatole-France
FR-93285 Saint-Denis Cedex - France
Tel.: +33 (0) 1 48 13 65 00
Fax: +33 (0) 1 48 13 65 54
Faiveley
www.faiveley.com
E-mail: info@faiveley.com
2 The Chairman’s message
4 Governance
5 Shareholder’s Manual
6 Significant events
7 Key figures
8 Strategy
9 Outlook
10 Faiveley’s Worldwide Presence
12 Customer Services
14 Brakes and couplers
16 Air conditioning
18 Electromechanical products
20 Electronic products
22 Research and development
23 Human Resources
24 Industrial coherence
28 Legal structure
29 Faiveley Group
Consolidated Financial Statements
77 Faiveley S.A. parent company
Financial Statements
About
the Faiveley Group
619 M€
Sales
862 M€
Order Book
3,593
With more than 3,500 employees, the Faiveley Group
generates sales of €619 million. Ranked second in the
world in on-board railway systems since the acquisition
of Sab Wabco, the Faiveley Group serves customers in
every major international market. Unlike its competitors, Faiveley focuses exclusively on the railway equipment
market, and has the widest range of products. Owing to
its recognized expertise in engineering, product management and products with high-added technological
value, Faiveley offers a complete line of standard and
customized solutions. Its strengths include extremely
effective products and systems as well as a wide range
of customer services.
Employees
Faiveley - Annual Report 2006/2007
1
“Our goal is to bring together
our Group’s resources and
know-how in order to develop
the high performance solutions
that our customers expect.”
2
Faiveley - Annual Report 2006/2007
The Chairman’s message
Throughout the 2006-2007 financial year, our
railway business continued to develop around
customer satisfaction. The needs and demands of car
builders and operators have not stopped growing.
We have prepared for this trend by embarking on
a quest to improve our industrial performance.
The stakes are high: proving that Faiveley is capable
of anticipating its customers’ expectations.
Our goal is to bring together our Group’s resources
and know-how in order to develop the high performance solutions that our customers expect.
The Group certainly has an international dimension,
but it must apply a global approach from the moment
an order is received right through to the engineering
phase, to commissioning, sharing resources globally,
making best practices universal, using common guidelines and mobilizing and circulating expertise.
In this context, and more than ever before, we must
establish an effective management structure that
will allow us to cost-effectively serve our customers.
In our industry, we face a number of challenges, including pursuing excellence, ensuring that our equipment
is as durable as possible and meeting safety standards.
Our external growth is also a sign of our dynamism.
The acquisition of the Espas Group strengthened
our electronics product line and brought new life
into our research departments.
We are fortifying our presence in the Chinese market
to take part in its extremely rapid growth, positioning ourselves to achieve highly ambitious goals.
With a growth of 8.9% (excluding ESPAS), 20062007 has been a growth year for the Faiveley
Group.
An impressive symbol of our performance was
Faiveley’s contribution to breaking the world speed
record, when the TGV Est reached a speed of 574.8
kilometers per hour using a train equipped with our
most sophisticated systems: pantographs, brakes,
doors, air conditioning, and on-board electronics.
This feat is a tribute to our teams’ determination
and the quality of their work.
Our shareholders will understand the reason why
they have entrusted us: we create value.
Robert Joyeux
Chairman, Management Board of Faiveley S.A.
Faiveley - Annual Report 2006/2007
3
Governance
From left to right:
Jean-Claude Roncin
Industrial Director, Faiveley Transport
Mario Padovani
Product Line Manager Customer Services,
Faiveley Transport
Jean-Pierre Guy
Electronics Product Line Manager,
Faiveley Transport
Mats Svensson
Brakes and Couplers
Product Line Manager,
Faiveley Transport
4
Faiveley - Annual Report 2006/2007
Marc Jammot
Air Conditioning Product Line Manager,
Faiveley Transport
Pierre Sainfort
Chief Operating Officer,
Faiveley Transport
Robert Joyeux
Chairman of the Management Board,
Faiveley SA
Chief Executive Officer,
Faiveley Transport
Etienne Haumont
Chief Financial Officer,
Faiveley Transport
Harald Zinggrebe
Doors and Current Collection
Product Line Manager,
Faiveley Transport
Erick Descamps
Customer Services
Product Line Manager,
Faiveley Transport
And:
Marc Chocat
Strategy and Development
Director
Helen Potter-Balandrau
Human Resource Director
Shareholder’s Manual
A management board and a supervisory board
to better serve the interests of the Group
The 2006-2007 financial year remained highly competitive, but Faiveley S.A.’s
strong and manifold assets led to recorded growth in line with its initial goals.
Faiveley’s international management relies on a strategy defined by the
Group aimed at ensuring the development of a culture of good governance,
efficient internal control and operational performance. To this end, the
Management Board meets once a month in a steering committee, a practice
which applies to all of the Group’s subsidiaries, at every level of the company.
