A great name
in the automotive industry
12 _ Message from the Chairman
15 _ Executive Committee
16 _ Significant events
18 _ Human resources
12 _ Sustainable development
From initial concept to finished product: Faurecia’s capabilities
16 _ Acquisition
20 _ Innovation
24 _ Development
28 _ Production
32 _ Key figures
36 _ Stock market information
With 60,000 employees working at 160 sites in 28 countries and annual sales
of €10.7 billion, Faurecia is a major name in the automotive industry.
As experts in the design, development, production and delivery of six major
vehicle modules, namely seats, cockpits, acoustic packages, doors, front
ends and exhaust systems, Faurecia adopted two years ago a common
working method called the Faurecia Excellence System (FES). This continuous
improvement system, based on best practices taken from within and outside
the Group, creates value for customers, shareholders and employees alike.
In 2004, the Group’s priority was to explain and deploy the Faurecia Excellence
System throughout the organization. This initiative will continue until all of
Faurecia’s businesses are covered, from initial concept to finished product.
MESSAGE FROM PIERRE LÉVI
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
2004 marked a new phase in Faurecia’s drive for As far as progress with the automakers is concerned, although
continuous improvement. our top three customers, PSA Peugeot Citroën, Volkswagen
and Renault-Nissan, still account for almost two thirds of our
With sales growth approaching 8%, a further 0.4 percentage
annual sales, we also increased our business particularly with
point improvement in the operating margin, net income
DaimlerChrysler, Ford, General Motors and Toyota in 2004. The
increased by a factor of eight, and a reduction of our debt by
main vehicle launches in Europe this year are representative
almost €200 million, the 2004 results confirms our dynamism.
of this progression. Examples include DaimlerChrysler’s
Faurecia’s continuous improvement initiative is the realization
Mercedes SLK and Smart Forfour, the Ford Focus and Escape,
of our strategy to grow with the automakers by continually
the Pontiac G6 and Opel Astra from General Motors, and the
offering more in terms of innovation, and to match the
Toyota Corolla Verso to name just a few.
profitability of the best in the industry.
2004 was also a year of rapid growth for the Group outside
In terms of growth, 2004 was a particularly good year with
Europe. Although it accounts for less than 15% of the Group’s
annual sales up in all product lines, in all geographic areas
annual sales, growth outside Europe contributed around two
and with the majority of automakers.
percentage points to its overall growth in all regions.
Automotive Seating saw the most pronounced growth with
In North America, we are making headway with the US
sales increasing 11% in 2004. Indeed, the seating market
automakers in all our core businesses. 2004 saw an increase
is growing and becoming segmented with, for example,
in automotive seating business with General Motors and
the widespread availability of rear seats offering numerous
exhaust system business with Ford. With DaimlerChrysler
movement and storage options. 2004 saw the launch of many
we are at the beginning of a period of growth.
Faurecia-equipped vehicles where the second or even the third
row of seats can be folded away into the car’s floor to make In China, we are following our main customers as they move
a completely flat space. into the regions of Shanghai, Changchung and Wuhan. We will
soon have full production facilities set up there covering our
Exhaust Systems also performed well with an increase in sales
core businesses of seating, interior systems and exhaust
of almost 9%. The new and forthcoming standards for the
systems. In South Korea, we are continuing to develop our
processing of emissions should continue to make innovation
exhaust system business with Hyundai. In Japan, we opened
in exhaust systems a matter of increasing importance,
a Development Center in Shin-Yokohama to increase efficiency
particularly with the use of particulate filters for diesel engines
and bring us closer to our Japanese customers.
likely to become more widespread.
In South America, there has been an upturn in the automotive
On the basis that they would be more appropriately developed market that has had a highly beneficial effect on our business.
by companies more specialized than Faurecia in these areas,
Faurecia can continue to grow only if it remains innovative and
we sold two minor, non-strategic product lines: steering columns
competitive when bidding for contracts. That is why we have
to Fuji Kiko and the Mechanics and Environment activity to PSA
decided to considerably increase the number of innovation
projects we have in the exploratory phase. This initiative called
“1,000 ideas” will ensure that we are more creative and
MESSAGE FROM PIERRE LÉVI CHAIRMAN AND CHIEF EXECUTIVE OFFICER
selective when deciding which ones to pursue. By the end Seven values define the attitudes of responsibility and
of 2004, we had already achieved 50% of this objective. commitment necessary to ensure long-term success. They
We will be able to see the positive impact of the initiative now form the basis of Faurecia’s corporate culture and as such
in the next few years and get more out of the 5.6% of our are an important aspect of our individual and Group performance
annual sales invested in R&D. appraisal system. With more than 1,600 managers and
professionals recruited in 2004, the introduction of individual
Clearly, it has been a year of rapid growth. However growth
career development plans is a priority for Faurecia, as are
and profitability can only be built on the constant pursuit
internal mobility and the development of its employees’ skills
of the optimum global cost position and, at the same time,
at all levels of the organization from operators to managers.
on the trust our customers place in us. This confidence is
based on our capacity to master the development, launch and Our commitment to continuous improvement also extends
production of our modules across the ten-year cycle from the to our Safety and Environment policy, which is constantly
initial invitation to bid until production of the vehicle ceases. being added to, particularly in the areas of safety at work,
workstation ergonomics and environmental protection. Half
In structural terms, our cost position is developing favorably
of the Group’s sites have now been granted ISO 14001
with the redistribution of our manufacturing sites and our panel
certification. Faurecia’s move to join the UN Global Compact
of suppliers. We opened ten new sites in 2004, mainly outside
and the introduction of a Code of Ethics demonstrate our
Western Europe, in Romania and Slovakia, South Africa,
commitment to adhere all over the world to the universal
China, the USA and Mexico.
principles of respect for human rights, the right to work and
At the same time, we are reducing the number of suppliers
by picking the best and encouraging them in turn to attain
a better-cost position. We will be facing a particularly difficult environment in 2005,
since, in addition to poor market conditions, we will suffer the
Faurecia’s efficiency and the trust our customers have in us rely
effects of the highest increase in raw materials prices in thirty
on the competence and motivation of our 60,000 employees.
