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FAIVELEY ACTIVITY REPORT 2014/15

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Page 1: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... HVAC components assembly Shanghai, China

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

Page 2: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... HVAC components assembly Shanghai, China

F A I V E L E Y

onev i s i o n

CEo’s 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

Page 3: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... HVAC components assembly Shanghai, China

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

Page 4: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... HVAC components assembly Shanghai, China

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 world’s 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 Group’s

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

V i S i O n

Page 5: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... HVAC components assembly Shanghai, China

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.

Page 6: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... HVAC components assembly Shanghai, China

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.

Page 7: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... 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 SW4 distributor Amiens, France.

Page 8: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... HVAC components assembly Shanghai, China

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

O n e V I S I O n

Stéphane Rambaud-meaSSon, Chief exeCutive offiCeR of faiveley tRanSpoRt and ChaiRman of the management boaRd, diSCuSSeS the 2014/15 finanCial yeaR and the Company’S 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 €1.877 billion,

a testimony to the renewed confidence

of our customers in Faiveley Transport.

Sales passed the billion-euro mark

for the first time in the company’s 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 year’s 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 year’s 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 12 major sites by the end

of 2015/16, with 12 sites also being certified

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

in financial terms, our sales target

is €1.3 billion for 2017/18, with a

Group operating 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, which have all become

more demanding, as well as life-cycle cost

optimization, and the ever growing importance

of after sales: less than a decade ago,

Services represented less than 30% of our

sales: today it’s more than 40%, and rising.

in may 2015, you unveiled creating value 2018. What is its scope?

We devoted a great deal of time and energy

to drawing up Creating Value 2018. it is

a mid-term plan for rebuilding and projecting

a vision for our company moving forward.

it has five key building blocks and sets out

our objectives for customers, shareholders

and our teams. in each of our product lines

and our geographies, we are currently either

the market leader or among the top three;

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Activity report 2014/15 FAiveley trAnSPort 11FAiveley trAnSPort Activity report 2014/15 10

O n e V I S I O n

* newcomers. (1) Over the 2014/15 financial year.(2) Figures restated for iFRS 10,11 and 12 impact.

From left to right:

our executive committee

the gRoup enhanCed itS exeCutive Committee

in 2014/15 by appointing new membeRS with

an inteRnational baCkgRound.

Stéphane Rambaud-meaSSOnChief Executive Officer

and Chairman of the Management Board

GuIllaume bOuhOuRSChief Financial Officer

Member of the Management Board

SImOn ChaRleSWORthVice President Sales & Marketing

thOmaS FeSeRVice President Corporate Development

OlIVIeR RaVItPresident Energy & Comfort

Ralph FüRdeReR *Chief Technology Officer

Jun he *President China

JéRôme SpenCeR *President Services

alaIn deSChêneS *Vice President

Operations

lIlIan leROuXPresident Brakes & Safety

RémI CauSSePresident Access & Mobility

Jérôme Spencer and Jun he have joined as Presidents

of the Services and China Divisions respectively.

Alain Deschênes is Vice President of Operations

and Ralph Fürderer is our Chief Technology Officer.

Along with overseeing our Faiveley Worldwide Excel-

lence improvement program and other operational

initiatives, the Executive Committee was closely

involved with the drawing up of Creating Value 2018.

The plan was designed pragmatically in three distinct

stages over a six-month period, starting with top-

down guidance from Stéphane  Rambaud-Measson to

our Divisions and Group functions as to the key needs

and objectives. The Divisions Presidents and other

senior Group executives then put forward proposals

for achieving those targets. Members of the Executive

Committee subsequently made adjustments, accord-

ing to Group priorities, and allocated resources.

sales pass €1 bn euro marK for 1st time

Several factors contributed to this result: the Group’s ability to ramp-up serial production for major projects, a marked improvement in customer satisfaction and the growth of our Services Division. The dynamism of the freight business in the uS also played a key role. Sales were consistent across all our regions.

a record order booK

The Group achieved a record order intake in the second half of the year – for both Original Equipment and Services, highlighting the progress made in our recovery program. Renewed customer confidence was underlined by a record backlog, which stood at approximately 30 months for Original Equipment and 10 months for Services.

an increase in operating profits

Group operating profit rose by 8.7% over the period, despite localized cost overruns in certain projects and significant turnaround investments.

These positive figures reflect the Group’s renewed strength in project execution and the subsequent increase in customer satisfaction.

our performance 2014/15

€1,048 millionsales in 2014/15

€63.6 millionfree cash floW

9.1%group operating

margin

order book(in millions of €)

sales and operating margin(in millions of €)

2014(2)20132012201120102015 20152014(2)2013201220112010

957988

901914876

13.9%13.5%11.2%

9.2%

10.4%

1,0481,877

9.1%

+13.1%(1) +9.5%(1)

1,6601,616

1,690

1,453

1,301

2014(2)20132012201120102015 20152014(2)2013201220112010

957988

901914876

13.9%13.5%11.2%

9.2%

10.4%

1,0481,877

9.1%

+13.1%(1) +9.5%(1)

1,6601,616

1,690

1,453

1,301

Operating margin (% of sales)

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12

3

4

FAiveley trAnSPort Activity report 2014/15 12

O n e V I S I O n

our market

identified in original equipment

The outlook for Faiveley Transport is a positive one, with the Original Equipment market set to grow from €5.1 billion in 2013-14 to €5.3 billion in 2016-17. That forecast also reflects a number of long-term trends. A combination of population growth and increasing urbanization means that mass transit will be the main driver of this rising market, especially in the Asia-Pacific region. At the same time, a growing environmental awareness will favor the rail sector, while a number of network operators will face the need for fleet renewal.

