Idea Transcript
2014 Management and Sustainable Development Report
CONTENTS 4 / KEY FIGURES 6 / Financial Report 19 / H uman Resources and Social Responsibility
30 / Environmental Report
2 / Groupe Legris Industries / 2014 Management and Sustainable Development Report
FROM THE CHAIRMAN
2014 was a year of contrasts for Legris Industries Group. First, between the gloomy macro-economic environment that saw stagnant growth in emerging countries amplified by the Russian crisis—and the clear commercial success of our new product launches and expansion in selected geographical markets. But also a contrast between the difficult start to the year, with sales down by just over 20% in the first half, and a strong second half that saw a steep rise in new orders booked at the end of the year. The Ukraine crisis and its impact on the Russian economy thus halted a number of projects under way with several clients of our Divisions in 2014, especially Keller, which does a large amount of business in the region. In fact, lower sales in Russia accounted for the entire 9% decrease in consolidated sales we recorded—and then some. At the same time, with growth leveling off in emerging economies, those markets were in no position to offset the loss of business in Eastern Europe. Keller’s weaker results dragged down our consolidated operating income on ordinary business, and the Division undertook restructuring in Germany that will pay off full year in 2015. But despite this tougher environment, our Group also scored a number of successes during the year. Clextral successfully launched a new range of extruders, while Savoye’s vigorous expansion in the United States was a key contributor to the 11% increase in the Division’s sales. More importantly, all our businesses brought their orderbooks back up to strength in the fourth quarter—with 45% of all new orders in 2014 booked towards year-end! One obvious reason for this is that customers tended to postpone investment decisions until later on. But a weaker euro certainly didn’t hurt. The trend in exchange rates—and resulting cur rency gains—combined with an improvement in non-recurring items, resulted in our income before taxes reached the breakeven point for the first time in four years. So even in an unfavorable business environment, our Group continued to straighten out its fundamentals. We gained greater control of margins on contracts and made our offering more competitive, while maintaining R&D expenditure equal to a high 3.2% of sales. That spending, incidentally, means we will be in a position to start rolling out more new offerings in several of our businesses as of 2015. One last point is worth stressing: the net cash we generated in 2014 drove our consolidated net cash higher. Together with available debt financing, this excess cash provides the resources we need to carry out a major acquisition in short order. If and when we do, our portfolio of diversified industrial businesses will be more robust and more resilient than ever.
Erwan Taton Chairman, Executive Board
2014 Management and Sustainable Development Report / Groupe Legris Industries /
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2014 KEY FIGURES
Sales
€
206M
down 9% due to the Russian crisis.
By geographical area 5% / North Africa & Middle East 9% / Europe excl. Eurozone 12% / Rest of the world (incl. CIS 5%) 52% / Eurozone
22% / N & S America
New orders 2014/2013 change.
+18%
+18% +12%
Clextral
Keller
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Savoye
+
15%
KEY FIGURES
Employees worldwide Average full-time equivalent.
1,373
729 412
France
Germany
114
USA
61
Italy
23
17
17
Rest of South Rest of Europe America the World
Training
2,773 days of training were provided in 2014.
Research and Development
3.2% of sales were invested in R&D.
Carbon footprint
-
18%
2014/2013 change in direct greenhouse gas emissions at our industrial sites in Europe.
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Financial
Report
7 / 2014 Highlights / Outlook for 2015 9 / Consolidated sales 11 / Consolidated results 12 / Income statement - French GAAP 13 / Balance sheet - French GAAP 14 / Statements of cash flow - French GAAP 15 / RECONCILIATION BETWEEN French GAAP AND Belgian GAAP
16 / Income statement - Belgian GAAP 17 / Balance sheet - Belgian GAAP
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2014 Highlights The world economy did little more than tread water in 2014. More importantly, the slowdown in emerging markets, a significant outlet for many of our businesses, showed no sign of abating. With the Russian crisis making this bad situation worse, Legris Industries Group was especially hard hit by the postponement of investment decisions. In one Division after another, major projects expected to get under way in the first half did not start up until much later in the year—so much so that a full 45% of all new orders in 2014 were booked in the fourth quarter. The addition of these important contracts played a major part in beefing up our orderbooks, which increased 45% year on year to €140 million. They will also enable us to achieve part of our growth targets for 2015. But the short-term result was that consolidated sales in 2014 slid 9% to €205.7 million, a figure more than €20 million lower than in the prior year. Our Keller and Clextral Divisions were most heavily affected by the falloff in sales. At Keller, delayed bookings for turnkey plants and the postponement of investment projects in Russia led to a 31% drop in business, making 2014 a disappointing year for the Division. And while Clextral had an excellent year in its service business, the lack of a new contract to supply paper pulp for banknotes explains a 13% decline in sales. Our Savoye Division was confronted as previously with a sluggish market in Europe, but still recorded an 11% rise in sales, driven by 52% year on year growth of Retrotech’s business in the United States. Due in large part to the turnaround efforts of the past several years, gross margin continued to recover throughout 2014, despite Keller’s under-activity (-€2.5 million). The resulting 1.5-point increase in consolidated gross margin thus enabled us to offset part of the decrease in sales. Operating expense inched up by 2%, reflecting the higher R&D spending that has gone with new product development. Together, these various factors led to a €1.5 million operating loss on ordinary business. Consolidated EBITDA stood at €2.3 million, or 1.1% of sales. In 2014, we also successfully restructured our Keller Division. Accounting for the expected impact of this restructuring on a full-year basis would have yielded pro forma EBITDA of €5 million, or 2.4% of sales.
With non-recurring operating items totaling €0.3 million, consolidated operating income slid by a mere €1 million year on year to a loss of €1.2 million, a figure barely below our breakeven point in 2013. Net interest and other financial items stood at €1.9 million (reflecting a €2.4 million gain on currency translation), bringing income before taxes to €0.7 million, compared with a loss of €1.6 million in 2013. After €0.8 million in non-operating items, €1.6 million in goodwill amortization and income taxes of €1.8 million, our Group recorded a consolidated net loss of €2 million, which represented a €1.7 million improvement over the figure in 2013. Our financial structure is sound. At December 31, 2014, we had consolidated shareholders’ equity of €48.4 million and consolidated net cash of €26.8 million—up €6.2 million, thanks to advance payments on large orders booked in the fourth quarter. Our Group maintained its investment strategy, spending €3.4 million over the year on industrial investments at all three Divisions. In 2014, Legris Industries worked further to simplify its legal structures and carried out a cross-border merger with one of its intermediate holding companies in Belgium. This has given the Group the status of a European Company that is now headquartered in Brussels. The aim is to give a higher profile to our business, which already has considerable international scope, and to put us in a better position to make another acquisition in Europe in keeping with our strategy. A further consequence of this change is that Legris Industries Group’s consolidated financial statements in 2014 have been prepared in accordance with Belgian GAAP accounting standards. But to facilitate comparison, we have also prepared consolidated accounts under French GAAP; it is to those standards that this Report refers.
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Financial Report
Outlook for 2015 The crisis in Russia, further slowdown in the emerging economies, and the sharp rise of the dollar against the euro at year-end were all key developments in 2014. Against this backdrop, Legris Industries Group experienced weaker business due to substantial delays on major projects. But since those projects did not get under way until the fourth quarter, our full-year results were relatively unaffected. At the same time, we increased R&D spending by €1.5 million to the equivalent of 3.2% of our 2014 sales. With an orderbook 45% and €43 million larger at end-December 2014 and with the nearly full-year impact of restructuring in Keller’s heavy
clay business, our Group should be back on the path to growth and profits in 2015. We do not anticipate much change in the economic environment: global growth should hold steady, the Russian crisis will continue to affect business, the US economy will power ahead, and exchange rates should work further to our advantage. In addition to growing our Divisions, we are actively continuing efforts to diversify our operations further and identify a new industrial acquisition target in Europe. In view of our financial structure, the transfer of our headquarters to Brussels, and the commitment and quality of our teams, we are likely to achieve that in the short term.
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Consolidated sales Consolidated sales (€M)
2012
2013
2014
N/N-1
Savoye
89.0
94.8
104.9
10.8%
Keller
75.8
76.5
53.0
- 30.7%
Clextral Consolidated total
62.1
54.9
47.8
- 13.0%
226.9
226.2
205.7
- 9.0%
Consolidated sales came to €205.7 million in 2014, down by 9% and slightly over €20 million compared with 2013. Even though sales to the CIS (Community of Independent States) fell off following a year of large-scale projects there in 2013, and despite the impact of the Russian crisis in 2014, our Group still did 40% of its business outside Europe. The market remained buoyant in the Americas, with the result that our sales to the region jumped 27% from their level in 2013 and accounted for 22% of the Group total. Our business in Europe held up well in 2014, rising by nearly 10% and now generating 60% of consolidated sales. Retrotech, Savoye’s US subsidiary, once again took advantage of the upswing in North America. The Division achieved 11% growth for the year—enough to offset the lack of major banknote paper pulp contracts for Clextral. Although its service business grew, our Clextral Division
recorded a 13% decrease in sales. At Keller, delayed bookings for turnkey plants and a lack of new projects in Russia led to a 31% drop in business in 2014. Savoye’s European operations saw a 4% decline, caused mainly by a lack of new projects that was partially made up for by growth of nearly 15% in its service business. Business in the US was buoyed by an upbeat economy and a sizable orderbook at end-2013, and the Division recorded a 52% surge in sales. Clextral’s sales slid 13% due to the lack of new contracts to supply paper pulp for banknotes, and even with its service business up by 19%. At Keller, the 31% falloff in sales was attributable to significant delays on turnkey plant projects and the Russian crisis, which halted investment in what is a major market for the Division.
Savoye Division 2012
2013
2014
N/N-1
New orders
95.3
107.8
121.1
12.3%
Orderbook at 31/12
33.9
46.8
62.8
34.2%
Sales
89.0
94.8
104.9
10.8%
(€M)
Buoyed by the vibrant US market, the Savoye Division’s sales advanced 11% to a total of €104.9 million. While its units in Europe continued to grapple with a troubled economic environment that gave them about 4% less business than in the preceding year, Retrotech, Savoye’s US subsidiary, grew its sales by more than 50% to over €36 million in 2014 (on the heels of a 45% increase in 2013). The Division’s new project portfolio was hit by a substantial decline in Europe. In contrast, its service business enjoyed further growth – nearly 15% on 2013 – and now accounts for close to 40% of its sales in Europe. During the fourth quarter of the year, the US subsidiary booked new orders worth more than €36 million, with two large-scale projects each exceeding the $10 million mark. On December 31, 2014, Savoye’s
orderbook totaled €62.8 million, a figure 34% higher than in the prior year. The Division booked 40% of all new orders for 2014 in the last quarter, given that several major projects in the US and elsewhere had been postponed throughout the year. Sales at a-SIS, Savoye’s software arm, fell back 3.4% compared with 2013. Underlying this slight dip was a falloff in new projects in France during the year. However, strong business expansion overall drove the Division’s profit up to €1.6 million. Initiatives to boost operational efficiency contributed significantly to this €1 million improvement over 2013, even as Savoye raised R&D spending substantially. EBITDA stood at €2.5 million, or 2.4% of sales.