All our personnel are trained and then involved in the deployment
of the Faurecia Excellence System, which aims to achieve In this respect, I know that I can rely on the motivation and
excellence in terms of development and production. As an expertise of all Faurecia’s employees to continue to exceed
example, all the Group’s plants and programs are now measured our customers’ expectations and strengthen their trust in us.
against the same frame of reference, and the Excellence System The men and women of Faurecia all care about designing,
audit provides a means of comparing and measuring progress at developing and producing modules that, in terms of perceived
all sites. quality, safety, comfort and respect for the environment,
contribute to the success of our customers’ vehicles and
We have already seen the initial benefits. In two years, we have
reduced both the number of industrial accidents in the plants and
the number of defective parts (PPM) delivered to our customers I am convinced that, despite the impact of the increase in raw
by a factor of three. We have also improved with respect to many materials prices and driven by continuous improvement,
other indicators and plan to continue in the same way over the Faurecia can achieve lasting growth.
A culture of responsibility and commitment is being established.
All the plants are adopting an organizational structure in which
the operators themselves resolve problems, as close as possible
to the point where they occur. Teamwork, led by the management,
makes each person responsible for monitoring improvement
Left to right, top to bottom
_ Patrick Bikard
_ Gérard Breining
_ Gérard Chochoy
Chairman and Chief Executive Officer Group Industrial Management Group Purchasing Automotive Seating Business Group
Arnaud de David-Beauregard
_ Jean-Michel Elter
_ Jean-Marc Hannequin
_ Laurent Hebenstreit
Group Development Group Customer Development Exhaust Systems Business Group Interior Systems Business Group
_ Bruno Montmerle
_ Christophe Schmitt
_ Pierre-Jean Sivignon
Group Communications Group Strategy Components Business Group Chief Financial Officer
_ Guy Talbourdet
Group Human Resources Modules and Systems Business
2004 SIGNIFICANT EVENTS
single delivery all year and
02 03 for never exceeding the set 07
A NEW SEAT FRAME PLANT FAURECIA JOINS THE UN EMPLOYEE EMPOWERMENT
IN CLEVELAND, MISSISSIPPI, GLOBAL COMPACT BENEFITS QUALITY
The Group joined the UN 06 Largely due to Employee
The Group announced the Global Compact, confirming Empowerment, Faurecia’s
refurbishment of an existing its international commitment FAURECIA COLLABORATES automotive seating plant
facility in Cleveland, to this initiative. WITH A DESIGN SCHOOL
at Brebières, France reduced
Mississippi, USA, dedicated The Compact promotes Eight teams of students the number of defective parts
to the production of seat the respect and development from Strate College, an delivered to the customer
frames for its customers’ of human rights, the right international design school by a factor of 43 between
various platforms. The site, to work and environmental based in Issy-les-Moulineaux the beginning of January and
which represents an protection. near Paris, France, exhibited the end of June 2004.The site
investment of $12 million, their futuristic vehicle interior improved the circulation
will provide 250 jobs by the design projects. The project, of information so that each
end of 2006 and bring 04 which lasted five months, operator was aware of the
Faurecia closer to its was carried out in close customer’s concerns and
American customers. cooperation with Faurecia’s were made responsible
BUSINESS GROUP WINS design and marketing for poor quality. In addition,
AWARD FROM TOYOTA specialists. The concepts –
ARGENTINA half-hour quality meetings
visionary yet firmly anchored were organized on the shop
The Buenos Aires site
in industrial reality – were floor at the start of each shift.
in Argentina, won Toyota’s
aimed at different socio-
Golden Award for its
cultural groups and covered
performance in logistics and
aspects such as interior
the Silver Award for quality.
architecture, life on board,
Faurecia won the logistics
storage and trim.
award for not missing a
FAURECIA OPENS A NEW DEVELOPMENT
CENTER IN JAPAN
The new development center at Shin-Yokohama, Japan, will bring together all of Faurecia’s
activities at the same site, namely seating, interior systems, front ends and exhaust
systems. The opening of this new center emphasizes the Group’s desire to strengthen
ties with Japanese automakers, with the aim of becoming their preferred partner.
FAURECIA RECEIVES SYNTES COCKPIT RECEIVES
VOLKSWAGEN PRIZE INNOVATION AWARD
The Volkswagen Group Syntes, the structural
awarded Faurecia a prize in architecture of the cockpit,
GERMANY: ZERO ACCIDENT
RATE AT THE UNNA SITE recognition of its operational developed by Faurecia,
The Unna plant, Germany, performance. The award was and that is produced for
which makes seat frames for presented during a ceremony the Ford Group’s C-platform,
the Opel Vectra and Signum, in Warsaw, Poland. won an award from
Jaguar X-Type, MCC-Smart USA: NEW JIT SITE the Automotive Division
and Ford Focus, Mondeo INAUGURATED of the Society of Plastics
and Fiesta, cut its FR0t IN AUBURN HILLS, 11 Engineers (SPE) for the most
rating (number of workplace
MICHIGAN, USA innovative application
accidents per million CHEVROLET MALIBU SEATS of plastics in vehicle
RANK FIRST IN J.D. POWER
hours worked) from 20.2 interiors.
in September 2003 to 0 in 10
The seats for the Chevrolet
September 2004. This result Malibu, manufactured by
On October 12, 2004, in
was achieved thanks to an Faurecia, were named “best
the presence of Gene
awareness program initiated
in class” in the mid-size 1 million
by the management team vehicle category in a quality
focusing on safety at work
of the G6 line at This is the number
survey carried out by J.D.
using Faurecia Excellence
General Motors, Pierre hours without
Power & Associates in the
Lévi officially opened accidents with
the just-in-time work stoppages
manufacturing site of
recorded by the
10 Auburn Hills, Michigan, PLANT RECEIVES FORD North America
USA, which produces Q1 LABEL Division of the
complete seats for Thanks to the rigorous Exhaust Systems
NEW EXHAUST SYSTEMS
PLANT IN CHINA the Pontiac G6. Auburn application of FES methods Business Group,
Faurecia opened a new Hills supplies General and tools, Faurecia’s JIT which employs
manufacturing site at Motors’ Lake Orion plant in Cologne, Germany, 1,500 people
Changchun in the Jilin plant. specializing in interior and manages
province of Northeast China. systems, has recorded seven sites.
