2022 ACTIVITY AND SUSTAINABILITY REPORT
MESSAGE FROM MARIE-CHRISTINE LOMBARD 04 1. PROFILE AND AMBITION 07 1.1 Presentation of the Group 09 1.2 Activities 09 1.3 Business model and value creation 13 1.4 Trends and challenges 16 1.5 Strategy 17 1.6 Innovation 19 1.7 Corporate governance 21 2. CORPORATE SOCIAL RESPONSIBILITY POLICY 25 2.1 CSR policy 27 2.2 Main challenges and GEODIS’s responses 28 2.3 Stakeholders 30 2.4 CSR governance 32 2.5 Recognition 33 3. ENVIRONMENT 35 3.1 Climate 37 3.2 Biodiversity 43 3.3 Air quality 44 3.4 Circular economy 44 4. SOCIAL 47 4.1 Health and Safety in the workplace 49 4.2 The Group’s employees 53 4.3 Management of talent 55 4.4 Diversity and inclusion 59 4.5 Compensation and benefits 62 4.6 Labor relations 63 4.7 Employee engagement 64 4.8 Corporate citizenship initiatives 64 5. ETHICS 67 5.1 Business ethics 69 5.2 Human rights and fundamental freedoms 71 5.3 Responsible value chains 72 5.4 Data protection 74 6. TABLE OF INDICATORS 77 Environmental indicators 78 Certifications 80 Social indicators 81 03 2022 ACTIVITY AND SUSTAINABILITY REPORT
MESSAGE FROM MARIE-CHRISTINE LOMBARD Chief Executive Officer 2022 was the year of such major events as the outbreak of war in Ukraine, escalating inflation, and the continued impact of the Covid-19 pandemic. Factors such as these have created a climate of global uncertainty. One thing this context has highlighted is the central, not to say critical, importance of the logistics industry for world trade. In 2022, GEODIS enabled its customers to continue their businesses by ensuring all stages of their supply chains, from product manufacturing to final delivery. The engagement of all its employees has meant that the Group has been able to support the development of its customers by offering them ever more innovative solutions adapted to their needs. This success is borne out by our strong results. With record revenues of €13.7 billion and a margin of 8.5%, GEODIS achieved the objectives set out in its strategic plan, Ambition 2023, by 2022. Not only did we manage to take full advantage of favorable market conditions, but above all we were able to strengthen our presence in key parts of the world thanks to the strategic acquisitions of Keppel Logistics, a major player in contract logistics and e-commerce services in the Asia-Pacific region, and Need It Now Delivers, a specialist in last-mile delivery in the United States. The construction of an integrated global transport and logistics network took a further step forward in 2023 with the acquisition of trans-o-flex, a leading German network for temperature-controlled transport of pharmaceutical goods and express premium delivery services. 04 2022 ACTIVITY AND SUSTAINABILITY REPORT
GEODIS boasts a robust yet agile organization built around its four lines of business – International Freight Forwarding and Supply Chain Optimization, Global Contract Logistics, European Road Network, and Last Mile and Express Delivery – and four key regions. The Group is now present in some 70 countries, operating a network that practically covers the entire planet. We have been encouraged by this success to focus on the future, and our strong ambition is to be a global operator, able to offer innovative, tailor-made, end-to-end logistics solutions to each of our customers, from large groups to small companies. This desire to continue our expansion through acknowledged expertise and know-how is reflected in our new strategic plan, Ambition 2027. Our growth strategy is built around our commitment to sustainability. The transport and logistics sector bears responsibility for 11% of the world’s CO2 emissions, so it must be decisive in its approach to its transition towards protection of the environment and the climate. In 2023, GEODIS is setting new, more ambitious targets to further accelerate its 2030 decarbonization trajectory, in compliance with the Paris Agreement. We are activating all possible levers: converting fleets of vehicles to low-carbon technologies, ensuring city-center deliveries in 40 French cities using 420 clean vehicles by 2024, and forming a partnership with an industrial vehicle manufacturer to develop a 16-tonne electric vehicle dedicated to urban logistics. Many other initiatives, involving the modal shift from road to rail, digitalizing our industry and optimizing our services, will be undertaken with all our partners to keep us on this virtuous path. However, we are aware that the vast majority of our greenhouse gas emissions stem from the activities of our subcontractors. Our drive for decarbonization therefore also involves carefully supporting each of them in their efforts to achieve more responsible performance. The ecological imperative is coupled with a duty to set an example: GEODIS must ensure that its own and its partners’ value chains and processes respect the environment, as well as human rights, health and safety, and the best international standards. Social progress is an essential part of our sustainability model. We are very committed to equal opportunity and believe that diversity and inclusion are key to performance. Today, 40% of our employees are women – in traditionally masculine professions – and we are comfortably on the way to achieving our target of having 25% women in Top Executive management positions by the end of 2023. We must continue and expand this effort at all levels of responsibility, in particular through the GEODIS Women’s Network, which this year celebrates its tenth anniversary. More generally, we want to make it possible for every individual working for us, men and women alike, to have the means to achieve the career they want. Turning finally to Health and Safety, the resources that we have applied have enabled us to reduce the rate of work-related accidents by almost one-third in three years. We are confident that this positive trend will continue thanks to our training and operational excellence programs, essential to ensuring that every employee can work in the best possible conditions. As we embark on a new stage in the Group’s development, we have defined a purpose for GEODIS, intended to express loud and clear the identity, values and ambition that drive us: Serving people by delivering their goods all around the world with innovative, sustainable and ethical logistics. This short phrase conveys the desire to look to the future that unites us. Although there is still much work to be done to develop fully sustainable logistics, we know we can count on the unstinting commitment of GEODIS teams to carry out their various missions. We can all work together to fulfill this collective promise and move forward in the right direction. I would like to warmly thank all those who, day after day, through their persistence and their professionalism, have helped make our Group become more efficient, more responsible, and therefore closer to the aspirations of its customers. 05 2022 ACTIVITY AND SUSTAINABILITY REPORT > PROFILE AND AMBITION > CSR POLICY > ENVIRONMENT > SOCIAL > ETHICS > TABLE OF INDICATORS EDITORIAL