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Financial Report
Keller Division 2012
2013
2014
N/N-1
New orders
84.6
62.4
73.7
18.1%
Orderbook at 31/12
45.7
31.8
52.2
64.2%
Sales
75.8
76.5
53.0
- 30.7%
(€M)
The Keller Division was hard hit in 2014 by a protracted lack of new turnkey plant orders. The bulk of the orders in its orderbook, where machinery sales figured prominently, had been delivered in 2013. At the same time, new turnkey plant projects in the CIS were delayed as a result of the Russian crisis. But the Division still succeeded in winning a major contract with Saudi Arabia for four turnkey plants worth over €70 million in September 2014. Two of them broke ground in the fourth quarter and therefore had little impact on 2014 results, since most of the construction work will take place in 2015. These two plants were instrumental in replenishing Keller’s orderbook, which increased by 64% compared with end-2013 to a total of €52 million.
In 2014, the Division also restructured its heavy clay business. By reducing the number of jobs by nearly 80 at the two production facilities in Germany and by outsourcing part of the unit’s production work, this process made it possible to lower the breakeven point for Keller. The 31% decrease in Keller’s sales primarily reflected €2.5 million under-activity, which was partially offset by higher margins and good control over operating expense. The Division’s operating income showed a loss of €2.2 million, while EBITDA showed a loss of €1.2 million. If the €2.7 million gain due to restructuring were calculated on a full-year basis, the Division would have had pro forma EBITDA of €1.5 million, or 2.8 % of its 2014 sales. New offerings geared to emerging markets and the introduction of an innovative drying technology should set the stage for future business growth.
Clextral Division 2012
2013
2014
N/N-1
New orders
56.5
46.6
55.1
18.2%
Orderbook at 31/12
24.9
17.9
24.8
38.5%
Sales
62.1
54.9
47.8
- 13.0%
(€M)
With no new large-scale contracts to supply banknote paper pulp in 2014, Clextral’s sales were down 13%. In contrast, its service business showed a 19% increase. Excluding banknote projects, the Division achieved 7.5% growth in 2014. Due to a powerful inflow of new orders (mainly from the food industry) during the fourth quarter—accounting for 40% of the full-year total— Clextral’s orderbook swelled by nearly 38.5% to €24.8 million at yearend, thus recovering to the level recorded in 2012. 2014 also saw the roll-out of EVOLUM+, a new range of twin-screw extruders that can raise output by up to 40% and reduce energy use by anywhere from 20% to 30%. With several customers opting as of this year for EVOLUM+, Clextral is well-positioned to maintain its technological lead in the market.
Operating expense increased, primarily as a result of the higher R&D spending required to develop the new EVOLUM+ twin-screw extruder range, which is slated for further enhancements in the years to come. With operating profitability at 7.7% of sales in 2014, Clextral experienced a 23% decrease in operating income on ordinary business to €3.7 million. At €5.2 million, EBITDA still represented a very healthy 10.8% of sales. At the end of the first quarter of 2015, Guillaume Pasquier, a member of the Legris Industries Group Management Board since 2009 and Chief Financial Officer, was appointed to head Clextral. He is tasked with accelerating the Division’s development by making full use of its key growth drivers, which are international reach, innovation, and engineering expertise.
The positive impact of services on the Division’s business mix gave gross margin a large enough boost to offset most of the falloff in sales in 2014.
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Consolidated results Operating income on ordinary business Although gross margins improved on the whole in 2014, consolidated sales decreased by more than €20 million and 9%, with the result that operating income on ordinary business could not be maintained above the breakeven point. The decline in business affecting Keller prior to restructuring could not be offset by the profit margins achieved by our other Divisions. Operating income on ordinary business thus showed a loss of €1.5 million. Overheads held steady over the period despite the transfer of our headquarters to Brussels in the fourth quarter. EBITDA came in at €2.3 million, or 1.1% of sales. If the restructuring at Keller were accounted for on a full-year basis, our pro forma EBITDA would have reached €5 million—equal to 2.4% of consolidated sales.
Non-recurring operating items Non-recurring operating items consisted primarily of the €2.7 million cost of reorganizing Keller’s production facilities in Germany and the €4.8 million reversal of a provision for long-standing legal claims affecting its Italian subsidiary. The total amount was €0.3 million, which was €2.1 million better than in 2013. This brought EBIT to -€1.2 million, a result €1 million lower than in the previous year.
Net interest and other financial items Due mainly to appreciation of the US dollar, our Group recognized a €2.4 million unrealized gain on currency translation, resulting in net financial income of €1.9 million for the year. Net interest expense went from €0.2 million to €0.6 million.
Operating income before taxes Buoyed by net interest and other financial items, operating income before taxes stood at €0.7 million, a rise of €2.3 million over 2013.
Non-operating items Non-operating items showed net income of €0.8 million. Its primary component was a reversal of provisions for legal claims and expenses relating to entities that have since been deconsolidated by our Group.
Income before taxes Owing to our net financial income and net income on non-operating items, Legris Industries Group almost broke even on income before taxes, posting a loss of just €0.1 million. This marked an improvement of €3.7 million over the 2013 figure, which amounted to a loss of €3.8 million.
Net income Legris Industries Group posted a net loss of €2 million, up €1.7 million, after relatively stable goodwill amortization of €1.6 million and income tax expense of €1.8 million consisting primarily of deferred taxes.
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Financial Report
Income statement French GAAP 2012
2013
2014
226.9
226.2
205.7
12.2
11.5
12.9
(133.2)
(130.3)
(117.0)
Personnel expenses
(84.7)
(87.3)
(87.7)
Other operating expenses
(19.2)
(18.6)
(15.4)
2.0
1.5
(1.5)
(€M) SALES Other operating income Raw materials, supplies and services
OPERATING INCOME ON ORDINARY BUSINESS Non-recurring operating items EBIT Net interest and other financial items Operating income before tax Non-operating items Net appropriations to amortization of goodwill INCOME BEFORE TAX Income taxes CONSOLIDATED NET INCOME Minority interests NET INCOME, GROUP SHARE
(8.0)
(1.7)
0.3
(6.0)
(0.2)
(1.2)
(0.7)
(1.4)
1.9
(6.7)
(1.6)
0.7
6.4
(0.5)
0.8
(2.2)
(1.7)
(1.6)
(2.4)
(3.8)
(0.1)
0.4
0.2
(1.8)
(2.0)
(3.6)
(1.9)
0.3
0.1
0.1
(2.3)
(3.7)
(2.0)
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Balance sheet French GAAP Assets 2012
2013
2014
4.4
3.6
3.3
Goodwill on acquisitions
16.3
16.6
14.9
Property, plant and equipment
30.8
30.1
30.0
1.0
1.0
1.0
FIXED ASSETS
52.5
51.3
49.2
Inventories and work in progress
25.6
26.9
25.8
Trade accounts receivable
90.1
96.4
93.5
(€M) Intangible assets
Investments
1.4
1.5
9.0
Cash and equivalents
58.4
40.8
43.8
CURRENT ASSETS
175.5
165.6
172.1
Deferrals and accruals
1.7
1.9
2.4
Deferred tax assets
6.2
6.3
3.9
235.9
225.1
227.6
2012
2013
2014
29.6
29.6
29.6
Other accounts receivable
TOTAL ASSETS
Liabilities and shareholders’ equity (€M) Capital stock
2.1
2.1
2.1
Consolidated reserves
25.9
23.6
19.8
Net income, Group share
(2.3)
(3.7)
(2.0)
Additional paid-in capital
Cumulative translation adjustment
(0.1)
0.3
(1.2)
SHAREHOLDERS’ EQUITY, EXCLUDING MINORITY INTERESTS
55.3
51.9
48.3
2.5
0.1
0.1
57.8
52.0
48.4
0.4
0.4
0.5
PROVISIONS FOR CONTINGENCIES AND CHARGES
44.8
44.5
32.5
Borrowings
24.2
20.2
17.0
102.9
101.3
119.5
Minority interests SHAREHOLDERS’ EQUITY INCLUDING MINORITY INTERESTS Other equity
Accounts payable Other liabilities
1.5
–
6.2
LIABILITIES
128.6
121.5
142.7
Deferrals and accruals
0.7
3.3
0.8
Deferred tax liabilities
3.6
3.4
2.7
235.9
225.1
227.6
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
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Financial Report
Statements of cash flow French GAAP 2012
(€M)
2013
2014
5.4
0,2
(5.4)
(8.6)
(5.7)
16.6
(3.2)
(5.5)
11.2
(1.8)
(3.7)
(3.3)
–
(4.6)
(0.1)
(1.8)
(8.3)
(3.4)
Capital increase (decrease)
–
–
–
Dividends paid
–
–
–
Other
0.4
0.6
(2.0)
NET CASH FLOWS FROM FINANCING ACTIVITIES
0.4
0.6
(2.0)
–
(0.3)
0.4
(4.6)
(13.5)
6.2
Cash flows from operations Change in working capital requirement NET CASH FLOWS FROM OPERATING ACTIVITIES Investments in property, plant and equipment, net Acquisitions of equity interests, net NET CASH FLOWS FROM INVESTING ACTIVITIES
Net effect of currency translation DECREASE (INCREASE) IN NET DEBT
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RECONCILIATION BETWEEN French GAAP AND Belgian GAAP 2014 Income statement (€M) Ebit (operational)
French GAAP
Goodwill
Transfer of operational to exceptional
Belgian GAAP
(1.2)
(1.6)
(0.7)
(3.6)
Net interest and other financial items
1.9
Non-operating income (exceptional)
0.8
1.9 0.7
1.6
Income taxes
(1.8)
Amortization of goodwill
(1.6)
1.6
(1.9)
–
–
(1.9)
French GAAP
Goodwill
Transfer of operational to exceptional
Belgian GAAP
