Annual Report 2011 - Knorr-Bremse
Annual Report 2011 - Knorr-Bremse
Annual Report 2011 - Knorr-Bremse
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
<strong>Annual</strong> <strong>Report</strong><br />
<strong>2011</strong><br />
K n o r r - B r e m s e G r o u p
At a Glance<br />
KNORR-BREMSE GROUP 2007 2008 2009 2010 <strong>2011</strong><br />
Sales EUR mill. 3,251 3,384 2,761 3,712 4,241<br />
Net income EUR mill. 198 192 99 239 329<br />
Employees (as per Dec. 31)* 15,235 15,890 15,613 18,053 20,050<br />
Personnel costs EUR mill. 622 686 641 721 805<br />
Balance-sheet total EUR mill. 1,735 1,788 1,664 2,194 2,530<br />
Equity EUR mill. 566 639 533 754 902<br />
Capital expenditure ** EUR mill. 140 134 101 113 159<br />
Depreciation ** EUR mill. 113 115 118 147 165<br />
Incoming orders EUR mill. 3,767 3,209 3,185 4,040 4,073<br />
Research and development expenditure EUR mill. 159 171 153 175 209<br />
* incl. Leasing<br />
* *not including investments in financial assets
Main Majority-owned<br />
Subsidiaries<br />
of <strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
The Americas<br />
<strong>Knorr</strong> Brake Holding Corporation,<br />
Watertown, NY (US)*<br />
Anchor Brake Shoe Company LLC (US)<br />
Bendix Commercial Vehicle<br />
Systems LLC (US)<br />
Bendix Spicer Foundation<br />
Brake LLC (US)*<br />
IFE North America LLC (US)<br />
<strong>Knorr</strong> Brake Corporation (US)<br />
<strong>Knorr</strong> Brake Ltd. (CA)<br />
Merak North America LLC (US)<br />
New York Air Brake Corporation (US)<br />
Technologies Lanka Inc. (CA)*<br />
* Minority holding in subsidiary by<br />
non-group companies<br />
** 20 % stake held by Robert Bosch GmbH,<br />
Stuttgart (DE)<br />
As per December 31, <strong>2011</strong><br />
<strong>Knorr</strong>-<strong>Bremse</strong> Brasil<br />
(Holding) Administração e<br />
Participação Ltda.,<br />
São Paulo (BR)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Sistemas para<br />
Veículos Comerciais Brasil Ltda. (BR)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Sistemas para<br />
Veículos Ferroviários Ltda. (BR)<br />
Europe – Middle East – A<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systeme für<br />
Schienenfahrzeuge GmbH,<br />
Munich (DE)<br />
Freinrail Systèmes Ferroviaires S.A. (FR)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems Italia S.r.I. (IT)<br />
IGE-CZ s.r.o. (CZ)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Ges.m.b.H. (AT)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Nordic Rail Services AB (SE)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systemy dla Kolejowych<br />
Srodków Lokomocji PL Sp. z o.o. (PL)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems (UK) Ltd. (GB)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> S.A. (Pty.) Ltd. (ZA)*<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Vasúti Jármű Rendszerek<br />
Hungária Kft. (HU)<br />
Merak Sistemas Integrados de<br />
Climatización S.A. (ES)<br />
Microelettrica Scientifica S.p.A. (IT)<br />
Oerlikon-<strong>Knorr</strong> Eisenbahntechnik AG (CH)<br />
Sociedad Española de Frenos, Calefacción y<br />
Señales S.A. (ES)<br />
Dr. techn. Josef Zelisko Ges.m.b.H. (AT)
frica Asia – Australia<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systeme für<br />
Nutzfahrzeuge GmbH,<br />
Munich (DE)**<br />
Bost Ibérica S.L. (ES)<br />
Hasse & Wrede GmbH (DE)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Benelux B.V.B.A. (BE)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Fékrendszerek Kft. (HU)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> KAMA Systems for<br />
Commercial Vehicles OOO (RU)*<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Polska SfN Sp. z o.o. (PL)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Sistemi per Autoveicoli<br />
Commerciali S.p.A. (IT)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systèmes pour Véhicules<br />
Utilitaires France S.A. (FR)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> System för Tunga<br />
Fordon AB (SE)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systems for<br />
Commercial Vehicles Ltd. (GB)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systémy pro užitková vozidla<br />
ČR, s.r.o. (CZ)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Asia Pacific<br />
(Holding) Ltd.,<br />
Hongkong (HK)<br />
Hasse & Wrede CVS Dalian, China Ltd. (CN)*<br />
IFE-VICTALL Railway Vehicle Door Systems<br />
(Qingdao) Co., Ltd. (CN)*<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Australia Pty. Ltd. (AU)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Brake Equipment (Shanghai) Co.,<br />
Ltd. (CN)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Braking Systems for Commercial<br />
Vehicles (Dalian) Co., Ltd. (CN)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> CARS LD Vehicle Brake Disc<br />
Manufacturing (Beijing) Co., Ltd. (CN)*<br />
<strong>Knorr</strong>-<strong>Bremse</strong> CAFF Systems for Commercial<br />
Vehicles Chongqing Ltd. (CN)*<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Commercial Vehicle Systems<br />
Japan Ltd. (JP)**<br />
<strong>Knorr</strong>-<strong>Bremse</strong> India Pvt. Ltd. (IN)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> / Nankou Air Supply Unit (Beijing)<br />
Co., Ltd. (CN)*<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems Japan Ltd. (JP)*<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems Korea Ltd. (KR)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systems for Commercial Vehicles<br />
India Pvt. Ltd. (IN)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systems for Rail Vehicles<br />
(Suzhou) Co., Ltd. (CN)<br />
Sigma Transit Systems Pty. Ltd. (AU)<br />
Sydac Pty. Ltd. (AU)<br />
Westinghouse Platform Screen Doors<br />
(Guangzhou) Ltd. (CN)*
Overview<br />
<strong>Report</strong>s<br />
Consolidated<br />
Financial<br />
Statements<br />
04<br />
06<br />
08<br />
10<br />
12<br />
38<br />
40<br />
42<br />
56<br />
64<br />
68<br />
76<br />
78<br />
82<br />
92<br />
104<br />
110<br />
118<br />
120<br />
128<br />
138<br />
144<br />
150<br />
171<br />
172<br />
174<br />
175<br />
176<br />
177<br />
<strong>2011</strong> at a Glance<br />
The Executive Board of <strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
The Supervisory Board of <strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
<strong>Report</strong> of the Supervisory Board<br />
The State and Development of <strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
and the <strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
Rail Vehicle Systems<br />
Markets<br />
Market Successes<br />
Products<br />
Aftermarket<br />
Site-specific Projects<br />
Commercial Vehicle Systems<br />
Markets<br />
Market Successes<br />
Products<br />
Aftermarket<br />
Site-specific Projects<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
<strong>Knorr</strong> Excellence<br />
Responsibility<br />
Employees<br />
Trade Fairs<br />
Notes to the Consolidated Financial Statements<br />
Consolidated Cash Flow Statement<br />
Segment <strong>Report</strong>ing<br />
Statement of Changes in Group Equity<br />
Independent Auditors’ <strong>Report</strong><br />
Consolidated Balance Sheet<br />
Consolidated Statement of Income
<strong>2011</strong> at a Glance<br />
Ansgar Fries joins the Executive<br />
Board of <strong>Knorr</strong>-<strong>Bremse</strong> Commercial<br />
Vehicle Systems, taking charge of<br />
the Center of Competence for chassis<br />
and brake control<br />
Bendix opens third plant in Acuña,<br />
Mexico<br />
<strong>Knorr</strong>-<strong>Bremse</strong> IT-Services founded<br />
January<br />
February<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Commercial<br />
Vehicle Systems receives <strong>2011</strong><br />
VDA Logistics Award<br />
Dr. Stefan Haas, Head of Innovation and<br />
Development at <strong>Knorr</strong>-<strong>Bremse</strong> Rail<br />
Vehicle Systems, receives the European<br />
Railway Award for development of the<br />
eddy-current brake<br />
<strong>Knorr</strong>-<strong>Bremse</strong> KAMA named Company<br />
of the Year by the President of the<br />
Russian Federation<br />
Start of production at the <strong>Knorr</strong>-<strong>Bremse</strong><br />
CAFF joint venture in Chongqing<br />
<strong>Knorr</strong>-<strong>Bremse</strong> makes donation to help<br />
victims of natural disaster in Japan<br />
István Lepsényi, Managing Director of<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s Hungarian subsidiary,<br />
named Manager of the Year 2010 in<br />
Hungary<br />
Expanded production facilities at<br />
IFE-VICTALL in Qingdao officially<br />
opened<br />
<strong>Knorr</strong>-<strong>Bremse</strong> plant in Suzhou<br />
celebrates completion of third<br />
expansion phase<br />
The <strong>2011</strong> Financial Statements Press<br />
Conference takes place at headquarters<br />
in Munich<br />
March May<br />
Presentation of the in-house <strong>2011</strong><br />
<strong>Knorr</strong> Excellence and CSR Awards<br />
<strong>Knorr</strong>-<strong>Bremse</strong> showcases products and<br />
services at the UITP trade fair in Dubai<br />
Group-wide <strong>Knorr</strong>-<strong>Bremse</strong> Identity<br />
project kicks off<br />
<strong>Knorr</strong>-<strong>Bremse</strong> and Deutsche Bank<br />
celebrate a century of successful<br />
collaboration<br />
<strong>Knorr</strong>-<strong>Bremse</strong> voted “Best Brand in the<br />
Commercial Vehicle Sector” for the sixth<br />
time running<br />
Merak Railway Technologies completes<br />
expansion of Shanghai plant<br />
Heinz Hermann Thiele is made an<br />
honorary citizen of Aldersbach<br />
April June<br />
<strong>Knorr</strong>-<strong>Bremse</strong> celebrates 30th<br />
anniversary of ABS anti-lock brakes<br />
<strong>Knorr</strong>-<strong>Bremse</strong> supports DocStop and<br />
donates a “DocMobil”<br />
<strong>Knorr</strong>-<strong>Bremse</strong> sets out its stall at the<br />
Railtex fair in London<br />
“North American Product Leadership of<br />
the Year Award” goes to <strong>Knorr</strong>-<strong>Bremse</strong><br />
subsidiary Bendix
<strong>Knorr</strong>-<strong>Bremse</strong> Global Care provides<br />
emergency aid for Horn of Africa famine<br />
10,000th Chinese metro car fitted with<br />
<strong>Knorr</strong>-<strong>Bremse</strong> systems<br />
Microelettrica acquires Comet Fans<br />
S.r.l., an Italian manufacturer of axial fans<br />
for rail vehicles<br />
<strong>Knorr</strong>-<strong>Bremse</strong> wins major order for<br />
metro project in Beijing<br />
Bendix acquires select assets from<br />
US traffic data management provider<br />
Iteris Inc.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> again receives<br />
excellent ratings from<br />
Standard & Poor’s and Moody’s<br />
<strong>Knorr</strong>-<strong>Bremse</strong> stages “Girls for<br />
Technology” camp in Munich<br />
The first turf is cut for a new<br />
<strong>Knorr</strong>-<strong>Bremse</strong> plant in Brazil<br />
<strong>Knorr</strong>-<strong>Bremse</strong> conducts its fourth<br />
worldwide employee survey<br />
Series production of ESP celebrates<br />
tenth anniversary<br />
<strong>Knorr</strong>-<strong>Bremse</strong> joins the exhibitors at<br />
the ComTrans and Railway Salon Expo<br />
fairs in Russia<br />
July September November<br />
Heinz Hermann Thiele awarded the<br />
Beuth Medal of Honor<br />
<strong>Knorr</strong>-<strong>Bremse</strong> obtains approval<br />
for KAB60 control valve for the<br />
Russian market<br />
Jochen Hahn wins European Truck<br />
Racing Championship<br />
TATA Tec Day staged at TATA Motors<br />
premises in Pune, India<br />
In Barcelona, <strong>Knorr</strong>-<strong>Bremse</strong> receives the<br />
European Business Award<br />
<strong>Knorr</strong>-<strong>Bremse</strong> KAMA honored for best<br />
charitable project<br />
The first turf is cut for the new<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Manufacturing &<br />
Development Center in Pune, India<br />
August October December<br />
The 500,000th drum brake is<br />
produced at <strong>Knorr</strong>-<strong>Bremse</strong> KAMA<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Corporation in the USA<br />
purchases a 75% stake in<br />
Technologies Lanka in Canada<br />
Expansion measures successfully<br />
completed at <strong>Knorr</strong>-<strong>Bremse</strong> plant in<br />
Liberec, Czech Republic
6<br />
The Executive Board of <strong>Knorr</strong>-<strong>Bremse</strong> AG
Klaus Deller<br />
Dr. Lorenz Zwingmann<br />
Spokesman of the Executive<br />
Board since October 10, <strong>2011</strong><br />
Dr. Dieter Wilhelm<br />
E X E C U T I V E B O A R D<br />
Dr. Raimund Klinkner<br />
Chairman of the Executive Board until October 10, <strong>2011</strong><br />
7
8<br />
The Supervisory Board of <strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
Wolfgang<br />
Hubert*<br />
Munich<br />
(since March 18, <strong>2011</strong>)<br />
Representative of the<br />
disabled, Chairman of<br />
the Works Council of<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systeme<br />
für Schienenfahrzeuge<br />
GmbH, <strong>Knorr</strong>-<strong>Bremse</strong><br />