01. Profile and ambition 1.1 PRESENTATION OF THE GROUP 09 1.2 ACTIVITIES 09 1.3 BUSINESS MODEL AND VALUE CREATION 13 1.4 TRENDS AND CHALLENGES 16 1.5 STRATEGY 17 1.6 INNOVATION 19 1.7 CORPORATE GOVERNANCE 21 07
In a constantly changing world, logistics has become a key factor in the competitiveness of companies. GEODIS ranks among the world leaders in its sector and supports its customers on a daily basis, helping them to overcome their logistical constraints. KEY FIGURES 2022(1) Revenues 2022 EBITDA 2022 2021 2022 2021 2022 €3.0 bn €1.4 bn €3.1 bn €3.4 bn €4.3 bn €1.9 bn €3.7 bn €3.8 bn €13.7 bn €10.9 bn €953 m €1,163 m • France • Europe • Americas • Asia-Pacific (APAC) & Middle East 3% Others 44% Global integrated freight network 25% European overland network 28% Contract logistics 2% Others 47% Global integrated freight network 22% European overland network 29% Contract logistics 2021 2022 Breakdown of revenues by activity Number of employees: 49,476 Number of customers: 165,000 Number of countries served: 167 Total number of sites: 936 (1) Financial data is expressed according to the financial scope of the Group at 31/12/2022. All logistics, industrial, commercial and service activities are included in the scope of reporting. Any organizations sold, closed, purchased or created during the course of the year of reporting are not included in the scope: this concerns the acquisitions made in 2022 (Keppel Logistics and Need It Now Delivers). 08 2022 ACTIVITY AND SUSTAINABILITY REPORT 01 PROFILE AND AMBITION
1.1 Presentation of the Group As a growth partner to more than 165,000 companies, ranging from local SMEs to multinationals, the Group is recognized for its expertise and mastery of all aspects of the supply chain. The Group’s ambition is to support its customers by offering them an end-to-end service, in any part of the world. With a global network covering almost 170 countries and more than 49,000 employees, GEODIS is ranked world number six in its sector. GEODIS recorded revenues of €13.7 billion in 2022. The Group draws its strength from more than a hundred years of experience, an attentive and structured approach to its customers and constant innovation. On this basis, it is GEODIS’s goal to offer its customers all over the world innovative, fully integrated and tailored logistics solutions that optimize the economic, operational and environmental performance of their supply chains. To succeed in a world that is rapidly evolving, GEODIS has to constantly reinvent itself by adapting its business model, processes, tools and organization to address fast-changing markets, customer needs and stakeholder expectations. Changes in the Group’s scope GEODIS carried out acquisitions in 2022 in line with its ambition of supporting its customers in all parts of the world by meeting all their needs in logistics: • acquisition of Keppel Logistics, which has warehousing capacity in Singapore. This operation strengthens the Group’s Contract Logistics and e-Commerce services in Asia-Pacific; • acquisition of Need It Now Delivers in the United States, which operates an excellent domestic freight network. Thanks to this acquisition, GEODIS has extended its presence in this strategic area, increased its capabilities in contract logistics and in urban logistics. 1.2 Activities A specific offer for each business sector At the core of the Group’s approach to earning the trust of its customers is understanding their needs, designing the best solutions, implementing them consistently, measuring operational performance and identifying areas for improvement. To help its customers access its offer, it is structured around two main areas: • freight management for air transport, sea transport and land transport (road and rail); • inventory and order management. With 165,000 customers around the world, GEODIS has a thorough understanding of the specific logistics needs of each business sector and it possesses the agility required to meet them. To help customers overcome the logistics constraints of their markets and gain a competitive edge, the Group’s experts design customized transport and logistics solutions specific to each sector of industry. GEODIS offers a complete range of services based on a highly structured customer segmentation strategy. This approach enables the Group to provide more effective support for each of the markets in which it operates. Whether on a global or a local scale, GEODIS’s tailor-made solutions address specific challenges at each link in the logistics chain and create value for its customers. 09 2022 ACTIVITY AND SUSTAINABILITY REPORT EDITORIAL > CSR POLICY > ENVIRONMENT > SOCIAL > ETHICS > TABLE OF INDICATORS > PROFILE AND AMBITION
GEODIS provides expertise to its customers in seven key vertical markets: Industrial: GEODIS offers a full range of multimodal and more environmentally friendly transportation solutions to meet the challenges of its customers at all stages of their logistics chains. These solutions are adapted to each project, including the most unusual and challenging ones, calling for a high level of technical expertise, solid logistics and great precision. They aim to optimize supply, distribution and after-sales flows. Retail: GEODIS supports the retail market by implementing its customers’ omni-channel strategies and providing them with the keys to take full advantage of the dramatic growth of e-commerce through specific integrated solutions. The Group helps its customers optimize their logistics chains in real time through complete visibility of their inventories, strategic allocation of orders through a decentralized management system, and greater visibility of distribution to ensure that no sale is missed. Fast-Moving Consumer Goods: GEODIS provides its FMCG customers