Ebit (operational)
(0.2)
(1.7)
1.8
(0.1)
Net interest and other financial items
(1.4)
Non-operating income (exceptional)
(0.5)
Net income
(1.8) –
2013 Income statement (€M)
Income taxes Amortization of goodwill Net income
(1.4) (1.8)
0.2
(2.3) 0.2
(1.7)
1.7
(3.6)
–
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– –
(3.6)
Financial Report
Income statement Belgian GAAP 2014 Income statement (€M)
French GAAP
SALES
205.7
Other operating income Raw materials, supplies and services Personnel expenses Other operating expenses OPERATING INCOME ON ORDINARY BUSINESS Non-recurring operating items EBIT Net interest and other financial items Operating income before tax Non-operating items Net appropriations to amortization of goodwill INCOME BEFORE TAX Income taxes CONSOLIDATED NET INCOME Minority interests NET INCOME, GROUP SHARE
12.9 (117.0) (87.7) (15.4)
Offset provisions/ reversals
Reclassification of training as personnel expense
Reclassification of non-recurring items
Amortization of goodwill
Belgian GAAP 205.7
(10.8)
10.8
(0.9) 0.9
(0.4)
(1.6)
2.0 (117.0) (88.6) (5.7)
(1.5)
–
0.3 (1.2) 1.9 0.7 0.8 (1.6) (0.1) (1.8) (1.9) 0.1 (2.0)
(0.3)
0.7 1.6
– (3.6) 1.9 (1.7) 1.6 – (0.1) (1.8) (1.9) 0.1 (2.0)
2013 Income statement (€M)
French GAAP
Offset provisions/ reversals
SALES
226.2
Other operating income Raw materials, supplies and services Personnel expenses
11.5 (130.3) (87.3)
(9.9)
(18.6)
9.9
Other operating expenses OPERATING INCOME ON ORDINARY BUSINESS Non-recurring operating items
Reclassification of training as personnel expense
Reclassification of non-recurring items
Amortization of goodwill
Belgian GAAP 226.2
0.2
1.8 (130.3) (88.2)
(0.9) 0.9
(1.7)
(9.5)
1.5 (1.7)
– 1.7
–
EBIT Net interest and other financial items Operating income before tax Non-operating items Net appropriations to amortization of goodwill
(0.2) (1.4) (1.6) (0.5) (1.7)
INCOME BEFORE TAX Income taxes
(3.8) 0.2
(3.8) 0.2
CONSOLIDATED NET INCOME Minority interests
(3.6) 0.1
(3.6) 0.1
NET INCOME, GROUP SHARE
(3.7)
(3.7)
(1.9) 1.7
(0.1) (1.4) (1.5) (2.3) –
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2013 Balance sheet Belgian GAAP Assets (€M) Intangible assets
French GAAP
Transfer of deferred tax
Provision for expense / Debt (personnel)
Qualified pre-payments / Financial debt
3.6
Belgian GAAP 3.6
Goodwill
16.6
16.6
Property, plant and equipment
30.1
30.1
Investments FIXED ASSETS
1.0
1.0
51.3
51.3
Inventories and work in progress
26.9
26.9
Trade accounts receivable
96.4
96.4
Other accounts receivable
1.5
6.3
7.8
Cash and equivalents
40.8
40.8
CURRENT ASSETS
165.6
171.9
Deferrals and accruals
1.9
1.9
Deferred tax assets
6.3
(6.3)
225.1
–
TOTAL ASSETS
– –
–
225.1
Qualified pre-payments / Financial debt
Belgian GAAP
Liabilities and shareholders’ equity (€M) Capital stock Additional paid-in capital
French GAAP
Transfer of deferred tax
Provision for expense / Debt (personnel)
29.6
29.6
2.1
2.1
Consolidated reserves
23.6
23.6
Net income, Group share
(3.7)
(3.7)
0.3
0.3
51.9
51.9
0.1
0.1
52.0
52.0
Cumulative translation adjustment SHAREHOLDERS’ EQUITY, EXCLUDING MINORITY INTERESTS Minority interests SHAREHOLDERS’ EQUITY INCLUDING MINORITY INTERESTS Other equity
0.4
PROVISIONS FOR CONTINGENCIES AND CHARGES
44.5
Borrowings
20.2
Accounts payable
(0.4) 3.4
47.0
(0.9) 0.4
101.3
–
0.9
20.6 102.2
Other liabilities
–
–
LIABILITIES
121.5
122.8
Deferrals and accruals
3.3
3.3
Deferred tax liabilities
3.4
(3.4)
225.1
–
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
17 / Groupe Legris Industries / 2014 Management and Sustainable Development Report
– –
–
225.1
Financial Report
2014 Balance sheet Belgian GAAP Assets French GAAP
(€M) Intangible assets
Transfer of deferred tax
Provision for expense / Debt (personnel)
Qualified pre-payments / Financial debt
3.3
Belgian GAAP 3.3
Goodwill on acquisitions
14.9
14.9
Property, plant and equipment
30.0
30.0
Investments FIXED ASSETS
1.0
1.0
49.2
49.2
Inventories and work in progress
25.8
25.8
Trade accounts receivable
93.5
93.5
Other accounts receivable
9.0
3.9
12.9
Cash and equivalents
43.8
43.8
CURRENT ASSETS
172.1
176.0
Deferrals and accruals
2.4
2.4
Deferred tax assets
3.9
(3.9)
227.6
–
TOTAL ASSETS
– –
–
227.6
Qualified pre-payments / Financial debt
Belgian GAAP
Liabilities and shareholders’ equity French GAAP
(€M) Capital stock Additional paid-in capital
Transfer of deferred tax
Provision for expense / Debt (personnel)
29.6
29.6
2.1
2.1
Consolidated reserves
19.8
19.8
Net income, Group share
(2.0)
(2.0)
Cumulative translation adjustment
(1.2)
(1.2)
SHAREHOLDERS’ EQUITY, EXCLUDING MINORITY INTERESTS
48.3
48.3
0.1
0.1
48.4
48.4
Minority interests SHAREHOLDERS’ EQUITY INCLUDING MINORITY INTERESTS Other equity
0.5
PROVISIONS FOR CONTINGENCIES AND CHARGES
32.5
Borrowings
17.0
Accounts payable
(0.5) 2.7
34.4
(0.8) 0.5
119.5
–
0.8
17.5 120.3
Other liabilities
6.2
6.2
LIABILITIES
142.7
144.0
Deferrals and accruals
0.8
0.8
Deferred tax liabilities
2.7
(2.7)
227.6
–
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
– –
–
227.6
2014 Management and Sustainable Development Report / Groupe Legris Industries /
18
Human resources
and social responsibility
20 / Workforce 22 / International presence 24 / Labor relations 25 / Tr aining and professional development 26 / Gender equality 27 / R egional, economic and social influence 29 / Health and safety
2014 Management and Sustainable Development Report / Groupe Legris Industries /
19
Workforce The Legris Industries workforce grew slightly from an average of 1,358 full-time equivalent permanent and temporary employees in 2013 to an average of 1,373 in 2014. 2013
2014
Change
Clextral
254
254
–
Savoye
588
627
+39
Keller
501
477
-24
Headcount — average full-time equivalent*
Holding Co. Group total
15
15
–
1,358
1,373
15
* This metric accounts for each employee’s workload in proportion to a full-time schedule.
The workforce on payroll at December 31, 2014 breaks down as follows:
Workforce on payroll*
Permanent employees
2013 Temporary employees
Total
Permanent employees
2014 Temporary employees
Total
Clextral
255
9
264
256
12
268
Savoye
577
30
607
616
35
651
Keller
473
50
523
429
38
467
14
2
16
13
2
15
1,319
91
1,410
1,314
87
1,401
Holding Co. Group total
* The workforce on payroll represents the number of employees holding an employment contract with one of the Group’s companies.
The slight decrease in Group headcount during the year was mainly attributable to large-scale restructuring at Keller in Germany (467 employees at end-2014, down from 523 at end-2013) undertaken to adjust the company to its actual volume of business.
The workforce at our Clextral Division showed little change (268 employees at end-2014 versus 264 at end-2013), whereas at our Savoye Division it grew more significantly, above all in the United States, where business has been expanding. Savoye thus went from 607 employees in 2013 to 651 at December 31, 2014.
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Human resources and social responsibility
Staff by gender, job category, and age: The indicators below have all been calculated on the basis of the workforce on payroll at December 31, 2014.
Staff by gender in 2014 Since we operate in the historically male-dominated mechanical engineering industry, the proportion of male employees is still high in our Savoye, Keller, and Clextral Divisions.
100
18%
21%
19%
20%
Women
80
Men 60
In 2014, the percentage of female employees at Clextral edged up from 17% to 19%, but Group-wide it showed no change.
40
82%
79%
81%
80%
Keller
Savoye
Clextral
Group
31%
6%
18%
16%
20
0
Staff by job category The nature of each Division’s operations explains differences in the distribution of employees by job category, and in particular the smaller percentage of manual workers in some cases. Manual workers make up 16% of our Group’s total workforce. Due to the nature of Clextral’s and Keller’s business, manual workers, office workers, and technicians make up a larger proportion of their workforce than engineers and managers. At Savoye, in contrast, engineers and managers are in the majority.
100
Blue-collar workers
24%
80
40
38%
47%
60
53%
Office staff/ technicians Engineers and managers
70%
20
46%
35% 16%
0
Altogether, office workers and technicians make up 38% of the Group’s total headcount, engineers and managers account for 46%, and manual workers for 16%.
Keller
Savoye
Group
Clextral
Age structure of the workforce Legris Industries employs a significant percentage of workers in the 50-and-over age group. They make up more than 30% of our total workforce, while under-30s account for just over 16%.
307
300
268
278
250 200
178
Total women
150 100 50 0
48
71
102
86 50 13
Under 30
age 30 to 40
age 40 to 50
age 50 to 60
Total men
60 and over
2014 Management and Sustainable Development Report / Groupe Legris Industries /
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International presence Workforce on payroll by geographical area
Europe 1,227 employees
United States 127 employees Rest of the world 26 employees
South America 21 employees
Workforce on payroll Clextral Keller Savoye
France
Germany
Italy
Rest of Europe
United States
South America
Rest of the world
Total
223
–
–
9
8
21
7
268
4
397
61
–
–
–
5
467
503
5
–
10
119
–
14
651
Holding Company
14
–
–
1
–
–
–
15
GROUP TOTAL
745
402
61
19
127
21
26
1,401
Today close to 90% of our employees are based in Europe, a large proportion of them in France (53%), while 28% of our employees are in Germany. Nearly 10% of the Legris Industries workforce is based in the Americas, predominantly in our Savoye Division.