While urban transit will lead the way, the locomotives market is expected to increase, particularly as a result of major projects in emerging countries, and the high-speed segment is forecast to remain stable. in terms of geography, China and north America will provide most of the growth, though metro projects in india will also contribute. A market slowdown is anticipated in Europe, driven by lower volumes in high-speed and regional EMu.

1 Western europeExpected market decrease, despite new projects

Major investments in metro and commuter networks (London, Berlin, Paris region)

Market slowdown in high-speed and regional EMUs

Lack of funding in Southern Europe

3 chinaStrong market with continued growth

Sustained demand for high-speed trains

Steady growth in inter-city segment

Continuing development of metro segment, driven by urbanization

Emerging LRV segment with large investments

2 north americaDynamic market dominated by freight

Freight market still pulled by strength of US GDP* (sustained need for new locomotives; wagons market at its highest level in 2015-16)

One large very high-speed order expected

4 indiaEmerging market with real potential

Authorities providing stimulus for economy, including rail sector

Rapid growth of metro segment

Major locomotive projects resumed

S T R A T E G y

Our mid-term plan is designed to maximize Faiveley Transport’s potential for profitable growth

and competitiveness over the 2015-18 period. To achieve this goal, we are focusing on five strategic

building blocks: Shape, Execute, Create, Develop and Grow talent. These building blocks involve

all the key operational aspects of our business, and each of them is structured around detailed

action plans and clear deliverables. Together, they will enable us to create value for customers,

shareholders and the Group as a whole.

creating value 2018

4 key strategic geographies

Source: Faiveley Transport internal estimates. * Growth Domestic Product.

Page 11: · PDF fileFaiveley Transport is a global supplier of engineering solutions for the railway industry. ... HVAC components assembly Shanghai, China

Shape2018

CREATINGVALUE

Activity report 2014/15 FAiveley trAnSPort 15FAiveley trAnSPort Activity report 2014/15 14

O n e S t R at e G y

The global reach and the internal organization

of Faiveley Transport are two topics of crucial

importance to the Group’s future. As a result,

we have developed strategies that will shape the

way we do business in both areas. in terms of

our industrial footprint, the strategy is two-fold:

to develop manufacturing and supply bases in

low-cost regions, while strengthening engineer-

ing and project management at our established

Centres of Competence.

developing our WorldWide footprint

As an example of this strategy, Faiveley Transport

is investing in a new industrial site near Plzen

in the Czech Republic that will replace existing

facilities in the country at Blovice. initially, the

new plant will focus on pantograph assembly,

but its scope will later be expanded to include

the assembly of brake, coupler and door compo-

nents. Covering 20,000 square meters, it will be

Faiveley Transport’s second largest production

facility worldwide and will employ 400-450 people

when it reaches peak capacity in 2018. Similarly,

the Group also plans to develop its existing indus-

trial presence in india, which is currently focused

on brake systems but which will be extended to

include other product lines. The twin objective in

india is to satisfy growing local demand and to

also meet the export needs of a number of major

train manufacturers who have chosen india as an

offshore industrial base.

handing poWer to the divisions

From an organizational point of view, the shaping

process also focuses on two areas; our operat-

ing Divisions and our functional departments. For

the Divisions, the emphasis is on giving them full

responsibility for their activities – and providing

significantly increased resources to enable them

to deliver on their objectives. Those resources

include project management, engineering, qual-

ity, procurement and the supply chain. That same

desire to concentrate resources where they can

be most successfully deployed is also behind the

creation of the China Division. led by Jun he,

the new Division is equipped with its own man-

agement team to ensure full alignment with the

Chinese market in terms of products, costs and

specific customer requirements. it will also enable

Faiveley Transport to respond rapidly to a grow-

ing market and reflects our determination to be a

world-class player.

more independence for human resources and finance

Creating Value 2018 provides a new model for the

Finance and human Resources functions, which

will now operate as independent business part-

ners from the sites and Divisions. This will allow to

implement a stricter governance as well as allow

to standardize key processes across the organiza-

tion. The change will also see human Resources

and Finance providing improved services to the

Divisions as their business partners.

faiveley tRanSpoRt iS Shaping itS induStRial footpRint

and oRganization to meet the needS of an inCReaSingly

global CuStomeR baSe. CompetitiveneSS and effiCienCy,

whiCh aRe eSSential foR the gRoup’S long-teRm futuRe,

aRe the inSpiRation behind theSe impRovementS.

Stéphane Rambaud-meaSSOnChief Executive Officer and Chairman of the Management Board

“competitiveness is absolutely central to creating value 2018. Where we operate around the world and how we are organized will be decisive for the delivery of competitive solutions to our customers.”

Adapt our industrial footprint and our organization to improve

our performance and our competitiveness.

Achieve operational excellence, in terms of Quality, Project

management, On-Time Delivery in order to provide full satisfaction

to our customers and improve our financial performance.

invest in Product and System innovation to maintain a

technological edge, meet customers’ needs and improve

our competitiveness.

Focus and accelerate our commercial initiatives to

achieve steady and profitable growth that outpaces the rail

market.

Promote a shared culture and a working environment which foster talent development and

team commitment.

Shape execute Create

develop grow talent

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Activity report 2014/15 FAiveley trAnSPort 17FAiveley trAnSPort Activity report 2014/15 16

O n e S t R at e G y

faiveley tRanSpoRt haS been a leading teChnology pRovideR foR

the Railway induStRy foR almoSt a CentuRy and ouR CommeRCial

SuCCeSS haS been built on a longStanding talent foR innovation.