with an agile and robust logistics chain to cope with significant volume fluctuations due to micro- and macroseasonality, the impact of marketing campaigns and new product launches. The Group’s logistics solutions are both global and local, and are designed to adapt to all scales, regardless of the supplier’s location. Automotive & Mobility: GEODIS draws on decades of logistics expertise to help its customers navigate the challenges of an ever-changing industry. The Group’s experts help their customers redesign their supply chains in the face of new advances such as autonomous driving, shared mobility, connectivity and the electrification of vehicles. Customers can benefit from GEODIS’s resources and expertise in dealing with the complexities of automotive logistics and the challenges of the new era of mobility. High Tech: GEODIS offers agile and secure solutions for all of the logistics operations of its High Tech customers. The Group provides support throughout the product value chain, from supplying components through VMI (Vendor-Managed Inventory) to final recycling. GEODIS also ensures order management across all sales channels and direct deliveries to resellers or end consumers. Healthcare: As a flexible solutions provider for many leading pharmaceutical companies, GEODIS excels in meeting the demands of the strictest legislation across the entire healthcare logistics chain. The Group provides logistics solutions that are innovative at a global level and compliant with regulations, no matter where the suppliers are located. From inventory planning to climate-controlled storage and specialized transport, GEODIS’s added-value solutions will adapt to its customers’ every need for true operational excellence. Aerospace & Defense: GEODIS’s activities for the aviation, space and defense sectors tackle the specific challenges of each stakeholder, from manufacturer to after-sales service. The Group uses its thorough knowledge of aerospace and defense logistics to create new methods and tools to optimize the logistics chains. 10 2022 ACTIVITY AND SUSTAINABILITY REPORT 01 PROFILE AND AMBITION
Road freight full truck load (FTL) or less than truck load (LTL) Rail freight Sea freight full container load (FCL) or less than container load (LCL) Consolidation (WNƂNNOGPV CPF YCTGJQWUKPI UGTXKEGU .QY ECTDQP FGNKXGT[ XGJKENGU Ship to store .CUV OKNG FGNKXGT[ $ % %QPVTQN VQYGT Air freight %WUVQOU DTQMGTCIG $WNM HTGKIJV CPF EJGOKECN products Four complementary lines of business dedicated to creating shared value GEODIS operates in four complementary lines of business: • Global Freight Forwarding; • Global Contract Logistics; • Distribution & Express; • European Road Network. GEODIS can offer its customers unique know-how at every stage of the supply chain, adapted to the needs of each market and geography, with a focus on end-to-end optimization. To provide its customers with this comprehensive service, GEODIS employs its own resources as well as working with a network of partners and subcontractors. 11 2022 ACTIVITY AND SUSTAINABILITY REPORT EDITORIAL > CSR POLICY > ENVIRONMENT > SOCIAL > ETHICS > TABLE OF INDICATORS > PROFILE AND AMBITION
Distribution & Express: with a network of more than 100 agencies in France, GEODIS ranks as the leading French operator of express solutions for next-day delivery and courier solutions for deliveries in 24 to 48 hours. Offering customers of all sizes and in all sectors innovative solutions designed for their shipments and their recipients, this line of business covers 35 European countries. It specializes in low-carbon deliveries in dense urban areas. Over 100 million parcels delivered annually Over 6,000 rounds daily Over 120,000 recipients delivered daily Global Freight Forwarding: GEODIS offers multimodal transport solutions (sea, air, road and rail) throughout the world, with high added-value services including customs operations to guarantee its customers the optimal routing of their goods in terms of lead time, cost and environmental impact, regardless of the place of departure or of arrival. In the context of its project logistics activity, GEODIS designs specific tailor-made offers, primarily for largescale projects in the oil & gas, mining, petrochemical, rail and energy sectors. 308,000 tonnes of air freight 961,000 TEUs (twenty-foot equivalent units) of sea freight Integrated into Global Freight Forwarding, the Supply Chain Optimization activity supports and advises customers seeking to optimize their logistics chains. In addition to consultancy on supply chain management, the selection and management of service providers and strategic outsourcing, other specific optimization solutions are also offered, such as the implementation of same-day solutions and reverse logistics. Global Contract Logistics: with more than 300 sites and 7,900,000 sqm of warehousing throughout the world, GEODIS is one of the market leaders in contract logistics. From the management of warehouses (automated or not) and distribution centers to deliveries to production lines, the Group offers a wide range of services enriched with innovative solutions, targeted to manage flows in a cost-effective way, reduce storage costs, increase stock rotation and thus improve the efficiency of the supply chain. GEODIS is also a major player in the e-commerce sector through its fulfillment, e-fulfillment offers and, through its value propositions, GEODIS eLogistics and GEODIS Online Marketplaces. Over 300 warehouses in 34 countries worldwide Over 7.9 million sqm of warehousing European Road Network: with over 6,200 self-owned semitrailers and more than 2,000 tractors, as well as a network of partners, GEODIS is one of the leading European players in the transportation of full and partial loads. It offers a wide range of specialized solutions for chemical, industrial and automotive products as well as for retail and consumer goods. The Group develops, sets up and implements added-value solutions for multimodal transport flow management and logistics in Europe, for both packaged and bulk goods. 70 logistics platforms in 15 European countries Over 6,200 self-owned semi-trailers 12 2022 ACTIVITY AND SUSTAINABILITY REPORT 01 PROFILE AND AMBITION