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Human resources and social responsibility
Average number of full-time equivalents by geographical area Europe 1,225 employees
United States 114 employees Rest of the world 17 employees
South America 17 employees
Workforce (average number of full-time equivalents) Clextral Keller Savoye
France
Germany
Italy
Rest of Europe
United States
South America
Rest of the world
Total
217
–
–
7
7
17
6
254
4
407
61
1
–
–
4
477
493
5
–
15
107
–
7
627
Holding Company
14
–
–
1
–
–
–
15
GROUP TOTAL
729
412
61
23
114
17
17
1,373
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Labor relations For many years, Legris Industries has promoted labor relations grounded in respect for employee representatives, their duties, and the mandates of the bodies through which they work at every relevant level of the organization. The focus of negotiations is set either at corporate or at subsidiary level, depending on the nature of each business and on the issues facing each subsidiary. As our Group adopted European Company status in 2014, we deemed it essential to reaffirm our determination to maintain and promote good labor relations. We therefore initiated negotiations on setting up a European Company Works Council.
Labor relations at corporate level Collective bargaining Management and the trade unions drew on their experience with Group-wide bargaining to negotiate over two major issues in the course of 2014. First, the talks initiated in 2013 on promoting senior and youth employment in the Group led to an agreement signed in April 2014. Second, the talks launched to create a European Company Works Council gave rise to an agreement signed on June 3, 2014. Senior and youth employment agreement On April 2, 2014, a three-year agreement was signed on promoting senior and youth employment in the Group, an issue on the bargaining table since 2013. An assessment of the job situation for young people and seniors had been carried out with the union coordinators on the basis of data available on December 31, 2013. The agreement sets out clear commitments on maintaining older employees in their jobs and on recruitment. Signed by the two trade unions recognized as representative of the workforce at Group level, it underscores all parties’ attachment to values including equality of opportunity and equality among all employees, refusing discrimination and promoting respect for all. The agreement also identifies a large number of indicators tracking how young people enter the workforce, jobs for seniors, job interviews in the second half of employee careers, training, mentoring programs, job expertise and transmission of knowledge, and finally the role of Group companies in their region. These indicators and related action plans will be monitored and assessed annually within each company and at Group level for all operations in France. Agreement on the creation of a Works Council reflecting the Group’s European presence In view of our Group’s international reach, we initiated talks with trade unions at the end of 2013 to set up a Works Council representing Group employees in Europe. A Special Negotiation Group composed of French, German, and Italian representatives was established in the first quarter of 2014 with an outside expert to assist them in the discussion process. The outcome was an agreement of major importance for our Group signed on June 3, 2014.
The preamble restates the principles that have shaped labor relations in our Group for years: “For many years, Legris Industries Group has worked to promote labor relations that reflect the scope of its business, its geographical presence, and the requirements at each relevant level of the organization. This approach has led the Group to invite representatives of subsidiaries located elsewhere in the European Union to attend meetings of the Group Works Council. A practice that emerged spontaneously thus provided the basis for the agreements of 2006 on the composition of the Group Works Council. This agreement was born of the belief that staff representatives can make a major contribution to the Group’s overall results. Accordingly, its explicit purpose is to enhance labor relations by informing and consulting staff representatives at the transnational level in a spirit of good cooperation.” Since its inception, the Group Works Council has had 11 permanent members and 11 alternates. The three countries represented are France, Germany and Italy.
Employee representation Group Works Council 2013 saw a change of membership in the Group Works Council. It is composed of 6 permanent members and 6 alternates. All Group Divisions operating in France are represented. Moreover, the works councils of the various subsidiaries in the European Union have been asked to send one representative each to attend annual meetings. Trade unions with a presence in the Group and recognized as representative of the national workforce have likewise selected a union representative to attend, as provided for by the agreement. The 2014 annual meeting was held in Paris on July 8. In addition to permanent members, the foreign guest representatives from Germany and Italy and union representatives attended. As every year, the Group Works Council receives detailed information on how the Group is faring in business and financial terms, what the business and strategic outlook is, and the state of human resources. The outside expert named by the Council also has opportunities to meet with the Management Board Chairman and the Head of Human Resources. In addition, a variety of cross-cutting issues can be dealt with at the Council’s plenary sessions. These have included Sustainable Development, for example.
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Human resources and social responsibility
Labor relations in our Divisions Savoye Division
Keller Division
Trade unions represented at our Savoye Division are CFE/CGC, FO, and CGT.
The IG Metall union is represented at Keller in Germany.
We signed a number of agreements with these partners in 2014. After the signature of the Group’s Perco agreement, one contract defines the employer’s contribution at a-SIS. A pre-election memorandum of agreement was also signed on the procedures for electing new staff representatives.
Two agreements were signed at Keller during the year: - an agreement on shift work for part of the production staff; - an agreement on apprenticeship. In Italy, the CISG union (Confederazione Italiana Lavoratori Metalmeccanici) is represented at Keller’s national subsidiary Morando. The national agreement was renewed this year.
At the Prodex subsidiary, an agreement on salaries was signed. Savoye initiated a discussion process on teleworking with input from the unions.
Clextral Division Clextral has a single representative body, and CFE-CGC is the only union officially recognized as representative. Management and the union signed an agreement on salaries and work time. Clextral also took part in UIMM regional social commission in the run-up to negotiations with the unions for the mechanical engineering industry as a whole in the Loire region.
Training and professional development The collective agreements on gender equality at the workplace signed in 2012 and 2013 state clearly that “training is essential to developing and maintaining each employee’s skill-set, and all training courses are open to women. Companies will ensure that all employees—both men and women— throughout their career acquire the skills made necessary by changes in their job, and to this end will deploy options aimed at maintaining their employability.”
Savoye Division In 2014, our Savoye Division drew up a training program to meet the many strategic challenges it faces. Focal points were occupational courses (provided in-house and outside), technical courses, courses in English and other foreign languages, courses on innovation process, communication, trade, and management.
As part of the initiative, Savoye filed an application with the Burgundy Regional Council with the aim of gaining support under the Regional Support for Company Training program for its Ecole Savoye project, which is designed to put the Division’s expertise on a more long-term footing.
The percentage of payroll devoted to training showed virtually no change year on year, going from 2.84% in 2013 to 2.86% in 2014. While there were roughly the same number of days of training outside of the Group, the number of courses provided in-house shot up by nearly 50% compared with 2013.
Customer relations courses were also given to the Division’s service staff.
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Clextral Division To keep pace with changes in technology and its own international growth, Clextral continued to invest in training, offering 426 interns a total of 5,470 hours of training in 2014. The recurring themes on how to maintain skill levels had to do with automation, IT, and production technology. In those areas, it is crucial to stay abreast of the constant changes under way. Both for reasons of strategy and to assist employees evolving towards a broader set of responsibilities, Clextral also plans to provide training on team cohesion and management.
Courses have been organized for employees who are changing jobs, particularly those with a broader set of responsibilities than before. Control/verification, sales efficiency, and training for instructors were the topics addressed in 2014. In addition, sessions on quality and safety were provided to newly appointed managers. Safety will remain a key focus of the training program set up to facilitate Clextral’s growing involvement with nuclear power.
Keller Division Keller’s training programs this past year focused primarily on technical subjects, along with time management and human resource issues.
Staff at Morando’s engineering office were trained in new software and technologies including 3D CAD, PDM, and more.
Gender equality 2014 initiatives promoting gender equality Agreements related to gender equality at all Group companies in France called for concrete action in the following areas: - professional development, in particular through training, - hiring in certain fields, - career paths and compensation. Each action plan is linked to a series of indicators measuring training, performance and development interviews, career development and promotions, average compensation, awareness of gender equity, and recruitment of women. As a result, since the Divisions in France implemented those agreements, the trade unions and staff representatives have been provided with full reports on workplace equality to enable them to prepare for meetings ahead of the annual compulsory negotiations.
The Savoye Division produces a report every year on all measures taken and what they achieve in terms of training, promotion, and compensation policy. In 2014, all Retrotech employees got training in how to prevent sexual harassment in all its forms. To achieve greater diversity in hiring, the Division also posts all job openings on the website Rochester Women’s Network. Clextral has likewise pursued its efforts to promote gender equality. The Division has appointed a woman to its Management Committee and put other female employees in charge of departments or given them technical positions. Finally, Keller has used part-time scheduling arrangements as a means to sustain its ongoing drive to help employees achieve greater work-life balance.
2014 initiatives for disabled workers ESATs are French entities that provide assistance to allow disabled people to work at a protected site if they are unable to work at an ordinary workplace or a specially adapted site. All Group Divisions have access to ESAT services for some activities.
Legris Industries SA turned to ESAT de Bourgcheveuil in CessonSévigné to assemble training kits for the courses offered by Legris Industries University on company sites.
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Human resources and social responsibility
The Disability Working Group previously set up by Savoye took further action in 2014, including a number of measures aimed at the disabled and a campaign to raise employee awareness, combat prejudice, and promote the integration of people with disabilities into the workplace. The campaign was backed up by a tri-fold brochure distributed to the entire workforce. In 2014, a-SIS continued to move forward on this issue as well, meeting with a firm focused on disability to explore forms of action that might be adopted at the Lyon site.
At the Ladoix site, a workstation was specially outfitted for a disabled employee. Our Clextral Division continued to work on action plans including ESATs. Keller pursued ongoing exchanges with Handicap, an organization serving disabled workers, and continued to collaborate with sheltered workshops. Its subsidiary Morando set up special functions to accommodate three people with disabilities.
Anti-discrimination policy As a general rule, human resource policy at all Legris Industries Group companies aims to implement the principles set out in our Code of Business Conduct. This is based on the following commitments: ”We view all our co-workers and stakeholders with the same respect and dignity, regardless of their position in the corporate hierarchy, and regardless of their gender, age, religion, sexual orientation, marital status, ethnic origin, nationality or race, trade union or association activities, religious beliefs, physical appearance, family name, health or disabilities.”
In other words, and very concretely, respect for individuals — including zero tolerance for failures to apply strict non-discrimination and respect for employees’ private lives — lies at the heart of our human resource policy. In all our Divisions and in all of the countries where we operate, hiring is open to all people based on the principles defined in our Code of Business Conduct. Savoye and Clextral exemplified this approach in 2014 by aiming for greater diversity in hiring.