The site produces mufflers, no quality faults or late
catalytic converters and BEST INNOVATOR 2004 deliveries. As a result,
complete exhaust systems AWARD FOR FAURECIA Ford granted the site the Q1
for the Audi A6, Volkswagen Faurecia was selected from award just fourteen months
Jetta, FAW Red Flag and among ten finalists to receive after production started
Mazda 6. the “Best Innovator 2004” on the Ford Fiesta 3-door.
award for its “Innovation
management process”. The
award, which was presented
in Paris by the French minister
for Research, François
d’Aubert, is sponsored
by AT Kearney and the
French magazine L’Expansion.
SKILL DEVELOPMENT The deployment of Employee Its deployment develops work
Empowerment is a fundamental lever practices at the sites and is organized
Faurecia has always considered for Faurecia’s industrial performance. according to six priorities:
that its employees are its principale Forming the basis of the Faurecia
asset and that the development Excellence System (FES), it supports 1. 2004 saw an acceleration in the
of their skills is key to the Group’s the whole system by developing transfer of skills to operators,
success. The company’s commitment the role of management and the which allows for problems to be
to skill development is manifested competence of our teams, as well as resolved as close as possible to the
in the deployment of Employee the working methods that will ensure point where they occur. Each site
Empowerment for the benefit continuous improvement. identifies the activities that can be
of all staff and in the introduction taken on board by the production
of a specific management system teams and organizes the transfer
aimed at its engineers and managers. of skills to the operators concerned.
In addition, to increase responsiveness 3. Operational communication 5. Professional development
and the ability to adapt to customers’ has also been strengthened within within the Group is another priority.
changing requirements, Faurecia is the Group. Indeed, operational Faurecia provides opportunities for its
training operators to work at several efficiency depends on the ability personnel to develop professionally,
workstations thus making the most to communicate quickly. A daily based on the development of
of employees’ job flexibility. process of communication with each polyvalence on the shop floor. Certain
This is reinforced by Organizing team means that problems are dealt career paths have been defined in this
Human aspects of Production, which with more quickly. Operational way. An operator will, for example,
is underpinned by a maximum of four communication is also about making have the opportunity to become
hierarchical levels. The size of each dedicated communication zones a GAP leader with responsibility for an
team is reduced, enabling managers available to all staff to ensure Autonomous Production Group before
to monitor and develop the total transparency of performance becoming a Supervisor. The Group
performance of each individual. indicators displayed in each workshop. makes promotion conditional
on mastering the job and makes
2. In addition, teamwork has also 4. 2004 also saw the further professional development one of the
been developed. This is a necessity integration of the continuous basic drivers of its own development.
for Faurecia, even more than individual improvement initiative. Employee
performance improvement, because Empowerment makes continuous 6. Employability has also been
it determines the Group’s ability improvement the responsibility developed. Faurecia develops
to satisfy its customers’ requirements of teams and individuals. At Faurecia, technical and behavioral skills
in terms of quality, cost and delivery each team is responsible for defining of employees by giving them
(QCD). The roles and responsibilities its performance indicators in terms additional responsibilities and through
of each person are clearly defined. of quality, cost, delivery and people the development of team-working
(QCDP), measuring them and methods. This gives Faurecia the
improving them. Each manager plays image of a dependable company that
a key leadership role in this process. helps to increase the employability
Faurecia University develops and implements training programs
designed to enhance the development of managers and
professionals, as well as specialist skills. The training program
aims to ensure the success of the organization’s core businesses.
The university also contributes to the deployment of the Faurecia
Excellence System, in close cooperation with the Group’s
industrial management department. Faurecia University therefore
plays a leading role in building a strong corporate culture. Finally,
all the training courses put in place demonstrate Faurecia’s
commitment to investing in the development of its employees.
Throughout 2004, almost 3,000 employees participated in training
programs run by Faurecia University. This represents an increase
of more than 27% compared with the previous year. Faurecia
University provided over a million hours of training in the Group
of its personnel both internally managerial staff were highlighted development of Faurecia’s managerial
and externally. in 2004 by the declaration of a common staff of 8,000 people by focusing
value base to be applied on a day- on the following aspects: level of
Recruitment is crucial to the Group’s to-day basis. These behaviors, drawn performance, potential, succession
success and forms an integral part up on the basis of the seven Faurecia planning, mobility and identification
of its management and development values (transparency, accountability, of experts. Beyond the identification
system. To attract talented people, teamwork, drive, speed, entrepreneur and monitoring of individual action
the recruitment process has been and master your future), provide plans, this initiative is consolidated
made considerably more professional. a common frame of reference and by activity and by function.
In 2004, Faurecia recruited more than increase the ability of teams to work The main objective is to encourage
1,600 managers and professionals together. the emergence of talented individuals
on permanent contracts. In addition Performance management within internally and ensure they reach the
the Group is focused on recruiting Faurecia, based on the achievement highest levels of responsibility in
young graduates from selected of personal and group objectives, the company. For this reason, special
schools in each country. Bearing in evolved in 2004 and also incorporates attention is paid to succession
mind Faurecia’s specialties, priority an appraisal of behaviors with planning, a valuable career and
is given to engineering and technical reference to the seven Faurecia mobility management tool.
degrees. More generally, all values. Emphasis is also placed The company is committed to offering
management positions available can on structuring individual development its managers the opportunities for
be viewed on the Faurecia website. plans. These plans allow professional development that they
The installation of new recruitment for greater clarity and objectivity deserve within an international group.
software led to more than 100 positions in performance appraisal and the Mobility can be geographic, functional
being filled in less than six months. development of company employees. or organizational. In 2004, it affected
Career management is a major 12% of managers and professionals.
In the case of more experienced component of Faurecia’s Human The target for 2005 is 15%.
personnel, the Group gives priority Resources policy. Every year, all
to their capacity to progress within executive and managerial positions
the company and internationally. are monitored through a process
The Faurecia management model called the staffing review. This
and the behaviors expected of its analyzes the composition and
THE DEVELOPMENT Safety at work is one of the
OF ECONOMIC fundamental aspects the Faurecia
AND SOCIAL DIALOG Excellence System and is an
imperative condition that the Group
The European Works Council, set up owes to its employees. The company’s
in 2003 at a Group level, is a high-level progress in terms of safety and
consultative and discussion body working conditions intensified
to complement the contractual policy throughout the year. At an individual
and social dialog being developed plant level, initiatives raising the
within the European subsidiaries. The management’s awareness with regard
second meeting chaired by Pierre Lévi to moral, civil and penal responsibility
took place on June 9 and 10, 2004 of each individual, and the creation
at the Group’s head office in Nanterre, of HSE (Health, Safety and the
France. Environment) core teams on the shop
The policy of consultation and 12 floor are already resulting in the
negotiation continues to evolve introduction of more accident
This is the number of sites
in all the subsidiaries. Agreements prevention measures. Similarly,
opened by Faurecia in 2004.
on working hours and job flexibility the introduction of model production
In detail, Automotive Seating
have been signed in Portugal, Spain, lines (see page 30) has meant that
acquired four new sites, including
Germany and France. In 2004, more prevention measures can be
two in the United States,
all companies in France reached integrated into the manufacturing
one is a just-in-time site in
an agreement on wages. In addition, processes by revising safety
Auburn Hills, Michigan,
with the signing of seven profit-sharing regulations at the same time
that supplies General Motors,
agreements, almost all companies are as other Faurecia Excellence System
and the other is in Cleveland,
now covered by this scheme. In Spain, standards.