A customer-oriented regional organization With its four complementary lines of business, GEODIS operates through a customer-focused regional organization. The Group is organized into four major geographical areas under a single management team responsible for the entire GEODIS logistics offering: France, Europe (excluding France), Asia-Pacific and Middle East, and the Americas. Americas Asia-Pacific & Middle East France & Maghreb* Europe* * The freight road transport activities in France, Poland, Hungary, Romania, Finland, Slovakia, Czech Republic are reporting to our European Road Network line of business. 1.3 Business model and value creation GEODIS, a world leader in logistics, is committed to creating longterm value for its customers, employees, partners, shareholders and society more broadly through its supply chain optimization business. In its pursuit of performance, GEODIS applies a model of business excellence that gives an operational definition of the organization, each person’s mission, priority measures, expected results and performance indicators. To reflect this model in the day-to-day work of its teams, GEODIS has defined 7 Golden Rules and 7 Leadership Principles founded on the “Investors In People” framework. The 7 Golden Rules summarize the important actions required to deliver excellent results. The 7 Leadership Principles address the behavior of our managers needed to support, empower and engage our employees. Along with its purpose, vision and values, these foundational elements are the cornerstones of the company mindset and culture. 13 2022 ACTIVITY AND SUSTAINABILITY REPORT EDITORIAL > CSR POLICY > ENVIRONMENT > SOCIAL > ETHICS > TABLE OF INDICATORS > PROFILE AND AMBITION
OUR BUSINESS MODEL AND VALUE CREATION Human 49,476 employees of which 40% women of which 74% outside France Commercial 165,000 customers worldwide 100,000 suppliers and subcontractors Financial Stable ownership 100% SNCF (rated AA- by S&P and AA3 by Moody’s) Operational 936 sites Network covering 167 countries 10 million sqm of warehouses and operating premises Fleet of 3,607 self-owned trucks Advanced IT systems Environmental Fuel consumption 94 M liters Electricity consumption 244 GWh Natural gas consumption 211 GWh OUR RESOURCES OUR PURPOSE Serving people by delivering their goods all around the world Confiance VISION We want to be our customers’ preferred growth partner • Make it easy for the client to do business with us • Win, retain and develop profitable clients • Always deliver a perfect service • Get paid for what we do • Recruit, develop and retain quality people • Ensure the safety of our people everywhere and at anytime • Be a good citizen 7 GOLDEN RULES Common principles of excellence Freight management Warehousing and high added-value logistics services A GLOBAL OFFER TO PROVIDE OUR CUSTOMERS WITH END-TO-END SUPPORT FOR THEIR LOGISTICS NEEDS The strengths of a world leader 14 2022 ACTIVITY AND SUSTAINABILITY REPORT 01 PROFILE AND AMBITION
On employees Overall satisfaction rate for employees 81% 22% of women in senior management positions 10 hours of training annually per Full Time Equivalent Frequency rate of lost-time accidents 10.5 Severity rate 0.55 On customers Overall satisfaction rate for customers 89% Net Promoter Score +24 26% of sites triply certified Quality-Safety-Environment On our shareholder Revenues €13.7 billion EBITDA €1.16 billion Operating cash flow transformation rate 44% On society EcoVadis evaluation: 68/100 (Gold) Commitments to the community Taxes paid in 2022: €261 M On the planet 92% of vehicles rated Euro 6 or alternative CO2 emissions scopes 1+2+3: 4.2 MTCO2e CDP Climate score: B OUR IMPACTS with innovative, sustainable and ethical logistics VALUES • Be a strategy ambassador • Debate. Decide. Align. • Drive results • Engage and empower people • Duty to communicate • Walk the talk • Own the all 7 LEADERSHIP PRINCIPLES CLOSE TO OUR CUSTOMERS • Industrial • Retail • Fast-moving consumer goods • Automotive & Mobility • High Tech • Healthcare • Aerospace & Defense VERTICAL EXPERTISE Drivers of transformation A structured organization aiming for excellence LINES OF BUSINESS • Global Freight Forwarding & Supply Chain Optimization • Global Contract Logistics • European Road Network • Distribution & Express • Data management • Cybersecurity • Robotics • Low-carbon mobility INNOVATION & DIGITAL SUSTAINABILITY • Climate & environment • Responsible employer • Ethics & compliance Innovation Passion Commitment Solidarity Trust • Europe • Asia-Pacific & Middle East • France & Maghreb • Americas 15 2022 ACTIVITY AND SUSTAINABILITY REPORT EDITORIAL > CSR POLICY > ENVIRONMENT > SOCIAL > ETHICS > TABLE OF INDICATORS > PROFILE AND AMBITION
1.4 Trends and challenges The last three years have been marked by a succession and accumulation of global crises. No one could anticipate them but everyone has had to adapt to them: public health crises, economic crises, geopolitical crises. The uncertainty and extreme volatility inherent in this “world in crisis”, accentuated by the inevitable challenges linked to climate change, now constitute the new framework for action and development for businesses, individuals and for society at large. These crises have also highlighted the vital importance of global transport and logistics in sustaining economies in all circumstances: the complex interconnections of production centers, assembly, distribution and consumption between different areas of the globe require the specialized expertise of logistics providers such as GEODIS, which can supply optimized, innovative and resilient end-to-end transport solutions for its customers, ranging from small businesses to large multinational groups. In this context, several significant factors for the transport and logistics sector characterized 2021 and 2022 and could continue in the short or medium term. The first of these is the sustained growth of e-commerce. In spite of the economic slowdown observed in 2022, this channel has reached a very significant level, particularly for retail activities. This has generated an increase in the volume of small and medium-sized parcels to be delivered within short timeframes as close as possible to consumers in urban and suburban areas, entailing complete rethinks of flow and inventory management, optimizing them without compromising on service quality. To meet this demand, GEODIS constantly adapts and innovates, taking account of its customers’ omni-channel strategies and providing them with its know-how in real-time optimization of their logistics chains through complete visibility of their inventories