Regional, economic, and social influence Our Group encourages and promotes the development of long-term links with business and social stakeholders in the regions where we operate.
Savoye Division In 2014, Savoye hosted 23 work-study interns at its locations in France. The Division once again took part in a range of initiatives designed to encourage young people to consider working in industry in the regions where it operates. It maintained its partnerships with schools like ESISAR in Grenoble and Valence, the Compiègne Polytechnic, Saint-Etienne Telecom, and Montluçon University Institute of Technology, and with associations like Logistique 42, a member of the Young Ambassadors program and the Numélink network. Savoye also maintained and developed its relationships with local business and trade organizations, taking part in the Saint-Etienne Urban Community Development Board, working with UIMM Loire and Côte d’Or, participating in UIMM Côte-d’Or’s career day, presenting careers in industry to young people with the help of employee volunteers, and having managers give courses on project management, logistics, and human resources at schools, universities, and Chambers of Commerce. In addition, the Division was involved with establishing a logistics cluster with local businesses in Côte d’Or whose purpose is to promote skill pooling and the sharing of best practices.
Savoye also continued to work with the ALIZÉ ® Convention, a program designed to supply skilled workers to SMEs with medium-term development projects, thus promoting or maintaining employment. In 2014, this involvement gave rise to several human resource and management control engagements. The Division also took part in the “100 Opportunities, 100 Jobs” program following its signature in January 2013 of a “Revitalization Agreement” with regional authorities. This is aimed at helping disadvantaged young people get into long-term employment, and promoting secondments of employees with selected skills to SMEs in the region. Around ten assessments were scheduled in 2014 and half have already been financed. Savoye also maintained its partnership with AFEV, the student foundation association in Saint-Etienne. Retrotech continued to work with universities in its area like the Rochester Institute of Technology, Rochester University, the University of Buffalo, and the State University of New York at Brockport, and with local business institutions like the Rochester Business Alliance and the Victor Chamber of Commerce.
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Clextral Division Clextral plays an active role in business and community initiatives in the Saint-Etienne region, and several Clextral managers took part in local radio and television broadcasts or were interviewed in the local press. The Division also made several presentations to the Chamber of Commerce in 2014. Clextral hired 11 permanent employees in 2014, including two work-study interns who were hired permanently at the end of their study programs. Another work-study intern was recruited under the Preparation for Employment program, which enables recruits to be fully effective in their new positions. In 2014, Clextral participated in a feasibility study conducted as part of Ondaine 2020, a project to revitalize local industry in Vallée de l’Ondaine, an area with extensive brownfields that was hard hit by the Aperam plant closing. The French government and the regional authorities call for creating an environment that will foster the growth of local companies, with the upgrading of industrial sites as a key component of such a policy.
On its home turf, the company participates in school open days, internship programs, and factory tours—all activities that give young people a better idea of jobs in industry. It also takes part in job fairs organized by UIMM Loire and the Loire Conseil Général. In 2014, Clextral participated in a week-long celebration of manufacturing and industry, organizing a day-long meeting with nearly 160 suppliers, most from the region but some from abroad as well. This event offered an opportunity to discuss markets and strategies, promoting a better understanding of the challenges involved. Clextral plans to pursue and enhance its long-term strategic alliances with suppliers to improve its overall performance. Clextral and its Works Council also support AFEV, an association that tutors young people from disadvantaged communities. Clextral is also member of the Jean-Monnet University Foundation (Saint-Etienne) and the Fabrique de l’Industrie Policy Board.
The Prefecture, the Conseil Général, the Conseil Régional, and the Saint-Etienne Urban Community believe that this strategic project should be included in the Central Government–Regional Plan for 2014–2020.
Keller Division Keller works with and sponsors a variety of organizations—universities, sports clubs, an association fighting cancer, local cultural associations, and more—near its facilities, both in Germany and in Italy. The Keller company maintains close ties to local universities and vocational schools and takes part in events known as University– School–Job Days. Keller also sits on the Chamber of Commerce Apprentice Examination Board.
In Italy, Morando continued in 2014 to host interns under an agreement with the Turin Polytechnic Institute. The Job Center in Asti is another vector that helps integrate young employees into the working world. Finally, the company works closely with the Italian Association for Industry to hire staff and train teams.
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Human resources and social responsibility
Health and safety Legris Industries Group makes the health and safety of all employees a priority in the goals for human resources and social responsibility set out in its Code of Business Conduct.
Savoye Division Our Savoye Division deployed a range of initiatives in 2014. At a-SIS, a consultant helped a working group on psycho-social risks set up in April 2012 to conduct a needs analysis. Results sent to staff members identified a number of issues. Analyzed by a consultant and the Health and Safety Committee, these led to the deployment of action plans addressing customer relations, work volumes and scheduling, organization and workplace relations.
Savoye launched an awareness and risk prevention campaign directed at employees working in oxygen-deficient atmospheres. In 2014, Prodex made further investments that included installation of a new paint booth. In the United States, Retrotech reviewed its risk prevention posters and had all employees take safety rule courses of varying length, depending on their job profiles.
Three working groups were also set up during the year to deal with internal communications, organization, and psycho-social risk prevention.
Clextral Division At Clextral, safety management has been integrated into the general management system, with the environmental section now ISO 14001-certified. In 2014, three joint meetings were held for workers at shop-floor level to consider further improvements to safety. The occupational health physician is involved in all projects concerning working conditions and safety. In addition, the company has one employee working full-time in a safety function who is also a volunteer firefighter in Saint-Etienne. Four Health and Safety Committee meetings were held in 2014, each preceded by a tour of one sector and followed by an evaluation of
the previous year. Committee members also took part in meetings on operational safety. To promote risk prevention, posters addressing specific issues (hygiene, reminders to flag any problems, etc.) are regularly displayed. An internal hygiene audit was conducted with management and hygiene officials that resulted in a proposal to offer workwear cleaning services. In addition, an information meeting was held on risk prevention for employees working off-site. Clextral also produced fact sheets on stressful working conditions this year.
Keller Division To give greater scope to preventive action, Keller held a number of physiotherapy sessions and time management courses in 2014. The Division also installed personal protective gear suited to the various kinds of ailments encountered.
In Italy, Morando initiated a program of sessions spanning such areas as the provision of personal protective gear, machinery and equipment safety, maintenance and emergency procedures, workplace design, the introduction of health and behavior standards, and the creation of internal control and monitoring structures. Morando provided workplace health and safety training to the entire staff in the course of 2014.
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Environmental
report
31 / Sustainable production strategy 32 / Environmental policy 34 / Managing our environmental impacts 37 / I nnovation and product/solution development
42 / Supplier relations
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Sustainable production strategy We provide clients with technologies and solutions that meet the challenges of sustainable development and boost the competitiveness and growth of our business. As our society confronts major environmental challenges—fighting climate change, using natural resources sustainably, and preserving biodiversity, to name just a few—technology can play a powerful role, helping industry address these challenges and simultaneously spurring competitiveness and growth. At Legris Industries Group, sustainable development is an integral part of our strategy. Our Divisions work constantly to innovate and develop the very best technologies, solutions and equipment. Their goal: meet customer expectations, delivering both high operating performance and high environmental performance that will minimize their impact on the planet. These innovations keep us competitive in our various markets today, and will help us grow our business tomorrow. Sustainability presents different challenges in different market segments. Clextral manufactures and integrates twin-screw extrusion equipment and production lines for food processing, chemicals (including specialty paper pulp) and biomaterials, offering solutions that significantly outperform traditional technologies in terms of environmental impact. Depending on their segment, customers can select technologies that consume less energy and water—especially in the food and paper industries, where more intensely focused processes boost industrial, economic and environmental performance—and offer a reduced carbon footprint, biosourced raw materials and certified Green extrusion. The challenges of sustainable development have driven Clextral’s approach to innovation for many years and underlie many of its solutions.
Keller manufactures and integrates turnkey plants and automated equipment, and provides services for the heavy-clay building materials sector, enabling clients to sell bricks and tiles with environmental qualities that are recognized by industry professionals across a number of geographical markets. And the company continues to innovate, developing new solutions that continually improve the energy efficiency of its kilns, dryers, and other equipment—thus enabling customers to reduce the energy consumed in their heavy-clay manufacturing processes. Savoye manufactures and integrates automated systems, equipment, and IT solutions for logistics centers. A major player in the logistics chain, it builds sustainability into its product development process, from marketing to user training at client sites. This includes making equipment more energy-efficient, designing equipment that uses less raw material, making warehouse workstations more ergonomic, optimizing warehouse workflows, and organizing transport flows. The Division leverages the cutting-edge capabilities behind brands that are highly respected inside and outside of France, as well as the synergies between them. Savoye is known for light and heavy load order picking and mechanized packaging; a-SIS has earned recognition for its Logistics Manager Suite, a full suite of APS/OMS, WMS/WCS, and TMS supply chain solutions; Prodex provides dynamic storage equipment; and Retrotech specializes in logistics engineering and automated storage and retrieval system modernization.
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Environmental report
Environmental policy Core principles Long-term commitment: a UN Global Compact member At Legris Industries Group, we’ve been focusing on sustainable development for years. We joined the UN Global Compact in 2004—a reflection of our commitment to supporting and promoting all of its fundamental principles within our sphere of influence. In 2014, we continued our commitment to the Global Compact and publicized the steps we took to improve our compliance with its ten principles.
Code of Business Conduct formalizes our principles and best practices In 2008, we established our Code of Business Conduct, which we provide to every Group employee and disseminate as widely as possible to the businesses we work with. The Code (which is available at www.legris-industries.com) is fully consistent with the fundamental principles of the UN Global Compact and reflects our commitment to formalizing its principles and practices, applying them in our business dealings, and disseminating them as widely as possible. Since 2011, we have also deployed a business ethics training module to raise awareness of business ethics among our employees, especially our sales and purchasing personnel. Our Code of Business Conduct defines the key principles behind our environmental policy. Our offer (design phase): actively pursue a strategy of designing environmental, health and safety benefits into our products and solutions for our customers’ users, from the very first stages.
Above and beyond our compliance with environmental law, we are engaged in a process of constant environmental progress, designing energy efficiency into the solutions we offer to customers and constantly working to reduce energy consumption linked to their use. As a result, our solutions give our customers both environmental performance and a business advantage. Our industrial operations (manufacturing phase): minimize the environmental impact of our operations. Because our goal is to become ever more conscious of the environmental impact of our manufacturing processes, we work to ensure that whenever we make a decision—in any area—we consider the full environmental impact, from energy efficiency, water consumption, and emissions to safety and ergonomics.