Mississippi. The other two sites
several single-plant collective On the subject of ergonomics
are located in Talmaciu,
bargaining agreements at a plant level in the working environment, Faurecia
Romania and Wuxi, China.
have been signed (Vitoria, Burlada has for several years been aware
Exhaust Systems has also
and Vigo). And finally in Germany, of Musculo Skeletal Disorder (MSD).
opened four new sites. Three
local negotiations have led to As far back as 1998, a prevention
of them operate in just-in-time
some innovative cost-reduction policy was drawn up by the
mode – Poissy, France, for PSA
and flexibility solutions, thereby Automotive Seating Business Group
Peugeot Citroën, Rastatt,
maintaining jobs that would to define the available ergonomic
Germany, for DaimlerChrysler,
otherwise have been threatened. analysis tools and to implement a series
and Lordstown, Ohio, USA, for
Program management, closely tied of corrective and preventive measures
Chevrolet. The fourth site was
to the life and commercial success designed to improve workstations.
opened at Hermosillo in Mexico
of our customers’ vehicles, calls for In 2004, the scope of this policy
for Ford. Interior Systems
constant redistribution of industrial was extended to the entire Group.
opened two new sites, one
and human resources. In 2004, An Ergonomics memorandum giving
at Kosice, Slovakia and the other
as in other years, Faurecia’s facilities the essential rules to be followed when
at Boeblingen, Germany. The
and their work loads were determined designing workstations, packaging
latter is a just-in-time site for
by several factors: close-proximity and supply flow racks, or the human-
support for customers, their machine interfaces and environment
Modules and Systems has also
performance in terms of quality, cost of the workstation, was disseminated
expanded with a new just-in-time
and delivery, and the commercial throughout the Group. It is designed
site at Rosslyn, South Africa.
success of the vehicles supplied. to be used as a training resource
Finally, a development center was
for all employees involved in work
opened at Shin-Yokohama, Japan
organization and workstation design.
in June 2004.
In 2004, the Group introduced a new The Group is determined to improve To ensure that the manufacturing
system for monitoring its Health, safety at work. For 2005, Faurecia processes do not contribute
Safety and Environment (HSE) has set an objective of a maximum to the depletion of natural resources
organization at its 160 sites. The of five workplace accidents per million or pollute the environment, during
system takes the form of a document hours worked (expressed as FR0t). 2004, the Group’s sites also set up
sent to each site every six months 91 sites have already achieved this environmental management systems
including a series of questions objective in 2004 accounting for more based on the ISO 14001 international
and monitoring indicators. The than half the Group’s sites. It is worth standard. Attaining this standard
questionnaire is a reflection of the pointing out, moreover, that some thirty is part of the Faurecia Excellence
Group’s responsible, consistent sites did not report a single accident System (FES). 73 sites had been
and long-term approach to the HSE during the entire year. At the end certified by the end of 2004.
issue. HSE contacts have been of December 2004, Faurecia was Note that only 30 sites in the Group
appointed at various sites and to date showing an FR0t rating of 8.7, a 46% are subjected to the self-monitoring
the network consists of the equivalent improvement compared with 2003. of their waste water and atmospheric
of around fifty full-time employees for A similar policy has been developed emissions imposed by the
the whole of the company. in ergonomics. government. All the sites concerned
proved to be in compliance with In addition, Faurecia officially joined company, in all Faurecia establishments
the regulations in force. The Group’s the UN Global Compact in March worldwide. It was drawn up and widely
other sites are not subjected to this 2004. This initiative unites private distributed, and is available on the
requirement because of either the type companies, UN bodies as well as Group’s Intranet site, so that all
or the intensity of their activity. associations and trade unions around employees have access to it and can
These indicators show that the ten universal principles of respect adhere to it at all times and under
organization of production within for human rights, the right to work all circumstances.
Faurecia takes the environment into and the environment. “Our
account. requirement for excellence is reflected
As an example, the Group has put in our continuous improvement
in place an ambitious plan to overhaul initiative”, explains Pierre Lévi,
its paint lines, all of which are now Chairman and Chief Executive Officer.
ready to use water-soluble paints, “Signing up to the Global Compact for
thus reducing the use of solvents. us represents a commitment to adhere
The new-generation paint lines are to these principles for the good of our
also equipped with incinerators employees and the environment in
capable of processing the effluent which we work. It will help us forge
when solvents are present. They have better links internationally and
also been designed to reduce energy promote the sharing of best
consumption. practices.” The Group is also
On a wider scale, Faurecia has committed to disseminating these
embarked on an ambitious plan to principals among its suppliers.
replace solvents with water-based Finally, in December 2004, Faurecia
substances, particularly in painting, published a Code of Ethics that was
but also for removing foam from molds drawn up in accordance with
and for thermocoating. This reduction Faurecia’s Mission Statement. This
in solvent use minimizes atmospheric code defines the basic principles
discharges and helps to prevent risks of behavior that must be applied
to employees and people in the on a daily basis in relations between
neighborhood. people both internally and outside the
FROM INITIAL CONCEPT TO FINISHED PRODUCT: FAURECIA’S CAPABILITIES
from initial concept
to finished product:
Acquisition, innovation, development, production
In a global industry where ten or so Faurecia takes into account new
automakers share 90% of the market, social trends, vehicle functionalities,
Faurecia has put the emphasis on modularity and design.
customer satisfaction and anticipating Innovation research is therefore
the expectations of vehicle users. focused more than ever on perceived
Instead of relying solely on its quality, safety, modularity,
technological expertise, Faurecia has environmental-friendliness and
had to extend its know-how from the integration of new functionalities,
production to engineering, even to the taking into account, for example,
extent of designing six major vehicle the increase in the number of
modules, working further and further on-board communication resources.
upstream on the automakers’ programs. Not forgetting, of course, the cost
The Group’s areas of expertise have of the vehicle. In all these areas,
as much to do with module and system Faurecia’s goal is to move forward
architecture as with industrial and innovate, and to this end
production control. For this, it is constantly improving.