Shareholder’s
Agenda
5 July 2007
Full year results
24 July 2007
1st quarter 2007
19 September 2007
Annual Shareholders’
Meeting
24 October 2007
Semester sales
Stock Market price performance
over the last year (in euros)
50
48
46
44
Share capital
ownership
42
40
38
2.8%
Auto-control
36
34
32.2%
Floating
32
30
April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. March
2006
2007
65%
Faiveley family
Faiveley - Annual Report 2006/2007
5
Significant events
The TGV reaches
574.8 km/hr (357.2 mph):
Faiveley captures
the current
Faiveley confirmed its mastery of
high-speed rail current collection
technology, maintaining constant
pantograph/catenary contact despite
significant variations in conducting
line height and in aerodynamic
turbulence generated by the train.
Other Faiveley systems and products
contributed to the new record:
Faiveley doors, air conditioning,
brakes, the SIL4 triple odometry
system, Doppler radar, Wiegand
effect wheel speed sensor, ATESS
system and anti-skid systems.
On April 3, 2007,
the TGV hit a new world
record for speed, with
the help of Faiveley’s
latest electronicallycontrolled CX pantograph.
6
Faiveley - Annual Report 2006/2007
Faiveley’s fruitful
participation
at Innotrans 2006
The International Trade Fair
for Transport Technology is Europe’s
most important gathering of railway
technology constructors and
suppliers. Faiveley’s participation
at the 2006 bi-annual convention
proved a great success, thanks
particularly to the signing of
a new contract for the London
Underground.
From October 19-22, 2006,
all of Faiveley Transport’s
product lines were once
again represented at Berlin’s
Innotrans Fair – leading
to a new contract.
IRIS Certification
for three Faiveley sites
IRIS, the rail industry’s internationally
recognized standard for evaluating
management systems, has certified
three Faiveley sites: Amiens, with
an overall grade of 74%, Remscheid,
which received an exceptional
rating between “qualified” and
“optimized,” and Leipzig, which saw
no requests for corrective measures.
Faiveley Transport was
awarded the International
Railway Industry Standard
(IRIS), a quality assurance
initiative led by the Union
of European Railway
Industries (UNIFE).
Key
figures
€619 million
in consolidated
sales
€862 million
in orders
3,593
ESPAS extends
its field of action
to the Faiveley Group
ESPAS, in addition to strengthening
its activity in the field of on-board
doors, power converters, automatic
door controllers, speed regulations,
and driver assistance, has brought
complementary expertise that
includes passenger information
devices and signal readers
and decoders.
Two new factories
in China
Located in Shanghai, SFRT
is dedicated to air conditioning
and door systems.
The Qingdao factory is focused
on the manufacturing of new brake
systems. These two production
units play a key role in the Group’s
growth in China.
employees
31sites
in
20 countries
Breakdown of sales
by geographic zone
On February 21, 2007,
Faiveley Transport
reinforced its position
in the field of electronic
doors and railway
systems when it acquired
the ESPAS Group.
These strategic sites have
been operational since
January 26 and 27, 2007,
with major constructor
customers that include
Alstom, Bombardier,
and the Chinese Ministry
of Rail Transport.
12.5%
Asia-Pacific
4.2%
Americas
3.3%
Eastern
Europe
80%
Western
Europe
Faiveley - Annual Report 2006/2007
7
Strategy
Striving for competitiveness in a changing railway world,
Faiveley builds on its expertise and sites around the world
while sharing its global resources in order to create the added
value its customers expect.
External growth enhanced
by a changing market
The railway industry is undergoing a reorganisation around the world. Major international
constructors are relying on key equipment
manufacturers with the critical size required to
respond to their calls for tender. As a result,
small equipment manufacturers are joining
larger corporations. The Faiveley Group is
seizing these opportunities to reinforce its two
external growth objectives:
Access and interior doors
on a Virgin Cross Country train.
Solutions from a major
equipment manufacturer.
8
• to acquire companies with high technological
value to set itself apart with greater expertise:
Faiveley is expanding its knowledge base by
acquiring companies who are looking to reach
critical size and who have expertise that
complements the Group’s. In this way, Faiveley
strengthens its approach to offering comprehensive solutions, creating a wide range of
specialities and thus gaining a significant
Faiveley - Annual Report 2006/2007
foothold in a market where customers strive to
limit outsourcing by selecting several preferred
providers. This was the aim of the 2006 acquisition of ESPAS, which produces electronic
systems and railway doors.
• to acquire companies in order to expand
market share:
for fields in which Faiveley already plays a major
role, the aim of acquisitions is to gain a captive
market and broaden customer base. The acquisition of NEU Systèmes Ferroviaires, which
specializes in air conditioning, is an example of
this strategy.
A Group approach to building
successful solutions
Winning market share and offering the widest
range of solutions are key components of
competitiveness. Therefore the Group serves
customers in a number of countries where
railway projects are a major source of economic
growth and job creation. Constructors benefit
from the Group’s local expertise, which
optimizes both technical solutions and equipment costs. But today, local presence must also
be driven by a global strategy. Collecting and
optimizing feedback will lead to a common
Group approach. It involves creating industrial
consistency, sharing expertise around the
world, standardizing processes and using
common guidelines. In both engineering and
manufacturing, the resources provided
by Faiveley’s research departments and
production units are available and meet
the same quality and industrial standards in
Asia, America, Oceania, and Europe. These
globally optimized resources fuel the Group’s
success around the world.