Our cross-functional sustainable development program: Sustainability by Groupe Legris Industries We’re pursuing our commitment to continuous environmental progress with Sustainability, a cross-functional sustainable development program that began in mid-2010. As regulatory constraints increase and customers demand ever more energy-efficient solutions, we want to ensure that each of our businesses anticipates and benefits from the opportunities that sustainability presents. We named this effort “Sustainability by Groupe Legris Industries”—expressing our ability to change our internal practices and to meet the challenge of sustainable development in our operations and internal structure—and it now includes all of our environmental protection initiatives, generating momentum throughout the Group. A dedicated employee manages and promotes the Sustainability program at Group level.
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Structure and resources Dedicated cross-functional teams for environmental management systems Three ISO 14001-certified sites in 2014 Clextral has been ISO 9001-certified since 1996 and earned ISO 14001 certification in 2005, with the most recent renewal of both certifications in 2014. The Division views ISO 14001 as a true performance driver and has used the standard to manage, structure, and formalize part of its sustainable development effort for years. The environmental management system and structure derived from it allow for continuous improvement in every area covered by ISO 14001. An employee focuses full-time on managing the environmental impacts of Clextral’s operations, as well as health and safety in the workplace. Since the audit on positioning relative to the ISO 26000 standard (on social responsibility at businesses and organizations) conducted in 2011, Clextral has been using the guidelines in the Guide FD E01-001, “Social responsibility of mechanical engineering companies” (based on ISO 26000 and adapted to mechanical engineering SMEs) as a benchmark so that environmental and social concerns can be more fully incorporated into its strategy.
Savoye began using the ISO 14001 standard as an organizational model and methodological tool in 2011. After a diagnostic phase conducted with support from Cetim, a Dijon-based technical center for the mechanical engineering industry, the Division deployed a number of initiatives. These included incorporating a sustainable development section in the job description and goals of every employee in the products department; making sustainable development an integral part of both process formalization and product design; recovering waste at the Ladoix-Serrigny industrial facility; and introducing energy-saving solutions at the various sites. The Division’s Product Committees now routinely factor sustainable development concerns into equipment and product design and enhancement. In 2014, for example, an ergonomist helped Savoye design workstations for its new PTS (Picking Tray System) to ensure maximum comfort for workers at customer facilities. Keller also adopted the ISO 14001 environmental management system in 2011. After investing a year in setting up a structure and a management/continuous-improvement system for quality, health and safety, and the environment, the Division was awarded both ISO 9001 Certification (for quality) and ISO 14001 Certification (for environmental responsibility) in April 2013, which was renewed in April 2014. ISO 14001 certification was a concrete result of the cross-functional Sustainability program. As an expert in contact-free measurement of temperatures, Keller’s pioneering MSR activity has been ISO 9001-certified since 1996. Its environmental management system is coordinated by an employee who reports directly to Keller’s chairman.
Sharing best practices We promote cross-functional relationships between our Divisions to share best practices The diversity of Divisions’ operations allows them to benefit from a variety of experiences and types of expertise.
In 2013, we formed environmental working groups that included employee representatives from all of our sites. Their goal was to take an inventory of existing practices, share best practices with other Group sites, and implement new green habits tailored to their own operations. In 2014, the groups forged ahead with the aim of achieving continuous improvement.
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Managing our environmental impacts Managing, communicating, and coordinating the environmental impact of our business. We measure and disseminate information on energy consumption, water consumption, emissions, and waste generation for all our activities, and track their impact using indicators adopted by each of our units.
Using natural resources wisely Water consumption
Energy consumption
12% increase in water consumed Group-wide in 2014
14% reduction in energy consumed Group-wide in 2014
(in m3) Water consumption
2012
2013
2014
13,996
11,415
12,764
Water consumption (in M3)
Energy consumption (in kWh ‘000 equivalent)
2012
2013
2014
Natural gas
14,829
15,054
12,455
Electricity
6,622
6,240
5,905
727
491
309
22,178
21,785
18,669
Fuel oil
14,000
Total energy consumption
12,000 10,000 8,000
Keller
6,000
Energy consumption (kWh)
4,000
Clextral
25,000,000
2,000
Savoye
20,000,000
0
2012
2013
2014
15,000,000
Keller Clextral uses water primarily for testing at its R&D centers. Water consumption levels therefore vary with the type and number of tests performed for customers, although the Division makes continuous improvements to its equipment to ensure the most efficient consumption possible. In 2014, Clextral’s water consumption was up by a mere 2% in relation to 2013. Since neither of the other Divisions uses water in their manufacturing processes, virtually all of their water-consumption efforts consist of green habits practiced by individuals. Employees have been made aware of these habits and can suggest and implement their own ideas (See Employee awareness and participation below). The 10% increase in water consumption at Savoye was attributable in part to a leak detected at the Dijon plant. In the case of Keller, water consumption increased at the Asti site in Italy after the start-up of a new pilot production line for the extrusion of masonry components made of inorganic insulation materials. A number of tests required the use of water to bring the paste to exactly the right consistency. In Germany, more intensive use of the second building in Laggenbeck to develop the innovative Enviro kiln accounted for most of the increase in the Division’s water consumption in the country. Total water consumption at Keller stood 25% higher in 2014 than in 2013.
10,000,000
Clextral 5,000,000
Savoye 0
2012
2013
2014
Energy consumption in 2014
2% / Fuel oil 67% / Natural gas
31% / Electricity
In 2012, Clextral was awarded the European Commission’s GreenLight label for its renovation of lighting systems at its production units. In 2013, the Division commissioned a specialized supplier to run a complete analysis of the energy needed to produce compressed air. Steps to improvement were made in 2014 on the basis of the results.
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Moreover, milder weather in 2014 at Clextral’s main location led to a substantial decrease in the consumption of natural gas, which is used primarily for heating. The Division’s energy consumption as a whole was down 23% compared with the previous year. At Savoye, an analysis of workstation practices and employee awareness initiatives encouraged staff to systematically turn off devices at the end of the day, while at a-SIS, section lighting was reconfigured to limit lit areas to users’ actual needs. In 2014, meeting-room lamps were replaced by LED lamps and a new boiler was installed at the a-SIS site in Saint-Etienne, which should reduce natural gas consumption significantly. At the Prodex plant in Bourgbarré, production equipment was upgraded further. Following the replacement of the paint-curing oven with a next-generation model, which reduced natural gas consumption by 15% in 2012–2013, the quenching tank used to prepare parts was replaced in 2014. This made it possible to cut power consumption by some 10%. In 2014, total energy consumption at Savoye was down 22% compared with 2013, due primarily to the closing of the Genlis plant, but also to a milder winter than in 2013 (requiring less heating) and to a variety of continuous improvement programs. Keller periodically measures the energy it consumes for heating and lighting. By the end of 2014, the Division had replaced 80% of the light bulbs in the shop at its site in Laggenbeck, Germany, following a roof renovation that increased natural lighting. Keller received a subsidy from the Bundesamt für Wirtschaft und Ausfuhrkontrolle (Germany’s Federal Office for the Economy and Export Control) to replace light bulbs with LEDs. In return, Keller installed a new compressor that provides a 65% gain in efficiency. Steps to improve production building insulation in Mellrichstadt have also reduced energy costs. The reorganization of several production processes initiated in late 2014 will impact energy consumption in 2015. The 11% increase in energy consumption at the Laggenbeck plant was due to more intensive use of the second building for Enviro kiln development work, which began in late 2013,
with around-the-clock testing and measuring, and the kiln starting up with electric power and then switching over to natural gas. All of the electricity used at the Konstanz and Laggenbeck sites is supplied by hydroelectric generating plants. The plant in Asti, Italy, achieved a 27% decrease in total energy consumption by adopting a new approach to lighting and more efficient workshop heating practices. Total energy consumption was 4% lower in 2014 than in 2013. In 2014, the messaging service for all Group employees was migrated to the Cloud. Because we are convinced that resource sharing via cloud computing translates into greater all-around efficiency, we deployed this new platform in the course of 2014. Employees have been provided with new collaboration tools that they can access anywhere on any Internet-enabled device, from PCs to smartphones and tablets. A communication campaign and training modules helped ease the transition. Our cloud computing solution will gradually lead to a smaller environmental footprint for the Group. We will eventually need less IT equipment like servers and will therefore use less electric power; paper consumption will potentially decline as document search, data storage and sharing, and collaborative work on documents all become easier; and videoconferencing available on all messaging platforms will reduce employee travel. In addition, cloud computing helps reduce under-utilization of IT resources, which are necessarily scaled for peak loads, and cloud infrastructure is low-energy and standardized.
Consumption of raw materials Reducing the steel, stainless steel, and other raw materials used to manufacture our equipment means focusing essentially on the design phase. This is why we are adopting eco-design for our products and equipment, whether we manufacture components in-house or subcontract them to outside suppliers (see Innovation and product/ solution development).
Managing pollution Waste generation 13% reduction in waste generated Group-wide in 2014 (vs. 2013)
Waste production (metric t) 1,600
74%
72%
2012
2013
2014
Total waste production
1,432
1,073
928
of which waste recycled/reused
1,031
690
581
1,000
72%
64%
63%
800
64%
600
62%
Metric tons
% of waste recycled/reused
An estimated 63% of total waste generated was recycled or recovered in 2014, which was roughly on par with the percentage in 2013.
72%
1,400 1,200
64%
70%
63%
68% 66%
60%
400
58%
200
56%
0
54 %
2012
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2013
2014
% recycled Keller Clextral Savoye
Environmental report
Clextral, which has been ISO 14001-certified since 2005, continually optimizes its sorting and processing systems for recoverable waste, with the cost of sorting largely covered. In 2014, waste generated was reduced by 6%, and 39% of the total was recovered, up from 37% in 2013. Because that waste comes from the Division’s R&D centers, the quantity generated depends on the number and type of tests performed for customers in a given year. The non-recoverable waste is non-polluting. Keller completely restructured its waste management approach in 2013, reducing waste generation to a minimum, sorting the remaining material, and setting up a recycling system for all recoverable waste. The Division periodically measures and analyzes the quantity of its waste stream producing reports to serve as a basis for action plans. Morando has maintained a best practice initiative for reducing and recycling paper waste first launched in 2012: discarded paper is shredded and re-used to package and cushion fragile products shipped to customers. In 2014, Keller reduced the quantity of waste generated by 9%, and recycled or recovered 88% of the waste produced (the same percentage as in 2013). Since late 2012, Savoye has been systematically sorting all of the waste—mainly cardboard and steel—generated by its industrial site in Ladoix-Serrigny. In 2014, the Division put in place a procedure called W3E for sorting Electronic and Electrical Equipment, an increasingly large source of waste. A great deal of such equipment contains substances or components that are hazardous to the environment
(e.g., batteries and accumulators, greenhouse gas, cathodic tubes, components containing mercury, condensers that may contain PCBs). At the same time, there is major potential for recycling the core materials (e.g., ferrous and non-ferrous metals, rare metals, glass, plastic). In the course of the year, Savoye provided a W3E recovery dumpster that made it possible to process 244 kg of waste. Altogether, Savoye reduced waste volumes by 46% compared with 2013, due primarily to the Genlis plant closing. The percentage of waste recycled fell 10 points to 79%.