and flows. The second relates to the pressure on energy supplies, particularly in Europe, which has led to an increase in prices and the adoption of a low-consumption approach in view of the economic risk generated and the threat of shortages. Even though the impact has been very limited for GEODIS, given its contractual arrangements, this volatility in the price and availability of energy – which could continue for a variety of reasons, particularly geopolitical ones – creates uncertainty in the planning of energy transformation schemes, which are essential to the decarbonization of the economy. Thirdly, the strengthening of regulations with regard to social and environmental impact, in particular linked to the European Green Pact, has imposed a sustained pace of transformation of fleets and the organization of certain logistics chains. As far as the climate and emissions in general are concerned, regulatory changes are particularly strong with the Fit for 55 European legislative package and the introduction of Low-Emission Zones (LEZs) for downtown deliveries. GEODIS is constantly monitoring and trying to anticipate these changes for each of its lines of business and geographical areas. However, the lack of visibility on the availability of technologies, infrastructures and access to decarbonized energies at a competitive cost is an obstacle to the anticipation that GEODIS wishes to initiate, in line with its commitment to a path to decarbonization in compliance with the Paris Agreement. The fourth factor is the fluidity of the employment market, which has affected many sectors of the economy, combined with the lack of attractiveness of the logistics industry, which has put a strain on the sector, particularly in the United States. GEODIS is addressing this situation proactively, raising awareness of the logistics industry and strengthening its employer brand, “GEODIS, join the talent pool”, which highlights its values and incorporates its vision of sustainable logistics. As it enters a new phase of its development with the launch of its new strategic plan, Ambition 2027, inspired by the successes and progress achieved by the company during its previous plan, Ambition 2023, the Group is aware of its responsibilities and the difficulties of a world that has become more uncertain and unpredictable. In such a challenging context of crisis, GEODIS’s teams have clearly shown to what extent the values that drive them (commitment, innovation, passion, trust and solidarity) constitute a solid foundation for the Group to contribute to a better future for its clients and, indeed, for all its stakeholders. Thanks to the underlying financial performance, it has been able to generate significant room for maneuver to innovate and to invest, whether organically or through targeted acquisitions. The new Ambition 2027 strategic plan is therefore a natural continuation of the previous plan, enhancing its ambition in terms of operational, financial, social and environmental performance. 16 2022 ACTIVITY AND SUSTAINABILITY REPORT 01 PROFILE AND AMBITION
The main challenges of sustainability In this changing world, and in order to generate value over both the short and the long term for customers, employees and partners, its shareholder and society at large, GEODIS has identified the main sustainability challenges to enable it to reduce risks and continue its growth. GEODIS has identified six major challenges which the Group is addressing and which are discussed in various sections of the present document. Climate (see section 3.1) Faced with the global climate challenge, GEODIS is determined to act responsibly by following a path to decarbonization in compliance with the Paris Agreement. The Group has been taking concrete action for many years to reduce the intensity of its greenhouse gas emissions and is working on updating its commitments according to a Science-Based Targets (SBT) approach covering scope 1, 2 and 3 emissions. Alongside the actions being taken to reduce greenhouse gas emissions, GEODIS has launched a strategy to adapt to the effects of climate change. Innovation & digitalization (see section 1.6) GEODIS’s capacity for innovation is a key differentiator compared to its competitors, a means of creating value for its customers and a major lever for growth and performance. Data management and digital technologies are two fundamental dimensions of digital transformation. This transformation will assist the support functions in their drive for business excellence, management and internal control processes, and the lines of business in their operational processes and new offerings. Security & cybersecurity (see section 5.4) In view of the increasing digitalization of processes and the sharing of sensitive information with its customers, GEODIS is constantly adapting its prevention, detection and protection capabilities for its IT systems. Talent acquisition & retention (see section 4.3) In the context of a talent war caused by the fluidity of the job market and a growing desire for professional fulfillment, GEODIS is making changes to its practices. As it focuses on attracting, developing and retaining talent, the Group is addressing the challenge of satisfying the new needs expressed by candidates and existing employees alike. Environmental impact (see sections 3.2 and 3.3) Fully aware of the environmental impact of logistics and transport activities and the growth in demand, GEODIS is committed not only to lowering its greenhouse gas emissions but also to reducing its environmental footprint. The Group is concerned about the decline in biodiversity, especially due to the pressure that the construction and management of its infrastructures can create on the environment. GEODIS is already carrying out actions in favor of biodiversity at its existing sites and integrating this dimension into its new projects. GEODIS is also striving to limit the impact of its activities on air quality and public health. In particular, the Group is developing a competitive low-emission delivery service adapted to the environmental issues facing city centers. Circular economy (see section 3.4) Responsible resource management is a major challenge for society and the economy. The development of the circular economy is creating new flows to enable the recovery, processing, repair and recycling of products. This transition offers new business opportunities for the Group which, at the same time, is endeavoring to limit the use of non-renewable resources and to minimize its waste production. 