AG, KB Media GmbH,<br />
<strong>Knorr</strong>-<strong>Bremse</strong><br />
IT-Services GmbH<br />
*Employee representative<br />
Dr. Hans-Peter<br />
Binder<br />
Berg<br />
Retd. Member<br />
of the Board of<br />
Management<br />
of Deutsche Bank<br />
AG, Munich Branch<br />
Werner<br />
Ratzis berger*<br />
Munich<br />
Project engineer,<br />
mechanical surface<br />
treatment,<br />
<strong>Knorr</strong>-<strong>Bremse</strong><br />
Systeme für<br />
Nutzfahrzeuge<br />
GmbH<br />
Dr. Kurt<br />
Kiethe<br />
Munich<br />
Attorney at law<br />
Dr. Martin<br />
Kimmich*<br />
Munich<br />
IG Metall Trade<br />
Union Secretary,<br />
Munich Office<br />
Manfred<br />
Wennemer<br />
Bensheim<br />
2nd Deputy<br />
Chairman,<br />
Former Chairman of<br />
the Executive Board<br />
of Continental AG
Heinz Hermann<br />
Thiele<br />
Munich<br />
Chairman,<br />
Entrepreneur<br />
Dr. Eduard<br />
Gerum*<br />
Rosenheim<br />
1st Deputy<br />
Chairman,<br />
Consultant to the<br />
Executive Board<br />
of <strong>Knorr</strong>-<strong>Bremse</strong><br />
Systeme für<br />
Nutzfahrzeuge GmbH<br />
Dr. Wolfram<br />
Mörsdorf<br />
Essen<br />
Retd. Member of the<br />
Executive Board of<br />
ThyssenKrupp AG<br />
Frank Hellmer* Munich (until March 18, <strong>2011</strong>)<br />
Test engineer, <strong>Knorr</strong>-<strong>Bremse</strong> Systeme für Schienenfahrzeuge GmbH<br />
Günter<br />
Wiese*<br />
Berlin<br />
(since March 18, <strong>2011</strong>)<br />
Full-time Chairman<br />
of the Works Council<br />
of <strong>Knorr</strong>-<strong>Bremse</strong><br />
Systeme für<br />
Schienenfahrzeuge<br />
GmbH, Berlin plant<br />
Dr. h. c. Horst<br />
Zimmer<br />
Lampertheim-<br />
Hofheim<br />
Retd. Member<br />
of the Board of<br />
Management of<br />
Mercedes-Benz AG<br />
S U P E R V I S O R Y B O A R D 9<br />
Heinz<br />
Hausner*<br />
Salzweg<br />
Klaus Gegen furtner* Aidenbach (until March 18, <strong>2011</strong>)<br />
Assistant Representative<br />
of the IG<br />
Metall Trade Union,<br />
Passau Office<br />
Toolmaker, <strong>Knorr</strong>-<strong>Bremse</strong> Systeme für Nutzfahrzeuge GmbH
1 0<br />
<strong>Report</strong> of the Supervisory Board<br />
In the course of fiscal <strong>2011</strong>, the Supervisory Board concerned itself in detail with the state<br />
and development of <strong>Knorr</strong>-<strong>Bremse</strong> AG and all Group companies.<br />
Along with important individual transactions and human<br />
resources decisions, this also included consideration of<br />
fundamental aspects of strategic direction and corporate<br />
planning. In addition, the Supervisory Board received<br />
regular reports from the Executive Board either in the<br />
course of its meetings or in written or oral form. The Supervisory<br />
Board examined important individual transactions,<br />
as well as deciding on items of business that required<br />
its approval either by law or in line with company<br />
statutes. The information and analyses upon which the<br />
decisions of the Supervisory Board were based were discussed<br />
and assessed in depth together with the Executive<br />
Board. In order to comply with the requirements of<br />
the German Accounting Law Modernization Act in terms<br />
of corporate governance, a second meeting of the Financial<br />
Statements Committee was held in mid year. At its<br />
meetings, the Financial Statements Committee dealt in<br />
particular with the supervision of the accounting process,<br />
the efficacy of the internal controlling system, the risk<br />
management system and the internal audit system, as<br />
well as the work of the auditors.<br />
In fiscal <strong>2011</strong> the <strong>Knorr</strong>-<strong>Bremse</strong> Group was able to increase<br />
sales to EUR 4.24 billion (2010: EUR 3.71 billion).<br />
The Rail Vehicle Systems division posted further sales<br />
growth assisted primarily by the recovery of the freight<br />
market in North America, but also by positive impetus<br />
from the European region. The Commercial Vehicle Systems<br />
division benefited from the recovery of the markets<br />
in Europe and North America in particular, as well as from<br />
the expansion of its business across all regions, and was<br />
also able to report substantial sales growth.<br />
To safeguard the future development of the company, in<br />
<strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> continued to invest in the strategic<br />
development and expansion of its production plants. In<br />
the year under review, a new Commercial Vehicle Systems<br />
plant was opened in Acuña (Mexico). Also in <strong>2011</strong>, two<br />
extensions to the Rail Vehicle Systems plants in Shanghai<br />
and Suzhou were officially opened in China. Moreover,<br />
the Commercial Vehicle Systems plant in Liberec (Czech<br />
Republic), which was only inaugurated in 2010, was expanded<br />
in the year under review.<br />
In addition to organic growth, the year under review saw<br />
corporate strategy continue to focus on targeted acquisitions<br />
and joint ventures with the aim of optimizing the<br />
product portfolio. In the rail vehicle sector the acquisition<br />
of the Kalmar Tågkompetens AB in Kalmar (Sweden), a<br />
specialist in the door aftermarket segment, and Technologies<br />
Lanka Inc. in La Pocatière (Canada), who specialize in<br />
linear door motors, led to a strengthening of the onboard<br />
system portfolio. In addition, Microelettrica Scientifica<br />
S.p.A., Milan (Italy), acquired Comet Fans S.r.l., Solaro<br />
(Italy), an Italian manufacturer of axial fans for locomotives,<br />
vehicle drive systems and other industrial applications,<br />
also expanding the portfolio. The acquisition of an<br />
additional 25% of the Icer Rail S.L. joint venture in Pamplona<br />
(Spain) also reinforced the friction materials product<br />
segment (subject to official approval). Also, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> Systeme für Schienenfahrzeuge GmbH, Munich<br />
(Germany), purchased the remaining 25% of <strong>Knorr</strong>-<br />
<strong>Bremse</strong> Nordic Rail Services AB, Lund (Sweden), from HVL<br />
BaneTeknik A/S, Snekkersten (Denmark). In the commercial<br />
vehicle sector, <strong>Knorr</strong>-<strong>Bremse</strong>’s US subsidiary Bendix<br />
Commercial Vehicle Systems LLC, Elyria (USA), acquired<br />
select assets of Iteris Inc., Santa Ana (USA), strengthening<br />
its product portfolio in the field of active safety systems. In<br />
addition, the joint venture <strong>Knorr</strong>-<strong>Bremse</strong> CAFF Systems<br />
for Commercial Vehicles Chongqing Ltd. was founded in<br />
Chongqing (China) for the production of commercial vehicle<br />
braking system and drivetrain components, representing<br />
a further important strategic step forward in the<br />
world’s largest commercial vehicle market.<br />
Against the backdrop of rising sales, the company’s top<br />
priority remained ensuring the highest quality standards<br />
in its products and processes. In <strong>2011</strong>, work continued on<br />
the optimization of processes and structures in all of the<br />
key areas. In particular, the FIT (Finance & IT Excellence)<br />
initiative introduced in 2010 was further expanded in the<br />
year under review. In the context of the ONE IT project the<br />
company’s organizational IT structures were refined and,<br />
effective January 1, <strong>2011</strong>, merged to form <strong>Knorr</strong>-<strong>Bremse</strong> IT<br />
Services GmbH.
The <strong>2011</strong> Financial Statements and the Management <strong>Report</strong><br />
on <strong>Knorr</strong>-<strong>Bremse</strong> AG, the <strong>2011</strong> Consolidated Financial<br />
Statements and the Management <strong>Report</strong> on the<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group drawn up by the Executive Board,<br />
and the company‘s accounts were examined by the auditors<br />
elected by the <strong>Annual</strong> Shareholders‘ Meeting, KPMG<br />
AG Wirtschaftsprüfungsgesellschaft, Munich, and endorsed<br />
with their unqualified opinion dated March 2,<br />
2012. The Supervisory Board also examined the Financial<br />
Statements for fiscal <strong>2011</strong>, the Management <strong>Report</strong>, the<br />
proposed allocation of unappropriated retained earnings,<br />
and the Consolidated Financial Statements and Management<br />
<strong>Report</strong> on the <strong>Knorr</strong>-<strong>Bremse</strong> Group. No objections<br />
were raised. At its meeting on March 16, 2012, the Supervisory<br />
Board approved the <strong>2011</strong> Financial Statements,<br />
which thereby became legally binding. The Supervisory<br />
Board concurs with the Executive Board’s proposal for the<br />
allocation of unappropriated retained earnings. The Consolidated<br />
Financial Statements were also approved.<br />
The auditors attended the meeting of the Financial Statements<br />
Committee on February 24, 2012 as well as the financial<br />
statements meeting of the Supervisory Board on<br />
March 16, 2012, reported on their key findings and answered<br />
outstanding questions.<br />
KPMG AG Wirtschaftsprüfungsgesellschaft, Munich, also<br />
examined the Executive Board‘s report on relations with<br />
affiliated companies, drawn up in line with Paragraph 312<br />
German Corporation Law (AktG). The auditors endorsed<br />
this report with the following opinion:<br />
“Having audited and assessed this report in accordance<br />
with professional standards, we confirm that: 1. The factual<br />
contents of the report are correct. 2. The consideration<br />
furnished by the Company in the legal transactions<br />
set out in the report was not unreasonably high.”<br />
The Supervisory Board also examined the Executive<br />
Board‘s report on relations with affiliated companies and<br />
has no objections to the concluding statement by the Executive<br />
Board or to the auditors‘ findings.<br />
S U P E R V I S O R Y B O A R D<br />
The term of office of the existing Supervisory Board expired<br />
in <strong>2011</strong>. At the <strong>Annual</strong> Shareholders’ Meeting on<br />
March 18, <strong>2011</strong> the previous representatives of the shareholders<br />
were re-elected to the Supervisory Board of<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG. The employees are now represented by<br />
Wolfgang Hubert, Werner Ratzisberger, Dr. Martin Kimmich,<br />
Dr. Eduard Gerum, Günter Wiese and Heinz Hausner.<br />
On behalf of <strong>Knorr</strong>-<strong>Bremse</strong> AG, the Supervisory Board<br />
wishes to thank all its former members for their contributions<br />
to the work of this body.<br />
Effective October 10, <strong>2011</strong>, Dr. Raimund Klinkner resigned<br />
his seat on the Executive Board and all other positions at<br />
<strong>Knorr</strong>-<strong>Bremse</strong> by mutual agreement and left the company<br />
on December 31, <strong>2011</strong>. On October 10, <strong>2011</strong>, Dr. Lorenz<br />
Zwingmann assumed the interim role of Spokesman of<br />
the Executive Board of <strong>Knorr</strong>-<strong>Bremse</strong> AG in addition to his<br />
existing duties in the areas of Finance, Controlling and IT.<br />
It is with a deep sense of gratitude that we honor the<br />
memory of Dr.-Ing. E. h. Wilfried Lochte, who passed away<br />
on March 7, <strong>2011</strong>. Dr. Lochte was a member of the Supervisory<br />
Board of <strong>Knorr</strong>-<strong>Bremse</strong> AG and of the Supervisory<br />
Board of <strong>Knorr</strong>-<strong>Bremse</strong> Systeme für Nutzfahrzeuge GmbH<br />
from 1993 to 2008. With his extensive experience and<br />
pronounced entrepreneurial thinking, throughout this<br />
period Dr. Lochte stewarded the progress of <strong>Knorr</strong>-<strong>Bremse</strong><br />
with great commitment and was instrumental in shaping<br />
the company’s development through fundamental decisions<br />
on its strategic direction. He maintained close,<br />
friendly and trusting relations with the company’s shareholders.<br />
We will not forget him.<br />
Munich, March 16, 2012<br />
The Supervisory Board<br />
Heinz Hermann Thiele,<br />
Chairman<br />
1 1
Management<br />
<strong>Report</strong><br />
IN FISCAL <strong>2011</strong>, THE KNORR-BREMSE GROUP SAW SALES CLIMB MORE<br />
THAN HALF A BILLION EUROS OR 14% TO EUR 4.24 BILLION (2010:<br />
EUR 3.71 BILLION). The Rail Vehicle Systems division posted a further 8%<br />
increase in sales in <strong>2011</strong>, reaching a total of EUR 2.19 billion (2010: EUR<br />
2.02 billion). In the year under review, growth was driven not least by the<br />
North American region, on the back of a resurgent freight car market, and<br />
by Europe. <strong>Knorr</strong>-<strong>Bremse</strong>´s Commercial Vehicle Systems division reported<br />
22% growth in <strong>2011</strong> with business expanding in every region as sales<br />
reached EUR 2.07 billion (2010: EUR 1.70 billion). A key contributory factor<br />
here was the ongoing buoyancy of the commercial vehicle markets in<br />
Europe and North America in particular.