Water and ground pollution The pollution levels in wastewater disposed of at the Clextral property line were last measured in 2012 and found compliant. Savoye no longer does painting at its Ladoix-Serrigny plant, nor does Keller at its Konstanz site, thus eliminating the risk of pollution. In 2014, Prodex equipped the degreasing booth in its paint booth with state-of-the-art technology.
External noise pollution Noise levels at the Clextral property line were last measured in January 2012 and found compliant. At Keller’s Laggenbeck site, the average noise level does not require routine individual protection, and the impact on the outside environment is limited. Savoye’s operations do not generate any noise pollution for its immediate environment.
Climate change Direct greenhouse gas (GHG) emissions 18% reduction in GHG in the direct vicinity of sites in France, Germany and Italy in 2014 (vs. 2013) (In metric tons of CO2 equivalent) Direct greenhouse gas (GHG) emissions: direct perimeter* in France and Germany
2012
2013
2014
Greenhouse gas emissions (metric tons of CO2 equivalent) 3,500 3,000
3,072
3,125
2,567
2,500
Keller
2,000
* Scope 1: direct emissions produced by the company’s equipment (from sources including heating of buildings, operation of equipment, and leakage of refrigerant gas from air conditioning systems)
1,500
Clextral
1,000
Savoye
500
In 2012 a Group employee was trained to measure greenhouse gas emissions using the BEGES methodology. He was recertified in 2014.
0
2012
2013
2014
The decrease in greenhouse gas emissions in 2014 correlated to a large extent with lower energy consumption in relation to 2013 (See Managing our environmental impacts—Energy consumption).
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Innovation and product/solution development Innovation has been central to our growth model for years—we see it as the ultimate performance driver. Sustainable development issues are now among the main sources of innovation for all three of our business lines.
Eco-design Products, solutions, and services combining innovation and eco-design Eco-design incorporates environmental impacts into every phase of the product/solution life cycle, beginning with design. Clextral has been using the ISO 14006 standard (Environmental management systems—Guidelines for incorporating eco-design) since 2013 to develop a new peripheral machine. ISO 14006 sets out an eco-design methodology that incorporates and reduces environmental impacts throughout the model’s life cycle. Clextral has already achieved tangible results in areas including raw materials and the number of components (by replacing painted steel with stainless, particularly in the new EVOLUM+® twin-screw extruder range, and limiting the number of parts) and energy savings (by optimizing use of steam). The project of redesigning Intelis®, the new conveyor range launched by Savoye at the end of 2012, in the interest of standardization, modularity, and shorter installation time at customer sites, included eco-design as an integral part of the initial specifications. With the support of CETIM, a Dijon-based technical center for the mechanical engineering industry, the Division carried out a comprehensive eco-design
approach (with special reference to the NF E 01-005 standard) spanning recyclability, carbon footprint, and optimized energy consumption. This has led to significant, tangible results. The energy used is 100% electric; 45% less energy is now used; the number of components has been reduced by 65%; and there has been a 32% decrease in CO2 equivalent. Savoye puts forward all these achievements to customers as selling points, and the same approach is now being applied to all Savoye products and services. Savoye was unanimously awarded the 2014 Eco-Innovez en Bourgogne (“Eco-innovating in Burgundy”) trophy in the eco-innovative product/ service category for its new Intelis® conveyor range. The competitors in this regional contest are businesses and research laboratories that have developed pioneering solutions offering enhanced environmental efficiency, and the eco-innovative product/service category award is for the company in the region that has brought to market an innovative product or service that included environmental concerns right from the design stage. Although Keller does not currently use any specific eco-design standard, it is constantly alert to environmental issues during design, manufacture, on-site commissioning, and customer use of its equipment and plants.
Co-development Co-development drives our customeroriented approach to innovation As leaders or pace-setters in the markets where we operate, we guide our clients and assist them in efforts to minimize environmental impact, encouraging close collaboration with all external research units to combine product development with environmental protection. Clextral has been working since 2013 with an Institute for Excellence in Carbon-Free Energy (IEED) tasked with producing materials from biomass: IDEEL (the Institute for the Development of Ecotechnologies and Carbon-free Energies), an active participant in AXELERA, a globally oriented chemicals/environmental competitiveness cluster based in Lyon, France. IDEEL is housed on the premises of Axel’One, a collaborative innovation platform dedicated to clean processes and innovative materials in the chemical and environmental industries. Through this partnership, Clextral is promoting use of its twin-screw extrusion technology in biomass recovery, contributing its expertise to the research effort and making industrial pilot equipment available for
testing. As part of this joint development effort, for example, Clextral twin-screw extruders made with custom metal are included in the platform at the Carbohydrate Recovery Center. Clextral is also continuing joint projects with competitiveness clusters in a range of different areas, including Valorial (Food of the Future), Céréales Vallée (the grains of tomorrow with the Granoflakes project), Plastipolis (plastics) and Viaméca (mechanical engineering). Since January 2012, the Keller Division’s subsidiary Morando has been a partner and active member of LEEMA (Low Embodied Energy Advanced Insulation Materials and Insulation Masonry Components for Energy Efficient Buildings), a project funded by the European Commission as part of its high-priority Energy Efficient Buildings program. LEEMA’s goal is to develop a new generation of inorganic insulation materials and building insulation masonry components, with embodied energy more than 50% lower and total cost at least 15% lower than the insulation materials and building solutions currently on the market.
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Morando is involved with developing new manufacturing processes for these innovative materials. In 2013, a large number of tests were successfully carried out, and the consortium continued with its work in 2014, resulting in a pilot line prototype for the extrusion of geopolymer binders. The goal for 2015 is to deliver state-of-the-art production lines and industrial equipment to our other industrial partners to enable the roll-out of new insulation and building materials that offer the following: - greater durability and higher energy efficiency for buildings; - a safer, cleaner indoor building environment due to incombustibility and the absence of organic/fibrous compounds; - use of mineral waste from industrial processes and recycled glass industry waste and industrial by-products. To foster synergy and open up further fields of cooperation, Morando also joined the AMANAC (Advanced Material & Nanotechnology Cluster for Energy Efficiency in Buildings). The aim is to achieve greater impact on issues like nano-insulation, the reduction of embodied energy, HVAC (Heating, Ventilation and Air Conditioning), lightweight components, and indoor air quality.
In 2014, Keller also teamed up with several universities on a variety of research projects. These partnerships included work with the Osnabrück University of Applied Sciences on technological processes, with examples that include making kilns more energy efficient, and developing test equipment for fans. Keller also works with customers to develop innovative new solutions, such as optimizing fans and air flow for kilns, and using landfill gas to power kilns. Savoye’s subsidiary a-SIS continued its partnership with start-ups in the northern French city of Lille. Focus areas include integrating contactless NFC (Near Field Communication) technology for automatic identification at facilities and 3-D warehouse modeling that enables users to view customer-specific solutions, lay out warehouses, run digital and visual flow simulations, and more. This unique 3-D display solution, known as a-SIS VIEW, will be coming out in early 2015. In addtion, a-SIS is working with UTC de Compiègne to model algorithmic solutions for use in software for warehouse management systems (WMS).
Professional networks Professional networks help share our expertise and support innovation processes We encourage our employees to take part in professional networks to share our practices and expertise—and to back our own approach to innovation. Keller belongs to several professional associations, including the Association of the German Mechanical Engineering Industry (VDMA) and European Ceramic Technology Suppliers (ECTS). The Division has also participated in a number of industry conventions, seminars, conferences, and working groups, including Automatica in Munich, Germany, Zieglertage, the congress of brick producers held in Würzburg, Germany, and Mosbuild in Russia. Morando is a member of the Engineering and Modernization Cluster promoted by the European Union as an adjunct to the LEEMA project, whose purpose is to help manufacturers establish an engineering and modernization road map for producing the next generation of advanced nanomaterial-based products, and to contribute towards policy-making with regard to European engineering. Savoye is a member of the French Logistics Association (ASLOG), European Logistics Mediterranean (ELMED), and the Rhône-Alps Logistics Cluster, which focuses particularly on optimizing intra-city delivery modes. For several years, the Division’s software subsidiary a-SIS has organized a users’ club, where logistics managers can share information and exchange ideas. As part of its club activities, a-SIS
launched a benchmarking and review process for working conditions and health indicators at logistics facilities. The initiative is designed to help logistics site managers find solutions to one of their greatest challenges—improving performance and making warehouse work less tiring. Subsidiary a-SIS is also a member of the Innovation Center for Contactless Technologies (CITC-EuraRFID), dedicated to technologies that enable objects to communicate with each other dynamically and interact with their physical and virtual environments, while maintaining high levels of confidentiality and security. The company is moreover a member of the Lille Metropole Development Agency (APIM) and participates in joint projects in packaging with the MAUD (Materials & Applications for Sustainable Use) competitiveness cluster. Clextral is represented on the Policy Board for Fabrique de l’Industrie, a French think-tank founded jointly in October 2011 by UIMM, the French industrial forum Cercle de l’Industrie, and GFI, an umbrella group for French industry to promote more extensive, higher-quality discussion of industrial issues, and is a member of ADEPTA, the Association for the Development of International Exchange on Food Products and Technologies. In addition, two Clextral Vice Presidents serve as French Foreign Trade advisers. In 2014, the Union de Normalisation de la Mécanique (UNM, the French standardization entity for mechanical engineering and the rubber industry) released standard FD E01-001, “Corporate social responsibility—an approach to benefit the strategy and effectiveness of mechanical engineering SMEs”. Clextral played an active part in drafting this practical guide to implementing ISO 26000 in the mechanical engineering industry.