Outlook
China, India, Europe and the United States offer key prospects
for expansion. The market of Faiveley’s customers, whether
it be car builders or operators, is on the right track and
continues to grow.
A sustainable growth market
The revival of European rail transport is driven
by technological developments, providing an
appropriate response to the growing need for
mobility in modern societies. Increasingly, environmental concerns among public authorities
and the general public are working to promote
this cleaner means of transportation. The third
growth factor resides in developing countries,
particularly in Asia, where rail travel is the
central means of transport for both freight and
passengers. Finally, railway equipment requires
maintenance throughout its lifecycle, creating
a constant dynamic for new orders.
A growing presence in China
The Chinese railway network is rapidly
expanding. Stretching over 70,000 kilometers
in 2005, it will expand to 100,000 kilometers
in 2020, including 3,000 kilometers for
high-speed trains, 2,000 for main lines, and
10,000 for freight. China has clearly stated
its goals for the future: high-speed lines
running at 250 to 350 kilometers per hour, the
2008 Olympic Games and the 2010 World Fair,
numerous metro projects in Beijing, Shanghai,
and Nanjing, and an increase in the number of
locomotives in service from 1,500 to 2,000.
In this promising market, Faiveley already has
five sites and opened two new plants in
January 2007: Shanghai Faiveley Railway
Technology (SFRT) in Shanghai, specializing in
manufacturing door and air conditioning
systems, and Qingdao Faiveley SRI Rail Brake
Co Ltd in Qingdao, which manufactures parts
for brake systems.
The Group’s economic strategy is twofold:
meeting technology transfer needs and
attaining production costs that reflect the
Chinese market and are competitive for export.
Moreover, within the framework of a
purchasing policy grounded in cost control,
purchasing platforms are being established
in China and India. They should be in full
service by the 2007-2008 financial year.
New SFRT plant
in Shanghai. Faiveley’s
goals match the Chinese
railway network in scale.
Faiveley - Annual Report 2006/2007
9
Faiveley
Worldwide Presence
Faiveley Transport
La-Ville-aux-Dames ∙ France
Faiveley Transport Leipzig KG
Schkeuditz ∙ Germany
Faiveley Transport Amiens
Amiens ∙ France
Faiveley Transport Remscheid
Remscheid ∙ Germany
South America
Faiveley Transport NSF
Lille ∙ France
Faiveley Transport Belgium
Zaventem ∙ Belgium
Faiveley Transport do Brasil
São Paulo ∙ Brazil
ESPAS
Mont-Louis-sur-Loire ∙ France
Faiveley Transport Nordic AB
Landskrona ∙ Sweden
Northern Europe
Faiveley Transport Tamworth
Tamworth ∙ United Kingdom
Southern Europe
Faiveley S.A. (Headquarters)
Saint-Denis France
Faiveley Transport Birkenhead
Birkenhead ∙ United Kingdom
Faiveley Transport Iberica SA
Tarragone ∙ Spain
North America
Faiveley Transport USA
Exton ∙ USA
Faiveley Transport
Saint-Denis ∙ France
Faiveley Transport
Saint-Pierre-des-Corps ∙ France
NORTH AMERICA
1 site
SOUTH AMERICA
1 site
10
Faiveley - Annual Report 2006/2007
Faiveley Transport Iberica SA
Madrid ∙ Spain
Faiveley Transport Pilzen s.r.o.
Pilzen ∙ Czech Republic
Qingdao Faiveley sri
Qingdao ∙ China
Sab Wabco Iberica
Madrid ∙ Spain
Faiveley Transport Tremosnice s.r.o.
Tremosnice ∙ Czech Republic
Faiveley Transport India
Tamil Nadu ∙ India
Faiveley Transport Verona
Bussolengo ∙ Italy
Lekov a.s.
Blovice ∙ Czech Republic
Faiveley Transport Korea
Seoul ∙ Korea
Faiveley Transport Piossasco
Piossasco ∙ Italy
Asia
Faiveley Transport Bangkok
Bangkok ∙ Thailand
Eastern Europe
Faiveley Transport Polska z.o.o.
Poznan ∙ Poland
Shanghai Faiveley Railway
Technology Co. Ltd.
Shanghai ∙ China
Faiveley Transport Far East Ltd.
Hong Kong ∙ China
Faiveley Transport Beijing, China
Beijing ∙ China
EUROPE
20 sites
Faiveley Transport Iran
Teheran ∙ Iran
Oceania
Faiveley Transport Australia
Seven Hills ∙ Australia
ASIA
8 sites
OCEANIA
1 site
Faiveley - Annual Report 2006/2007
11
Customer Services
The Faiveley Group is structured to support its customers
by designing, producing and maintaining the basic building
blocks of trains. Faiveley optimizes the performance and costs
throughout the lifetimes of the trains.
Upstream guidance
over the long term
Product expertise and
services intrinsic to the
business of its constructor
and operator customers.