CReating value 2018 will fuRtheR StRengthen that link between

new ideaS and maRket needS.

Create

To achieve our aim of consistently being best- in-

class for manufacturing and project execution,

Faiveley Transport has embarked on a Group-wide

change program focusing on two critical areas;

standardization, through the ongoing Faiveley

Worldwide Excellence (FWE) program, and gov-

ernance, which is being strengthened by a number

of different strategic initiatives. Their common goal

is to deliver customer satisfaction and improved

financial performance.

delivering on faiveley WorldWide eXcellence

The FWE Program was launched during the fis-

cal year 2013-14 and is designed to standardize

the way we operate across our organization. it is

structured around two main blocks; the Faiveley

Management System, which sets out the model

and best practices for managing all of our business

activities, and the internal Control manual, which

defines the way we identify, assess and deal with

risk. Both these aspects of FWE are supported by

the rollout of new, global iT tools that will harmo-

nize our procedures in three key areas – Enterprise

Resource Planning (ERP), Product Data Manage-

ment (PDM) and Customer Relationship Manage-

ment (CRM).

The tools, which will facilitate cooperation among

different teams involved in the same project, will

also enable the Group to measure its performance

in these areas. Currently being deployed across

all Faiveley Transport sites worldwide, a minimum

of 10 of our locations will have the new ERP sys-

tem installed by May 2016. An important element

As a market leader in its industry, Faiveley Transport

devotes 2% of Group sales – excluding customer

projects – to its Research and Development pro-

grams. innovation, both at a product and a system

level, provides not only the means to maintain our

technological advantage and meet the evolving

needs of our customers, but also to improve the

competitiveness of our solutions.

the demand for energy efficiency

The Group’s R&D activities are closely aligned to

a number of key trends among our customers,

led by the need for greater energy efficiency and

a reduction in mass. With energy representing a

significant share of train operators’ overheads,

there is a growing requirement to reduce power

consumption in all electrical equipment, whether

for new builds or retrofits. By the same token,

car builders and operators are also seeking a

reduction in the mass of train components and

sub-assemblies, given the relationship between

weight and energy cost. Clearly, both these trends

also address the far broader issue of the trans-

port sector’s carbon footprint. integrating new,

more energy efficient systems and lighter weight

components to their rolling stock can make a real

contribution to the sustainability objectives of

network operators.

a neW generation of products

Two other current trends are the demand for

ever-higher levels of reliability, so as to maximize

asset availability, and both a reduction in the initial

of FWE is certification, which will be delivered

following an internal audit to ensure that a site

has met all the program’s objectives. Our aim is to

have six sites certified by May 2016, and a further

six by May 2017.

strengthening our operational functions

To strengthen our operational governance, we

have established a Project Management Office

(PMO). The PMO has a broad mandate that

includes defining project management best prac-

tices, the training and coaching of project man-

agers, and conducting performance audits on

our project portfolios. Our ability to accurately

meet customer requirements and to achieve both

on-time and on-quality delivery depends heav-

ily upon having an efficient project management

organization, and support by effective project

governance. Along with the PMO, we have also

introduced a Group Operations Department, a

Supplier Development Program and a series of

strategic initiatives in the area of purchasing and

the supply chain. To support our sites in delivering

these changes efficiently, the Group has provided

an appropriate level of staffing, and recruitment

where necessary.

product cost and an optimization of the total

life cycle cost. Two examples of that innova-

tion at work were presented in September 2014

at innoTrans, the rail industry trade fair in Berlin:

the new generation of axle-mounted brake

disks, the Faiveley neoFlexx® Disc, and a new

ultra-compact door mechanism for mass transit

applications, ESP4C®.

improving life-cycle cost for operators

The Faiveley neoFlexx® Disc offers lower wear

rates and a high resistance to mechanical and

thermal stress. These features significantly extend

its lifespan – thereby reducing operating costs –

and improve its performance. Produced by a

revolutionary manufacturing process involving

electron beam welding, the unit is also 25 kilo-

grams lighter and more energy-efficient than con-

ventional discs and conforms to rail industry uiC

and European En standards. using a more effi-

cient manufacturing process also means signifi-

cantly shortening market lead times. ESP4C® has

meanwhile been developed with service-proven

components for sliding plug doors in the light rail

and metro markets. The mechanism features an

optimized design in terms of space and weight,

low sound emissions and high levels of quality

and reliability.

opeRational exCellenCe iS key to CuStomeR SatiSfaCtion,

whiCh in tuRn dRiveS ouR finanCial peRfoRmanCe. to aChieve

thiS exCellenCe we aRe deploying StRategiC initiativeS

and impRovementS foCuSing on the way we manage ouR pRojeCtS

and opeRationS, all with the objeCtive to SeCuRe ouR quality

and on-time deliveRy CommitmentS.

execute

alaIn deSChêneSVice President Group Operations

“faiveley Worldwide excellence is a transversal and focused program for improvement. Within this context, we are determined to become world-class in project management and will devote all necessary resources to achieve this.”

Ralph FüRdeReRChief Technology Officer

“sustainability and energy consumption have become key issues for the railway sector. our product innovation roadmaps are very clearly focused on improving the efficiency of our customers’ equipment – and the industry as a whole.”

