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5. WABCO Holdings Inc. Business Report FY ended Dec. 2015

WABCO Holdings Inc. Business Report FY ended Dec. 2015

Factors
1) Net Sales
-FY ended Dec. 2015, the Company's sales decreased by 7.8% (increased by 6.6% excluding foreign currency translation effects) year-on-year. The increase was mainly driven by increased the Company content per vehicle partially offset by an estimated 7% decline in the global production of new trucks and buses greater than 6 tons.

2015 Sales by region

Contracts

-On Dec. 16, 2015, the Company announced that the Company and Dongfeng Liuzhou Motor have signed a long-term strategic partnership. In accordance with the agreement, the Company will provide Dongfeng Liuzhou Motor with ABSs, electronic brake systems, ESCsmart electronic stability control systems, and OptiRide electronic control air suspensions. The Company's products will be used on Dongfeng Liuzhou's mid- and heavy-duty truck models. (From a press release on December 16, 2015)

-The Company announced that it has entered into several long-term supply agreements with JMC Heavy Duty Vehicle Co. Ltd (JMCH), a new customer and a major truck manufacturer based in China. The Company's new business involves wheel-end solutions, including air-disc brakes, as well as conventional brake valves, other brake components and clutch servo technology. Among other technologies, the Company will supply JMCH with MAXX air disc brakes (ADB). The Company will support two new and separate platforms for the customer's different brands of medium- and heavy-duty trucks. Series production is planned to begin in three years for the Chinese market and expected export to Southeast Asia. In addition to utilizing its engineering and production capabilities in China, the Company is serving JMCH by leveraging the Company's global engineering, supply chain and manufacturing resources in Europe, Turkey and Brazil. (From a press release on August 19, 2015)


-The Company announced that it has successfully homologated advanced safety systems on the leading commercial vehicle platforms of two global coach manufacturers headquartered in Europe. The Company's OnGuardACTIVE advanced emergency braking system and OnLane lane departure warning system will enable coach builders Van Hool of Belgium and VDL Bus & Coach of the Netherlands to be fully compliant with European regulation on advanced driver assistance systems taking effect on November 1, 2015. Both coach manufacturers have already launched series production of respective vehicle platforms for European markets, featuring the Company's safety technologies. (From a press release on October 13, 2015)


-Meritor WABCO announced that its SmartTrac electronic stability control (ESC) is featured on Thomas Built Buses' Saf-T-Liner C2 school buses. Starting in September 2015, Thomas Built Buses will offer SmartTrac ESC, an active vehicle safety system that intervenes automatically when there is a high risk of rollover or directional instability that could lead to loss of vehicle control. (From a press release on September 9, 2015)

-The Company signed a long-term supply agreement with Hendrickson Trailer Commercial Vehicle Systems to provide an advanced air disc brake (ADB) system for trailers in North America. As part of the agreement, the Company will launch its MAXX22T in North America, the most optimized ADB system for trailer applications in the region. The new system combines the Company's braking technologies with Hendrickson's medium- and heavy duty suspension and axle systems. (From a press release on March 25, 2015)


-The Company announced that it has entered into a new long-term agreement as major supplier for a comprehensive range of advanced and conventional technologies with one of Russia's largest heavy-duty commercial vehicle manufacturers. The new agreement marks further expansion of the Company's partnership with this customer as the Company is now engaged as major supplier of anti-lock braking as well as electronic braking systems; traction control and electronic stability control; and electronically controlled air suspension, among other braking and air management products. For more than a decade, the Company has been supplying this major original equipment manufacturer headquartered in Russia with its technologies for braking, stability and suspension systems. (From a press release on September 7, 2015)

Restructuring

-The Company announced proposals to cease manufacturing operations at two production facilities in Western Europe to preserve the Company's global competitiveness for certain mechanical products. The Company presented proposals to cease manufacturing at its facilities in Meppel, the Netherlands, and Claye-Souilly, France. These proposals would result in a total reduction of workforce of approximately 320 positions. Both of these factories make conventional mechanical components. Production could cease at the Meppel facility by the second half of 2016, and at the Claye-Souilly plant in the second half of 2017, with production being transferred to other facilities within the Company's globally integrated supply chain. (From a press release on September 23, 2015)

Awards

-The Company announced it has received the following three awards from Dongfeng Liuzhou Motor: the "Excellent Supplier Award"; the "Excellent Quality Award"; and the "Strategic Partner Award". (From a press release on December 16, 2015)

