Wabtec’s long-term financial goals are to generate cash flow in excess of net income, maintain a strong credit profile while minimizing our overall cost of capital, increase margins through strict attention to cost controls, and increase revenues through a focused growth strategy. To help us meet these goals, we will rigorously apply the principles of the Wabtec Performance System, which we believe will help us to generate cash to invest in the following growth strategies:
GLOBAL AND MARKET EXPANSION
When the company went public in 1995, less than 5 percent of its sales were outside North America, compared to about 35 percent currently. International growth has come from acquisitions and from exporting U.S.-made products into overseas markets where customers are seeking to improve the efficiency and productivity of their freight and passenger rail systems. In addition to geographic expansion, Wabtec seeks to sell its existing rail products into new markets, such as power generation, oil and gas, mining and heavy equipment.
AFTERMARKET PRODUCTS AND SERVICES
To help offset the cyclicality of its original equipment markets, Wabtec plans to expand aftermarket sales of both products and services. Today, the aftermarket represents about 50 percent of the company’s sales, with opportunities for further growth as customers increasingly rely on suppliers to provide services and not just products.
NEW PRODUCTS AND TECHNOLOGIES
The original Westinghouse Air Brake was founded in 1869 when George Westinghouse invented the straight air brake, which revolutionized the railroad industry. Today, Wabtec remains focused on developing profitable new products and technologies that help our customers improve safety, quality, productivity and capacity.
Using a disciplined approach, Wabtec seeks to acquire companies in its core or adjacent markets. We focus on companies that will add to Wabtec’s product differentiation in the marketplace and/or help to dampen the effects of the business cycle. In evaluating possible acquisition candidates, Wabtec applies disciplined strategic and financial criteria.