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Activity report 2014/15 FAiveley trAnSPort 19FAiveley trAnSPort Activity report 2014/15 18

O n e S t R at e G y

With more than 5,700 employees around the

world, harnessing the talent and spirit of team-

work among our people is a priority for Faiveley

Transport as it looks to the future. in terms of tal-

ent development, the Group will be taking a more

proactive approach to identifying, developing and

motivating our high-potential employees, across

both functions and geographies.

a shared corporate culture

We will also review policies in the area of incen-

tives at every level of the organization, and estab-

lish a greater emphasis on employee feedback

and succession planning. As part of our 2015-18

strategic plan, all of our talent initiatives will be

reviewed on a quarterly basis by senior man-

agement. We will also be devoting considerable

attention to the way that individuals work together

as a team and share a common set of values.

having completed a year of transition, in which

a largely site-based organization has been trans-

formed into operating Divisions with a consider-

able degree of autonomy, a key focus of Creating

Value 2018 will be to promote a shared culture;

One Faiveley.

values eXpressed by employees

As part of that promotion exercise, the Group will

communicate internally about the three shared

values – “Reliable–Collaborative–Passionate” –

that emerged from our change process. Each of

these reflects the way we view our industry, our

customers and ourselves, and will be used in

decision-making processes moving forward. it is

also significant that these values were not cas-

caded down by senior management. They are

instead the result of an exercise carried out dur-

ing 2014-15 among a number of our employees at

multiple sites. Theirs are the voices and opinions

expressed in these values.

it iS an aCCepted faCt that whateveR advanCed teChnologieS

it may poSSeSS, a Company iS only aS good aS itS employeeS.

faiveley tRanSpoRt iS Committed to pRomoting a ShaRed CultuRe

in whiCh ouR people Can flouRiSh and develop theiR talent.

teamwoRk iS alSo an eSSential paRt of that CultuRe.

grow talent

The Group’s target over the 2015-18 period is to

grow faster than the rail market as a whole. To

achieve this, we will concentrate our commer-

cial efforts in three areas: specific geographies,

services and M&A opportunities. in geographical

terms, Faiveley Transport has four strategic mar-

kets: China, india, north America and Western

Europe. The first three markets offer significant

potential, either through their intrinsic rail mar-

ket growth, or because of the opportunities to

increase our market share in certain segments.

Western Europe remains the Group’s core region,

due to its size and its role as a base for major car

builders and their engineering teams – including

for projects in emerging markets, such as the Mid-

dle East and South East Asia.

developing our services to customers

A second key activity will be to accelerate an

already successful strategy of developing the

Group’s Services Division. having worked with

our major customers for many decades, Faiveley

Transport has accumulated a huge installed base

of equipment. The challenge is to further unlock the

full potential of that base, principally by adopting

proactive sales strategies and being systematic in

the way we deploy them. Our objective is to posi-

tion Faiveley Transport as a ‘one-stop shop’ for

our customers and to demonstrate how we can

meet their needs across the full spectrum of ser-

vices, equipment and parts. in terms of our market

offer, we will expand the range of our engineering

services and seek to maximize sales volumes. in

part, we will achieve this through operational excel-

lence that is aligned to the needs of our custom-

ers and helps them to achieve their fleet availability

objectives. We will also aim to develop sales by

proposing equipment retrofits that, for example,

offer lower energy consumption, lower weight,

increased reliability and improved life-cycle cost.

increasing our sales activities

As part of this strategy, the Group is already

entering into an increasing number of long-term

commitments with customers to provide ser-

vices over the entire lifetime of the equipment. To

support the development of the Services Division

portfolio, the Group will also be strengthening its

sales and engineering teams and deploying a

series of growth initiatives among the customer

base. Forming innovative new partnerships with

operators, where we can share maintenance pro-

grams, will be another commercial objective in

the years ahead.

seeKing opportunities for acquisitions

Finally, along with organic growth, the Group will

also seek to increase its position in high-growth

markets through external growth opportunities.

The aim here will be to consolidate the Group’s

position, either in a given market segment or a

specific region, or in a complementary technol-

ogy, with the intention of creating value over the

medium term. Typical areas could include safety-

related components and safety electronics.

Steady, pRofitable gRowth iS a majoR taRget of CReating value 2018.

to fuRtheR develop ouR buSineSS, faiveley tRanSpoRt

will foCuS on maRketS in key RegionS of the woRld, itS StRength

in SeRviCeS and the potential foR gRowth thRough meRgeRS

and aCquiSitionS.

develop

faiveley transport:a set of shared values

reliableWe can be counted on. We deliver our

commitments with integrity. We are accountable and trustworthy partners.

collaborative

We work as a global team. We listen to and respect each other. We share our knowledge

and believe in our collective contribution.

passionateWe are passionate about railways.

Passion and expertise are the pillars of our craft. We build on them

to address our customers’ needs creatively and swiftly.

GuIllaume bOuhOuRSChief Financial Officer

“faiveley transport has a wealth of talent among its many teams around the world. the challenge now is to help our most gifted people to reach their full potential in their chosen careers.”

thOmaS FeSeRVice President Corporate Development

SImOn ChaRleSWORthVice President Sales and Marketing

“creating value 2018 is a plan for growth. We will be focusing our resources wherever we see opportunities to significantly develop the business – whether that involves geographies, products or other companies.”

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FAiveley trAnSPort Activity report 2014/15 20

O n e S t R at e G y

Our product Divisions - Brakes & Safety, Energy & Comfort, and Access & Mobility – are responsible

for the design, manufacture and marketing of our equipment. The Services Division then provides

maintenance, retrofits and spares that enable customers to optimize the availability and life-cycle

cost of our products. All of these activities have been brought under one roof in the China Division,

so that our teams can tailor our equipment and services to meet the precise requirements of the

world’s biggest railway market.

P O R T F O l i O

a solid platform for growth

thRough a CleaR aCtion plan, CReating value 2018

iS deSigned to fuRtheR impRove the finanCial

peRfoRmanCe of faiveley tRanSpoRt.