1 4<br />
The State and Development<br />
of <strong>Knorr</strong>-<strong>Bremse</strong> AG and the<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
An overview of the<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
The <strong>Knorr</strong>-<strong>Bremse</strong> Group is the world‘s leading manufacturer<br />
of braking systems for rail and commercial vehicles.<br />
For more than 100 years now the company has pioneered<br />
the development, production, marketing and servicing of<br />
state-of-the-art braking systems. Other lines of business<br />
in the rail vehicle systems sector include automatic door<br />
systems, HVAC systems, control components and windscreen<br />
wiper systems, platform screen doors, friction material,<br />
simulators and driver assistance systems. In the<br />
commercial vehicle systems sector, the product range includes<br />
complete braking systems with driver assistance<br />
systems, as well as torsional vibration dampers and powertrain-related<br />
solutions, and transmission control systems<br />
for enhanced energy efficiency and fuel economy.<br />
The structure of the <strong>Knorr</strong>-<strong>Bremse</strong> Group is based on the<br />
regions Europe, North America and South America, and<br />
Asia/Australia, and the development of the Group is<br />
geared to meeting the specific requirements of the markets<br />
and customers in these regions.<br />
This regional organizational structure is designed to offer<br />
globally active customers uniform technical platforms<br />
worldwide, while at the same time taking specific local<br />
needs into account. It also ensures that customers who<br />
operate on a regional basis are supplied with globally<br />
proven systems and components.<br />
General<br />
economic developments<br />
Compared to the recovery of the worldwide markets in<br />
the previous year, the global economy proved far more<br />
volatile in <strong>2011</strong>, with marked differences in developments<br />
from one region to the next. In overall terms, however,<br />
worldwide growth can be said to have continued.<br />
A slowdown in the pace of growth became evident in<br />
both industrialized and emerging nations, with the latter<br />
continuing to make a larger contribution to growth. In<br />
<strong>2011</strong>, the gross domestic product (GDP) of the emerging<br />
economies increased by 6.2% (2010: 7.3%) compared to<br />
average GDP growth of just 1.6% (2010: 3.2%) for the industrialized<br />
nations of the world. Global figures showed<br />
overall economic growth of around 3.8% (2010: 5.2%).<br />
The economic performance of the Eurozone was particularly<br />
hard hit by the pronounced sovereign debt of several<br />
EU member countries, including Greece, Spain and<br />
Portugal. Following on from 1.9% growth in 2010, economic<br />
output in the Eurozone rose by a similarly modest<br />
1.6% in <strong>2011</strong>. With growth of 3.0% (2010: 3.6%), Germany<br />
made a substantial contribution to GDP growth in the<br />
Eurozone.<br />
Following the same pattern as in the Eurozone, in the USA<br />
economic growth slowed from 3.0% in 2010 to 1.8% in<br />
<strong>2011</strong>. The reasons here included the high level of sovereign<br />
debt, a weak housing market and the continuing<br />
weak state of consumer confidence. In Brazilian economy<br />
too, the pace of GDP growth slowed to 2.9%, down from<br />
7.5% in 2010.<br />
China and India, by contrast, retained their role as drivers<br />
of global economic growth. In <strong>2011</strong>, GDP in China was up<br />
9.2% (2010: 10.4%), while India saw GDP rise 7.4% (2010:
9.9%). In Japan, however, GDP sank 0.9% as a result of the<br />
natural disaster that occurred in the spring of <strong>2011</strong> (2010:<br />
+4.4%).<br />
The growing uncertainty surrounding the development<br />
of the real economy was also reflected in the commodity<br />
markets in <strong>2011</strong>. Following a sharp rise in the first half<br />
year, commodity prices faded strongly towards year-end<br />
in what was a highly volatile market environment. From<br />
around USD 90 per barrel at the end of 2010, the price of<br />
oil rose to USD 127 per barrel at the beginning of the second<br />
quarter of <strong>2011</strong>, before falling back to USD 107 per<br />
barrel at year end. Aluminum prices followed a similar<br />
pattern and, after rising as high as USD 2,800/t (top price<br />
in 2008 approx. USD 3,300/t, lowest price in 2009 approx.<br />
USD 1,300/t) declined again to approximately USD 2,000/t<br />
in the course of the year under review. On the balance<br />
sheet date the value of the US dollar – which lines up<br />
alongside the euro as one of the Group’s main operating<br />
currencies – had risen 3.2% against the euro compared to<br />
December 31, 2010, with one euro worth USD 1.29. As an<br />
annual average, the euro traded at USD 1.40.<br />
3,251<br />
198<br />
M A N A G E M E N T R E P O R T<br />
Sales and net income for the <strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
in EUR millions<br />
Sales<br />
3,384<br />
192<br />
2,761<br />
99<br />
2007 2008 2009 2010 <strong>2011</strong><br />
Net income<br />
3,712<br />
239<br />
4,241<br />
329<br />
1 5
1 6<br />
Development of the<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group in <strong>2011</strong><br />
Consolidated sales for the <strong>Knorr</strong>-<strong>Bremse</strong> Group were up<br />
14.2% from EUR 3,712.2 million in 2010 to EUR 4,240.8 million<br />
in fiscal <strong>2011</strong>. This figure includes negative currency<br />
translation effects in the amount of approximately EUR 60<br />
million (compared to positive effects of EUR 170 million in<br />
2010). In an economic environment that remained volatile,<br />
the company benefited from its strong strategic position<br />
with two globally active divisions, Rail Vehicle Systems<br />
and Commercial Vehicle Systems, in markets that<br />
developed differently.<br />
The Rail Vehicle Systems division witnessed diverse regional<br />
developments in the year under review and was<br />
able to increase sales to EUR 2,186.9 million (2010: EUR<br />
2,024.4 million). Positive impetus was mainly generated<br />
by the North American region, led by the recovery of the<br />
freight market, and by Europe.<br />
In <strong>2011</strong> the Commercial Vehicle Systems division grew its<br />
business across all regions and posted sales of EUR 2,068.2<br />
million (2010: EUR 1,700.7 million). In Europe and North<br />
America in particular, the division benefited from the ongoing<br />
positive development of the commercial vehicle<br />
markets.<br />
The business environment by sector<br />
The development of the global markets and the ongoing<br />
overall increase in the volume of freight transportation had<br />
different impacts on the various regions across the Group.<br />
For the Rail Vehicle Systems division, the market environment<br />
was shaped by a modest recovery in the rail freight<br />
sector. In Europe demand for freight cars stabilized, while<br />
the locomotive market showed 15% growth. In South<br />
America, by contrast, demand for freight cars more than<br />
doubled, while in North America it reached three times its<br />
prior-year level. Demand for locomotives was also up in<br />
both of these regions. In Asia, demand for freight cars increased<br />
by 16%, while demand for locomotives showed a<br />
24% decline.<br />
Following their 2010 recovery, the commercial vehicle<br />
markets stabilized in <strong>2011</strong> with truck production (airbraked<br />
trucks of 6t and over) rising 4%. In Europe, truck<br />
production was up by a further 31% in <strong>2011</strong> (2010:<br />
+53%). Even so, the market remained 24% below the<br />
level of its record year 2008. The North American market<br />
was vitalized by rising replacement investments, growing<br />
54% in the year under review (2010: +23%). In South<br />
America, truck output was 14% up in <strong>2011</strong> (2010: +54%).<br />
The Asian region was unable to sustain the growth of<br />
past years, with truck production falling 9% in <strong>2011</strong><br />
(2010: +46%).<br />
Acquisitions, additions and joint ventures<br />
In the year under review <strong>Knorr</strong>-<strong>Bremse</strong> continued its<br />
strategy of improving its market position through targeted<br />
acquisitions.<br />
Effective January 1, <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> Nordic Rail Services<br />
AB, Lund (Sweden), acquired the Swedish door aftermarket<br />
specialist Kalmar Tågkompetens AB, Kalmar<br />
(Sweden), thereby strengthening its portfolio in the<br />
Northern European market.<br />
Also effective January 1, <strong>2011</strong>, the organizational structures<br />
of <strong>Knorr</strong>-<strong>Bremse</strong> IT-Services GmbH, Munich (Germany),<br />
became operational, uniting the IT functions of<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG, Munich (Germany), <strong>Knorr</strong>-<strong>Bremse</strong> Systeme<br />
für Nutzfahrzeuge GmbH, Munich (Germany), and<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systeme für Schienenfahrzeuge GmbH,<br />
Munich (Germany).<br />
With effect from January 19, <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> Asia Pacific<br />
(Holding) Ltd., Hong Kong (China), and the Chinese<br />
manufacturer Chongqing CAFF Automotive Braking &<br />
Steering Systems Co., Ltd., Chongqing (China), founded<br />
the joint venture <strong>Knorr</strong>-<strong>Bremse</strong> CAFF Systems for Commercial<br />
Vehicles Chongqing Ltd., Chongqing (China).<br />
<strong>Knorr</strong>-<strong>Bremse</strong> holds a 66% stake in the joint venture<br />
company, which manufactures brake components in the
air supply and brake control segments, as well as transmission<br />
and clutch control components.<br />
On July 27, <strong>2011</strong>, Microelettrica Scientifica S.p.A., Rozzano<br />
(Italy), acquired Comet Fans S.r.l., Solaro (Italy), an<br />
Italian manufacturer of axial fans for locomotives, vehicle<br />
drive systems and other industrial applications,<br />
thereby expanding its product portfolio. In addition,<br />
Microelettrica Scientifica S.p.A., Rozzano (Italy), extended<br />
its worldwide sales activities through the establishment<br />
of two joint ventures, one in Brazil (Microelettrica<br />
do Brasil Ltda., São Paulo (Brazil), founded on January<br />
14, <strong>2011</strong>) and the other in Turkey (Microelettrica Scientifica<br />
Aktif Ltda., Istanbul (Turkey), founded on November<br />
1, <strong>2011</strong>).<br />
On July 29, <strong>2011</strong>, North American subsidiary Bendix<br />
Commercial Vehicle Systems LLC, Elyria (USA), purchased<br />
select assets of Iteris Inc., Santa Ana (USA). This led to<br />
Bendix adding the Lane AutoVue Departure Warning system<br />
and the Safety Direct data management system to<br />
its portfolio in the North American market.<br />
On October 27, <strong>2011</strong>, Sociedad Española de Frenos, Calefacción<br />
y Señales S.A., Getafe (Spain), acquired an additional<br />
25% stake in the Icer Brakes S.A. joint venture in<br />
Pamplona (Spain), enabling it to further strengthen its<br />
position in the manufacturing of brake pads (subject to<br />
approval by the antitrust authorities).<br />
On December 2, <strong>2011</strong>, the newly founded <strong>Knorr</strong> Brake<br />
Corporation Canada Holdings Ltd., Montreal (Canada),<br />
acquired the onboard systems specialist Technologies<br />
Lanka Inc., La Pocatière (Canada), not least adding linear<br />
drive technology to the company’s door systems business<br />
in North America.<br />
On December 30, <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> Systeme für<br />
Schienenfahrzeuge GmbH, Munich (Germany), purchased<br />
the outstanding 25% of the shares in <strong>Knorr</strong>-<br />
<strong>Bremse</strong> Nordic Rail Services AB, Lund (Sweden), from HVL<br />
M A N A G E M E N T R E P O R T<br />
BaneTeknik A/S, Snekkersten (Denmark), with retroactive<br />
effect from December 31, 2010.<br />
Overall, these acquisitions had no substantial effect on<br />
the assets, financial status and profitability of the <strong>Knorr</strong>-<br />
<strong>Bremse</strong> Group in fiscal <strong>2011</strong>.<br />
Major projects<br />
In <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> continued its rigorous strategy of<br />
localizing assembly operations and creating production<br />
capacity on site in the various markets. Aligned with <strong>Knorr</strong>-<br />
<strong>Bremse</strong>’s regional approach, this enabled the company to<br />
further enhance its global market position in a series of<br />
business areas and thereby secure its commercial success.<br />
The aim is also to always ensure the same customary high<br />
standards in terms of production processes and product<br />
quality at all <strong>Knorr</strong>-<strong>Bremse</strong> plants around the world. In<br />
January <strong>2011</strong> a new Commercial Vehicle Systems plant<br />
was opened in Acuña (Mexico). Among other things this<br />
plant will be producing brake and spring brake cylinders<br />
for the commercial vehicle market in North America. The<br />
physical proximity to the two established plants in Acuña<br />
means that optimum utilization of corporate shared services<br />
and processes is assured. The resultant lean and costeffective<br />
processes ensure a lasting boost for the competitiveness<br />
of <strong>Knorr</strong>-<strong>Bremse</strong>. Elsewhere, in Liberec (Czech<br />
Republic) the need for greater capacity led to the Commercial<br />
Vehicle Systems plant, which was only inaugurated<br />
in June 2010, being expanded in <strong>2011</strong> by a further<br />
7,500 m². The additional space was taken up in part by<br />
new production lines for bayonet-type filter cartridges<br />
and double-diaphragm brake cylinders.<br />
Three new production lines were also set up at the Naberezhnye<br />
Chelny plant in Russia, where the <strong>Knorr</strong>-<strong>Bremse</strong><br />
KAMA Systems for Commercial Vehicles OOO joint venture<br />
is based. September <strong>2011</strong> saw the start of production of<br />
three new products – manual slack adjusters, power<br />
clutches and clutch master cylinders – all further additions<br />
1 7
1 8<br />
to the portfolio of the joint venture, which had previously<br />
concentrated on the manufacture of drum brakes and torsional<br />
vibration dampers.<br />
In China the Rail Vehicle Systems division geared up to<br />
meet changing local market conditions and invested in<br />
the expansion of production capacity. In <strong>2011</strong>, this led to<br />
the opening of two extensions to existing facilities. One of<br />
these was at the Shanghai plant, where <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary<br />
Merak manufactures HVAC systems. The newly extended<br />
plant is designed to comply with the highest international<br />
standards of process organization, labor efficiency,<br />
logistics and quality, based on full implementation of the<br />
globally applicable <strong>Knorr</strong>-<strong>Bremse</strong> Production System<br />
(KPS). The extension was officially opened in May <strong>2011</strong>.<br />
The second extension, opened in March <strong>2011</strong>, was at the<br />
Suzhou plant, originally founded in 2005 and since twice<br />
extended – in 2007 and again in 2010. The latest measures<br />
brought an additional 5,700 m² of production space and<br />
office facilities covering around 3,300 m².<br />
Quality and processes<br />
<strong>Knorr</strong>-<strong>Bremse</strong> continues to target best-in-class processes<br />
as the foundation on which its competitive capabilities<br />
are based. In <strong>2011</strong>, processes and structures were again<br />
reviewed and enhanced across all key areas.<br />
For several years now, <strong>Knorr</strong>-<strong>Bremse</strong> has been bundling<br />
initiatives designed to drive the continuous improvement<br />
of its business processes within the <strong>Knorr</strong> Excellence<br />
(KE) business model, which has been rolled out<br />
across the Group. In this context, the company has<br />
brought together all process optimization initiatives<br />
from across the divisions. In addition, in <strong>2011</strong> <strong>Knorr</strong>-<br />
<strong>Bremse</strong> also merged its management systems within a<br />
single, harmonized process model, leading to the creation<br />
of a common platform within the Group that facilitates<br />
access to the business processes and enhances<br />
communications.<br />
In the Rail Vehicle Systems division, one key measure was<br />
to anchor the specific requirements of the International<br />
Railway Industry Standard (IRIS) in the various processes<br />
and ensure compliance across all plants. <strong>Knorr</strong>-<strong>Bremse</strong><br />
has become one of the first companies in the rail transportation<br />
sector to implement certification to this standard<br />
across the Group.<br />
For several years now the Strong Focus program has successfully<br />
brought together all activities designed to<br />
boost productivity, cut costs and promote growth. As<br />
part of a multi-year forward projection, valuable ideas<br />
submitted by the workforce and management are collected,<br />
evaluated and gradually implemented. In <strong>2011</strong><br />
this brought further substantial cost savings and improvements<br />
in productivity along the value chain, helping<br />
safeguard the company’s competitiveness.