From the beginning of each project, Faiveley
provides an active offer for its customers that
include commissioning, installation, warrantees
any type of maintenance over a set period of
time, retrofitting and renovations, spare parts
contracts and new services. As part of this highly
upstream process, the Group’s research departments design products that facilitate installation
and maintenance. They rely on their experience
and their knowledge of how existing systems
perform.
Beyond the warranty period, service teams
support customers over the long term, meeting
their basic needs.
Passenger safety
Faiveley supplies safety equipment, guaranteeing
a unique level of quality through their own
rigorously tested parts. Its brake systems combine
advanced technology with reliability that lasts
for millions of kilometers. Certified processes for
validating manufacturing and repairs ensure
that all required safety standards are met on a
permanent basis.
Availability and regularity of rolling stock
Today, competition from other means of
transportation, such as airplanes and cars, has
become fiercer and travellers are more
demanding than ever before. Perfecting train
operation is a growing priority for train operators,
who are seeking to concentrate on their core
business. The goal of Faiveley Customer Services
is to provide support through maintenance.
Optimizing maintenance costs
Several factors come into play, including limiting
maintenance time, detecting and precisely
locating malfunctions, increasing time between
required maintenance operations, optimizing
systems to facilitate maintenance, and
optimizing the concept of asset management.
A central component of Customer Services,
Customer Services
• Supplying spare parts and related logistics
• Installation
• Depot maintenance or mobile on site maintenance
• Long-term maintenance contract
• Factory and on site repairs
• Retrofit upgrade
• Support engineering during commissioning
• Training
12
Faiveley - Annual Report 2006/2007
predictive maintenance ensures increasingly
reliable materials and improved anticipation
of malfunctions. Moreover, opportunities for
renovating materials extend the operating life of
rolling stock.
Faiveley enjoys a strategic position in terms of
these three expectations. Its expertise in highlevel safety systems and its local presence allow
it to effectively lend its know-how and support
to each country.
Predictive maintenance
The key differentiating factor of Faiveley
Customer Services lies in its ability to base its
maintenance program on real-time measures
of wear (predictive maintenance), according to
each specific operating condition, rather than
on expected wear (preventive maintenance).
As soon as equipment goes into operation
and until it is taken out of service, the relay
of on-board information provides detailed
predictions of future performance. This has
two key benefits:
• wider availability of rolling stock, improvement of overall operating costs thanks to
equipment in better condition, optimizing
time between maintenance operations ;
• longer lifetime of equipment because
the feedback from operators about the
operational reliability systems available with
each new generation of products.
Overall service provider
With a full understanding of on-board systems
in their specific environments and a strong
connection to each critical train component,
Faiveley is fully qualified to perform work
on non-Faiveley equipment. As an overall
maintenance provider, the Group is highly
respected and valued by its customers.
Optimizing availability, overall
operating costs, and the
lifetime of rolling stock.
Faiveley - Annual Report 2006/2007
13
Brakes and couplers
In addition to an upsurge in overall results, the 2006-2007
financial year was marked by Faiveley’s breakthrough in
Germany through deals with Siemens and its first major
contract for brake systems in China.
Stronger positions within rapidly
expanding markets
Manufacture of brake
systems for Alstom
and Datong locomotives,
a growth center in China.
Once again, the brakes and couplers product
line enjoyed a highly satisfactory financial year,
with sales increasing 13.5% to €172.7 million.
Far surpassing market trends, this growth is a
reflection of Faiveley’s technology and its ability
to create value for its customers. It also results
from the Group’s foothold in dynamic markets,
particularly in Spain, India and France.
Faiveley’s growth in sales was accompanied by
a significant increase in its operating margin
over 2005-2006, thanks to cost-effective,
high-quality and deadline-driven project
management.
In one year, orders increased from €165.5 to
€207.6 million, demonstrating customers’
trust and the excellent long-term relationships
Faiveley has built.
Faiveley is benefiting
from a growing number
of metro projects in China
Faiveley signed its first contract in China
in 2006, the result of several years of hard
work. Signed in partnership with SRI Qingdao
Ltd, the contract is for the brake systems,
of 360 locomotives built by Alstom and
Datong. The technology’s proven reliability
and the company’s ability to transfer it
to its Chinese partner, were the keys to this
success. From now on, Faiveley will benefit
from a strong growth center in China, with a
Brakes and coupler plant in
Landskrona, Sweden, featuring
cutting-edge industrial methods
and quality assurance.
14
Faiveley - Annual Report 2006/2007
joint venture structure, a production unit, and
the first significant reference for this product
line. The Group is poised to reply to other calls
for tender in the Electro-Mechanical Units
(EMU) and metro fields.
In Hungary, Faiveley was granted a major
contract in March 2007, triumphing over its
leading competitor, which had the advantage
of a strong local foothold. The contract involves
brake systems for the Budapest metro’s railcars.
Developed in 2006, the metro version
of Faiveley’s EPAC command system played a
key role in this achievement. In Italy, Bombardier Italia continued its longstanding
partnership with Faiveley by enlisting it to
equip 150 locomotives. In the coupler field,
Faiveley made inroads with Siemens, signing a
framework agreement to supply couplers for
Desiro and Railjet. Another contract was signed
with Lirex Continental (Alstom) for couplers
intended for Augsburg.