The successful delivery of Creating Value 2018 will

lead to sustained growth for Faiveley Transport, and

an improvement in the key indicators of the Group’s

financial performance. Our strategic goals are there-

fore linked to a series of precise financial objec-

tives, notably with a projected rise in sales from

€1.05 billion in 2014/15 to €1.30 billion in 2017/18.

Among the factors driving this growth will be a con-

tinued development of our Services Division, which is

expected to account for more than 47% of total sales

by the end of the plan, compared to 42% in 2014/15

and less than 30% more than a decade ago.

increases in group operating profit

As our industrial footprint continues to expand and

our ability to address growth markets increases,

we also forecast a rise in the share of sales out-

side Europe from 39% to more than 45% of total

sales over the same period. The plan will also drive

a sustained improvement in the competitiveness of

Faiveley Transport – an essential feature of Creat-

ing Value 2018. The combination of our develop-

ing footprint, improvements in contract execution,

the deployment of innovative new products and

our sales development should deliver a significant

increase in margins, from 9% to 11-12%. Exclud-

ing any external growth through M&A activity, these

percentages would translate as Group Operating

Profit of €125 million to €140 million.

a positive corporate turnaround

Clearly, the Group will be heavily investing in new

plant, new teams, equipment and iT systems as part

of its strategic plan. As a result, capital expenditure

is expected to increase to approximately 3.5% of

sales over the next two financial years. Once this

deployment phase is complete, capex is forecast to

come back to its historical level of 2.2% in 2017/18.

Overall, the Group’s free cash flow generation should

remain strong, with more than €110 million free cash

flow generated from 2015/16 to 2017/18. Faiveley

Transport’s positive financial results for 2014/15, in

terms of order intake, backlog, sales growth and free

cash flow are both an indicator of the turnaround in

the Group’s performance and an encouraging sign

for the period covered by Creating Value 2018.

€1.3 billionsales in 2017-18

financial objectives

> €110 millionfree cash floW

generation cumulated over 3 years

11% to 12%group operating margin

Before restructuring

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O n e p O Rt F O l I O

access & mobility

Two distinct activities are covered by the Access & Mobility Division, each having its own

business unit. A complete range of doors and access products cover both the external and

internal doors of all types of train, and are marketed as Original Equipment to car builders.

Faiveley Transport is meanwhile the market leader worldwide in platform screen doors and

automatic gates, supplying both the door systems and the surrounding glass and metals

panels. Some 32,000 modules have been delivered to train manufacturers, civil engineering

companies and rail authorities since the range was fi rst launched in 1989 – an installed base

that would stretch for 170 kilometers if laid end to end.

delivering on major projects, securing neW orders

The twin focus in 2014-15 was to ensure progress on a series of existing major contracts,

notably door systems for Germany’s iCx high-speed trains, and to secure new orders from

both ongoing and new projects. The Division achieved all of these objectives during the year.

Series production of the doors for Siemens and Bombardier is on track, while new follow-on

orders have been secured in France for door systems for a further 40 TGV high-speed trains,

along with another 34 Regiolis and 30 Regio 2n regional trains. The Division also delivered a

strong performance outside Europe, securing contracts for the Salvador metro in Brazil and

the East-West Fleet Extension in hong kong. A highlight of the Division’s growing business

in Asia was a €15 million order in india to equip 486 cars using line 7 of the Delhi metro. The

contract is particularly signifi cant as it will be the fi rst access doors system to be manufac-

tured in india by Faiveley Transport, using our production facility at hosur, south of Bangalore.

Keeping metro trains moving

For platform doors, delivery continued on a series of major ongoing programs. A total of

40 projects are scheduled to be delivered between 2011 to 2020. To support our customer by

preventing any disruption to daytime commuter services, Faiveley Transport has developed a

special process for the retrofi tting of our platform doors and gates for the lille metro project in

northern France. This innovative process enables sections to be installed during a three-hour

period overnight, when the lille network is closed. Two new contracts stood out during 2014-

15, in Sydney and Riyadh. The fi rst platform doors in Australia will be installed by Faiveley

Transport, following a €35 million order from the northwest Rapid Transit consortium. Plat-

form doors and gates will be provided for the north West Rail link, Sydney’s new rapid transit

rail system. in Saudi Arabia, Faiveley Transport has been awarded a major platform door

contract by Ansaldo STS for line 3 of the Riyadh metro. As part of a fl agship infrastructure

project in the Middle East, full-height doors that have been specially engineered to cope with

the climatic conditions will be supplied for 44 platforms.

25COUNTRIES HAVE BEEN SUPPLIED WITH FAIVELEY TRANSPORT PLATFORM DOORS AND GATES

RémI CauSSePresident Access & Mobility

“in terms of platform doors, creating value 2018 will help us to focus on standardizing our offer, reducing installation time and delivering innovation with our clear-flowtm product. for access doors, the development of lighter, more compact products will gradually transform our portfolio. together, these initiatives will help the division to become even more competitive.”

1 Platform doors 2 Automatic platform gates 3 Access doors 4 Movable step and ramp

for disabled person 5 Interior doors

Door leaf painting inspection Saint-pierre-des-Corps, France.