Assets, financial status and profitability<br />
In <strong>2011</strong> the main factors in the development of the<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group’s business were the continuing recovery<br />
of the commercial vehicle markets and growth in<br />
the rail vehicle sector which varied from one region to<br />
the next.<br />
Consolidated sales rose 14.2% in <strong>2011</strong> to EUR 4,240.8 million<br />
(2010: EUR 3,712.2 million). In Europe, consolidated<br />
sales were up 15.0% to EUR 2,169.5 million (2010: EUR<br />
1,886.0 million), which corresponds to 51.2% of the consolidated<br />
total (2010: 50.8%). The Americas contributed<br />
EUR 1,020.0 million (2010: EUR 827.0 million) or 24.1%<br />
(2010: 22.3%) to consolidated sales. In the Asia/Australia<br />
region, sales amounted to EUR 1,051.3 million (2010: EUR<br />
999.2 million), which equates to 24.7% (2010: 26.9%) of<br />
the consolidated total.<br />
Incoming orders were valued at EUR 4,072.5 million<br />
(2010: EUR 4,040.0 million), 4.0% below the level of annual<br />
sales and 0.8% up on the previous year. Orders on<br />
the books at the <strong>Knorr</strong>-<strong>Bremse</strong> Group declined 3.4% in<br />
the year under review to EUR 3,268.1 million (2010: EUR<br />
3,381.8 million).<br />
Net income for the <strong>Knorr</strong>-<strong>Bremse</strong> Group increased in the<br />
year under review to EUR 329.3 million (2010: EUR 239.4<br />
million). Net return on sales reached 7.8% (2010: 6.4%).<br />
The European region contributed EUR 173.9 million to<br />
net income, corresponding to a net return on sales of<br />
8.0%. Net income from the Americas totaled EUR 76.0<br />
million, with a net return on sales of 7.5%. The Asia/Australia<br />
region posted net income of EUR 79.4 million,<br />
which equates to a net return on sales of 7.6%.<br />
In fiscal <strong>2011</strong>, the door systems business unit (<strong>Knorr</strong>-<br />
<strong>Bremse</strong> Ges.m.b.H, Mödling (Austria), IFE Division) had to<br />
contend with a drop in profitability due to product quality<br />
and delivery performance issues. Appropriate provisions<br />
have been made in the financial statements. The<br />
M A N A G E M E N T R E P O R T<br />
rail vehicle HVAC systems business unit, Merak Sistemas<br />
Integrados de Climatización S.A., Getafe (Spain), reported<br />
a loss in the year under review. This was largely down to<br />
the loss of high-margin sales to a Chinese customer, as<br />
well as the substantial impact on income of quality problems,<br />
primarily affecting supply obligations in China.<br />
The consolidated balance sheet total rose 15.3% in <strong>2011</strong><br />
to EUR 2,530.4 million (2010: EUR 2,194.2 million), largely<br />
influenced by investments in fixed assets, the volumeled<br />
increase in inventories, and the rise in liquid funds. At<br />
year-end <strong>2011</strong>, total assets represented 59.7% of sales. As<br />
a proportion of the balance sheet total, intangibles, fixed<br />
assets, and investments were down against the prioryear<br />
level to 32.7% (2010: 36.5%). Working capital, defined<br />
as the sum of inventories and accounts receivable,<br />
minus accounts payable trade, rose as a result of the increased<br />
volume of orders to EUR 470.6 million at yearend<br />
(2010: EUR 415.6 million) or 39.9 days’ sales (2010:<br />
40.3 days). The equity ratio rose by 1.3 percentage points<br />
from 34.4% to 35.7%.<br />
Of the Group’s total assets, 48.9% are tied up in the European<br />
region, 23.8% in the Americas, and 27.3% in the<br />
Asia/Australia region. Net cash flow of EUR 194.7 million<br />
led to net liquidity of EUR 397.0 million and was achieved<br />
primarily by an inflow of funds from gross cash flow<br />
equivalent to 12.1% of sales. Substantial capital requirements<br />
were generated in <strong>2011</strong> by investments (EUR<br />
158.9 million), dividends (EUR 177.4 million) and an increase<br />
in working capital (EUR 54.9 million). The ratio of<br />
net liquidity to shareholders’ equity stood at 44.0%, compared<br />
with 26.8% in 2010.<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s robust strategic positioning, the positive<br />
development of the company’s business and its excellent<br />
working capital management were confirmed by<br />
the external rating agencies Standard & Poor’s and<br />
Moody’s, who have been rating the <strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
1 9
2 0<br />
since 2000. Moody’s awarded <strong>Knorr</strong>-<strong>Bremse</strong> an “A3/Outlook<br />
stable” rating, while Standard & Poor’s rated the<br />
company “A-/Outlook stable”. That makes <strong>Knorr</strong>-<strong>Bremse</strong><br />
the only family-owned company in the Standard & Poor’s<br />
Global Automotive Suppliers Ranking <strong>2011</strong> with investment<br />
grade status to be awarded an “A” rating.<br />
Overall assessment of the economic<br />
position of the Group<br />
Within the general economic environment described<br />
above, the <strong>Knorr</strong>-<strong>Bremse</strong> Group maintained its overall position<br />
with regard to its assets and financial status, and<br />
was able to further increase its net liquidity in <strong>2011</strong>. The<br />
Group’s profitability was ensured by rigorous cost management<br />
and above all by the internal optimization of<br />
processes and structures.<br />
With an equity ratio of 35.7% and net liquidity of EUR<br />
397.0 million, the structure of the Group’s assets is extremely<br />
stable, so that it can continue to readily meet its<br />
financial obligations.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
As the parent company, <strong>Knorr</strong>-<strong>Bremse</strong> AG performs the<br />
role of service provider and holding company, as well as a<br />
strategic management function on the operational side.<br />
Rising income from investments in associated and related<br />
companies meant that income before taxation increased<br />
to EUR 183.2 million in the year under review (2010: EUR<br />
119.3 million).<br />
Along with interests in affiliated companies, the balance<br />
sheet of <strong>Knorr</strong>-<strong>Bremse</strong> AG largely reflects receivables from<br />
and payables to Group companies and these are centrally<br />
administered, partly within the framework of the cashpooling<br />
process managed by <strong>Knorr</strong>-<strong>Bremse</strong> AG. <strong>Knorr</strong>-<br />
<strong>Bremse</strong> AG acts as an in-house bank for its subsidiaries<br />
around the world. This includes handling the central<br />
hedging of market price risks. The subsidiaries contract<br />
their hedging transactions with <strong>Knorr</strong>-<strong>Bremse</strong> AG, which<br />
in turn hedges part or all of the net residual risk for the<br />
Group with external banks.<br />
With the aid of the global process standardization and<br />
transparency achieved through <strong>Knorr</strong> Excellence, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> AG is able to efficiently control its own business<br />
and that of the associated and related companies.
Appropriation of retained earnings<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG posted unappropriated retained earnings<br />
of EUR 263.9 million in <strong>2011</strong> (2010: EUR 262.6 million).<br />
The <strong>Annual</strong> Shareholders Meeting will be asked to approve<br />
the proposal that an amount of EUR 156.0 million<br />
from the unappropriated retained earnings of <strong>Knorr</strong>-<br />
<strong>Bremse</strong> AG be used to pay a dividend of EUR 60.00 (2010:<br />
EUR 60.00) per dividend-bearing share with a par value of<br />
EUR 26.00, with the balance to be carried forward to new<br />
account.<br />
Balance sheet total<br />
in EUR millions<br />
Structure of assets, liabilities and finances of the <strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
M A N A G E M E N T R E P O R T<br />
Relations with affiliated companies<br />
KB Holding GmbH, Grünwald, Germany, directly holds<br />
more than half the share capital of <strong>Knorr</strong>-<strong>Bremse</strong> AG. Pursuant<br />
to § 312 German Corporation Law (AktG), a report<br />
on relations with affiliated companies has been drawn up<br />
which includes the following statement: “In the legal<br />
transactions listed in the <strong>Report</strong> on Relations with Affiliated<br />
Companies, in accordance with the circumstances<br />
known to us at the time at which the said transactions<br />
took place, our company received appropriate counterperformance<br />
in each case.” The report was audited by the<br />
Auditors and received their unqualified opinion.<br />
Assets Liabilities<br />
FIxed assets/intangibles 34%<br />
30% 34% 36% Shareholders‘ equity<br />
3%<br />
3%<br />
9% 8%<br />
Investments Pension accruals<br />
Current assets/RAP 49%<br />
46% 52% 51%<br />
Short-term debt<br />
Liquid assets<br />
14%<br />
2,194.2 2,530.4<br />
21%<br />
2,194.2 2,530.4<br />
5%<br />
2010 <strong>2011</strong> 2010 <strong>2011</strong><br />
5%<br />
Balance sheet total<br />
in EUR millions<br />
Borrowings<br />
2 1
2 2<br />
Regional developments by division<br />
In the year under review, the Rail Vehicle Systems division<br />
contributed EUR 2,186.9 million (2010: EUR 2,024.4 million)<br />
to consolidated Group sales, while the Commercial Vehicle<br />
Systems division posted sales of EUR 2,068.2 million (2010:<br />
EUR 1,700.7 million). The continuing buoyancy of the commercial<br />
vehicle markets and the expansion of the division’s<br />
global market position led to convergence of the contribution<br />
to sales of the two divisions in <strong>2011</strong>. The Commercial<br />
Vehicle Systems division accounted for 49% (2010:<br />
46%) and the Rail Vehicle Systems division for 51% (2010:<br />
54%) of consolidated sales.<br />
The development of the two divisions is set out below for<br />
the individual regions that make up the Group.<br />
Europe<br />
Rail Vehicle Systems<br />
<strong>2011</strong> brought an end to the decline in rail freight transportation<br />
that set in towards the end of 2008 under the<br />
influence of the financial and economic crisis. The market<br />
situation in both the original equipment and aftermarket<br />
sectors showed a modest recovery. Compared to the previous<br />
year, more locomotives were purchased in the year<br />
under review and locomotive output increased by around<br />
15%. Production of freight cars remained at the prior-year<br />
level, settling at 7,000 units. In the European passenger<br />
transportation sector too, a recovery set in and several important<br />
large-scale projects were revived or newly awarded<br />
in both the mass transit and mainline sectors.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> was among the beneficiaries of European<br />
market developments and in <strong>2011</strong> was again able to win<br />
some important orders. The company’s position in the European<br />
mass transit sector was strengthened by incoming<br />
orders. One example here was the framework agreement<br />
that <strong>Knorr</strong>-<strong>Bremse</strong> concluded with Alstom to equip<br />
the LINT mass transit multiple units. The first job under<br />
this agreement will cover 65 DMU cars for the Neckar-<br />
Köln line. In the metro segment, <strong>Knorr</strong>-<strong>Bremse</strong> is to supply<br />
door systems, oil-free compressors, shoe brake units<br />
and brake resistors to the Moscow Metro.<br />
In the multiple unit and high-speed rail markets too,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> was able to conclude significant sales<br />
agreements. For example, <strong>Knorr</strong>-<strong>Bremse</strong> was the successful<br />
bidder in the tender for the new V300 ZEFIRO highspeed<br />
trains for operator Trenitalia and is to equip 50<br />
eight-car sets with HVAC and door systems. The company<br />
also won the order to supply the braking systems for Kazakh<br />
Railways’ twin-unit KZ8A locomotives. The equipment<br />
concerned (the EP Compact brake control system<br />
with electronic brake pressure control and wheel slide<br />
protection) was specially developed to operate at temperatures<br />
down to minus 55 °C. Also, after many years of<br />
development and marketing activities, a pilot order in the<br />
European region was obtained for the LEADER driver assistance<br />
system.<br />
Commercial Vehicle Systems<br />
After truck output in Western Europe had fallen in 2009,<br />
the market began to recover in 2010. This trend continued<br />
in <strong>2011</strong> with truck production reaching 422,000 units.<br />
However, while this equated to a 30% increase year-onyear,<br />
the market still trailed 25% behind its pre-crisis level<br />
of 562,000 vehicles built. All of <strong>Knorr</strong>-<strong>Bremse</strong>’s customers<br />
in the original equipment sector benefited almost equally<br />
from this upturn, which therefore had a positive impact on<br />
the full range of products manufactured and marketed by<br />
the Commercial Vehicle Systems division’s European production<br />
network. Trailer output in Western Europe also<br />
showed 30% growth in <strong>2011</strong>, rising to 156,000 units. However,<br />
this was still 23% down on the 2008 peak of 202,000<br />
trailers built. Production of trucks in Central and Eastern<br />
Europe also increased, rising 35% from around 75,000<br />
units in 2010 to 101,000 units in <strong>2011</strong>, slightly outpacing<br />
the growth in Western European truck output. In the aftermarket<br />
sector too, <strong>Knorr</strong>-<strong>Bremse</strong> benefited from the positive<br />
development of the European market.