These numerous successes stem from Faiveley’s
unceasing capacity to innovate, enabling the
Group to meet the growing needs of its
customers in terms of energy economy, weight
reduction, reliability, availability and cost
reduction. The development of the EPAC
brake management system exemplifies this
policy in a field where Faiveley already boasts a
solid technological edge.
A technological
edge in highly
dynamic markets
July 11, 2006
Contract in China to supply
360 locomotive brake systems
for the CNR Datong Electric
Locomotive Company.
Faiveley - Annual Report 2006/2007
15
Air conditioning
Within a highly competitive market that exerts heavy pressure on
prices, Faiveley continues to grow, increasing its air conditioning
sales by 5.5% and its orders by 30%.
Growth and success through NSF
The Swiss constructor Stadler
multiplied the number of orders
it placed with Faiveley in the
2006-2007 financial year.
Having strengthened its
production and engineering
outsourcing, Faiveley offers
competitive pricing.
The acquisition of Neu Systèmes Ferroviaires
(NSF) and the synergies that resulted from
it have spurred Faiveley’s growth on the
European market. The Group expanded in
Eastern Europe through an order from Alstom
for the Budapest metro. In Southern Europe, it
gained ground within the Spanish market,
winning contracts for high-speed Intercity
trains and Talgo trains for RENFE. In Western
Europe, it is building new growth channels
with the help of car builders. In Germany, the
Group is responsible for outfitting 37 new
Deutsche Bahn trains. And in the Nordic
countries, Sweden expressed its satisfaction by
ordering X60 options and Talgo Finland
involved the Group in its local expansion.
Outside of Europe, Faiveley successfully
returned to North Africa with a significant
order by Stadler for the SNTF in Algeria. In
Brazil, the Group was awarded a contract for
Cofesbra (a consortium composed of Alstom,
CAF and Bombardier), strengthening its
position in South America.
Success in Asia through
its Chinese subsidiary
Faiveley achieved its quest to target the Chinese
market, drawing on its competitive costs and its
Chinese design center. This initiative allowed the
Standardization
and adjustment
of air conditioning
systems: streamlining
of design and process.
16
Faiveley - Annual Report 2006/2007
company to win two projects in Turkey with the
constructor Rotem: the Istanbul metro and the
train operator TCDD’s regional trains. Faiveley is
also affirming its leading position within the
Chinese market. Major orders have been placed:
locomotive cabs for the DJ4 project with Alstom,
Siemens and their local partners (Datong and
Zhu Zhu, respectively) and a repeat order for
high speed trains with Bombardier Sifang.
The NAIDA concept strengthens
Faiveley’s relationship
with Siemens
Under the name NAIDA, the Group is working
to standardize and adjust its technical
solutions. This aggressive measure combines a
streamlining of the design process with
rigorous cost structure, made possible
by subcontracting engineering work and the
quality control of production outsourcing.
It has already convinced Siemens to involve
Faiveley in its new regional train platform,
the Desiro Mainline, a generic train designed to
be marketed throughout Europe. More generally, these strengths, along with product
quality, have brought customer loyalty. The
Swiss constructor Stadler, for example, multiplied the number of orders it placed with
Faiveley, in the 2006-2007 financial year.
Standardization
and quality for
guaranteed loyalty
July 28, 2006
Contract with Alstom Transport
for research, design, production,
and perfection of air conditioning
equipment for train cars, first applied
in a series of 340 air conditioners
for the Budapest Metro.
Faiveley - Annual Report 2006/2007
17
Electromechanical
products
For all of its regions and products combined, Faiveley achieved
record sales growth of 23%, thanks primarily to the sweeping
London Underground project and other significant contracts.
Overall, orders reached €277 million.
Success across the globe
Pantographs
and electromechanical parts
grew 43% and 34%,
respectively.
Faiveley is number two
in the world and in Europe
in on-board doors. In this
market, sales grew 16%.
In Western Europe, the historic hub of
Faiveley’s growth, total sales increased by 16%.
The year 2006-2007 brought on-board door
and electrical parts contracts for numerous
projects: the regional TER and AGC trains as
well as high-speed trains in France, the ET 422
regional train in Germany, suburban and highspeed trains in Spain for Alstom and CAF, and
bi-level trains in Italy for Corifer. Faiveley signed
a major €54 million contract for the London
Underground’s SSL project, and is also
supplying metro projects in Oslo, Bucharest,
and Dubai. Sales of CTRL pantographs for a
high-speed train project in England have made
Faiveley a player on the British pantograph
market as well as a supplier for Hitachi.
Eastern Europe offers numerous possibilities
for growth. Faiveley increased its sales by 30%
in the region, leveraging its electromechanical
product line and its breakthrough on the
Russian market with the opening of a new
office in Saint Petersburg, and its first orders.
Through its Czech subsidiary Lekov, the Group
made strides on the pantograph and tramway
markets, also supplying pantographs for Skoda
locomotives.
Thanks to significant growth in Asia, Faiveley
continued to strengthen its position in the
region. Sales of on-board doors and platform
Platform screen doors
grew by 40%. Faiveley
is strengthening its position
in emerging markets
in Western Europe and Asia.