Automatic platform gates installation helsinki, Finland.

improved access and comfort with clear-flowtm

As metro services everywhere continue to grow and station platforms become ever busier, the demand for platform screen doors has followed a similarly upward trend. For more than a quarter of a century, Faiveley Transport has made a major contribution to passenger safety and the effi ciency of metro operators as the world’s No. 1 supplier of platform doors. To maintain that position, we are continually creating new solutions. Based on the product presented to the public for the fi rst time at

the InnoTrans trade fair in Berlin during September 2014, our latest development is Clear-FlowTM, a new type of platform gate that offers higher, safer and aesthetically improved platform edge barriers. Designed to facilitate installation for both new build and retrofi t projects with its modular approach, the gate was presented at InnoTrans with lean-to seats on the fi xed part of the barrier. Along with improving the comfort and safety of passengers, Clear-FlowTM also enhances station architecture.

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Activity report 2014/15 FAiveley trAnSPort 25FAiveley trAnSPort Activity report 2014/15 24

O n e p O Rt F O l I O

brakes & safety

To refl ect the wide diversity of its markets, the Brakes & Safety Division features three busi-

ness units: transit brakes, freight and couplers. That diversity is refl ected not only in their

product portfolios, but also in the types of solutions needed by our customers. Our brakes

for transit systems are designed for high speed, regional, metro and tramway networks alike,

and cover the entire command chain from the handle in the driver’s cab to the brake disks and

pads on the wheels. The transit brakes market is largely project-based and driven by a high

degree of customization for each contract.

in contrast, the freight sector is characterized by off-the-shelf products that share a great

deal of commonality. Faiveley Transport supplies a range of wagon brake components to

this market, including a very successful integrated bogie brake that offers high-performance

braking while reducing the wagons’ tare weight. The freight business unit also produces a

wide range of buffers.

Over the past year the Division has refi ned its portfolio of couplers following the acquisition

in 2013/14 of Schwab Verkehrstechnik AG, a leading Swiss-based supplier of both couplers

and buffers.

meeting the needs of a groWing marKet in india

Among the major orders received during 2014-15 was a contract from Alstom Transport for

brake systems and couplers to equip trainsets destined for the kochi metro in kerala, South-

ern india. Our hosur facility in india will be involved in the engineering and manufacture of

these systems. Faiveley Transport also has a production facility in Baddi, northern india,

which is largely dedicated to the needs of the national operator indian Railways.

in Europe, new orders for braking systems were placed by Bombardier and Alstom for the

Regio 2n and Regiolis regional trains respectively. As part of its portfolio, Faiveley Transport

has the market’s most advanced sanding system – for improving adhesion between vehicle

and track. Orders in 2014/15 included units for the Siemens inspiro metro lines in Riyadh and

a fl eet of Siemens Vectron locomotives purchased by Finland’s state railway.

major orders in north america and for couplers

For freight, the year witnessed signifi cant growth in north America, where the Group operates

through a majority-owned joint venture, Amsted Rail-Faiveley (ARF). With 73,000 car builds

over the period, Original Equipment sales rose 113% as ARF delivered a record year in terms

of sales, with improvements in On Time Delivery playing a key role in enabling ARF to respond

to this increased market demand.

Along with the kochi contract, orders for the couplers business unit included part of a

€7  million project to equip some 250 cars of the lima metro in Peru.

98%ON TIME DELIVERY BY ARF JV’S PLANT IN GREENVILLE, USA

lIlIan leROuXPresident Brakes & Safety

“for brakes & safety, the 2015-18 strategic plan will drive our transition to becoming one of the most efficient players in the market. from brakes to couplers, the aim is to increase efficiency at every step of project execution – a process that will involve greater standardization and modularization of our products.”

1 Couplers and/or Draw gear 2 Buffers and self lubricated

buffers 3 Air Generation and

Treatment Unit 4 Brake Control (Pneumatic,

electro-pneumatic and electronic)

5 Brake frame 6 Wheel and axle mounted

discs 7 Disc and tread brake units 8 Magnetic track brake 9 Sanding 10 Pantograph Compressor

Brake frame assembly amiens, France.

Coupler assembly Witten, Germany.

staying safe with parklock® brakesWhether it’s stationary freight wagons at a customer location or locomotives at a rail yard, parking brakes have an important role to play in ensuring safety and protecting operators’ assets. Faiveley Transport not only has an established track record in this fi eld, but a commitment to innovation. At the InnoTrans trade fair in Berlin during September 2014, the Group provided a worldwide preview of its latest development in this area – the ParkLock® concept. ParkLock® offers twice the braking force compared to previous parking brakes, yet requires only half the amount of space – due to its reduced number of components. This new concept replaces the spring system with a mechanical block of the service brake, which is already present in the system. Along with its superior braking performance, the concept offers several other benefi ts: as a light, compact product, ParkLock® contributes to vehicle lightweighting – and a positive impact on energy consumption – and also offers greater reliability. Taken together, these elements also provide an improved life-cycle cost for the customer.

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O n e p O Rt F O l I O

energy & comfort

demetra: driving energy efficiency from the cabKnown in the industry as On Train Metering, the ability to accurately measure a train’s electricity consumption has never been more important. Two factors are driving this – the growing deregulation of electricity grids means that operators need accurate billing for their trains, while the need to lower energy consumption and the rail industry’s carbon footprint has become increasingly urgent. Faiveley Transport is a leader in this fi eld with its Demetra energy meters, and in 2015 we began delivering the largest contract in Europe since the EU standard for meters (EN50463) was introduced. Some 600 Demetra systems are now being retrofi tted to 300 of the SNCF’s TGV high-speed trains. Along with precise billing information, studies have shown that a train driver’s ability to monitor consumption in real-time can lead to energy savings of up to 25% per journey. Demetra can be installed in a matter of hours, avoiding any costly downtime to train operators.