1.5 Strategy By 2022, GEODIS had achieved the objectives it had set in 2018 in its Ambition 2023 strategic plan. As part of this plan, which is based on three key areas (business excellence, innovation, and acquisitions), GEODIS had set a target for 2023 of around 20% organic growth in revenues and multiplying its operating margin by a factor of 1.7. GEODIS’s financial performance has given it considerable room for maneuver for innovation and investment, both organic and through targeted acquisitions. The Group has been able to seize acquisition opportunities in the logistics market (Keppel and Need It Now Delivers in 2022), expanding its range of services in Asia and the Americas. The new Ambition 2027 strategic plan should therefore be seen as a natural continuation of the previous plan, further developing its ambition in terms of operational, financial, social and environmental performance. GEODIS’s strategy is designed to strengthen its position as a leader in sustainable and innovative end-to-end logistics solutions to help its customers succeed and grow around the world. This strategy is based on three pillars, each imbued with the Group’s innovative spirit and its capacity for investment: expertise in its core businesses, digital transformation and external growth. 17 2022 ACTIVITY AND SUSTAINABILITY REPORT EDITORIAL > CSR POLICY > ENVIRONMENT > SOCIAL > ETHICS > TABLE OF INDICATORS > PROFILE AND AMBITION
Expertise in core businesses The first pillar for GEODIS consists of capitalizing on the know-how and value creation of its four lines of business, whose diversity, complementarity and policy of business excellence should ensure constant commercial development that exceeds that of its market. The Group intends to ensure the growth of its core businesses by bringing more value to its customers and by taking account of the specific nature of each market. Each of these lines of business is organized according to its specific characteristics in order to optimize the level of service to customers. Accordingly, the Group made changes to its organization early in 2023, with the creation of a new Europe region combining the two previous European regions and a Global Contract Logistics line of business. In addition, a France Region was created, incorporating the Distribution & Express, Global Contract Logistics and Global Freight Forwarding lines of business. The Supply Chain Optimization activity is now an integral part of the Global Freight Forwarding line of business, in order to encourage synergies. This development enables GEODIS to combine expertise in its lines of business with detailed knowledge of regional conditions to achieve ever greater commercial and operational efficiency. Each core business also has its own capabilities for investment, combining different modes of holding and using assets to suit the situation (the “asset right” notion) and the spirit of innovation that drives the Group. Digital transformation Innovation and investment are central to the second pillar of GEODIS’s strategy, digital transformation. The Group focuses particularly on innovation in the areas of e-commerce and urban logistics. On the one hand, this transformation relates to the support functions in their drive for business excellence, management and internal control (grouped together in a dedicated transformation program called Odyssey). The pooling of data enables a more detailed performance analysis of the company’s activities and the development of new opportunities for cross-selling. On the other hand, digital transformation affects the lines of business at the heart of their operational processes: its purpose is to enrich their ranges of services with innovative digital solutions in order to create more value for the Group’s clients. For example, Upply, a digital marketplace that compares freight rates in real time, combines business expertise and data science to meet the demands of a changing logistics market. The start-up has continued to grow since its launch in 2018 with the addition of new features on the matchmaking platform for transporters and shippers. External growth The third pillar of the strategic plan is the Group’s external growth policy. GEODIS uses targeted investments to ensure sustainable growth. The desire for expansion is intended to provide a better response to the demands of the Group’s customers by supporting them in the development of their activities with an end-to-end service, whatever the configuration of their supply chain. It is reflected in an enhanced service offering and a stronger geographical presence in strategic markets (North America, Europe and South-East Asia). In a sector that is still largely fragmented, GEODIS seeks to consolidate its positions by targeting companies whose activities are complementary to those already developed. The acquisition in 2022 of Need It Now Delivers in the United States, a domestic transportation company, allows GEODIS to offer an end-to-end freight network from Europe and Asia to the United States. 18 2022 ACTIVITY AND SUSTAINABILITY REPORT 01 PROFILE AND AMBITION
1.6 Innovation GEODIS’s capacity for innovation is a key differentiator compared to its competitors, a means of creating value for its customers and a major lever for growth and performance. The Group focuses on three main areas of innovation: • digital technology at all stages of the Group’s processes, from customer relations to delivery; • robotics, a powerful lever for operational performance and making tasks less arduous; • decarbonization to address the climate issue (discussed in section 3.1, dedicated to the climate). Innovating to meet the challenges of the Group’s customers Innovation is one of the basic values of GEODIS. It is at one and the same time a major vector of operational excellence, a source of value creation and a key differentiator in markets where the Group is present. With sophisticated processes, GEODIS offers solutions to the new challenges of a rapidly changing world. In response to the dramatic growth in e-commerce, GEODIS provides end-to-end logistics support to B2C brands, with the goal of offering customers the same personalized experience online and in-store. The GEODIS eLogistics solution draws on the Group’s global network of warehouses and