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R&D Investment €6.6 million invested in R&D in 2014—3.2% of sales
Total expenditure on R&D (€ ‘000) R&D as % of sales
INVESTMENT IN R&D
3.2%
7,000
3.5%
2012
2013
2014
5,408
5,128
6,666
5,000
2.5%
3.2%
4,000
2.0%
3,000
1.5%
2,000
1.0%
1,000
0.5%
2.5%
2.3%
In 2014, R&D spending increased from its already significant level by €1.5 million, because our three Divisions all carried out major R&D projects concurrently.
6,000
2.5%
3.0%
2.3%
0
R&D in % of sales R&D in € ‘000
0.0%
2012
2013
2014
Key innovations in 2014 Years of research and development paid off in 2014 with the launch of several major breakthroughs and promising ongoing work in other areas, making it a banner year for innovation throughout the Group EVOLUM+, setting the new standard for extrusion excellence with an intensified process. In 2014, Clextral brought out a new range of twin-screw extruders. The EVOLUM+ combines the proven features of the Evolum® range with advanced technology to give processors new levels of throughput, flexibility, and control while ensuring maximum product quality and process stability. This new generation of extruders also takes into account the steadily increasing hygiene requirements of users. By intensifying the process, Clextral has reduced the equipment’s carbon footprint for the customer: - At unchanged size, the EVOLUM+ delivers up to 40% higher volume production over the current Evolum®, resulting in a better return on investment through a profitable processing solution. EVOLUM+ offers increased volumetric capacity while optimizing the volume/ energy ratio. The investment cost divided by throughput is dramatically reduced. - A dvanced Thermal Control (ATC) is a self-learning proprietary innovation for equipment that ensures improved response time, enhanced process stability of up to 70%, and energy savings of up to 20% during the start-up phase, as well as lower production waste from variations in temperature. - T he EVOLUM+ range has been specifically designed for more hygienic processing and food safety. The extruders are built of either corrosion-resistant painted steel or stainless steel, depending on the application. New ergonomic design and open profiles make the entire machine accessible. Intelis®, a breakthrough eco-designed conveyor that adapts to clients’ needs. In late 2012, Savoye rolled out Intelis®, a new conveyor range with innovative features that set it apart from other products on the market and that have made it a huge success ever since. The Division has sold some thirty installations in Western Europe and Russia. This fully modular eco-designed system uses standard, 100% independent components and offers extreme energy efficiency. Models now in service
have continued to deliver a 45% reduction in energy consumption, in addition to the advantages of modular design and shorter installation time on customer premises. In a further sign of forward motion, Savoye also developed a workstation in 2014 by bringing together an in-house working group and an ergonomics consultant. The project has reached the prototype stage and is scheduled for market release in 2015. The system reduces workstation fatigue and stress, both limiting and preventing work-related illnesses and musculoskeletal disorders, which sometimes affect workers at logistics centers. LM Order Manager, an OMS that meets the multi-channel challenge. a-SIS is continuing its R&D and expanded-range strategy, and in 2014 launched its new LM Order Manager, an OMS (Order Management System) designed to meet changing demand in distribution models, with a shift from single- to multi- and cross-channel, and from singlewarehouse to multi-network. It collects orders sent by commercial systems (ERP) and manages distribution and delivery of individual items in each order from storage areas including multiple warehouses. The system then interfaces with ERP and WMS systems to organize and optimize flows in the distribution chain. To address a French market as yet relatively unfamiliar with OMS solutions, a-SIS brought in Evolena, a firm specializing in information systems, to write a white paper that explains in accessible terms the trends currently affecting supply chain organizations and that outlines both the challenges involved in adopting an OMS (Order Management System) and the potential upside. The white paper was released in March 2014 to coincide with the 2014 SITL transport and logistics trade show. In addition, a-SIS now offers TMS (Transport Management System), which is all about sustainable development. The system doesn’t just help manufacturers and logistics service providers optimize transport management—a key driver of competitiveness and performance
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for today’s customers. It also makes a difference in those areas of the logistics chain with the highest environmental impacts: energy consumption and pollution. Last of all, a-SIS On Demand, a highly effective subscription service that is tailored to warehouse volume, can grow with the customer’s need for functionality in key areas ranging from freight deliveries to storage, order picking, shipment, inventories, dashboards, statistics and more. In 2012, 2013, and 2014, Savoye’s subsidiary Retrotech won a Green Award from the US monthly magazine Food Logistics, recognizing it as one of the US food industry’s best green suppliers. Retrotech has successfully continued to upgrade and modernize clients’ automated handling systems, optimize their distribution activities, and significantly reduce their carbon footprint. Enviro, a revolutionary, energy-saving kiln. To drastically reduce the energy requirement for clay brick and tile firing, Keller has radically revisited the principle of the countertravel kiln and created a new sustainable kiln concept. With the new Enviro kiln, the energy consumption of a roof tile plant, for example, can be reduced by about 30%.
Keller accordingly focused in 2014 on developing this new process. To obtain drastic energy savings, it was necessary to rethink the traditional tunnel kiln design and ensure that the “solid-solid” energy transfer operates successfully in this countertravel kiln. After installing and starting up the Enviro prototype kiln, Keller performed a number of tests on sample tiles and bricks, all of which yielded positive results: - the direct heat transfer from tile to tile works perfectly (according to the “solid-solid” principle); - 99% of the bricks fired in the Enviro kiln are free of cracks and black cores; - the tiles are uniform in color; - tiles and bricks fired in the Enviro have similar intrinsic properties to those made in conventional kilns. Encouraged by these results, the team at Keller is ready to enter the final engineering stage. They are in regular contact with customers interested in adopting this advanced technology at new installations or existing installations slated for overhaul.
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Employee awareness and participation Employee awareness drives sustainable development. No sustainable development program can succeed without active employee support.
Training At the end of 2014, 75% of Group employees had taken our CAP Planet training program To raise awareness of sustainable development within our workforce, Legris Industries University launched CAP Planet, a new training program, in November 2011. An e-learning course that students can take remotely via the web or the Group Intranet, CAP Planet has two modules: one on sustainability in general and another on sustainable development at Legris Industries Group. Both were developed jointly
with Terra Eco, an e-learning specialist, and are available in French, English, and German. CAP Planet rounds out the curriculum at Legris Industries University, which offers training for employees at all levels. Courses include CAP éco on business economics and key performance indicators; CAP dialogue on communication and performance & development reviews; and CAP innov’ on creativity and innovation.
Internal communications Group and Division communications raise employee awareness and understanding We use Intralina, our Group intranet, to update employees on sustainable development issues and the action plans underway in our Divisions. In-house announcements and Eco du mois, a feature on our home page, highlight the theme for each year’s Sustainable Development Week campaign and other topics, with news also posted on
bulletin boards and in Division newsletters including Clextrusion and En Savoy’R+. A green habits campaign launched at year-end 2013 to reach out to all Group units through the intranet and bulletin boards was continued in 2014.
Idea Management Systems Employee input feeds momentum and encourages innovation at all levels Clextral encourages employees to contribute their ideas—especially those linked to sustainable development—through its Mouv’idées idea management system, deployed in 2008. At the same time, the forecasting exercise designed to prepare the company for the future by projecting technological, demographic and environmental trends through the year 2020 under the H2020 project, has continued to generate a variety of action plans. A large number of employees contributed to the exercise, taking part in workshops designed to anticipate change and lay the groundwork for our business in 2020.
Keller uses Ideen+, an idea management system launched in 2011, to encourage employees to contribute solutions for sustainable development and other issues. Altogether 20% of ideas proposed in 2014 had a direct connection to sustainable development issues. Savoye took a variety of steps to cultivate new ideas. These included “intelligence and innovation,” an in-house newsletter; sessions to make employees more aware of innovation and introduce them to the innovation process; a new mailbox to collect ideas; and the introduction of creativity units, set up to explore clearly defined themes. The in-house innovation process also collects ideas on increasing sustainability, both in Savoye’s offer and in its manufacturing operations.
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Green habits in the workplace Employees contribute directly to progress through green habits Green habits are everyone’s business, and each employee has a role to play in minimizing our environmental impact. Making these habits truly ingrained and automatic often requires an effort, but every one of our sites is already promoting a number of them, from car-sharing to sorting and recycling waste. The inventory of existing practices conducted in 2013 enabled each Division to share its best initiatives with other Group sites and tailor them to the specifics of each business. In 2014, for example, Team Grün—the green habits working group at Keller—got car-sharing off the
ground within the Division. Comprehensive tests were also performed in all Group buildings to find out whether it would be worth equipping the kitchens and restrooms with motion sensors. The conclusion was reached that it would not be a good investment. The green habits campaign launched at all Group facilities at the end of 2013 over the intranet and on bulletin boards is built around six themes: energy, transport, waste, water, purchasing and responsible consumption, and IT. In the Divisions and over the Group intranet, it was continued in 2014, taking other forms.
Supplier relations Lasting, efficient relations with suppliers. Legris Industries Group makes lasting and efficient relationships with our suppliers a priority.
Purchasing policy Compliance with applicable law is a decisive factor in our process for selecting suppliers and subcontractors. We expect our suppliers to meet a wide-ranging set of standards, including maintaining decent
working conditions that comply with applicable law on health, safety, and environmental protection. We also seek to prevent suppliers from becoming economically dependent on our Group.
Qualifying suppliers Each Division requires all suppliers and subcontractors to complete a detailed questionnaire that qualifies them and assesses their labor and environmental practices. We use this tool to make suppliers more aware of these issues, to guide them, to encourage them to improve their performance as needed, and to qualify and select individual suppliers based on these key criteria. Clextral has signed the French national business-to-business relationship charter, which encourages businesses to adopt responsible, respectful practices toward suppliers by adhering to ten commitments that improve these relationships. Following its first Suppliers’ Conven-
tion held in 2013 in partnership with France’s Ministry for Economic Regeneration, the Division has continued to pursue its goal of intensifying its long-term strategic alliances with key suppliers to improve its overall performance. With much the same purpose in mind, Clextral’s machining department joined forces in 2013 with the Rhône-Alpes Development and Innovation Agency (ARDI) to set up a working group called AAA with four partners. The aim is to improve Clextral’s customer service ratio and give its suppliers greater flexibility in scheduling their production work. All the parties involved found the first results for 2014 to be conclusive.
2014 Management and Sustainable Development Report / Groupe Legris Industries /
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Design and Production: NewSens - English text: Cohen / Durban