Annual Report 2010 - Knorr-Bremse AG.

16
Development of the Knorr-Bremse
Group in 2010
Consolidated sales for the Knorr-Bremse Group were up
34% from EUR 2,760.9 million in 2009 to EUR 3,712.2 million
in 2010. This figure includes positive currency translation
effects in the amount of approximately EUR 170 million. In
an improving but still volatile economic environment, the
company benefited from its strong strategic position with
two divisions, Rail Vehicle Systems and Commercial Vehicle
Systems, in markets that developed differently.
The Rail Vehicle Systems division showed a positive development
in the year under review, stepping up sales to EUR
2,024.4 million (2009: EUR 1,552.6 million). The increase was
primarily driven by a steep rise in sales of over 100% in Asia,
where Knorr-Bremse has been progressively expanding its
market presence since the late 1980s.
In 2010 the Commercial Vehicle Systems division benefitted
from the increasing pace of recovery of the commercial vehicle
markets, posting sales of EUR 1,700.7 million (2009: EUR
1,221.5 million). One major focus of commercial vehicle activities
in the year under review was on expansion in China.
The business environment by sector
The Group benefitted decisively from the recovery of the
global markets and the resultant increase in the volume of
freight transportation – although with major differences
from one region to the next.
Despite a modest rise in transportation volumes, demand
in the rail freight sector in the North and South America
region and in Europe remained subdued. This was reflected
in 2010 by a further 30% fall in demand for freight cars
in Europe (2009: minus 31%) and by a 32% decline in North
America (2009: minus 63%). In the rail-borne passenger
transportation sector major projects were postponed or
cancelled in Europe and North America. The Asian market,
by contrast, showed positive development in both the
freight and passenger sectors.
Following a 25% slump in worldwide truck output in 2009,
the year under review saw global truck production rise
48%. In Europe, where a record year in 2008 was followed
by the sharpest downturn in any region, truck production
was 55% up in 2010 (2009: minus 63%). The North American
market witnessed its first upswing since 2006, growing
23% in the year under review (2009: minus 37%). In South
America, truck output was 56% up in 2010 (2009: minus
29%). The Asian region showed further growth in 2010
with truck production rising 52% (2009: 1%). Aftermarket
business also benefitted from these positive developments
across all regions and posted further growth in
2010.
Acquisitions, additions and joint ventures
In the year under review Knorr-Bremse continued its strategy
of improving its market position through targeted acquisitions.
In the first quarter of the year under review, Knorr-Bremse
Asia Pacific (Holding) Ltd., Hong Kong, China, and Knorr-
Bremse AG, Munich, Germany, acquired the 26% stake held
by Tata Autocomp. Systems Ltd., Pune, India, in the joint
venture Knorr-Bremse Systems for Commercial Vehicles India
Private Ltd., Pune, India. Knorr-Bremse is now the sole
owner of the company. The acquisition of the outstanding
shares took place by mutual agreement between the joint
venture partners.
To further strengthen its position in the rail vehicle brake
pad business, Knorr-Bremse entered into a joint venture for
the development and production of organic brake pads
and brake shoes. The company is called Icer Rail S.L., and is
based in Pamplona, Spain. The two joint venture partners
are Knorr-Bremse Group subsidiary Sociedad Española de
Frenos, Getafe, Spain, and Icer Brakes S.A., Pamplona, Spain,
a member of the Spanish Berkelium Group. Knorr-Bremse
originally accessed the brake pad business in 2008 with