transport facilities to direct the customer to the nearest available product, thanks to real-time visibility of inventory worldwide. GEODIS is committed to putting its innovative capabilities to work for its customers, whether it involves just-in-time delivery, visibility of the logistics chain or social responsibility. Faster implementation of robotics Recent years have seen the rapid and widespread development of robotics applied to logistics. The automation of logistics activities in warehouses is a considerable performance driver, enabling more flows to be processed in record time. Faced with a massive increase in consumer demand, particularly when it comes to online shopping, smart robots are becoming ever more mobile and autonomous and are carrying out order picking tasks, improving the quality and speed of operations. Data management solutions combined with artificial intelligence (AI) systems produce algorithms that increase operational efficiency and accuracy of forecasting. In addition, robotic systems improve working conditions and productivity in the warehouse by reducing repetitive tasks that are physically demanding for the operator (moving, bending, carrying loads), thus freeing up time for the personnel to perform higher value-added tasks. GEODIS has approximately 80 highly automated sites around the world, making it one of the leaders in the integration of the latest generations of robots within warehouses. Its teams are working on the development of Application Programming Interfaces (APIs) and Plug & Play solutions that are seamless and fast, improving connectivity with its customers’ systems. This edge in robotics is both a source of differentiation and a growth driver for the Group. Prioritizing digital technology Data and digital technologies remain two fundamental aspects of innovation that are adapted to the realities of the field and profitable for the supply chain and business management. GEODIS works continuously in close collaboration with its customers and academic and industrial partners to identify areas where digital innovation and data mining can make a difference. The Group has identified a relevant use case for blockchain technology to meet the challenges associated with vaccine distribution. Its teams ensured the logistics and transportation of batches in strict compliance with the cold chain and with precise monitoring of the data reported and validated automatically under the supervision of pharmacists. This technological breakthrough reduced the time required to record data by 12 hours, speeding up vaccine distribution and limiting the number of doses wasted as a result of inefficient logistics. The quality and robustness of data repositories are essential drivers of performance, quality of operations and regulatory compliance. In its quest for operational excellence, GEODIS uses algorithms to detect and process errors and missing data. 19 2022 ACTIVITY AND SUSTAINABILITY REPORT EDITORIAL > CSR POLICY > ENVIRONMENT > SOCIAL > ETHICS > TABLE OF INDICATORS > PROFILE AND AMBITION
The multi-channel businesses of the Group’s customers (traditional stores and online sales) combined with multiple end-customer delivery strategies (“ship from store” from warehouses and “click & collect” from stores) require powerful software for realtime inventory tracking, calculation of replenishment strategies and order allocation, and tracking of shipments and deliveries (DOM [Distributed Order Management] systems). GEODIS and its software partner have established themselves as leaders in this fi eld. Accelerating the digital transformation The latest technological advances now make it possible to embrace an increasingly high portion of the complexity of the logistics industry, encompassing a significant number of distinct concepts required for present-day supply chain operations. Digital technology and other new technologies combine to intensify communication and data flows, providing better visibility of the arrival times of parcels and containers consigned to the Group by its customers. These communication flows must be secure, to protect customer data, but also resilient, to ensure an optimal level of service. The use of data captured, stored, transformed and then transmitted via the IT system and digital channels generates gains not only in functional but also operational efficiency (optimized truck journeys, speed of last-mile deliveries, verification of transport conditions under stress – low temperature, real-time monitoring). Artificial intelligence is increasingly enabling GEODIS to make use of predictive models and suggest complementary logistics services from the Group’s catalog of offerings. GEODIS can thus develop cross-selling and build customer loyalty through end-toend operations, with the associated offer of greater visibility. On a more general level, digital technology also enables the Group to better integrate its ecosystem partners, with the aim of offering the most appropriate service to its customers. In addition, GEODIS is participating in the development of SDL (Shared Data Language), a standard for the world of logistics, in order to encourage the integration of “small” players within the value chain. The challenge is to limit the effects of lock-in by promoting free and fair competition and increasing the efficiency of the endto-end supply chain. GEODIS’s commitment to innovation is reflected in the following highlights of 2022: > The “You See You Act” safety reporting application Developed by safety teams in the APAC region and tested in Malaysia, a smartphone application allows any employee to report risky situations using a simple photo and a description to locate the hazard. The report is transmitted to the safety teams to implement a solution and follow-up tables are generated automatically. Implementation of the application halved the number of workplace accidents within six months. > The Tindsales business development algorithm Effective business development relies on making full use of data on current and prospective customers. GEODIS has developed an algorithm that actively allocates prospective customers to the most appropriate sales representatives based on their area of expertise, geographical area and availability. The algorithm is refined by selflearning based on business generated and sales successes. > Autostore GEODIS commissioned a number of major goods-to-person robotic order picking facilities in 2022. The largest of these is located in the United States, in Ohio. It is designed for a fashion brand, serving both its e-commerce channel and its 1,000 stores. Based on Autostore technology, it is currently the facility with the world’s fastest processing rate, handling some 270,000 order lines per day. 20 2022 ACTIVITY AND SUSTAINABILITY REPORT 01 PROFILE AND AMBITION