FROM INITIAL CONCEPT TO FINISHED PRODUCT: FAURECIA’S CAPABILITIES • ACQUISITION
Winning trust and becoming a key partner
Considering that vehicles have a five In this context, the Group’s image
to seven-year lifecycle, Faurecia is of course vital. This image is built
must generate €1.5 billion in new around the Group’s capacity for
contracts every year just to maintain innovation, proximity to the customer
its sales at the level of the previous and a good understanding
year. The acquisition of new of the issues they face, the credibility
programs is therefore a key issue of our program teams, a solid
for the future of the Group. It relies program management system, sound
first and foremost on the trust that industrial processes and high-quality
the automaker has in Faurecia. products.
THE BEST by making sure that sales teams are The Customer Councils were set up
TECHNICAL SOLUTION kept constantly up-to-date, not only in 2004, as part of the Group’s
AT THE BEST COST with the latest innovations and the commitment to improving customer
Group’s program development and relations. The main role of these
In 2004, almost 300 sales personnel management capabilities, but also councils is to coordinate sales
from all over the world attended on product quality and services information across the organization
a conference focusing on the offered by Faurecia. In the process in order to gain a better understanding
challenges facing Faurecia. The first of acquiring new customers, the trend of our customers’ needs. Each council
point to be emphasized was the need nowadays is towards ever-closer is headed by a member of the Executive
for employees at all levels of the relations. In parallel, the Group’s Committee and includes representatives
company, including members of the employees must strengthen their from each product line.
Executive Committee, to strengthen capacity for innovation. In short,
their relationship with the customer the challenge facing Faurecia
and to highlight the credibility, in the next few years is to become
professionalism and experience a key partner for all the automakers
of our teams. by always being in a position to offer
The conference also focused the best service at the best cost.
on improving internal coordination
FROM INITIAL CONCEPT TO FINISHED PRODUCT: FAURECIA’S CAPABILITIES • ACQUISITION
A third of all new vehicles launched worldwide in 2004 –
almost 30 models – incorporate at least one of the six modules
that Faurecia produces.
The main launches include:
seat structures, cockpit,
acoustic package, front end
and exhaust system.
BMW 1 Series
cockpit and front end.
seats, doors, acoustic package,
front end and exhaust system.
doors, acoustics package
and exhaust system.
cockpit and doors.
seats, acoustic package
and exhaust system.
Renault Grand Scenic
seats, cockpit and acoustic package.
seat structures and cockpit.
seats and acoustic package.
Toyota Corolla Verso
seat structures, cockpit and front end.
Volkswagen Golf Plus
seat structures and acoustic package.
FROM INITIAL CONCEPT TO FINISHED PRODUCT: FAURECIA’S CAPABILITIES •• INNOVATION
Innovation, the driving force behind Faurecia
“Growth through innovation is a key With its “1,000 ideas” initiative,
component of our strategy and must launched in 2004 and designed
become our mind-set. We must rely to stimulate new ideas in terms of
on our innovation process to speed processes and products, the Group
up development of the best ideas more than doubled the number
and use them to win new programs.” of new projects compared
These words, spoken by Faurecia’s with the previous year. 433 new
Chairman and CEO Pierre Lévi ideas went into development and
at the Group Innovation Committee 593 other projects were being
Meeting in December 2004, evaluated at the end of the year.
sums up the importance What is the purpose of innovation?
of innovation for the company. Above all, to invent original technical
Research & Development, which solutions that, within the bounds
alone occupies 5,000 engineers of the automakers’ brand strategies,
in 28 development centers around give them the means to differentiate
the world, was allocated resources themselves. Innovation is therefore
equivalent to 5.6% of the Group’s a lever for growth that enables
sales in 2004. Faurecia to become a key partner.
More than 300 patents were filed new features: the Noveo system, into a single part, resulting in weight
in 2004 making it an important year available on the Toyota Yaris, and cost reductions as well as
for innovation at Faurecia. Volkswagen Golf Plus and Smart improvements in safety. In addition,
In addition, at the 2004 Paris ForFour, which allows the seat back to Syntes can be applied to all vehicles
International Motor Show, Faurecia be folded down onto the cushion with using the same platform and has
unveiled some of its latest innovations, one hand, or the Maxx system, already been fitted to more than
such as the double-walled floor for the providing a power-adjustment system 1.7 million vehicles, notably the Ford
Peugeot 1007, which incorporates for the second row enabling floors Focus and C-Max, Mazda 3, Volvo S40
numerous functions in a single part to be folded flat. 2004 also saw the and V50, resulting in widely differing
and represents real progress in terms introduction of PU cast skin, a new looks based on a common structure.
of safety. Other innovations include technology whereby liquid Syntes was given a 5-star rating by
the front end for the BMW 1 Series, polyurethane is injected into a mold; Euro NCAP and received an award
a lightweight, economical metal/plastic the resulting skin, with a feel very close from the Society of Plastics Engineers
hybrid, or the package tray for the to leather at a competitive price, (SPE) in the USA.
Renault Modus, which offers is already used for the door panels of
outstanding acoustic comfort. Beyond the Mercedes SLK. Another Faurecia
the Paris Motor Show, many other innovation is the Syntes metal/plastic
innovations were unveiled, particularly hybrid cockpit structure that integrates
in terms of modularity. Among these structural and air-distribution functions
Faurecia’s three key innovations in 2004
Syntes: this metal/plastic hybrid cockpit structure integrates structural and air-distribution
functions into a single part. It reduces vehicle cost and weight and also increases comfort
by reducing vibrations. It behaves extremely well in crash tests. Designed for a global
platform, it can be tailored for different makes of car and reduces capital outlay for the
mEasy: this system optimizes adjustments to the vehicle’s front end module by
mechanizing the alignment of the headlights and bumper system with the wings. It reduces
the amount of adjustment necessary to achieve correct spacing and flush-mounting
and therefore improves the vehicle’s perceived quality. It also reduces assembly time for
Particulate filter: thanks to this filter, soot particles in the exhaust are trapped
by a porous ceramic substrate and build up on the walls of the filter. Once the maximum
limit of particulate build-up has been reached, it is burned off by raising the temperature.