Along with the disc brake, the key sales drivers in Europe<br />
in <strong>2011</strong> were the electronic braking systems ABS and EBS.<br />
Also in the year under review, two important electronic<br />
safety systems celebrated an anniversary: Series production<br />
of ABS anti-lock brakes for commercial vehicles began<br />
30 years ago, laying the foundation for the electronic braking<br />
system EBS, and the electronic stability program ESP<br />
celebrated its tenth anniversary. In the context of the SFTP<br />
vehicle platform that went into series production in September<br />
<strong>2011</strong>, for the first time <strong>Knorr</strong>-<strong>Bremse</strong> is supplying<br />
an electronic braking system for the heavy-duty trucks<br />
built by Daimler AG, including the new Actros model.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is also to equip the vehicles with Electronic<br />
Air Control (EAC), an air supply system including compressors,<br />
and disc brakes.<br />
<strong>2011</strong> also brought successes for <strong>Knorr</strong>-<strong>Bremse</strong> with smaller<br />
vehicle manufacturers. One such order was obtained<br />
from the European subsidiary of the Japanese manufacturer<br />
Nissan, NISSAN Motor Iberica S.A. This concerns the<br />
supply of the entire braking system, which along with ABS<br />
also includes the integrated electronic stability program<br />
(ESP), the air supply system, disc bakes and brake cylinders.<br />
In addition, <strong>Knorr</strong>-<strong>Bremse</strong>’s Polish subsidiary was able to<br />
conclude new long-term agreements with the leading<br />
Polish commercial vehicle manufacturers, thereby creating<br />
a stable basis for future business development.<br />
In <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> also benefited from the upswing in<br />
the Eastern European market. By way of example, the year<br />
under review brought the next stage in the expansion of<br />
the successful <strong>Knorr</strong>-<strong>Bremse</strong> KAMA Systems for Commercial<br />
Vehicles OOO joint venture initiated in 2007 between<br />
<strong>Knorr</strong>-<strong>Bremse</strong> and the largest Russian commercial vehicle<br />
builder, KAMAZ. September <strong>2011</strong> saw the start of production<br />
of three new products – manual slack adjusters, power<br />
clutches and clutch master cylinders – all further additions<br />
to the portfolio of the joint venture, which had previously<br />
concentrated on the manufacture of drum brakes and torsional<br />
vibration dampers. Also in <strong>2011</strong>, the joint venture<br />
celebrated production of its 500,000th drum brake.<br />
North America<br />
M A N A G E M E N T R E P O R T<br />
Rail Vehicle Systems<br />
In <strong>2011</strong> the freight car market in North America experienced<br />
its first upturn since 2008 in terms of unit output.<br />
New freight car construction increased from 17,000 units<br />
in the prior year to 47,000 units in the year under review.<br />
On top of this, North American customers took delivery<br />
of some 890 locomotives in <strong>2011</strong>, which equates to<br />
growth of over 150%. A further 420 locomotives built in<br />
North America were exported in the year under review.<br />
In the passenger transportation sector, the market was<br />
buoyant, not least on account of the expansion and construction<br />
of mass transit networks.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> benefited from the positive development<br />
of the rail freight market and was able to increase its<br />
market share significantly in this segment. <strong>Knorr</strong>-<strong>Bremse</strong><br />
was selected by the largest US freight car manufacturer,<br />
Trinity Rail Group, as its preferred supplier of braking systems<br />
and components and in that capacity supplied<br />
braking systems for the majority share of approximately<br />
14,000 freight cars delivered by Trinity in <strong>2011</strong>. Also worthy<br />
of note is an order by TTX of 3,600 car sets of <strong>Knorr</strong>-<br />
<strong>Bremse</strong> freight car brake equipment for new intermodal<br />
cars.<br />
In the mass transit sector, <strong>Knorr</strong>-<strong>Bremse</strong> was able to build<br />
on its existing position and won orders for several additional<br />
important mass transit projects. Thus <strong>Knorr</strong>-<strong>Bremse</strong><br />
Rail Vehicle Systems will be supplying air treatment systems<br />
and bogie equipment for over 460 MPM-10 metro<br />
cars for the Montreal Metro. This major order and the accompanying<br />
product development work has also assured<br />
<strong>Knorr</strong>-<strong>Bremse</strong> of a good starting point from which<br />
to acquire pending orders for the Paris Metro, which is<br />
based on the same technology. <strong>Knorr</strong>-<strong>Bremse</strong> also<br />
strengthened its collaboration with the Northeast Illinois<br />
Regional Commuter Railroad Corporation and will be<br />
equipping a total of 160 regional passenger cars for central<br />
and suburban Chicago with oil-free compressors,<br />
2 3
2 4<br />
rapid-action brake control units, ESRA brake control electronics,<br />
bogie equipment, and shoe brakes.<br />
Commercial Vehicle Systems<br />
The recovery of the North American truck market continued<br />
in <strong>2011</strong>. Compared to the prior year, vehicle output<br />
was up 54% at 335,000 units. Replacement purchases had<br />
a positive impact on this upward trend. Nevertheless the<br />
market still trails 33% behind its 2006 peak of 500,000<br />
units. Calendar year <strong>2011</strong> saw significant legislative and<br />
regulatory changes impacting the US commercial vehicle<br />
market. “The Greenhouse Gas Emissions Standards and<br />
Fuel Efficiency Standards for Medium- and Heavy-Duty<br />
Engines and Vehicles,” for example, establishes standards<br />
which will help reduce greenhouse gas emissions and increase<br />
fuel efficiency in medium- and heavy-duty commercial<br />
vehicles.<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s North American business is handled by its<br />
subsidiary Bendix Commercial Vehicle Systems LLC under<br />
the Bendix brand. Bendix made use of the positive market<br />
climate to expand capabilities and capacity at key manufacturing<br />
facilities to meet rising customer demand. Thus<br />
a third production plant at the Acuña, Mexico campus<br />
was opened in January <strong>2011</strong>. The products manufactured<br />
at the Acuña III plant include spring brake actuators and<br />
brake chambers for the commercial vehicle market.<br />
In <strong>2011</strong> Bendix was able to build on its position as the<br />
leading supplier of effective active safety solutions in the<br />
North American market. With Bendix Wingman Advanced,<br />
Bendix launched an innovative system that delivers Adaptive<br />
Cruise Control with Braking features along with collision<br />
mitigation technology. In addition, Bendix once<br />
again expanded its product portfolio in this area, acquiring<br />
the data management system SafetyDirect and the<br />
vision-based Lane Departure Warning (LDW) system<br />
AutoVue from Iteris, Inc. This acquisition rounds out the<br />
current portfolio and helps Bendix further secure its<br />
strong position in the market for active driver assistance<br />
systems. Bendix is also to equip coaches built by Prevost,<br />
a leading North American manufacturer of premium<br />
touring and conversion coaches with Adaptive Cruise<br />
Control (ACC) systems. This makes Prevost the first coach<br />
manufacturer to launch Adaptive Cruise Control with<br />
Braking as an option.<br />
South America<br />
Rail Vehicle Systems<br />
Global demand for raw materials again exerted a positive<br />
influence on freight volumes in South America. As a result,<br />
production of freight cars continued to rise in <strong>2011</strong>, climbing<br />
over 100% to 4,300 units and thus gradually approaching<br />
its 2008 peak of 5,000 units. The number of locomotives<br />
built also increased by over 100%. Procurement levels, by<br />
contrast, remained very low, with just 50 locomotives purchased.<br />
The passenger transportation market also remains buoyant.<br />
Two major events in the shape of the 2014 World Cup in<br />
Brazil and the 2016 Olympics in Rio de Janeiro are driving<br />
the expansion of the mass transit networks in Brazil.<br />
The aftermarket sector in South America also showed positive<br />
development in <strong>2011</strong>. <strong>Knorr</strong>-<strong>Bremse</strong> was able to benefit<br />
from the upward trend and signed an agreement with MRS<br />
Logistica S.A., one of the largest transportation companies<br />
in the Brazilian rail freight market. Up to 2013, <strong>Knorr</strong>-<strong>Bremse</strong><br />
is to handle the servicing of the company’s CCB II brake control<br />
systems, handling some 200 systems a year.<br />
Commercial Vehicle Systems<br />
<strong>2011</strong> brought a further improvement in the South American<br />
commercial vehicle market, which saw truck production<br />
rise 14% to 209,000 units. As in 2010, the market is in<br />
fine shape, driven not least by developments in Brazil,<br />
where the introduction of the EURO 5 standard in 2012
led to purchases in the Brazilian commercial vehicle market<br />
being brought forward to <strong>2011</strong>.<br />
In <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> was again successful in obtaining<br />
important orders from its customers. For example, shipments<br />
of 24,000 pedal units and the same number of<br />
automatic air treatment systems to Ford Caminhões<br />
began in the year under review. Also, <strong>Knorr</strong>-<strong>Bremse</strong><br />
began supplying 110,000 brake shoes a year to Mercedes-<br />
Benz in Brazil.<br />
Asia/Australia<br />
Rail Vehicle Systems<br />
The rail vehicle market in Asia/Australia showed positive<br />
development in <strong>2011</strong>. On the one hand the region’s main<br />
growth driver to date, China, throttled back its demand<br />
for new vehicles, above all in the high-speed train and locomotive<br />
sectors, where state stimulus packages and extensive<br />
infrastructure projects had been driving growth.<br />
On the other hand the Indian market developed very<br />
strongly, with substantial growth in both rail freight and<br />
passenger transportation. Positive impetus was also generated<br />
by the markets in Australia and Southeast Asia.<br />
Despite the slowdown in the Chinese market, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> was still able to acquire further significant orders<br />
in the mass transit sector. By way of example, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> will be supplying the braking systems for 64<br />
eight-car sets for an additional metro line in Beijing. This is<br />
the largest single order in the metro sector for <strong>Knorr</strong>-<br />
<strong>Bremse</strong> in Asia. In addition, <strong>Knorr</strong>-<strong>Bremse</strong> is to supply the<br />
braking systems for 234 metro cars for Guangzhou Metro<br />
and 402 cars for Nanjing Metro. In total, <strong>2011</strong> brought<br />
<strong>Knorr</strong>-<strong>Bremse</strong> incoming orders to equip over 2,000 metro<br />
cars in China. <strong>Knorr</strong>-<strong>Bremse</strong> brake equipment for mass<br />
transit vehicles is installed in 14 cities across the country<br />
and in all, the company has to date received orders for<br />
brake equipment for more than 10,000 metro cars.<br />
M A N A G E M E N T R E P O R T<br />
In Southeast Asia an initial major order governing braking<br />
systems for 1,200 coal wagons for Indonesia was acquired.<br />
In India <strong>Knorr</strong>-<strong>Bremse</strong> scored additional successes in<br />
both the rail freight and passenger transportation sectors<br />
and more than doubled its sales. Following on from<br />
the equipment of some 11,000 freight cars with modern<br />
Bogie Mounted Brake Systems (BMBS) in 2010/<strong>2011</strong>, the<br />
refurbishment of 600 freight cars with BMBS began in the<br />
year under review. <strong>Knorr</strong>-<strong>Bremse</strong> is also supplying brake<br />
calipers for state-of-the-art LHB coaches in an order that<br />
will increase from 780 coaches per year in 2012 to 3,000<br />
LHB coaches per year in the next five years.<br />
In Australia <strong>Knorr</strong>-<strong>Bremse</strong> was able to further strengthen<br />
its market position with orders received for braking systems<br />
for more than 1,940 freight cars. In addition, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> received an initial order to supply 180 LEADER<br />
driver assistance systems and eleven simulators to Rio<br />
Tinto in Pilbara, Western Australia. <strong>Knorr</strong>-<strong>Bremse</strong> will also<br />
be supplying the braking systems for 66 streetcars for the<br />
mass transit network in Adelaide. Significant business<br />
was also generated by the Australian aftermarket, where<br />
<strong>Knorr</strong>-<strong>Bremse</strong> won the order to overhaul the complete<br />
braking systems of 76 multiple units for the Melbourne<br />
Metro.<br />
Commercial Vehicle Systems<br />
The Asia/Australia region reported a 9% drop in truck production<br />
in <strong>2011</strong>. This was due to developments in China,<br />
the world’s largest commercial vehicle market in unit output<br />
terms. In China truck production was 16% down in<br />
<strong>2011</strong> at 1,119,000 units compared to the record year 2010,<br />
thus still performing at a very high level. While 2010 was<br />
strongly influenced by government stimulation directly<br />
influencing truck production, a new five-year plan came<br />
into effect in <strong>2011</strong> with still positive but more moderate<br />
effects on the truck industry.<br />
2 5
2 6<br />
Chinese manufacturers hold a dominant 98% share of the<br />
domestic commercial vehicle market, which explains why<br />
foreign manufacturers and suppliers are increasingly entering<br />
into joint ventures in order to secure a share of the<br />
growing market. By starting a joint venture early in <strong>2011</strong><br />
with the Chinese company Chongqing CAFF Automotive<br />
Braking & Steering Systems Co. Ltd. for the production of<br />
commercial vehicle braking system and drivetrain components,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> too took another important strategic<br />
step forward in the Chinese market. The joint venture<br />
opened for business at the beginning of <strong>2011</strong>.<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s local presence in China through its companies<br />
in Dalian and Shanghai already dates back several<br />
years.<br />
The commercial vehicle markets in India and Japan, by<br />
contrast, experienced an upswing in <strong>2011</strong>. Japan, which<br />
was hard hit by a major earthquake and tsunami early in<br />
the year under review, recovered in the course of the year<br />
and actually increased its truck production by 5% to<br />
163,000 units. Commercial vehicle output in India rose<br />
15% to 322,000 units. The majority of commercial vehicles<br />
in the Indian market are still equipped with more basic<br />
braking systems. In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong><br />
India presented an effective anti-roll-back system designed<br />
to match these braking systems and prevent vehicles<br />
rolling backwards when moving off on an uphill<br />
incline.<br />
Americas 24.1%<br />
Asia/Australia 24.7%<br />
Europe 51.2%<br />
Consolidated sales by region
Capital expenditure and depreciation<br />
In <strong>2011</strong>, the <strong>Knorr</strong>-<strong>Bremse</strong> Group invested EUR 158.9 million<br />
in fixed and intangible assets, which was 40.1% more<br />
than in the previous year (2010: EUR 113.4 million). This<br />
upward trend accompanied the positive development of<br />
sales in the year under review.<br />
At EUR 85.3 million, 53.7% of the company‘s capital expenditure<br />
was invested in Europe. EUR 38.1 million<br />
(24.0%) was invested in the Americas and EUR 35.5 million<br />
(22.3%) in Asia/Australia.<br />
Broken down by division, the allocation of capital expenditure<br />
was such that the Rail Vehicle Systems division<br />
benefited in the amount of EUR 65.9 million (2010: EUR<br />
61.2 million) and the Commercial Vehicle Systems division<br />
in the amount of EUR 74.7 million (2010: EUR 50.4 million).<br />
Depreciation on intangible and fixed assets showed a<br />
slight increase across the Group, rising from EUR 146.9<br />
140<br />
2007 113<br />
134<br />
2008 115<br />
101<br />
2009 118<br />
113<br />
2010 147<br />
159<br />
<strong>2011</strong> 165<br />
Capital expenditure<br />
Depreciation<br />
Consolidated capital expenditure and depreciation in EUR millions<br />
M A N A G E M E N T R E P O R T<br />
million in 2010 to EUR 164.6 million in the year under review.<br />
With EUR 76.1 million, Europe accounted for the<br />
largest share of depreciation, followed by Asia/Australia<br />
with EUR 55.2 million and the Americas with EUR 33.3 million.<br />
A breakdown of depreciation by division shows that<br />
the larger proportion of EUR 97.7 million (2010: EUR 82.9<br />
million) was accounted for by Rail Vehicle Systems, while<br />
depreciation at the Commercial Vehicle Systems division<br />
amounted to EUR 60.8 million (2010: EUR 61.0 million).<br />
In <strong>2011</strong>, investment activity focused primarily on the expansion<br />
of worldwide production capacities and on replacement<br />
investments, as well as on the start of construction<br />
of new production plants in India (Faridabad/<br />
Pune), the US (Westminster) and Brazil (Itupeva).<br />
2 7
2 8<br />
Research and development<br />
As a technology group, <strong>Knorr</strong>-<strong>Bremse</strong> continued to drive<br />
forward its research and development efforts in the year<br />
under review in close collaboration with its customers.<br />
Total expenditure on research and development and<br />
project planning amounted to EUR 208.8 million in <strong>2011</strong><br />
(2010: EUR 175.3 million), which equates to 4.9% (2010:<br />
4.7%) of consolidated sales.<br />
As the global technology leader in the fields of braking<br />
systems for rail and commercial vehicles, <strong>Knorr</strong>-<strong>Bremse</strong><br />
develops innovative products distinguished by their safety,<br />
high quality, reliability and customer benefits. This applies<br />
in equal measure to the other fields covered by the<br />
product portfolios of the Rail Vehicle Systems division (automatic<br />
door systems, air-conditioning and driver assistance<br />
systems, control components and platform screen<br />
doors) and the Commercial Vehicle Systems division (driver<br />
assistance systems, fuel-saving systems and powertrain-related<br />
innovations such as PBS and transmission<br />
control systems).<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s success in the market with these products<br />
is founded on its comprehensive command of electronics,<br />
pneumatics, and mechanical engineering. These capabilities<br />
enable the company to adopt an integrated approach<br />
and provide its customers with complete systems.<br />
The long-standing trend towards the introduction of innovative<br />
system solutions and modular solutions involving<br />
the increasing use of mechatronic systems is continuing,<br />
which gives <strong>Knorr</strong>-<strong>Bremse</strong> a competitive edge in the<br />
marketplace.<br />
2007 159<br />
2008 171<br />
2009 153<br />
2010 175<br />
<strong>2011</strong> 209<br />
Consolidated research and development expenditure in EUR<br />
millions<br />
In <strong>2011</strong>, development activities in the rail vehicle sector<br />
focused among other things on the development of innovative<br />
products for the growth markets of the BRIC<br />
states as well as for Middle Eastern countries. Thus, for example,<br />
the KAB60 control valve was inspected and approved<br />
as compliant with the specific product requirements,<br />
such as major variations in temperature. The HVAC<br />
systems built by <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Merak can also<br />
withstand extreme climatic conditions. Moreover they<br />
have been equipped with an efficient sand filtration system<br />
that can also extract the sand and dust particles from<br />
the air in desert regions to ensure optimum on-board air<br />
quality.<br />
In the commercial vehicle sector, development activities<br />
in the year under review focused – as in the previous year<br />
– on the next-generation ABS, EBS and ESP systems and<br />
on the further enhancement of the electronically controlled<br />
air treatment system (EAC2). Also on the development<br />
agenda were the Pneumatic Booster System (PBS)<br />
and the mechatronic control system for automatic transmissions.<br />
In addition, work began on the development of<br />
a new generation of disc brakes.<br />
In line with <strong>Knorr</strong>-<strong>Bremse</strong>’s regional strategy, in <strong>2011</strong> the<br />
proportion of the Group’s development capacity located<br />
in emerging markets such as India and China was further<br />
increased. At year-end <strong>2011</strong>, the <strong>Knorr</strong>-<strong>Bremse</strong> Group employed<br />
a worldwide total of 2,486 people in the field of<br />
research, development and project planning (2010:<br />
2,059).<br />
In <strong>2011</strong> the Group continued to pursue its ambition of<br />
realizing innovative solutions that meet local market and<br />
customer requirements, and of continuously improving<br />
these solutions in the interests of its customers, as evidenced<br />
by an impressive number of innovations and<br />
awards.