-The Company announced that it has received the "Supplier of the Year" award from Tata Motors. (From a press release on November 24, 2015)

-Meritor WABCO has earned the 2015 "Platinum Supplier Award" from Wabash National Corp. for excellence in quality and delivery performance. Meritor WABCO supplies Wabash with SmartTrac trailer anti-lock braking, roll stability and InfoLink data gateway systems. (From a press release on October 6, 2015)

-Meritor WABCO announced that it has received the 2014 "Excellence in Quality Award" from Hino Motors Manufacturing U.S.A., Inc. Meritor WABCO has been recognized with this award five times in the past seven years. Meritor WABCO supplies Hino with pneumatic and hydraulic anti-lock braking systems (ABS) for commercial vehicles built in Williamstown, West Virginia, USA and Woodstock, Ontario, Canada. In addition to the zero PPM quality performance for Hino, Meritor WABCO's on-time delivery performance was 100 percent for 2014. (From a press release on July 21, 2015)

Outlook

-For FY ending December 2016, the Company expects sales growth to range from 6 to 11% year-on-year in local currency.

-Approximately 16% of its employees work in research and development.

R&D Facilities

-The Company announced the opening of a new 65,000 square foot facility in Chennai, India that will enable the Company to significantly expand its software engineering and shared services capabilities. The Company plans to expand its software engineering capabilities to support the local design of new products and systems for emerging markets as well as to contribute to the global development of advanced technologies for commercial vehicles. Since 2010, the Company has more than doubled its software engineering talent pool in India to nearly 250 and anticipates enlarging its team by an additional 150 engineers over the next five years. The new facility will also accommodate the Company's business services team of approximately 110 professionals. The team is dedicated to continuously improving the cost effectiveness and efficiency of the Company's business operations worldwide. (From a press release on September 2, 2015)


-The Company has recently expanded its engineering capabilities in North America. The Company opened a new commercial vehicle development and testing facility in Rochester Hills, Michigan (USA) to help develop the next-generation safety and efficiency technologies for trucks, buses and trailers. The Company has invested USD 1.5 million and built an advanced 4,400-square-foot site to support the work of more than 50 engineers involved in the innovation and development of new products and systems for commercial vehicle manufacturers and fleet operators in North America. (From a press release on March 25, 2015)

Co-development

-The Company has further strengthened its partnership with SmartDrive Systems, a leader in driving performance management solutions that help fleets to enhance operating safety and lower fuel consumption. The Company invested USD 20 million in U.S.-based SmartDrive Systems and will jointly develop next-generation, video-based analytics solutions for commercial vehicle fleets worldwide. SmartDrive Systems offers real-time, video-based driving performance insights and analytics integrating information from data-rich vehicle systems such as the Company's advanced braking and stability control technologies into its offerings in real-time. (From a press release on March 25, 2015)

Product Development

"OnGuard", "OnGuardACTIVE" Collision Mitigation System
-Meritor WABCO announced the OnGuard Collision Mitigation System is now available for use in medium-duty trucks, another first in the industry. Used extensively in heavy-duty trucks since 2007, OnGuard is North America's leading collision mitigation system, with more than 90,000 systems and over 32 billion miles now on the road. A new member of the OnGuard family, OnGuardACTIVE, to be made available to medium- and heavy-duty trucks in 2016. (From a press release on September 3, 2015)

-The Company's OnGuardACTIVE utilizes a powerful 77GHz radar sensor that maintains the system's high performance in all weather conditions. OnGuardACTIVE's radar offers up to five times higher bandwidth than 24GHz radar-based collision mitigation systems available in the market. The system's dual mode function addresses both long range and adjacent lane views. This enables higher accuracy in object detection, and a more than 30% longer range than alternative systems. OnGuardACTIVE is capable of analyzing traffic up to 650 feet ahead, thus recognizing impending critical driving situations earlier. (From a press release on March 25, 2015)

Investment Outside Europe

-The Company will expand its manufacturing capabilities in North America. The Company will invest USD 17 million to build a new manufacturing site in Charleston, South Carolina (USA) to meet increasing customer demand for its air disc brakes (ADB), air compressors and related systems. Construction of the new, 145,000-square-foot facility is expected to be completed by the end of the year. The Company will then relocate from its exiting Charleston site to the new facility. The Company anticipates the new production facility to be fully operational by the first quarter of 2016. The Company's investment is expected to create more than 50 new jobs and help sustain approximately 175 existing jobs. (From a press release on March 25, 2015)

Major Joint Ventures