18
Faiveley - Annual Report 2006/2007
screen doors rose 38%, mainly in China and
Korea. Faiveley equipped the latest Shanghai
metro installation and Chinese high-speed
trains for the EMU 2008 project with on-board
doors, and supplied platform screen doors for
several metro lines in Shanghai and Canton. In
addition, the Group received its first orders for
on-board doors and electromechanical parts
with the Korean constructor Rotem for Irish
and Canadian projects.
In North America and Brazil, where Faiveley has
focused on on-board door sales, major
contracts in the United States fueled continued
growth (33%). The first delivery for the bi-level
train project in New Jersey with Bombardier is
in progress, with options for additional orders
to follow. The Silverliner 5 project with Rotem
USA for Philadelphia’s Septa network totals
€10 million. In Brazil, the Group received a
number of local orders, including one for onboard doors for Metrovias in São Paolo.
New innovations
Two new Faiveley designs are being industrialized and will soon enter the test phase. The
Pegase roof fully integrates all train roof functions to optimize space, weight, and cost,
while the new on-board door for high-speed
trains adds reliability, ease of use, and comfort.
New constructor
customers,
entering
new markets
September 7, 2006
New contracts for the Shanghai
metro lines, 6 and 8, reinforces
Faiveley’s position as a leader
in platform screen doors.
Faiveley - Annual Report 2006/2007
19
Electronic products
The acquisition of the ESPAS Group adds a new range of
products, passenger information systems (dynamic line maps,
passenger announcements), while complementing Faiveley’s
existing range of electronic products. These include:
Odometry/tachometry
and black boxes: the backbone
of new railway measures
The Competence Center
for electronic products, located
in La-Ville-aux-Dames, France.
XEBRA video surveillance
boasts a technological
advantage that has ushered
it onto the market.
The liberalization of the freight market in
France requires new operators to adapt their
locomotives accordingly. ATESS, a system developed by Faiveley that combines speed
measurement and black box functionality,
responds to all regulations. The new operators
have boosted ATESS sales to new customers
(EuroCargo, Veolia, EMD, Vossloh, etc.),
adding to existing sales for SNCF trains (French
national railways). As part of the European Rail
Traffic Management System, Faiveley’s SIL4
odometry was chosen to retrofit high-speed
Thalys trains, to equip the new high-speed TGV
Est trains, and to connect the service between
Belgium and Holland.
Faiveley was chosen by Ansaldo-Breda and
LACMTA to equip the cars of the Los Angeles
tramway with its TOM black boxes. This first
contract gives Faiveley the opportunity to
access the North American market, while
continuing to grow its European sales. With
audio and video recording and a new anticrash cassette that protects data from fire and
fluids, Faiveley’s black box technology is now
very similar to those used in avionics.
Video surveillance: introducing
XEBRA
Veolia Ile-de-France chose
XEBRA video surveillance
for its large bus fleet.
20
With the next-generation XEBRA video
recorder, Faiveley has made a powerful
return to the urban transportation market.
A noteworthy example is its framework agreement with Veolia, which operates a fleet of
1,600 buses in the Paris region, to provide
video surveillance systems for more than
300 buses from 2007 onward.
Faiveley - Annual Report 2006/2007
XEBRA will also be installed on buses in Lyon,
Amiens, Belfort, Calais and other cities in
France. XEBRA is an extremely promising
platform with the ability to evolve, in line with
the most cutting-edge technologies.
In the railway field, the cars of the Barcelona
metro’s line 1 will be retrofitted with the
JET Stre@m system, based on a high-speed
Ethernet network designed to secure data
transmission.
Auxiliary converters: Italy driving
business
Reaching nearly 40% and surpassing all of the
other electronic products, this growth was
fueled by the KATIUMTM converter range,
which is based on an innovative patent that
significantly reduces converter weight and
volume. In Italy, Faiveley supplied nearly
400 KATIUMTM converters to Corifer for the
Vivalto bi-level regional trains. It also began
delivering traditional converters with an innovative back-up system for tramways in Phoenix,
Arizona, currently being manufactured by
Sharyo. On the development side, Faiveley
completed a new line of optimized inverters.
Autonomous anti-skid devices
make a significant contribution
Adding to recurring equipment sales for the
high-speed TGV Duplex and TER2Nng regional
trains in France, major contracts were signed
for the new Talgo trains in Spain and for retrofitting the DMU158/159 trains in England.
An enhanced product
line, a powerful
source of growth
February 21, 2007
The acquisition of the ESPAS Group
companies is expected to create
opportunities for collaborative
development of new products
and sales growth in France
and abroad.
Faiveley - Annual Report 2006/2007
21
Research
and development
Innovation is essential to Faiveley. In the railway world, the goal
of innovation is not to launch new functionalities but to optimize
existing ones to design the most appropriate solution.
Shaping the most competitive
offer available
Faiveley’s innovations
optimize existing products.
Together with applied engineering, the R&D
teams’ primary task is to develop more
modern, reliable and competitive products. For
constructors, the most important factor is the
price at initial purchase. Network operators
care about the life cycle cost of equipment and
ensuring rolling stock operational availability.