The creation of the Energy & Comfort Division brought together most of the products related

to a train’s energy management chain – from its source in the pantographs to its various

applications throughout the cab and cars, with the exception of traction. The Division oper-

ates through two business units: Power & information (P&i), and heating, Ventilation and

Air Conditioning (hVAC), where Faiveley is the market leader worldwide. The Division's key

objectives are to identify and further develop future product synergies and to meet needs

common to all our customers or namely to reduce weight as well as the space envelope, to

increase effi ciency and to reduce energy consumption and maintenance costs.

Faiveley Transport is already doing so by making its latest hVAC systems more compact and

equipping them with energy-saving features such as built-in DC to AC power inverters that

regulate consumption according to need and reduce life-cycle costs.

a leadership position in the World marKet

in the hVAC sector, Faiveley Transport’s business unit remains a world leader, setting the

rail industry standard with a global business presence and production facilities in Europe,

the united States and China. its systems provide heating and cooling in driver cabs and

passenger cars alike, and are constantly being improved. in 2014/15, a decision was taken

to produce hVAC units for local and export markets in Faiveley Transport’s plant in hosur,

south of Bangalore, india. The Power & information portfolio covers the full spectrum of pan-

tographs and poles, roof-mounted switches and contactors, Auxiliary Power Supplies (APS),

passenger information systems, CCTV, energy meters, event recorders, radars and speed

sensors. With the exception of pantographs and APS, the Group's markets for these product

areas had mainly been based in Europe or embedded in Western European car builders’ plat-

forms. The formation in 2014/15 of a global, centralized sales organization for P&i with fi ve

key Regions will enable the business unit to become a truly international force.

innovation that drives neW business

A contract with Singapore Rail Engineering in 2014/15 underlined how our commitment

to product innovation is a driver of new business. An order worth more than €45 million

was secured to upgrade the hVAC and APS systems of 85 trains – comprising more than

500 cars – in Singapore’s mass transit network. A milestone contract not only due to its size,

it was also a powerful illustration of the benefi ts of our hVAC systems, featuring integrated

inverters, thereby providing energy savings, optimized weight and lower life-cycle costs for

the customer. The year also saw two separate hVAC contracts for the Riyadh metro, with a

€15 million order to equip 238 Siemens metro cars and a €5 million order for 138 Alstom units

that will be manufactured at the new production unit in hosur, india.

€15 millionNEW CONTRACT FOR PANTOGRAPHS, HVAC AND COUPLERS IN LIMA

OlIVIeR RaVItPresident Energy & Comfort

“our twin focus is on developing innovative and competitive systems that bring real value to the customer - and building ever-closer relationships with those customers. all of these commitments are shared by the 2015-18 plan. our r&d projects, the development of our industrial footprint and further enhancements in reliability will be key to achieving this.”

HVAC unit assembly leipzig, Germany.

1 Pantograph 2 Energy meter 3 Switch 4 Auxilliary power

converter 5 Heating, Ventilation

and Air Conditioning 6 Driving Aid

and recording 7 CCTV and passenger

information

Pantograph head assembly – Test laboratory – Saint-pierre-des-Corps, France.

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O n e p O Rt F O l I O

services

Relay valve assembly leipzig, Germany.

upgrades: a valuable toolfor cost efficiencyProviding rail operators with the means to run their trains more cost-effectively is at the very heart of the Services Division’s offer. One way of achieving that is to supply upgrades that offer improved functionality, and can be rapidly installed without affecting surrounding equipment. An example of this approach is Faiveley Transport’s electrically actuated door cylinder, the Electric Cylinder Drive & Lock, which is now entering service. The system has been developed for easy retrofi tting as a straight replacement for pneumatic door mechanisms, providing increased reliability and enhanced safety features. While providing a number of performance benefi ts, the new design enables customers to keep all their existing frames and door leaves. This same commitment to providing customers with value-added solutions also applies to other systems, notably for mid-life overhauls of HVAC installations.

The largest of Faiveley Transport’s fi ve Divisions by sales, Services deals with after-sales

activities that can last for years or even decades. The Division’s success refl ects a number of

factors: a recognition by customers of the quality and value of our services; a large and grow-

ing installed base; a growing trend in Europe towards the contracting out of maintenance;

and the challenge facing operators to maintain increasingly high-technology equipment. The

Division is divided into three business units – Engineering Services, Friction Pairs and Spare

Parts. Engineering Services provide commissioning, training, overhauls, repairs and mainte-

nance. Scheduled maintenance helps to maximize an asset’s availability, potentially over a 30

or 40-year period, and is provided by local service teams backed by Centres of Competence.

Mid-term overhauls of rolling stock are another important area, enabling customers to install

newer, more effi cient equipment. The Division’s R&D team is dedicated to developing retrofi ts

that are non-intrusive, quick and easy to install, and offer customers a short-term payback.

upgrade packages are also available.

controlling costs through computer simulation

Friction Pairs covers the engineering, homologation, manufacture and sales of brake disks

and linings, along with brake pads. The disk activities cover all types of rolling stock and, for

linings, are concentrated on high-performance sintered brake pads. in the spares segment,

Faiveley Transport parts offer a guarantee of quality and safety that is internationally recog-

nized. it is also an offer that continues to evolve. On request, the company can provide com-

puter simulations of a train’s mission profi le – based on the type of train, distances travelled,

type and frequency of braking, number of cars etc. – to propose an optimized, long-term plan

for disk and pad consumption.

a year of records

Services account for 42% of Faiveley Transport’s sales and an exceptional year saw the Divi-

sion achieve record sales of €436 million, a 10.7% increase over the 2013-14 fi gure – itself

a record year. Orders also broke company records. Among the highlights was a €45 million

contract to modernize more than 200 mainline and suburban passenger coaches of Algeria’s

national rail company, the Société Nationale des Transports Ferroviaires (SnTF). The Services

Division also secured its largest ever hVAC overhaul contract, worth €7 million, to upgrade

the hVAC systems of 36 high-speed trains for the Swedish State Railways (SJ). The award

by ABB of Switzerland follows an earlier €10 million order for upgrading the door systems

of the same trains. Along with the sales achievements in 2014-15, the Division also earned

independent recognition of its value to customers by winning the SnCF’s annual Excellence

Trophy award for parts and services.