Human resources<br />
At year-end <strong>2011</strong>, the <strong>Knorr</strong>-<strong>Bremse</strong> Group employed a total<br />
of 20,050 persons (18,143 excluding leasing) compared<br />
to 18,053 (16,277 excl. leasing) one year earlier. This equates<br />
to a year-on-year increase of 11.1% (11.5% excl. leasing).<br />
In the European region, there were 10,442 employees on<br />
the payroll at year-end <strong>2011</strong> (9,957 excl. leasing) compared<br />
to 9,861 (9,243 excl. leasing) at the end of 2010. Thus the<br />
proportion of employees in Europe declined from 54.6% in<br />
2010 to 52.1% in <strong>2011</strong>. The workforce in Germany totaled<br />
3,848 employees (3,587 excl. leasing), which is 417 more<br />
than in 2010 (3,431 or 3,235 excl. leasing) and equates to<br />
19.2% of the total Group payroll. The number of employees<br />
in the Americas also rose in <strong>2011</strong>, reaching 4,569 (4,363 excl.<br />
leasing) at year-end compared to 3,854 (3,556 excl. leasing)<br />
in 2010. The proportion of the total Group workforce in the<br />
Americas rose to 22.8% (2010: 21.4%). In Asia/Australia the<br />
size of the workforce increased from 4,339 in 2010 (3,478<br />
excl. leasing) to 5,039 (3,823 excl. leasing). The proportion of<br />
the total headcount employed in the region reached 25.1%<br />
in <strong>2011</strong>, up from 24.0% in 2010.<br />
Americas 22.8%<br />
Asia/Australia 25.1%<br />
Europe 52.1%<br />
Group workforce by region on Dec. 31, <strong>2011</strong><br />
M A N A G E M E N T R E P O R T<br />
The number of employees in both divisions increased, although<br />
without keeping pace with the rise in sales. In the<br />
Rail Vehicle Systems division, the number of employees at<br />
year-end <strong>2011</strong> was again up at 11,083 (9,955 excl. leasing)<br />
compared to 10,824 (9,523 excl. leasing) one year earlier. In<br />
the Commercial Vehicle Systems division too, the headcount<br />
continued to rise, reaching 8,636 employees (7,858<br />
excl. leasing) at year-end <strong>2011</strong> compared to 7,063 (6,590<br />
excl. leasing) in 2010. The number of employees in the holding<br />
companies also increased from 166 (164 excl. leasing) to<br />
331 (330 excl. leasing) at the end of <strong>2011</strong>.<br />
In view of demographic trends and in line with the company‘s<br />
international growth strategy, <strong>Knorr</strong>-<strong>Bremse</strong> attaches<br />
great importance to sustained human resources development.<br />
The importance of HR development is underlined by<br />
the People Excellence (PEX) initiative, which bundles all the<br />
necessary measures. The targeted advancement of high potentials<br />
and the creation of the appropriate development<br />
and career opportunities provide a source of employee motivation<br />
and support long-term loyalty. Through cooperation<br />
with key universities and participation at recruiting and<br />
university job fairs, <strong>Knorr</strong>-<strong>Bremse</strong> is regularly perceived as an<br />
innovative employer by young talents. In line with the increasingly<br />
international nature of its HR efforts, the company<br />
continues to support periods of employment at foreign<br />
locations within the Group.<br />
We would like to thank all of the company‘s employees for<br />
their commitment and hard work in <strong>2011</strong>. Our thanks also<br />
go to the employee representatives for their constructive<br />
collaboration.<br />
2007 15,235<br />
2008 15,890<br />
2009 15,613<br />
2010 18,053<br />
<strong>2011</strong> 20,050<br />
Group workforce on Dec. 31, <strong>2011</strong><br />
2 9
3 0<br />
Social responsibility and sustainability<br />
Particularly in times of globalization and climate change,<br />
being successful invariably also means conducting all aspects<br />
of one‘s business, from planning to execution, with<br />
foresight. Doing so in awareness of a responsibility for the<br />
impact of one‘s actions on people, the environment, and<br />
society, and working relentlessly to improve that impact,<br />
has become a maxim of modern corporate management.<br />
In <strong>2011</strong>, several projects were initiated to further enhance<br />
<strong>Knorr</strong>-<strong>Bremse</strong>‘s sustainability performance. Thus, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> published its first Communication on Progress<br />
since becoming a signatory to the United Nations Global<br />
Compact initiative, thereby documenting its commitment<br />
to observe and implement the Global Compact‘s<br />
principles. To foster the dialog between the Group’s various<br />
regions, in the year under review a Group-wide network<br />
with a focus on corporate responsibility topics was<br />
founded. This CR Roundtable is made up of corporate responsibility<br />
representatives from all the regions and is designed<br />
to facilitate regular communication regarding ongoing<br />
projects, strategic goals and operational measures,<br />
as well as the exchange of best practices.<br />
As a technology leader, <strong>Knorr</strong>-<strong>Bremse</strong> has a duty to develop<br />
innovative products and system solutions that support<br />
sustainable value creation and provide maximum<br />
benefits for its customers. The company therefore engages<br />
in the systematic pursuit of innovative technologies<br />
that help optimize safety, functionality, energy efficiency<br />
and environmental compatibility. In <strong>2011</strong>, for example,<br />
the Rail Vehicle Systems division launched the Ecodesign<br />
project to assess and continuously improve the environmental<br />
impact of products over their entire life cycle. Initial<br />
measures to optimize environmental compatibility<br />
were already derived and implemented in the year under<br />
review. These Life Cycle Assessments are to be extended<br />
in the coming year.<br />
As in previous years, in <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> supported the<br />
charitable organization <strong>Knorr</strong>-<strong>Bremse</strong> Global Care e. V.,<br />
which was founded in 2005, providing funding for its ac-<br />
tivities in the amount of approximately EUR 1,500,000.<br />
The main focus of the organization‘s activities in <strong>2011</strong> was<br />
again on long-term projects, such as the construction of a<br />
high school in Rwanda and a vocational training center in<br />
Faridabad, India. In <strong>2011</strong>, Global Care also provided emergency<br />
aid following the disasters in Japan and during the<br />
drought in East Africa.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Global Care e. V. was founded in response<br />
to the tsunami disaster of December 26, 2004 to provide<br />
unbureaucratic, effective and lasting help to the victims.<br />
In the year under review, 42 aid projects were realized in a<br />
total of 24 countries on four continents. The projects are<br />
supervised on a voluntary basis and with great dedication<br />
by <strong>Knorr</strong>-<strong>Bremse</strong> employees. In <strong>2011</strong>, with donations totaling<br />
EUR 1.73 million, <strong>Knorr</strong>-<strong>Bremse</strong> Global Care e. V.<br />
reached out to help some 65,000 people.
Follow-up report<br />
No events with a material influence upon the assets,<br />
financial or earnings position of the <strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
at the balance-sheet date have since taken place.<br />
M A N A G E M E N T R E P O R T<br />
3 1
3 2<br />
<strong>Report</strong> on risks and opportunities<br />
The <strong>Knorr</strong>-<strong>Bremse</strong> Group operates an established, multistage,<br />
worldwide planning, reporting and controlling<br />
system. Standard reporting periods and report contents<br />
have been defined across the Group. These formal reports<br />
are supplemented in greater depth by presentations<br />
on routine and special subjects at monthly review<br />
meetings.<br />
In addition, the <strong>Knorr</strong>-<strong>Bremse</strong> Group has put in place a<br />
standardized risk management system at top management<br />
level. This is based on a risk report that is discussed<br />
at regular top management and Executive Board meetings<br />
and used as a basis for introducing appropriate<br />
measures. This ensures that the operational risk management<br />
system is duly complemented at strategic level. In<br />
its entirety, this control system has proved an effective,<br />
reliable network for the early identification and remediation<br />
of potentially undesirable developments.<br />
Risk assessment and management also forms an important<br />
part of the process of describing, documenting, and<br />
continuously improving business processes across the<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group (<strong>Knorr</strong> Excellence model).<br />
Business risks<br />
The <strong>Knorr</strong>-<strong>Bremse</strong> Group is active in business segments<br />
that for some years have been characterized by a dynamic<br />
process of consolidation on the customer side. This has<br />
resulted in powerful demand-side leverage, with corresponding<br />
pressure on prices. <strong>Knorr</strong>-<strong>Bremse</strong> responds to<br />
these factors with innovative products and systems, positioning<br />
itself as a partner for long-term relationships<br />
that target cost-effective solutions for the customer. The<br />
earlier <strong>Knorr</strong>-<strong>Bremse</strong> is involved in the customer’s project<br />
as a whole, the better the chance of attaining that target.<br />
Regional commercial vehicle and rail vehicle markets are<br />
subject to irregular cycles. Market volatility and fluctuating<br />
growth can affect individual suppliers, market segments<br />
or entire regions. As a globally active corporate<br />
group, <strong>Knorr</strong>-<strong>Bremse</strong> is particularly exposed to the risks<br />
implicit in the changing state of the global economy. The<br />
development of the economies of individual countries<br />
and the worldwide flow of trade are carefully monitored<br />
in order to minimize risks affecting the company’s sales.<br />
At the same time, <strong>Knorr</strong>-<strong>Bremse</strong>’s international presence<br />
renders the Group largely immune to risks that are restricted<br />
to an individual region. The increased volatility<br />
being encountered worldwide in the commercial vehicle<br />
industry also affects <strong>Knorr</strong>-<strong>Bremse</strong> and continues to be<br />
carefully monitored. If customer creditworthiness falls,<br />
the risk of the loss of receivables outstanding increases<br />
and <strong>Knorr</strong>-<strong>Bremse</strong> counters this risk through effective receivables<br />
management.<br />
In the course of its dynamic growth in recent years,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has integrated a number of companies<br />
and shareholdings into the Group. The financial and cultural<br />
risks typically associated with such integration processes<br />
were effectively minimized by means of systematic<br />
analysis and assessment of the target companies.<br />
When it comes to overcoming cultural barriers, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> can draw on 20 years of experience with integration<br />
processes related to the acquisition of numerous<br />
companies as well as to joint ventures in which the company<br />
holds a majority stake and is responsible for operational<br />
management. This experience will pay dividends<br />
in any future mergers and acquisitions and has been<br />
mapped in the form of structured processes.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> and its systems are at the leading edge of<br />
technological development. This also engenders risks<br />
which, because of the safety-critical nature of the applications<br />
concerned, require particularly careful monitoring.<br />
To this end, <strong>Knorr</strong>-<strong>Bremse</strong> routinely employs comprehensive<br />
quality planning, quality assurance and<br />
testing procedures. To ensure continuous improvement<br />
of its business processes, <strong>Knorr</strong>-<strong>Bremse</strong> takes its lead<br />
from international standards. The individual plants regularly<br />
undergo internal and external audits in this context.<br />
Above and beyond this, despite having already attained<br />
a very high level of quality, both divisions work intensively<br />
to continuously improve the quality and reliability of
their products with the aid of the <strong>Knorr</strong> Excellence quality<br />
program “Quality First.”<br />
Operational risks<br />
Risks due to production downtimes are covered by commercially<br />
appropriate insurance contracts. Flexible working<br />
time models enable unexpected short-term shifts in<br />
capacity requirements to be accommodated efficiently.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> maintains a close working relationship<br />
with suppliers and service providers. In order to avoid delivery<br />
delays or quality defects, which in turn could lead<br />
to lost production time and have a negative impact on<br />
earnings, <strong>Knorr</strong>-<strong>Bremse</strong> attaches great importance to<br />
careful supplier selection procedures. Suppliers are also<br />
continuously subjected to technical and commercial audits.<br />
In the current economic environment, there is also a<br />
risk of business partners becoming insolvent – a risk to<br />
which the company responds directly.<br />
Exchange rate risk is not of crucial importance for the<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group because geographic diversification<br />
over recent years has enabled the Group to establish a<br />
high proportion of local manufacturing and local suppliers<br />
within the respective currency zones. In order to limit<br />
the residual exchange rate risk related to transactions<br />
across different currency zones, <strong>Knorr</strong>-<strong>Bremse</strong> is increasingly<br />
identifying opportunities to exploit compensatory<br />
supply volumes within the Group. In selected cases, currency<br />
risks are also hedged by means of derivatives. Such<br />
measures, however, serve exclusively to hedge basic<br />
transactions within the scope of normal business operations.<br />
The basis for managing foreign exchange risks is provided<br />
by the Guideline on Managing Currency Exposure in<br />
the <strong>Knorr</strong>-<strong>Bremse</strong> Group, which sets out the procedures<br />
to be followed and the necessary scope of hedging<br />
transactions in binding form for all Group companies.<br />
The monitoring of compliance with this guideline is part<br />
of the relevant <strong>Knorr</strong> Excellence process.<br />
M A N A G E M E N T R E P O R T<br />
The risk of fluctuations in the price of commodities that<br />
are of relevance to <strong>Knorr</strong>-<strong>Bremse</strong> is also hedged to an appropriate<br />
extent by means of derivatives in so far as these<br />
fluctuations could have a substantial impact on the<br />
Group’s profitability. In the case of steel and aluminum,<br />
basis hedging is undertaken to cover a part of the risk.<br />
Business processes within the <strong>Knorr</strong>-<strong>Bremse</strong> Group are<br />
supported by powerful and state-of-the-art IT systems. In<br />
order to avoid malfunctions, <strong>Knorr</strong>-<strong>Bremse</strong> attaches great<br />
importance to harmonization of the hardware and software<br />
architecture, the integrity and security of existing<br />
data, appropriate back-up solutions, and careful management<br />
of access control. Compliance with the IT Security<br />
Guideline is comprehensively monitored with the aid<br />
of internal and external audits at all major sites around<br />
the world. The Corporate Data Center in Munich, Germany,<br />
meets the very highest requirements (industry standard)<br />
in terms of efficiency, reliability and security. Based<br />
on this platform, the necessary global transparency and<br />
the integration of all corporate sites – and of recent additions<br />
in particular – are being further enhanced.<br />
In response to increasingly stringent environmental requirements,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has aligned its worldwide activities<br />
with the international standard ISO 14001. The<br />
majority of the company’s sites have already been certified<br />
or recertified accordingly.<br />
In Asia, as well as in the other regions, imitation and<br />
counterfeit products remain a serious threat to business<br />
in the commercial vehicle and rail vehicle sectors. The<br />
most effective countermeasure to this threat is <strong>Knorr</strong>-<br />
<strong>Bremse</strong>’s technical expertise, which on account of the<br />
safety-critical applications of its products is both recognized<br />
and appreciated by customers around the world.<br />
Careful analysis of the Group-wide risk profile has revealed<br />
that no identifiable risks exist that would threaten<br />
the survival of the company or have a substantial impact<br />