This mechanism is triggered by the engine control system with the intervention of the
catalytic converter further up the line. The filter is treated every 150,000 – 200,000 kilometers.
It significantly reduces the impact of diesel engines on the environment and incorporates
a mechanism enabling easy detachment from the catalytic converter.
FROM INITIAL CONCEPT TO FINISHED PRODUCT: FAURECIA’S CAPABILITIES •• INNOVATION
Faurecia also won the “Best devised a method of evaluating in the form of products or functions
Innovator” award in the “Innovation and developing quality as perceived for the benefit of both automakers
Management Process” category of an by the consumer (based on the Touch, and motorists.
award sponsored by AT Kearney and Appearance, Light, Color [TALC]
the French magazine L’Expansion. method). The evaluation is based
2004 also saw the launch of seven on the five senses and translates
new particulate filter systems fitted subjective feelings into concrete
to the Mercedes A, C and E Class. measures. Like all Faurecia teams
In short, the spotlight was turned on engaged in Research & Development,
all major areas of innovation this year, the design department monitors
including perceived quality, comfort the latest social, sociological and
(acoustic, thermal and postural), technological trends and throughout
safety, the environment, cost and 2004 was committed to developing
integration. The design department of the credibility of the Group’s
Faurecia’s Interior Systems Business innovation effort and “selling” it.
Group, a decentralized structure Teamwork among the R&D, marketing
consisting of 40 people based in and design departments has
France, Germany and the USA, has transformed ideas into reality
Mitis and innovation take shape
At Faurecia, innovation is not a fashion, it is an obsession, and we
needed a way of presenting it to automakers. Enter Mitis, which was
presented to the Group’s staff and customers starting in June 2004.
Mitis is a virtual demonstrator capable of presenting a coherent
selection of new concepts designed for the vehicle interior. Two key
areas were chosen by the designers and multi-disciplinary experts
who worked on the project: 1) defining new requirements of
consumers and 2) side impact. Mitis was able to show a side-on
collision to demonstrate several new solutions, including radar
to adapt the structure of the vehicle, a cross-car beam to strengthen
the vehicle body and an airbag located in the door.
FROM INITIAL CONCEPT TO FINISHED PRODUCT: FAURECIA’S CAPABILITIES ••• DEVELOPMENT
Solutions for every stage of vehicle development
Faurecia works together with technical and program management
automakers earlier and earlier in expertise. While the Group’s capacity
program development with the result for innovation is undoubtedly one
that its input is sought at every stage of its main strengths, another
of a vehicle’s development. Faurecia is its expertise in managing complex,
simultaneously develops 150 programs large-scale international projects.
a year with automakers thanks to its
This vital stage, development, in fact version of the PMS was produced, from its suppliers in 2004. In parallel,
comprises several phases and calls for incorporating the acquisition phase sourcing strategies based on cost
a wide set of skills. It requires a (anticipating the customer’s models have enabled precise
constant process of adaptation to requirements prior to any official identification of the competitive levers
customers’ projects and regular request for quotation). It includes used by the Group’s suppliers,
exchanges with them. It is for this procedures for determining technical and led to the setting of objectives
reason that customer specific teams challenges and planning product and the definition of a preferred panel
were appointed during the past year. launches, and enables a program’s of suppliers for each product sector,
The objective of these teams is, operational profitability to be particularly in low-cost countries.
together with the automaker, monitored even before the contract This strategy also helps to speed up
to develop a product tailored to has been awarded. the process of reducing the number
requirements in terms of functionality, Faurecia’s involvement further and of suppliers while improving their
style, brand positioning and cost. further upstream in the automakers’ quality.
It is also Faurecia’s responsibility development process has been
to validate the product, conduct one of the factors contributing
the necessary engineering and tooling, to a marked improvement in quality
design the production processes throughout the year.
and resources, and plan the logistics. At a purchasing level, it has become
These elements are described essential for suppliers to be
in the the Program Acquisition integrated into the development
and Management System (PMS) process. It is the Group’s
that provides a rigorous methodology responsibility to select and manage
and a common standard for the whole the suppliers for all programs.
Group. In the interest As a result, Faurecia saw a reduction
of continuous improvement, a new of more than 70% in quality shortfalls
FROM INITIAL CONCEPT TO FINISHED PRODUCT: AURECIA’S CAPABILITIES ••• DEVELOPMENT
Run at Rate,
or mass production trial
To check that a particular manufacturing process runs smoothly,
the Faurecia Group has strengthened its new product production start-
up procedures by developing a key phase called the “Run at Rate”.
This entails carrying out mass production trials of all production lines
well before start of production (SOP). It is used to check that quality
and quantity requirements are being met. The tests analyze
the non-stop, full-speed operation of the production system over
a period of up to eight hours, focusing on the functioning of
the machines, the competence of the operators and the implementation
of the Faurecia Excellence System. At least two Runs at Rate
are carried out for each program, one three months before SOP
and the other actually on start-up.
The number of suppliers that Faurecia
aims to have by 2007. The objective
is to work with the best and integrate
them further and further upstream.
FROM INITIAL CONCEPT TO FINISHED PRODUCT: FAURECIA’S CAPABILITIES •••• PRODUCTION
Produce and deliver optimum quality according to the same standards all over
Faurecia owes it to its customers not effort aimed at the Group’s
only to design innovative products, production teams and focused
but also to manufacture them all over on the deployment of the Faurecia
the world with optimum reliability. Excellence System (FES).
For this reason the Group has made The implementation of the FES has
manufacturing excellence one of its led to a more efficient organizational
main concerns. To achieve this, structure for the Group’s production
Faurecia’s approach to industrial activities, with a limited number
management needs to be understood of hierarchical levels, development
by all employees and its production of supervisory staff on the shop floor,
system has to be continuously and the introduction of management
improved. To this end, 2004 saw an teams comprising an average
enormous organization and training of five people.