202COACHES TO BE MODERNIZED FOR ALGERIA’S SNTF

JéRôme SpenCeRPresident Services

“for services, creating value 2018 underlines the fact that we are not just providing parts and maintenance – we are selling enhanced performance to our customers. that means continuing to invest in innovation, quality and cost control, and being proactive in proposing our solutions to the market.”

Hammer head assembly on brake cylinder amiens, France.

1 Installation 2 Commissioning

and training 3 Corrective

maintenance 4 Upgrades 5 Remote diagnostic

and predictive maintenance

6 Reliability and maintainability studies

7 Friction pair 8 Routine maintenance 9 Overhauls

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O n e p O Rt F O l I O

china

With its rapidly growing economy and population, China has become the world’s biggest

single market for mass transit rail systems and locomotives. in the high-speed sector, China

is a larger market than all the other countries combined. no fewer than 36 cities are currently

planning to build a mass transit network with at least 120 kilometers of track, as the coun-

try’s population becomes increasingly urbanized. Tramways, or light Rail Vehicles, are also

emerging as a growth sector as city authorities respond to the challenge of urban mobility. At

the same time, Chinese manufacturers are becoming major exporters in the rail industry, with

markets in South America, South East Asia, the Middle East and Eastern Europe. To reflect

this market’s importance, Faiveley brought together all its different business activities in the

country as a dedicated China Division in May 2014. The Division has some 1,300 employees

in six operating companies, between two subsidiaries based in Beijing and Shanghai, and

four joint ventures in Shanghai, Datong, Shijiazhuang and Qingdao. Together, the various

companies provide brake systems, hVAC, doors, couplers and air compressors.

a global player With a local presence

For certain products, the company’s presence in China is essentially marketing and distribu-

tion. For others, such as hVAC and doors, that presence covers the full product cycle of

R&D, engineering, manufacturing, sales and service. Between these two positions, a grow-

ing proportion of Brakes and Safety equipment is being manufactured locally. Moving for-

ward, increasing the degree of localization across the product range, whether through organic

growth or new partnerships, is a major objective. As elsewhere, sales and marketing can only

be carried out after a product has been homologated by the national rail authority.

in China, that homologation process for brakes, doors and other safety-related components

is extensive, comprising technical specifications, committee reviews and in-service testing

over 600,000 kilometers. Faiveley Transport currently has brake systems for several high-

speed platforms undergoing homologation by China Rail.

a reliable partner for shanghai’s tramWay

During 2014-15, Faiveley Transport tendered for its first ever order for hydraulic brakes in

China, announcing the contract award in April 2015. The equipment will be installed on

30  trams using the first two lines of Shanghai’s new Songjiang District tramway system,

a network that is scheduled to expand to six lines and 118 stations by 2020. Along with

contracts and business integration activities, the Division also used the period to prepare

for “China Quality year”, which began April 1st, 2015. This major new program is devoted

to improving local customer satisfaction by focusing on quality standards in products, pro-

cesses, delivery and services.

Jun hePresident China

“clearly, the watchword for the china division over the 2015-18 period is ‘growth’. our contribution to creating value will be to develop our localized product portfolio and our manufacturing presence in china, and to achieve growth by winning new business and working with new partners. customer satisfaction will be a priority.”

Door leaf glass bonding inspection Shanghai, China.

HVAC components assembly Shanghai, China.

Door operator assembly Shanghai, China.

Glue clearance after door

leaf bonding Shanghai,

China.

high growth in a high-speed market

For the high-speed rail industry, China has moved from being a new entrant to becoming the world’s dominant force in little more than a decade, a remarkable achievement. It has the world’s largest HSR network at 16,000 kilometers and the world’s longest line – the 2,298-kilometer route from Beijing to Guangzhou. It also leads the way in terms of journeys, with more than 100 million trips being made on the Beijing-Shanghai line alone in 2014(1). After a process of technology transfer and joint ventures with European and Japanese train builders, China has now become a major trainset producer. The CRRC Corporation, created by the merger in June 2015 of former rival state-owned companies CNR and CSR, claims to be the largest rolling stock supplier in the world(2). Faiveley Transport is positioning itself for this growing market, with our Brakes & Safety Division having submitted equipment for homologation aboard three Chinese-made trains: the CRH3G, the CRH3A, which is based on the Siemens Velaro, and the CRH2-250, a localized version of the Japanese Shinkansen family.

(1) Source: Xinhua, China’s official news agency.(2) Source: CRRC Corporation statement, June 2, 2015.

€1.6 billionCHINA’S ESTIMATED OE EQUIPMENT MARKET IN 2016-17

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FAiveley trAnSPort Activity report 2014/15 32

“together, we share the same vision of being reliable, collaborative,passionate. We aim to be one faiveley.”

Stéphane Rambaud-meaSSOn

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Design and layout:

Writing: Trevor Huggins.

Translation: RWM Translation.

3d illustration: Manuel Bortoletti.

Photo credit: Christophe Recoura,

Patrick Sordoillet.

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with share capital of €14,614,152�

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tel�: +33(0)1 48 13 65 00fax: +33(0)1 48 13 65 54

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