2007 was another good year for Converteam, with orders received increasing more than 80% to reach €1,426 million and sales up 29% to set EBIT at €121 million (14% of sales).

2007: another busy year

Our turnaround dates back to 2004, and with it the launch of our first major transformation aimed at
getting operations back on a growth track.

In 2007, we reaped the full benefit of this initiative with growth in all our markets and all our units. These systematically outperformed the rest of the industry, with particular successes in Metals, Renewables, and Oil & Gas, along with a new and promising application of static power conversion for Deutsche Bahn, the German railway company.

During the year we also consolidated our operations with the successful integration and turnaround of
Electric Machinery, a US company specializing in rotating machines that we acquired in January.

In addition, we laid foundations for growth in the years ahead by investing to expand our geographical coverage (Russia, Middle East and Korea). We also invested in Research & Development, achieving milestones in permanent magnet and superconductivity technologies.

Yet, high growth notwithstanding, our major priority in 2007 was to lead our company into its second
transformation.

Our second transformation

Reflecting our specialization in power conversion, Converteam systems are very often at the heart of
our customers’ process. And our mission is to help improve the performance of this process.

This obviously starts with an in-depth understanding of the process itself. But it also calls for outstanding overall quality of execution, since the stakes for our customers are much higher than the price they pay for our systems alone.

Our second transformation is thus designed to make Converteam the industry benchmark for quality of execution, mainly through ever-increasing reliability and ever-shorter lead times.

In 2007, this second transformation—launched in 2006 with our company-wide Excellence in Execution program, or EiE—led us to bring all our operational units into line with a single standard structure and launch two additional three-year programs: Converteam Global Project Management System and Converteam Information & Communication System.

Our uncompromising priority for 2008 is the deployment and implementation of these two programs.
This, coupled with another year of double-digit growth, will create major challenges in human resources as we will have to hire, integrate and train more than 1,000 highly skilled professionals spanning all functions and units of the Company.

2008: the year of the people

In recognition of this HR challenge, we have chosen “the year of the people” as our 2008 theme. At Converteam, we are only too aware that it is people who make the difference, and we are creating
our own school—Converteam Academy—to develop specific skills and train promising managers to achieve excellence in this key area.

Pierre Bastid