In 2004 the Faurecia Excellence of training courses for employees, was also improved and now allows
System (FES) played a decisive role all of whom have been encouraged for comparison between sites and
in the Group’s continuous to take responsibility for ensuring that technologies.
improvement initiative, in terms of products are thoroughly checked. These indicators also concern
quality, cost and lead time. Its Secondly, productivity has been Employee Empowerment and
potential for improving production improved at the Group’s 160 sites the programs themselves.
processes has already been by working on production-line design These results were achieved only
recognized by its employees and as well as organization and thanks to a rigorous policy aimed
customers. ergonomics. Production flows were at 100% involvement of the Group’s
On the quality side first of all, Faurecia analyzed and product flow times employees. In this respect, 2004 saw
recorded a 40% improvement in reduced. To achieve this, Faurecia the widespread setting-up of GAPs
the quality rating of its products. adopted a method based on the (Autonomous Production Groups),
This is the result of a number requirements and constraints of small autonomous teams responsible
of initiatives carried out both with the workstation to determine all for their own performance in terms
suppliers, to reduce the number the upstream production processes. of quality, cost and lead time.
of defective components, and on the The definition of performance These teams are required to hold daily
production lines, with the introduction indicators for quality and productivity meetings to define specific objectives
Model lines arrive
at the plants
2004 saw the development of model production lines
at Faurecia plants. By the end of the year, all the
Group’s sites had at least one in place. What
is a model line? Each plant deploys all aspects of the
Faurecia Excellence System (FES) on a production line
in order to improve performance in terms of safety,
quality, productivity, logistics and Employee
Empowerment. For an average six-month period,
experts from the FES networks get all the employees
and functions concerned to work together to achieve
the level of quality sought, and when they find
a system that works, they put it into general use
throughout the plant.
FROM INITIAL CONCEPT TO FINISHED PRODUCT: FAURECIA’S CAPABILITIES •••• PRODUCTION
to be achieved and look at ways to
improve. Particular attention was paid
to GAP leaders and their level of
motivation and involvement.
Half of Faurecia’s plants
Almost half of the Group’s 160 sites now operate in just-
in-time (JIT) mode, which means that they are able to deliver
according to the customer’s manufacturing rate, catering
directly to their assembly lines, sometimes in less than three
hours. To meet these increasing demands while ensuring
the necessary level of reliability and safety, JIT plants are most
often in close proximity (less than 30 km to the customer),
or even within the automaker’s manufacturing facilities.
Interior vehicle modules
Other modules No. 2 in Europe, No. 4 worldwide
Door and door panel
Exhaust system No. 1 in Europe, No. 2 worldwide
No. 1 in Europe, No. 2 worldwide
Front end No. 1 in Europe, No. 3 worldwide
No. 1 in Europe, No. 2 worldwide
Instrument panel and cockpit
No. 1 in Europe, No. 1 worldwide
719.0 In €M
3,500.9 BY ACTIVITY
3,297.6 INTERIOR VEHICLE MODULES
•_ Interior vehicle
4,031.6 OTHER MODULES
•_ Front end
2001 2002 2003 2004
• Exhaust system
2004 sales increased to €10,719.5 million, a 5.9% rise over 2003. Excluding monoliths, at constant exchange rates and on a comparable
basis, sales increased by 7.9%. All of Faurecia’s modules contributed to this growth in sales, which was achieved with the majority
of Faurecia’s customers and throughout all global regions.
Faurecia’s sales* ORGANIC GROWTH MAINTAINED
Faurecia achieved its objectives in 2004 in the context
+0.7 of a 1% increase in European automotive production,
which is the Group’s principal market and accounts
automotive for 84.8% of sales.
2001 2002 2003 2004 * Excluding monoliths, at constant exchange rates and on a comparable basis.
SALES BREAKDOWN BY CUSTOMER
In % 2002 2003 2004
Others 3.9% PSA Peugeot Citroën 28.8%
PSA Peugeot Citroën 25.7 28.2 28.8 BMW 5.6%
Volkswagen Group 23.4 23.4 22.2 GM Group 7.2%
Renault-Nissan 16.2 15.5 14.4
Ford Group 10.0 8.6 8.6 DaimlerChrysler 7.8%
DaimlerChrysler 6.3 6.4 7.8
General Motors Group 7.2 7.1 7.2 Ford Group 8.6%
BMW 4.5 5.2 5.6
Others 5.4 4.2 3.9
Toyota 1.3 1.4 1.5
Volkswagen Group 22.2%
FAURECIA’S INTERNATIONAL ACTIVITIES
EUROPE OUTSIDE OF EUROPE
Other European countries 8.8%
North America 9.6%
United Kingdom 3.3%
South America 1.5%
Spain 12.1% Asia 2.9%
Other countries 1.2%
SALES BREAKDOWN BY COUNTRY
At constant exchange rates and on a comparable basis, Faurecia’s sales increased 9% in North America and more than doubled in Asia
for the year 2004.
2003 2004 NUMBER OF INDUSTRIAL SITES PER GEOGRAPHICAL AREA
France 42 41
Germany 27 28
In 2004, like all other years, Faurecia’s industrial footprint and the workload
Spain 21 21 of its plants were determined by a multitude of factors: geographical proximity
Portugal 8 8 to customers, performance of the site in terms of quality, cost and delivery,
United Kingdom 7 6 and the commercial success of the customers’ vehicles.
Rest of Europe (1) 21 23
(1) Rest of Europe: Austria, Belgium, Czech Republic, Hungry, Italy, Luxembourg, the Netherlands,
Poland, Romania, Slovakia, Sweden, Turkey.
North America (2) 13 16 (2) North America: Canada, Mexico, United States. (3) South America: Argentina, Brazil
South America (3) 10 10 (4) Asia: China, India, Japan, South Korea. (5) Rest of world: South Africa, Tunisia.
Asia (4) 8 10
Rest of world (5) 6 7
Total 163 170
FAURECIA’S FAURECIA’S PROFITABILITY
NUMBER OF EMPLOYEES WORLDWIDE* 2002 2003 2004 •_ EBITDA* (in €M)
•_ In % of sales
France 24,628 24,966 24,504 •_ Operating income (in €M)
Germany 11,355 10,317 10,304 • In % of sales 706.0
Spain 6,113 6,117 5,832
Portugal 3,032 2,896 3,003 586.1
United Kingdom 1,534 1,361 1,326 6.6
Rest of Europe (1) 5,001 6,163 7,605 6.3
North America (2) 4,958 4,790 5,386
South America (3) 1,192 1,295 1,770
Asia (4) 153 625 1,529
Rest of world (5) 912 1,048 1,248 3.0 3.4
Total 58,878 59,578 62,507
* Includes temporary workers. 2002 2003 2004
* Operating income + depreciation, amortization and
RECRUITMENT 2004 depreciation in value of property, plant and equipment
and intangible assets.