1.7 Corporate governance GEODIS is committed to operating in an ethical and transparent manner. GEODIS, the parent company of the GEODIS Group, is a French limited company (société anonyme) that has adopted a dual management structure, with an Executive Board and a Supervisory Board. This organizational structure separates the management and direction of the Company, which is the responsibility of the Executive Board, from the control of this management body, which is exercised by the Supervisory Board, thus meeting the concern for a balance of power between the executive and control functions. The Supervisory Board has formed specialized committees to assist it in its deliberations. The Executive Board is supported by a Management Board, which comprises executive vice presidents for the regions, executive vice presidents for the lines of business and executive vice presidents for the support functions. As of the date of the present document, the Management Board consists of 18 members. GEODIS is a wholly owned subsidiary of the SNCF group through SNCF Participations. 1.7.1 The Executive Board The Executive Board of GEODIS SA is overseen by the Supervisory Board, to which it submits for approval the general strategy of the Company and the Group, as well as the annual budgets and multi-year plans of the Company and the Group. As of the date of the present document, the Executive Board consists of two members: Marie-Christine Lombard and DavidOlivier Tarac. The Executive Board is chaired by Marie-Christine Lombard. At a meeting on March 2, 2021, the Supervisory Board re-appointed Marie-Christine Lombard as Chair of the Executive Board for the duration of her term of office as a member of the Executive Board. At a meeting on December 6, 2022, the Supervisory Board appointed the Group Chief Financial Officer, David-Olivier Tarac (term ends 2025), as a member of the Executive Board, succeeding Amaury Valicon on January 1, 2023, for the duration of his mandate (term ends 2025). 1.7.2 The Supervisory Board The GEODIS Supervisory Board consists of eight members, three of whom are external. A representative of the European Consultation Committee (ECC) also attends meetings of the Supervisory Board. As of the date of this document, the Supervisory Board is composed of eight members. Three of these are women (37.5%) and three are external to the SNCF group (37.5%). Number of meetings of the Supervisory Board in 2022: 7 Attendance rate: 85% The Supervisory Board takes care to maintain a diversity of experience, particularly in international business, and a complementary mix of skills. It also ensures the presence of external members and a high proportion of women. The composition of the Supervisory Board covers the essential expertise required to exercise control over the company’s management: transportation & logistics, strategic planning and business strategy, finance and management, legal and regulatory, mergers & acquisitions, Corporate Social Responsibility, risk management and compliance. The Supervisory Board’s role is to oversee the management of the Executive Board and to ensure the smooth running of the company. In particular, it endorses all significant commitments and investment or divestment operations. To carry out its missions, the Supervisory Board relies on the work of two specialized committees: • the Audit and Risk Committee (ARC), whose role is to report on the accuracy and the fairness of the parent company and consolidated accounts, as well as the quality of the financial information; • the Human Resources Committee (HRC), whose role is to issue recommendations on the compensation policy for the members of the Executive Board, the Management Board and the Group’s leading executives. It periodically reviews the retention plan (Long-Term Incentive Plan) and any other incentive mechanism. In 2022, the Supervisory Board took positions on merger and acquisition projects, on the Group’s LTIP (Long-Term Incentive Plan) policy. In addition to activities and results, discussions in 2022 focused on the Group’s new strategic plan, Ambition 2027. 21 2022 ACTIVITY AND SUSTAINABILITY REPORT EDITORIAL > CSR POLICY > ENVIRONMENT > SOCIAL > ETHICS > TABLE OF INDICATORS > PROFILE AND AMBITION
Composition of the GEODIS Supervisory Board as of May 1, 2023 Name Start and end of term of office Functions and principal offices in 2022 Audit and Risk committee (ARC) Human Resources Committee (HRC) Nationality Laurent TREVISANI Chair and Member of the Supervisory Board 2020-2025 Deputy Chief Executive Officer Finance Strategy, SNCF group Deputy Chief Executive Officer, SNCF (since September 2016) Director of Development and Financial Operations, SNCF Mobilités (until September 2016) Member of the HRC French Albertine HANIN Vice-Chair and Member of the Supervisory Board 2020-2025 GEODIS Group EVP, Legal and Insurance French Patrick BERARD Member of the Supervisory Board 2021-2024 Board member of LKQ Chair, Transformation Advisory Chair of the HRC French Carine de BOISSEZON Member of the Supervisory Board 2021-2025 Chief Sustainability Officer, EDF Group Member of the Climate Committee of BPI France Joint Chair of the Purpose Committee at STOA Chair of the ARC French Sylvie CHARLES Member of the Supervisory Board 2013-2025 Managing director of Transilien since March 1, 2020 Member of the Executive Committee of SNCF Voyageurs and SNCF group French François NOGUÉ Member of the Supervisory Board 2021-2027 Senior Executive Vice President, Human Resources, SNCF group Member of the HRC French Raphaël POLI Member of the Supervisory Board 2021-2027 Managing director of SNCF Retail & Connexions Member of the ARC French Randy TUCKER Member of the Supervisory Board 2020-2026 Board member of Wineshipping Member of the ARC American In addition, Olivier ETHEVE, representing the European Consultation Committee, attends meetings of the Supervisory Board. 22 2022 ACTIVITY AND SUSTAINABILITY REPORT 01 PROFILE AND AMBITION
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