In addition to these priorities, Faiveley and
its customers focus on weight and size
reduction as well as ease of installation and
maintenance.
Gearing up for tomorrow’s
market
The immediate need to be competitive goes
hand in hand with Faiveley’s longer-term goal
22
Faiveley - Annual Report 2006/2007
to establish and prove its place as a preferred
provider. The Group aims to design and
develop products that will drive railway travel’s
progress five years from now.
Contributing to Europe
Faiveley is involved in innovations that benefit
the public interest within its field: pollution
control, lowering energy consumption and
better service. From this viewpoint, the Group’s
membership in UNIFE entitles it to public
funding from the EEC. In the 2006-2007
financial year, the EEC lent support to two
projects: modular brakes for high-speed trains
and improving energy consumption on trains.
At the brake competitiveness cluster in the
Picardie Pas-de-Calais region of France this
year, joint research began for two projects
currently being evaluated.
Human
Resources
International dimension
and culture:
• Creating options for mobility
• Cross-fertilization of expertise
• Recruiting, building
loyalty, offering
the best to the best
Creating options for mobility
The Faiveley Group’s customers are international in terms of their structure and culture,
and they expect no less from their supplier.
With 31 sites around the world, Faiveley
is continuing to create a shared Group culture
through a very active information gathering
strategy. The priority of Human Resources
management’s policy is to hasten this
movement towards unification. Mobility
plays a key role. The more knowledge is
transferred and best practices are shared
among the various entities across the globe,
the more know-how the Group attains.
Cross-fertilization of expertise
Sharing best practices within the Group
is crucial to improve overall quality. With
this conviction in mind, Faiveley strives
to develop technical teams and projects
as close to its customers as possible. Its
teams located around the world are well
positioned to understand local markets and
accompany their customers.
Recruiting, building loyalty,
offering the best to the best
The Group benefits from its international
dimension, by taking advantage of the
strength of its centers of excellence for all of
the product lines at local level.
The Group is determined to build loyalty
among its engineers and other employees,
honing its ability to meet the essential needs of
reliability, safety and equipment durability.
International reach encourages
the sharing of expertise, taking
the Group to the next level.
Faiveley - Annual Report 2006/2007
23
Industrial coherence
The Faiveley Group’s industrial coherence strategy is geared
toward achieving the ultimate in customer satisfaction. It is
based on streamlining the organization and reinforcing the
corporate culture.
Growing stronger through
streamlining and shared
responsibility
Speaking a common language,
following shared guidelines,
gearing up to meet
new challenges.
24
As the demands of the market toughen,
the pursuit of excellence requires a centralized
organization at the Group level that
oversees all business activities. This entails the
establishment of cross functions with specific
Faiveley - Annual Report 2006/2007
assignments: Quality, Supply Chain and
Purchasing. These functions exist at each site
and are responsible for instilling the Group’s
vision in each product line. The structure
revolves around a key new management
principle: streamlining jobs, processes and
technologies. All of the Group’s entities have a
common goal of customer satisfaction through
the power of industrial coherence.
Cross Functions: structuring
and guaranteeing continued progress
The Product Quality function is designed to optimize the Group’s approach to complying with specifications, delivering products in good
condition and ensuring long-term reliability.
The Supply Chain function strives for 100% service levels, honoring
delivery commitments and timelines.
The Purchasing function is the decision center for pooling the Group’s
finest engineering and production resources and selecting the best
suppliers. These suppliers share Faiveley’s commitment to excellence and
work in close collaboration with the Group as long term partners. This
ensures high-quality products that are delivered on time and meet the
Group’s market price guidelines, as well as access to certain technologies.
Furthermore, Faiveley limits product costs by involving suppliers in each
phase of design.
Faiveley - Annual Report 2006/2007
25
Industrial coherence
New heights of efficiency
through changing the corporate
culture
The Group also aims to improve its employees’
outlook and approach to teamwork. Indeed,
fostering a sense of belonging leads to a
culture of communication and openness.
Shared guidelines are shaped through the
universal, systematized exchange of best
practices. A culture of results, which is
fundamental and without compromise, must
be firmly established and requires complete
commitment at the individual and collective
levels. Standardizing goals is the key to a
pragmatic and quantifiable approach, offering
each contributor a clear vision of their action
plan and the desired result. Management,
guided by indicators, leads to improved
performance. Finally, a culture of quality is
particularly vital for recognizing and addressing
every aspect of any problem. Instead of simply
seeking possibilities for improvement, it is
important to detect hidden flaws that are
considered “normal.” Low quality, tolerance of
lateness, high inventory policy, poor customer
service – abolishing these failings is a crucial
strategy for Faiveley’s future.
Iris: Quality standards for the railway industry
Introduced in 2006, the International Railway Industry Standard (IRIS) was
promoted by the Union of European Railway Industries (UNIFE) at the request
of Alstom, Bombardier, Siemens and Ansaldo Breda. IRIS is modelled on
ISO 9001, and indeed may use the same audit, but IRIS goes much further
to ensure quality by assessing process and supply chain management. The
standard also focuses on elements that ISO 9001 disregards, including the
launch and authentication of new technologies, the commissioning process
and change management. The Amiens and Remscheid sites received their
IRIS certification in October 2006 and February 2007, respectively.