Germany 703 NET INCOME 198.3
Portugal 352 •_ Before goodwill
United Kingdom 185 • After goodwill
Rest of Europe (1) 1,219 120.5
North America (2) 1,639
South America (3) 693
Asia (4) 107 54.5
Rest of world (5) 272
2002 2003 2004
Faurecia’s employees are located at 160 sites in 28 countries. To attract talented
people, the recruitment process has been made considerably more professional.
In 2004, Faurecia recruited more than 1,600 managers and professionals
on permanent contracts.
(1) Rest of Europe: Austria, Belgium, Czech Republic, Hungry, Italy, Luxembourg, the Netherlands, Poland,
Romania, Slovakia, Sweden, Turkey. (2) North America: Canada, Mexico, United States. EBITDA/OPERATING INCOME
(3) South America: Argentina, Brazil. (4) Asia: China, India, Japan, South Korea.
(5) Rest of world: South Africa, Tunisia.
Operating income in 2004 was
€366.3 million and represented 3.4%
EVOLUTION IN WORKPLACE ACCIDENTS (FR0T) of sales, compared with 3.0% in 2003.
Faurecia has set an objective of a maximum of five workplace accidents per During the same period, EBITDA increased
million hours worked (expressed as FR0t). 91 sites have already achieved this to 6.6% of sales, versus 6.3% the
objective in 2004 accounting for more than half the Group’s sites. At the end previous year.
of December 2004, Faurecia was showing an FR0t rating of 8.7, a 63%
improvement compared with the beginning of 2003. NET INCOME
25 Net income before goodwill rose
to €198.3 million, an increase
of €77.8 million versus 2003. Goodwill
15 was €114.6 million compared
8.7 to €110.4 million in 2003.
10 Net income improved to €83.7 million,
FR0t 12 months rolling average up €73.6 million compared to
5.0 5.0 Objective FR0t by the end of 2005 the previous year.
1,707.1 1,695.7 1,903.5 1,896.0
NET DEBT SHAREHOLDERS’
In €M EQUITY
2002 2003 2004 2002 2003 2004
The control and reduction of debt is a major priority for Faurecia. Net debt has been reduced significantly and as of December 31,
2004 it was €1,497.5 million compared to €1,695.7 million at the end of 2003.
With shareholders’ equity of €1,896.0 million, gearing was 0.79 as of December 31, 2004 compared to 0.93 at the end of 2003.
531.8 380.0 378.3
CASH FLOW FROM CAPITAL
OPERATIONS 5.0 EXPENDITURES
_ _ 3.9
•_ In €M •_ In €M 3.4
• In % of sales 4.3
• In % of sales
2002 2003 2004 2002 2003 2004
CASH FLOW FROM OPERATIONS
Cash flow from operations in 2004 was €531.8 million or 5.0% of sales, compared with 4.3% of sales in 2003.
Capital expenditures were €378.3 million, 3.5% of sales versus 3.4% in 2003.
GROSS EXPENDITURE: €596.5 million (5.6% of sales)
NET EXPENDITURE: €272.8 million
NUMBER OF R&D AND D&D CENTERS: 28
HEADCOUNT: 5,000 engineers and technicians
Research and development expenditure was 5.6% of sales in 2004
and is a significant factor for Faurecia’s future growth.
STOCK MARKET INFORMATION
Fiscal year: January 1 through December 31
ISN code: ISIN FR0000121147
Nominal value: €7
Listed on the Euronext Paris, Eurolist
Stock eligible for deferred settlement (SRD)
FAURECIA’S SHARE PRICE EVOLUTION
% change as of Dec. 31, 2004
60 Compared to Compared to
58 Dec. 31, 2003 Dec. 31, 2002
54 Faurecia +16.6% +47.5%
SBF 120 adjusted +8.2% +26.4%
48 DS Autoparts
46 Europe adjusted +14.9% +77.6%
D J F M A M J J A S O N D
STOCK MARKET DATA 2004 2003 2002
Market capitalization at the end of the period (in €M) 1,399.4 1,199.9 947.6
Share price (in €)
- highest 69.60 73.90 61.40
- lowest 48.00 27.00 33.00
At year end (in €) 57.80 49.57 39.20
Shareholders’ equity per share (in €) 78.31 75.61 78.74
PER SHARE DATA 2004 2003 2002
Earnings per share after dilution (in €)
- Before amortization of goodwill 8.26 5.04 2.29
- After amortization of goodwill 3.49 0.42 (2.49)
Cash flow per share (in €) 22.29 18.18 15.69
Dividend (in €) 1.10* 0.91 0.91
- Tax credit - 0.455 0.455
- Total 1.10 1.365 1.365
* Dividend proposed at the Annual General Meeting on May 23, 2005.
SHAREHOLDER STRUCTURE 2004 2003
Number of shares outstanding at year end (in thousands) 24,212 24,206
PSA Peugeot Citroën 71.39% (83.6) 71.41%
Employees funds 0.36% (0.2) 0.37%
Treasury stock 1.57% - 1.71%
Publicly held 26.68% (16.2) 26.51%
(Voting rights in parentheses)
FINANCIAL INFORMATION AVAILABLE ONLINE AT www.faurecia.com
+33 (0)1 72 36 70 05
available on line at
(“finance & shareholders” section)
2, rue Hennape
92735 Nanterre Cedex – France
2005 Financial Calendar
& Full-Year 2004
& Full-Year 2004
presentations in Paris and London
Annual General Meeting, Paris
presentations in Paris and London
Photo credits: A. Gonin; S. Muratet; B. Schittny; G. Uféras/Rapho.
Third-Quarter 2005 We would like to thank the teams at our R&D and D&D centers located in Hagenbach,
Sales Announcement Germany and Seloncourt, France and at our production sites in Audincourt, Beaulieu,
Pulversheim, France and Scheuerfeld, Germany for their generous time and
cooperation in facilitating the photo shoots necessary for many of the images that
appear in this document.
Design and publishing: