Fact Book 2020 Knorr-Bremse Group 1 Introduction 2 Key Company Highlights 3 Rail Vehicle Systems (RVS) 4 Commercial Vehicle Systems (CVS) 5 R&D Focus 6 Financials 7 Sustainability 8 Capital Markets Summary 9 Appendix Knorr-Bremse Group The Knorr-Bremse leadership team Bernd Eulitz Ralph Heuwing Dr. Peter Laier Dr. Jürgen Wilder CEO CFO Head of CVS Head of RVS 2019-present: Knorr-Bremse 2017-present: Knorr-Bremse 2016-present: Knorr-Bremse 2018-present: Knorr-Bremse CEO CFO Head of CVS Head of RVS 2004-2019: Linde AG 2007-2017: Dürr (MDAX listed) 2014-2015: Benteler 2015-2017: DB Cargo AG Exec. Vice President Americas CFO International CEO COO EMEA COO 1990-2007: The Boston 2013-2015: Siemens AG 2000-2004: A.T. Kearney Consulting Group 2013-2014: Osram Licht Mainline Transportation Global Partner and Managing Director CTO Business Unit CEO Diploma in Process/Chemical Engineering Diploma in Mechanical 2000-2012: Continental 2011-2013: Siemens AG Engineering, Master of Executive Vice President Head of Strategy Infrastructure Business Administration (MBA) and Cities Sector PhD and Diploma in Mechanical Engineering Doctorate in Physics Professional Years with Professional Years with Professional Years with Professional Years with Experience Knorr-Bremse Experience Knorr-Bremse Experience Knorr-Bremse Experience Knorr-Bremse 25 1 29 3 23 4 19 2 Notes: RVS - Rail Vehicle Systems; CVS - Commercial Vehicle Systems Knorr-Bremse Group │3 Knorr-Bremse – One of Germany’s most successful industrial companies “>1 Bn people trust Knorr-Bremse systems every day” 115 #1 YEARS Family-Ownership, Global market leader Shared pneumatics Technology leadership heritage and unique DNA for braking systems experience between RVS and CVS 2019 key financials Sales op. EBITDA op. EBIT R&D €6.9bn Aftermarket €1.3bn €1.1bn €397m (>10% CAGR1) ~34% of sales since 1989) (margin 18.8%) (margin 15.1%) (~5.7% of sales) Balanced portfolio2) … … and diversified global footprint with high local content 30+ countries CVS Asia / Europe / CVS 38% Australia Africa Sales 47% EBITDA 29% Sales 46% RVS (16% Margin) 100+ sites RVS 53% 62% c. 29k Americas employees3) (22% Margin) 25% Notes: Sales, EBITDA, EBITA, and EBIT for 2019 based on annual report prepared in accordance with IFRS, other financial figures for 2019 prepared in accordance with German GAAP (HGB); Aftermarket share based on German GAAP (HGB) where BilRUG sales allocated proportionally between OE and aftermarket; RVS – Rail Vehicle Systems; CVS – Commercial Vehicle Systems; 1) CAGR 1989–2019 based on German GAAP (HGB), 1989 – first year when consolidated accounts are available; 2) Excluding consolidation/other; 3) Including human resources leased staff; Source: Knorr-Bremse information Knorr-Bremse Group │4 Over 30 years of consistent strong growth 1985 2000 2015/18 2010-2018 2019 2020 Management buyout Bendix integrates Joint Venture with €1bn+ capex Strategic investment in Planned acquisition of by Mr. Thiele Westinghouse Air JV DongFeng Motor invested RailVision & RailNova as RH. Sheppard Co., Inc. Brake company goes into operation & to future-proof well as acquisition of in the U.S expansion 2018 manufacturing and Snyder & Sentient, production facilities 1985-1990 2002 2015/16 2017/18 TRS Successful strategy: 100% acquisition Japan 7 acquisitions Acquisition of Globalisation, focus on of Bendix in Vossloh Kiepe, Federal RVS and CVS, growth the US Mogul Ind. Property Rights in connected systems and Hitachi Automotive Systems 1991 2006 2016 New state-of-the-art Dawn of the ICE era 4 Joint Ventures in innovation and with high-speed Rail formed in >10% sales testing centre in braking systems China Munich CAGR 6.9 19891)-2019 1995-1996 Rise of ADB technology 1999 Joint Venture with JV Bosch in Electronics 1985 1989 1990 1995 2000 2002 2003 2005 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Sales (€bn) Important corporate events Product innovation M&A / Strategic partnerships Notes: 1986-2018 based on financial statements prepared in accordance with German GAAP (HGB) and 2017-2019 based on financial statements prepared in accordance with IFRS. 1) 1989 – first year when consolidated accounts are available; Source: Knorr-Bremse information Knorr-Bremse Group │5 1 Introduction 2 Key Company Highlights 3 Rail Vehicle Systems (RVS) 4 Commercial Vehicle Systems (CVS) 5 R&D Focus 6 Financials 7 Sustainability 8 Capital Markets Summary 9 Appendix Knorr-Bremse Group Knorr-Bremse – A best-in-class industrial company with resilient outperformance thanks to high-quality business model Number one supplier for braking systems and a leading supplier of other safety 1 Global #1 critical rail and commercial vehicle systems protected by high barriers to entry 2 Synergistic business Technology and scale benefits between rail and commercial vehicles Consistent outperformance of attractive end-markets driven by megatrends and 3 Market outperformance increasing content per vehicle Driving innovation in mobility and transportation technologies through R&D, quality 4 The industry innovator excellence and edge in connected systems Resilient business model, supported by broad geographical and customer 5 Resilience diversification, high aftermarket exposure and strong localisation 6 Superior financial profile Strong growth, profitability, and cash generation with high earnings visibility Highly experienced management team with strong track record and clear vision for 7 Leadership excellence future value creation and firm commitment to Knorr-Bremse Knorr-Bremse Group │7 1 Global #1 – The world’s leading supplier of safety critical rail and commercial vehicle systems RVS offering (2019: 53% of sales, 62% of EBITDA) CVS offering (2019: 47% of sales, 38% of EBITDA) Train Control LRV2) Fuel efficiency Brake systems, steering & vehicle dynamics Brake Entrance HVAC1) Management traction systems systems ▪ Engine components ▪ Brake control ▪ Automated driving Systems systems ▪ Transmission ▪ Brake systems ▪ Steering systems Power Auxiliary Energy supply & Signaling systems Connectivity Electrification electrics power supply distribution Modernisation and support Aftermarket services Aftermarket services including Alltrucks network3) Preferred partner for all major OEMs4) and operators across the globe Example car builders Example operators Indian Railways Notes: 2019 financials based on IFRS excluding consolidation/other; 1)HVAC – Heating, ventilation and air conditioning; 2)LRV – Light rail vehicle; 3) Joint Venture between Bosch, Knorr-Bremse and ZF providing a range of workshop services relating to the repair and maintenance of commercial vehicles across all brands; 4) OEM – Original Equipment Manufacturer; Source: Knorr-Bremse information Knorr-Bremse Group │8 1 Global #1 – … protected by high barriers to entry Barriers to entry for RVS and CVS markets Market specifics Only supplier worldwide Regulation / homologation RVS certified for all global and local standards and norms (GOST, UIC, AAR, ARA) Low volumes, high number of variants with high level Vast array of product variants to homologate of customisation (e.g. >100k active brake articles by Knorr-Bremse) High initial capital requirements, highly protected IP landscape Homologation time typically 4-8 years and economies of scale for recent Knorr-Bremse products Highest quality and safety requirements CVS One of only two suppliers able to offer harmonised products globally Long lifecycle with resulting customer loyalty, long gestation period for aftermarket Continuously increasing safety and emission standards requirements Same industry leaders since creation of the industry over 100 years ago Source: Knorr-Bremse information Knorr-Bremse Group │9 2 Synergistic business – Technology and scale benefits between Rail and Commercial Vehicles Interdependence of RVS and CVS today Future technology development Unique scale benefits ✓ Same core technologies ✓ Shared research centres ✓ ~2x size of main competitors3) ✓ ADAS1) / HAD2) technology transfer ✓ Shared components and materials ✓ Balance sheet strength for M&A ✓ Condition monitoring, condition-based and predictive maintenance ✓ Comprehensive research and IP base ✓ Global footprint ✓ Electrification and connectivity ✓ Electromechanical brake systems RVS CVS Electric compressors Friction materials Air disc brakes (ADB) Driver assistance Trailer control valve Electronic air supply Notes: 1) ADAS – Advanced driver assistance system; 2) HAD – Highly automated driving; 3) Based on 2017 sales and status quo pre-Wabtec merger with GE Transportation; 2017 €/USD FX: 0.83346 used as of 31 December 2017; Source: Knorr-Bremse information; WABCO and Wabtec / Faiveley information based on Annual Report 2017 Knorr-Bremse Group │10 3 Market outperformance – Knorr-Bremse is well positioned to deliver continued growth above rail industry levels Knorr-Bremse with strong track record of industry outperformance Key future growth drivers CAGR (2010-2019) RVS sales1) (HGB) and market Asia Growth Outsourcing Chinese high-speed esp. AM Outsourcing from rail OEM’s 2.7x Mass urban transport in APAC (trend towards de-verticalisation) Expansion and upgrade of Indian rail 7.1% rolling stock CRRC international expansion Digitisation Aftermarket Increasing demand for connected Global rail services and aftermarket systems and other digital solutions for rolling stock 2.6% ✓ Certification capability for all global core markets ✓ Partner of many Chinese OEMs and large installed base Underlying Leading control and monitoring technology