ANNUAL REPORT 2013 2014 4 1 0 2 3/ 1 0 2 L A N R U O J L E V A R T 02 Zodiac Aerospace, a world-class equipment manufacturer 06 Message from Olivier Zarrouati 08 Stopovers 2013-2014 14 OUR GROUP 30 OUR ACTIVITIES 16 Development 32 Zodiac Aircraft Systems 20 Innovation 42 Zodiac AeroSafety 24 R&D 52 Zodiac Cabin & Structures 26 After-sales and repairs 60 Zodiac Galleys & Equipment 28 Operational excellence 68 Zodiac Seats 76 OUR COMMITMENTS 92 LOG BOOK 78 Human Resources MANAGEMENT TEAM 84 Environment FINANCIAL STATEMENTS 91 Societal Commitment OF THE GROUP Zodiac Aerospace, a world leader in aerospace equipment and systems on board commercial, regional and business aircraft as well as helicopters, is also a key player in air safety and teletransmission. Comfort and life on board aircraft, onboard systems, and safety on the ground and in-flight: its five business segments – Zodiac Cabin & Structures, Zodiac Galleys & Equipment, Zodiac Seats, Zodiac Aircraft Systems, and Zodiac AeroSafety – develop and implement the most advanced solutions for its clients. We stay close to our customers throughout the world by offering a comprehensive range of products and services to meet complex challenges in aerospace. ZZOODDIIAACC AAEERROOSSPPAACCEE 1 ZODIAC AEROSPACE, A WORLD-CLASS EQUIPMENT MANUFACTURER 4 DEVELOPMENT COMFORT AND LIFE ON BOARD PRINCIPLES AIRCRAFT DIVERSIFYING in businesses with a high-technology content, through AIRCRAFT INTERIORS internal and external growth ZODIAC SUPPORTING our customers over CABIN & STRUCTURES the long term through reliable OVERALL DESIGN AND after-sales activity IMPLEMENTATION OF CABIN LAYOUT FOCUSING ON NICHE MARKETS to acquire or strengthen leadership positions ZODIAC ENSURING steady growth in earnings GALLEYS & EQUIPMENT per share CABIN EQUIPMENT SOLUTIONS TO OPTIMIZE ONBOARD SERVICE AND PASSENGER COMFORT ZODIAC SEATS A COMPREHENSIVE AND INNOVATIVE RANGE OF SEATS FOR GREATER COMFORT, OPTIMIZING WEIGHT AND SPACE A COMPREHENSIVE RANGE OF ZODIAC AFTER-SALES SERVICES AEROSPACE TECHNICAL SUPPORT SERVICES A GLOBAL NETWORK FOR REPAIR SERVICES AND SPARE PARTS DISTRIBUTION 2 TRAVEL JOURNAL 2013/2014 3 core business areas, 5 business segments SAFETY IN ONBOARD FLIGHT AND ON SYSTEMS THE GROUND ZODIAC ZODIAC AIRCRAFT SYSTEMS AEROSAFETY HIGH-TECHNOLOGY EQUIPMENT COMPLETE SYSTEMS FOR AND SYSTEMS PROVIDING ENHANCED SAFETY ESSENTIAL FUNCTIONS FOR AIRCRAFT ZODIAC ZODIAC AEROSPACE AEROSPACE SERVICES SERVICES ZODIAC AEROSPACE 3 ZODIAC AEROSPACE, CONSOLIDATED REVENUE A WORLD-CLASS by business segment EQUIPMENT 31% Zodiac Aircraft Systems MANUFACTURER 14% Zodiac AeroSafety 4.2  BILLION 12% Zodiac Galleys 26% & Equipment Zodiac Seats CONSOLIDATED 17% REVENUE Zodiac Cabin & Structures Aircraft Interiors 567.3  MILLION CURRENT OPERATING INCOME* CONSOLIDATED REVENUE by geographic region 354.4 21%  MILLION Europe (excluding France) REPORTED NET INCOME 12% France 13.6 % OPERATIONAL MARGIN* 1.35  26% REPORTED NET EARNINGS PER SHARE* Rest of the world 31% * Excluding the effect of IFRS 3 10% United Other countries States in the Americas 4 TRAVEL JOURNAL 2013/2014 29,708 BREAKDOWN OF WORKFORCE by geographic region 22% France EMPLOYEES WORLDWIDE 12% Europe 66% of whom are based out of Europe (excluding France) (including France) 31% Rest of the world 5 35% PRINCIPLES FOR United States SAFETY ACTIONS BREAKDOWN OF WORKFORCE DEFINE AND IMPLEMENT STANDARDS by business segment (excluding holdings) to ensure workplace safety 24% Zodiac Cabin & Structures DEMONSTRATE THE PERSONAL COMMITMENT of all senior management 14% toward safety (exemplary, etc.) Zodiac Galleys & Equipment DEVELOP THE NOTION OF RESPONSIBILITY among all operators INVOLVE LINE MANAGEMENT in 24% identifying and reporting potentially Zodiac Seats hazardous situations 15% Zodiac AeroSafety CONDUCT SAFETY CAMPAIGNS 23% (run by line management and including Zodiac Aircraft Systems communication on progress and success) 42 sites 42 sites 10 sites in North America in Europe in Asia Pacific 4 sites 8 sites in South America in Africa ZODIAC AEROSPACE 5 MESSAGE FROM OLIVIER ZARROUATI CHIEF