26
Faiveley - Annual Report 2006/2007
Industrial coherence
Faiveley - Annual Report 2006/2007
27
Legal
structure
Faiveley
S.A.
Faiveley
Management
SAS
SAGARD
35.9%
Other
Management
2.1%
ä
61.7%
as of 31 March 2007
0.3%
Faiveley
Transport
Faiveley Transport
USA Inc.
ä
100%
Faiveley Transport
Amiens - France
ä
100%
Faiveley Management
äAcquisition AB - Sweden
100%
Faiveley Transport
äMalmö AB - Sweden
100%
Faiveley Transport
ä Holding GmbH & Co.
100%
ä
KG - Germany
100%
Faiveley Transport
India - India
100%
100%
Faiveley Transport
Verwaltungs - Germany
Lekov a.s.
Czech
Republic
Faiveley Transport
ä Remscheld - Germany
100%
75%
Sab Wabco UK Ltd
ä United Kingdom
ä
ä
91.28%
Faiveley Transport
Leipzig KG - Germany
28%
ä
100%
ä
ä
Faiveley Transport NSF
France
Sab Wabco
Investment
United Kingdom
Sab Wabco Iberica
51%
100%
Sab Wabco Sro
Czech Republic
ä
100%
ä
Qingdao Faiveley
Sri Rail Brake Co. Ltd
China
ä
50%
Faiveley Transport
Alpha SAS - France
ä
28
100%
100%
Faiveley - Annual Report 2006/2007
100%
ä
100%
Faiveley Transport
Australia Ltd
Australia
ä Spain
ä
ESPAS SAS - France
100%
Faiveley Transport
Polska z.o.o. - Poland
72%
Faiveley Transport
Italia Spa - Italy
ä
ä
100%
Shanghai Faiveley
Railway Technology
Co. Ltd - China
ä
Faiveley Transport
Pilzen sro
Czech Republic
Faiveley Transport
Birkenhead - United Kingdom
51%
ä
ä
8.72%
100%
100%
ä
Faiveley
Transport
do Brasil
ä
Faiveley Transport
Nordic AB - Sweden
100%
ä
Faiveley
Transport Metro
Technology Co. Ltd
Thailand
100%
Germany
ä
49%
ä Beteiligungs
100%
ä
ä
Faiveley Metro
Technology Co. Ltd
Shanghai
Faiveley
Transport
Far East
Hong Kong
Faiveley
100%
ä
100%
ä
Faiveley Transport
Tamworth
United Kingdom
ä Faiveley Transport
100%
Faiveley Transport
Korea Ltd
Korea
Iberica S.A. - Spain
100%
Transport
ä Faiveley
Belgium
100%
ä Transequipos
Spain
ä
49%
S.W. Shavaran Ltd
Iran
A comprehensive offer of system solutions
VIDEO SURVEILLANCE
SYSTEMS
AUXILIARY CONVERTERS
PANTOGRAPHS
AND HIGH-TENSION
EQUIPMENT
AIR CONDITIONING
PLATFORM SCREEN DOORS
ON-BOARD ELECTRONICS
COUPLERS
BRAKE SYSTEMS
BRAKE DISCS
INTERIOR DOORS
ACCESS DOORS
MASTER CONTROLLERS
BRAKES AND COUPLERS
THE BROADEST RANGE OF PRODUCTS AVAILABLE ON THE MARKET
AIR CONDITIONING
Faiveley’s systems are fundamental for trains, designed and developed around key imperatives such as
security, reliability, and comfort.
ELECTROMECHANICAL PRODUCTS
ELECTRONIC PRODUCTS
The goal of our on-board equipment, complemented by our platform screen doors, is to achieve ever-fuller
integration. By creating synergies amongst our products and systems, we aim to define more economical,
competitive solutions – positioning Faiveley as the constructors’ and operators’ natural choice for getting
projects off the ground.
Photography credits: B.Collet - Getty Images - G.Liesse - C. Recoura - P. Sautelet - P. Sordoillet - DR.
Design, copywriting and page layout:
Annual Report 2006-2007
Annual Report 2006-2007
Contents
One Step Ahead
Faiveley S.A.
Limited Liability Company with a Management Board
and a Supervisory Board with a share capital of €12,529,585.
Carrefour Pleyel, 143, boulevard Anatole-France
FR-93285 Saint-Denis Cedex - France
Tel.: +33 (0) 1 48 13 65 00
Fax: +33 (0) 1 48 13 65 54
Faiveley
www.faiveley.com
E-mail: info@faiveley.com
2 The Chairman’s message
4 Governance
5 Shareholder’s Manual
6 Significant events
7 Key figures
8 Strategy
9 Outlook
10 Faiveley’s Worldwide Presence
12 Customer Services
14 Brakes and couplers
16 Air conditioning
18 Electromechanical products
20 Electronic products
22 Research and development
23 Human Resources
24 Industrial coherence
28 Legal structure
29 Faiveley Group
Consolidated Financial Statements
77 Faiveley S.A. parent company
Financial Statements