on its assets, financial status or profitability. Nor are any<br />
such risks currently expected to arise in the future.<br />
3 3
3 4<br />
Outlook<br />
In the next two years, <strong>Knorr</strong>-<strong>Bremse</strong> is expecting to see a<br />
slowdown in the pace of economic growth, accompanied<br />
by further volatility in markets around the world. In<br />
regional terms the markets will probably continue to<br />
show divergent developments. In Europe, the high level<br />
of sovereign debt of certain EU member states represents<br />
a threat to Eurozone stability. In the US, too, the<br />
high level of sovereign debt and its impact on the real<br />
economy are considered critical, so that no major<br />
growth-driving impetus can be expected here. And<br />
while forecasts predict continuing strong growth for the<br />
emerging markets in South America and Asia, here too<br />
initial recessionary trends are making themselves felt as a<br />
result of inflation and restrictive monetary policies.<br />
Against this backdrop, for the next two years we are anticipating<br />
widespread moderate economic growth, albeit<br />
exposed to high risks and uncertainties in the regional<br />
markets. The emerging markets of Asia will<br />
probably continue to account for the lion’s share of global<br />
economic growth in 2012 and 2013, although by no<br />
means on the same scale as in previous years.<br />
In the European rail vehicle market we are currently anticipating<br />
modest growth for the next two years. The rail<br />
freight market is expected to stage a recovery, while a<br />
stable market environment is expected in the passenger<br />
sector. In the UK, three major projects are due to be<br />
awarded in 2012 that will have a decisive impact on the<br />
development of the market. Other growth drivers are expected<br />
to include the modernization of the rail network<br />
in Russia and the expansion of the mass transit sector in<br />
South Africa, not least via the PRASA project. The rapidly<br />
progressing Middle Eastern region will move toward<br />
center stage through the planned creation of a rail network<br />
and the accompanying expansion of the rail vehicle<br />
fleet.<br />
In the European commercial vehicle sector the market is<br />
expected to stabilize in 2012 and 2013. The volume of<br />
trucks built in 2012 will probably be slightly down on the<br />
prior-year level. The period covered by our outlook is unlikely<br />
to see a return to the record level of 2008.<br />
In fiscal 2012, the main challenge for the Commercial Vehicle<br />
Systems division in Europe will be posed by the increasing<br />
globalization of its business. Further expansion<br />
into markets of the future, such as Russia, China and India,<br />
and the shipments this calls for from Europe, along<br />
with the introduction of products that meet specific local<br />
requirements and selective penetration of new fields<br />
of activity should drive the growth of the company‘s<br />
business in the medium term. In all growth projects, the<br />
focus is on increasing customer benefits and extending<br />
our technology leadership, with the quality and reliability<br />
of all products being assigned top priority.<br />
In the North American OEM rail vehicle market, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> is anticipating a further increase in the output of<br />
freight cars and locomotives in 2012 and 2013. In the<br />
freight car segment, growth will be driven by two factors:<br />
rising demand for raw materials and growing numbers of<br />
replacement purchases. In the locomotive segment, new<br />
emissions legislation from 2015 means that high purchase<br />
volumes can be expected between now and 2014.<br />
Other contributory factors will include fleet modernization<br />
measures and continuing dynamic export activities<br />
on the part of US locomotive builders. Completing the<br />
picture, there are major mass transit orders pending in<br />
San Francisco and New York City, for example, so that<br />
positive market developments are forecast for the next<br />
few years in this area as well.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is expecting to see further growth in the<br />
North American commercial vehicle market in 2012 and<br />
2013. The aftermarket segment looks set to become increasingly<br />
important over time as market shares in the<br />
OEM sector increase.<br />
In the South American region the rail freight sector is expected<br />
to show further growth, driven by the ongoing<br />
rise in global demand for raw materials. Demand for
freight cars will likely settle at a high level, while demand<br />
for locomotives looks set to show a further increase. In<br />
the passenger transportation sector additional projects<br />
are anticipated, not least in conjunction with the forthcoming<br />
major sports events.<br />
In the South American commercial vehicle sector, truck<br />
output is expected to fall in 2012 compared to <strong>2011</strong> as a<br />
result of the introduction of the EURO 5 emissions standard.<br />
Production volumes will probably pick up again<br />
from 2013 onwards.<br />
In the rail vehicle sector in the Asia/Australia region, the<br />
outlook for 2012 and 2013 shows marked regional differences.<br />
In China future developments remain uncertain<br />
on account of the cutback in investments in the expansion<br />
of the rail network. The mass transit sector could<br />
well contribute to market buoyancy through the planned<br />
placement of orders for 10,000 cars in the next few years.<br />
Further growth is anticipated in India, Australia and<br />
Southeast Asia.<br />
In the commercial vehicle sector, the region as a whole is<br />
expected to show a moderate increase in truck production<br />
in 2012 and 2013. Following on from “over-stimulated”<br />
record production in China in 2010, truck and bus<br />
output returned to normal levels in <strong>2011</strong> and is expected<br />
to show moderate growth in the next few years. The<br />
commercial vehicle markets in India may well remain<br />
stagnant but Japan is expected to continue its positive<br />
development unabated.<br />
Based on the regional backdrops set out above, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> expects to see moderate sales growth in 2012<br />
and 2013 in a business environment marked by uncertainty.<br />
Regional developments will be influenced by the<br />
risks for the further growth of the global economy described<br />
above, which differ from one region to the next.<br />
Presuming that the economic picture does not deteriorate<br />
any further, <strong>Knorr</strong>-<strong>Bremse</strong> expects earnings to remain<br />
stable. Based on the assumptions made for the<br />
M A N A G E M E N T R E P O R T<br />
Group, the assets, financial status, and profitability of<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG too can be expected to remain stable<br />
– depending on income from the company‘s investments.<br />
In the coming years, <strong>Knorr</strong>-<strong>Bremse</strong> will continue to pursue<br />
a policy geared to safeguarding the company‘s longterm<br />
health and in particular will be driving forward the<br />
steps already introduced to expand its capacities in regions<br />
where demand is growing. These include, for example,<br />
an intensive marketing effort in the BRIC countries<br />
and the introduction of innovative products, as well<br />
as the selective expansion of the company‘s fields of activity.<br />
The focus here will remain on boosting customer<br />
benefits and securing the company’s technology leadership.<br />
3 5
<strong>Report</strong><br />
AGAINST A BACKGROUND OF CONTINUED ECONOMIC RECOVERY,<br />
KNORR-BREMSE POSTED FURTHER GROWTH IN <strong>2011</strong>. This demonstrates<br />
the success of its two divisions – <strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle Systems and<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Commercial Vehicle Systems – in developing and marketing<br />
products that meet highly specialized customer requirements. With a view<br />
to maintaining this capability, the Group continued to innovate during<br />
<strong>2011</strong>, developing new markets and fine-tuning its corporate processes. Its<br />
global strategy of maintaining a broad base in a wide range of markets and<br />
regions once again earned it excellent ratings from two prestigious rating<br />
agencies.
Rail Vehicle<br />
Systems<br />
<strong>2011</strong> saw <strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle Systems once again increase its sales revenues – by 8%<br />
to EUR 2.19 billion (previous year: EUR 2.02 billion) – thanks mainly to recovery in the North<br />
American freight market and positive developments in Europe during the course of the year.
4 0 R e p o R t | R A I L V e H I C L e S Y S t e M S
Markets<br />
R e p o R t<br />
Developments in the global rail market during the course of the year were satisfactory,<br />
with production of freight cars level-pegging in Europe and rising significantly in North<br />
and South America. In the mass transit, mainline passenger and freight sectors, <strong>Knorr</strong>-<strong>Bremse</strong><br />
was able to conclude a number of important contracts. And in India the company succeeded<br />
in almost doubling sales revenues in both mainline sectors.<br />
Europe<br />
The decline in freight transportation caused by the financial and economic crisis appears to be over for<br />
the time being. During the course of the year, the situation in both the OE sector and the aftermarket<br />
improved for the first time since the end of 2008. Locomotive production rose by some 15%, and the<br />
number of freight cars produced leveled off at around 7,000 units. <strong>Knorr</strong>-<strong>Bremse</strong> was able to sign a<br />
number of important contracts, particularly for multiple units and high-speed trains.<br />
North America<br />
During the period under review, production in the North American freight market rose for the first time<br />
since 2008. Output of new freight cars increased from 17,000 to 47,000 units, and <strong>Knorr</strong>-<strong>Bremse</strong> was able<br />
to benefit from this positive trend, signing a number of major contracts in the segment. Developments<br />
in the passenger segment were also positive, particularly due to the expansion of existing mass transit<br />
projects and the launching of new ones.<br />
South America<br />
An increase in global demand for raw materials triggered a significant increase in freight transportation<br />
in South America. This, in turn, had an impact on freight car production, which was up more than<br />
100% at 4,300 units. Two major events – the Soccer World Cup in Brazil in 2014 and the Olympic Games<br />
in Rio de Janeiro in 2016 – were the main drivers of efforts to expand mass transit networks.<br />
Asia/Australia<br />
Developments in the rail market in Asia/Australia during the year under review were once again positive,<br />
with strong growth in both the freight and passenger sectors. Despite a slight downturn in the<br />
Chinese market, <strong>Knorr</strong>-<strong>Bremse</strong> achieved a number of successes in the Asia/Australia region, the main<br />
drivers being Australia, Southeast Asia and India – where <strong>Knorr</strong>-<strong>Bremse</strong> succeeded in almost doubling<br />
sales revenues in the passenger and freight sectors.<br />
4 1
Market Successes<br />
R e p o R t<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle Systems’ reputation as a reliable and innovative supplier enabled<br />
it to conclude a range of contracts with customers all over the world. In North America two<br />
well-known operators ordered braking systems for several thousand new freight cars, and<br />
in China the company equipped its 10,000th metro car<br />
with brakes. Important orders also came from India,<br />
Kazakhstan, the Gulf region and many other markets.<br />
Development of worldwide sales revenues<br />
for the Rail Vehicle Systems division in eUR<br />
millions<br />
2009 1,553<br />
2010 2,024<br />
<strong>2011</strong> 2,187<br />
Europe<br />
Framework contract for revised LINT platform<br />
In order to meet the new technical specifications for interoperability (TSI) in Europe, Alstom has revised<br />
its popular LINT platform – and <strong>Knorr</strong>-<strong>Bremse</strong> is once again involved with this diesel multiple unit for<br />
local transport applications. On the basis of a follow-up framework contract signed during the year<br />
under review, the company will be contributing brake control systems, bogie equipment and air dryers<br />
to future LINT orders. The contract covers some 400 vehicles.<br />
Alstom’s positive experience with <strong>Knorr</strong>-<strong>Bremse</strong> systems in the past and its longstanding good working<br />
relationship with the company contributed to the decision to select it to supply the LINT platform once<br />
again. In addition to the products previously supplied, <strong>Knorr</strong>-<strong>Bremse</strong> will also be supplying Alstom with<br />
magnetic track brakes.<br />
Door and HVAC systems for Italian high-speed trains<br />
Trenitalia, Italy‘s national railroad operating company, is intending to run more new high-speed trains<br />
in the future. The high-speed car-sets will travel at up to 360 km/h and offer real competition for air<br />
travel. Along with cross-border routes, Trenitalia is focusing on rapid and safe domestic rail connections<br />
in particular.<br />
4 3
4 4 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
For its high-speed project Trenitalia is aiming to use V300 ZEFIRO trains, also known in Italy as the ETR<br />
1000. The car-sets are to be developed by a consortium comprising vehicle builders Ansaldobreda and<br />
Bombardier. The Italian operating company has placed an order with the two firms for 50 eight-car<br />
sets to be delivered over a five-year period starting in 2012. <strong>Knorr</strong>-<strong>Bremse</strong> is also on board and will be<br />
equipping the new trains with innovative door and HVAC systems.<br />
Like the advanced design of the trains themselves, the E3D door system to be supplied by <strong>Knorr</strong>-<br />
<strong>Bremse</strong> subsidiary IFE will set new standards in the high-speed train segment. Despite its low weight,<br />
the door system nevertheless presents impressive levels of pressure tightness and flexibility in service.<br />
For example, the clear opening widths of 800-1,600 mm in various types of vehicle can be realized<br />
with the same door concept.<br />
The HVAC systems are being entirely sourced from <strong>Knorr</strong>-<strong>Bremse</strong>’s Spanish subsidiary Merak. To ensure<br />
pressure tightness and guarantee comfort levels, several subsystems are required: roof-mounted compact<br />
HVAC saloon units, temperature sensors, fan heaters (in vestibules and toilets), oxygen sensors<br />
and the entire air ducting system.<br />
First order for LEADER in Europe<br />
Locomotive manufacturers Vossloh Spain have placed an order with <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Sociedad<br />
Española de Frenos for 30 units of the driver assistance system LEADER.<br />
LEADER is a sophisticated train management system that helps locomotive engineers drive their trains<br />
as economically and safely as possible by displaying recommendations on how to save fuel and minimize<br />
in-train forces. The system enables fuel savings and thus emissions reductions of up to 15%.<br />
LEADER helps train operators reduce energy consumption by calculating an optimum speed profile<br />
for every stretch of track. It also assists schedule compliance.<br />
Along with track and topography profiles, the system takes account of the schedule and the specific<br />
technical data of the locomotives and trains, drawing on this data to deliver energy-optimized train<br />
handling recommendations.<br />
In all, Vossloh is to equip 15 Euro 3000 diesel locomotives destined for Israel Railways with LEADER. The<br />
locomotives will be working in passenger transportation and each of the two cabs will feature a<br />
LEADER unit. The systems are slated for shipment to Vossloh in the first quarter of 2012. In June <strong>2011</strong>,<br />
a locomotive and control car already in service with the operator were equipped with two LEADER<br />
units by way of pre-series installation. This way the engineers have a chance to familiarize themselves<br />
with the system and <strong>Knorr</strong>-<strong>Bremse</strong> has an opportunity to acquire initial long-term experience with it<br />
under real conditions in Israel.<br />
Systems for Moscow metro<br />
Absolute reliability is crucial for the vehicles operating on Moscow metro. In very low winter temperatures<br />
more than 9 million people use it at peak times – considerably more than it was designed<br />
to cope with. As a result, trains enter and leave the stations at very short intervals. And because<br />
some of the metro is above ground, they also have to operate at extremely low temperatures.