EXECUTIVE OFFICER All in all, the fiscal year demonstrated the strength of our Group, while focusing on civil aviation, has diversified enough so that the performance of some of our segments – this year Zodiac Aircraft Systems and Zodiac AeroSafety – compensated for the less successful performance of others. Z odiac Aerospace had a mixed 2013/2014 Paradoxically, the difficulties with Zodiac Seats fiscal year. Our revenue continued to increase, were caused by the success of our new seat range, exceeding 4 billion for the first time. We won which was completely overhauled with new products a substantial amount of new business as released in all market segments: economy class, a result of innovations in our five business segments. premium economy, business class, and first class. Another positive development was the strengthening Yet at the same time, we were able to deal with of our global leadership positions following production ramp up and new, more stringent the purchase of TriaGnoSys for in-flight entertainment certification rules. Despite the extra work for our design and connectivity (IFEC) systems, Pacific Precision offices and delays in our design and production chain, Product for oxygen systems for business aviation, we remained customer-focused and established action and Greenpoint Technologies for VIP cabin interiors. plans firstly to restore our delivery schedules and We ended the year with an operating margin of 13.6%, secondly to eliminate incremental production costs. a good level compared to our peers but down on Against this backdrop, we also made changes to the previous year due to unfavorable exchange rates the Group’s organization, strengthening operational and the temporary difficulties encountered by our management and making our development Zodiac Galleys & Equipment and Zodiac Seats and production process more robust. segments. As a Group, we are keenly aware of our community All in all, the fiscal year demonstrated the strength and environmental responsibilities in our host countries. of our Group, while focusing on civil aviation, has To this end, we have stepped up our commitment diversified enough so that the performance of some of to improving the safety of our employees and facilities, our segments – this year Zodiac Aircraft Systems and reducing our environmental footprint, and ensuring Zodiac AeroSafety – compensated for the less respect for human rights. During the fiscal year successful performance of others. The operational we joined the United Nations Global Compact, difficulties of Zodiac Galleys & Equipment at the demonstrating our determination to align our beginning of period were settled in the second half operations with the ten universal principles relating of the year, while those affecting Zodiac Seats at to human rights, labor standards, the environment year-end are in the process of being resolved. and the fight against corruption. 6 TRAVEL JOURNAL 2013/2014 In 2014/2015 we will continue to expand Zodiac Aerospace and consolidate our position as leader and pioneer in our business sectors. We will also strengthen our operational excellence and enhance our Group’s image and reputation for the commitment and wellbeing of its employees. ZODIAC AEROSPACE 7 STOPOVERS 2013-2014 OVERALL VIEW AIRCRAFT INTERIORS EXPO 2014 Zodiac Aerospace was one of the main exhibitors at the 2014 Aircraft Interiors Expo in Hamburg (Germany) with two stands, one of over 1,000 m2 where it presented multiple innovations in the field of cabins, and another where it presented its innovations in IFE1 and connectivity. Innovations displayed in the Innovative Space Interior System Premium Body Cabin mockup A record number of innovations were unveiled by the Group to delegations from over 120 manufacturers, airlines and leasing companies. Some of these innovations were incorporated into the Innovative Space Interior System Premium Body Cabin mockup, including the RevolutionTM Toilet units, the Advanced Lavatory, new-technology stowage bins for twin-aisle aircraft, the G2 galley 1 In-Flight Entertainment Systems 8 TRAVEL JOURNAL 2013/2014