R e p o R t<br />
During the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> was selected on the basis of its experience in the Russian<br />
rail vehicle market to supply various systems for new metro trains being built by the two Russian<br />
companies Metrowagonmash and OAO TVZ. Factors that clinched the deal for <strong>Knorr</strong>-<strong>Bremse</strong><br />
included the low overall cost, the high level of aftermarket service offered by local personnel and<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s plan to manufacture the systems directly in Russia. The contracts cover braking,<br />
door and HVAC systems, as well as resistors and high-speed circuit breakers from <strong>Knorr</strong>-<strong>Bremse</strong>’s<br />
subsidiary Microelettrica.<br />
Locomotive braking systems for extremely low temperatures in Kazakhstan<br />
As part of an upgrade and expansion of its freight transportation system, Kazakhstan is purchasing a<br />
large number of new locomotives. The state railway system recently placed an order with French vehicle<br />
builder Alstom for 200 KZ8A double locomotives for freight trains and 95 locomotives for mainline passenger<br />
operations.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is involved in supplying complete locomotive braking systems for the initial order of 25<br />
double locomotives from Alstom – the first time it has developed such a system for the Russian GOST<br />
standard. The company also has a further option to supply systems for the remaining 175 vehicles, which<br />
will be built by a joint venture between Alstom, Kazakhstan State Railways and Transmash Holding. Contracts<br />
for the 95 mainline passenger train locomotives are due for signature during 2012.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> was once again able to draw on its extensive experience with projects in Russia involving<br />
the development of components for extremely cold conditions. The requirement for braking systems to<br />
withstand temperatures down to minus 55 °C is a huge challenge. Working in some cases with suppliers,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> had already developed new, cold-resistant plastics and elastomeres capable of functioning<br />
under such extreme conditions. Cast parts also had to be made largely with new materials. The requirements<br />
in terms of tolerances for moving parts were also extremely high, as temperature changes<br />
cause different degrees of expansion of the materials involved.<br />
The bogies are being equipped with Type PEC7 block brakes, and the BP Compact system – including<br />
slide protection with valves adapted for the GOST market – is being used for the electronic HL pressure<br />
control.<br />
The new KAB60 distribution valves specially developed by <strong>Knorr</strong>-<strong>Bremse</strong> for Russian freight trains will<br />
also be supplied for the new locomotives. Even though they are installed inside the locomotives, these<br />
systems are also capable of withstanding temperatures down to minus 50 °C or below. The large number<br />
of electric locomotives involved in the project clearly shows the huge expansion of the national rail system<br />
being planned by Kazakhstan State Railways.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systems for Deutsche Bahn<br />
In April <strong>2011</strong>, Deutsche Bahn signed a framework agreement with vehicle builder Bombardier for the supply<br />
of up to 200 diesel locomotives for mainline passenger and freight operations. The agreement, which<br />
runs till 2020, involves locomotives based on the Bombardier TRAXX platform. Instead of one large diesel<br />
engine, they will have four innovative industrial diesel engines designed for speeds of up to 160 km/h. The<br />
first twenty locomotives – due for delivery by mid 2013 for service on Deutsche Bahn’s regional passenger<br />
network – will be fitted with <strong>Knorr</strong>-<strong>Bremse</strong> systems that include the VV270-T oil-free compressor, the MBS<br />
locomotive brake control system and the RZS compact brake caliper with cast iron disc.<br />
4 5
4 6 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
Braking systems for new Hyundai Rotem locomotives<br />
As part of a modernization project, the Turkish state railway operator Türkiye Cumhuriyeti Devlet Demiryollari<br />
(TCDD) is planning wide-scale electrification of the country’s rail network. As a first step, 80 or more<br />
newly developed electric diesel locomotives ordered from Hyundai Rotem are to go into service.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is involved in the project and will be equipping the locomotives with complete braking<br />
systems including the brake control system, VV270-T oil-free compressors, compact brake calipers and<br />
wheel brake discs. It is no coincidence that <strong>Knorr</strong>-<strong>Bremse</strong> was chosen to supply these systems – the company<br />
has been working with vehicle builder Hyundai Rotem and operator TCDD for many years. Delivery<br />
of the braking systems is slated for the period from mid-2012 to the end of 2013.<br />
Important orders for Merak from Alstom and Bombardier<br />
During the year under review, <strong>Knorr</strong>-<strong>Bremse</strong>’s Spanish subsidiary Merak delivered on two important<br />
orders in the European rail market: HVAC systems manufactured by Merak were installed in Regio2N<br />
double-decker trains ordered by French operator SNCF from the Canadian conglomerate Bombardier<br />
and also in Régiolis regional trains, for which SNCF has signed a supply contract with French manufacturer<br />
Alstom.<br />
The Régiolis regional trains consist of low-floor 4- and 6-car trainsets that offer high levels of comfort<br />
thanks to their broad aisles and colorful, bright interiors. Of a total of 166 trainsets ordered, 100 are being<br />
equipped with Merak HVAC systems. By the end of <strong>2011</strong>, Merak had already delivered 51 of these for<br />
installation in the pre-series trains. The Régiolis trains are destined to replace older trains in the SNCF<br />
fleet and also help expand rail services in some of the French regions.<br />
Bombardier’s Regio2N double-decker trains consist of six, seven or eight cars that feature an articulated<br />
architecture and wide connectors, which create transparency and offer easy access throughout the
R e p o R t<br />
length of the train. In the year in question, Merak worked on developing the HVAC systems for the first<br />
batch of 129 trains ordered. Delivery is expected to run until 2015.<br />
Innovative freight car braking system for the United Arab Emirates<br />
The United Arab Emirates have started to invest in a country-wide rail network called “Etihad Railways“<br />
which is intended to link the UAE with other countries in the Middle East. The first step involves building<br />
a line some 270 km in length, on which 110 freight cars will carry pure sulfur granulate between the gas<br />
fields in the Western Desert region of Shah and the port of Ruwais. Two subsequent phases in the program<br />
will involve expanding the network to more than 1,000 km. The first line is scheduled to go into<br />
operation early in 2014.<br />
As part of the project, the state operator Etihad-Rail has ordered seven diesel locomotives from U.S.<br />
manufacturer EMD and 240 bulk freight cars from CSR in China. All the locomotives and freight cars will<br />
be equipped with a state-of-the-art electronic AAR braking system – the EP60 – from New York Air<br />
Brake.<br />
New York Air Brake will also be providing a new, innovative technology that enables the locomotive<br />
engineer to open and close the freight car loading doors by remote control and also to monitor their<br />
status via the main control line of the EP60 system. In addition, wireless sensors installed in the freight<br />
cars will alert the locomotive engineer to hot boxes or derailment further down the train.<br />
North and South America<br />
New York metro to test HVAC systems<br />
New York City Transit (NYCT) is operational 24 hours a day, 365 days a year. It is one of the largest and most<br />
complex metro systems in the world. Anyone who wants to supply systems to NYCT must go through a<br />
lengthy qualification process that includes in-service testing. <strong>Knorr</strong>-<strong>Bremse</strong>’s braking systems have already<br />
passed this test. In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Merak began preparing for the qualification<br />
process for HVAC systems. The tests to prove the reliability of the Merak systems are due to start in<br />
the summer of 2012.<br />
Framework contract with Trinity Rail Group<br />
In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary New York Air Brake (NYAB) concluded a framework<br />
agreement governing the supply of braking systems to Trinity Rail Group (TRG), one of the largest<br />
freight car builders in North America, with a market share of approximately 35%. Under this agreement,<br />
NYAB will supply at least 55% of the braking systems installed at TRG up to the end of 2014. In <strong>2011</strong> it<br />
supplied some 14,000 systems.<br />
This makes NYAB the first choice braking system supplier to TRG within what is a long-standing partnership<br />
with this OEM. Along with the mutual trust established over the years and the strong focus on<br />
customer service among NYAB employees, the main arguments in clinching the agreement were the<br />
reliability and life cycle cost of the NYAB systems. Given that TRG is changing its business model to focus<br />
more on leasing freight cars, total cost of ownership considerations played a major role in the company’s<br />
purchase decision.<br />
4 7
4 8 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
High volume of orders for passenger trains from North and South America<br />
North American company <strong>Knorr</strong>-<strong>Bremse</strong> Corporation can look back on a successful year, during which it<br />
received a large number of orders, particularly from the passenger rail sector. The biggest of these came<br />
from Montreal Metro, for which <strong>Knorr</strong>-<strong>Bremse</strong> is to supply air treatment systems, bogie equipment and<br />
HVAC systems to be installed in 468 new trains being built by a consortium consisting of Bombardier and<br />
Alstom. <strong>Knorr</strong>-<strong>Bremse</strong> also received orders from São Paulo to equip 378 maglev cars, from American train<br />
operator Amtrak for equipment for 70 e-locomotives and from Toronto for systems for a large number of<br />
new metro cars.<br />
New York City Transit also placed a major order with <strong>Knorr</strong>-<strong>Bremse</strong>: during the course of the year in question<br />
the company began deliveries of 352 Type VV120-T oil-free compressors. As this is the only oil-free<br />
compressor currently licensed for North America, <strong>Knorr</strong>-<strong>Bremse</strong> is expecting further significant orders<br />
during the course of the coming year.<br />
Although there are few signs of any major investment in the North American high-speed market, the<br />
mass transit infrastructure was expanded during the past year. Many cities are planning new lines or expanding<br />
existing networks, and <strong>Knorr</strong>-<strong>Bremse</strong> received orders from Houston, Atlanta and Minneapolis.<br />
After supplying streetcars for Minneapolis with braking, door and HVAC systems some 10 years ago, the<br />
company received a further order for braking systems for 59 street cars ordered by Minneapolis from<br />
Siemens.<br />
Major orders from TTX<br />
U.S. freight car provider TTX owns a fleet of more than 200,000 freight cars of many different kinds. In<br />
the year under review, the company continued to expand and for the majority (approx. 80%) of its<br />
newly ordered cars opted for the DB-60 braking system from <strong>Knorr</strong>-<strong>Bremse</strong>’s North American subsidiary<br />
New York Air Brake (NYAB).<br />
A breakdown of the orders shows that some 2,700 braking systems are to be provided for freight cars<br />
from OEM National Steel Car and around 1,000 for cars to be built by Gunderson of Portland, Oregon.<br />
Initial systems were shipped at the end of the year under review. Shipments to Gunderson are scheduled<br />
for completion in the second quarter of 2012, with the final deliveries to National Steel Car to be<br />
made one month later.<br />
EP60 for the world’s biggest producer of iron ore<br />
The world’s biggest producer of iron ore, the Vale company of Brazil, is to equip its latest ore train with<br />
the EP60 braking system specially developed by <strong>Knorr</strong>-<strong>Bremse</strong> for very long and heavy freight trains.<br />
The electronic transmission of the braking signal in the EP60 system means that the brakes are applied<br />
or released simultaneously along the entire train.<br />
This system prevents a situation arising in which the brakes on the front cars are already being applied<br />
while the rear cars are still unbraked and pushing forwards. A similar effect occurs when the brakes are<br />
not released simultaneously and the rear cars hold the train back until the brakes are fully released.<br />
Thanks to the faster transmission of the command data, the EP60 system eliminates this problem, leading<br />
to a more even braking profile, shorter stopping distances, less wear and tear, and lower fuel consumption.
R e p o R t<br />
The newly equipped train comprises 330 cars and is hauled by four locomotives. With an axle load of<br />
37.5 tons, each car can take a payload of 150 tons, making them the biggest in the world. The train is<br />
due to enter service in 2012.<br />
Mass transit orders from Brazil<br />
Two substantial orders enabled <strong>Knorr</strong>-<strong>Bremse</strong> to maintain a strong position in the Brazilian mass transit<br />
market in the year under review. First the São Paulo Metro placed an order with vehicle manufacturer<br />
CAF for 26 new car-sets comprising a total of 156 cars. The trains are destined for metro line 5. <strong>Knorr</strong>-<br />
<strong>Bremse</strong> is manufacturing the air supply systems, brake control units, bogie equipment and HVAC systems<br />
for the new vehicles.<br />
Another order that went to CAF was for 60 cars for the Recife Metro. In this case, <strong>Knorr</strong>-<strong>Bremse</strong> is providing<br />
the air supply, brake control systems and bogie equipment. One of the main reasons why the orders<br />
were placed with <strong>Knorr</strong>-<strong>Bremse</strong> was that much of the content of these systems is manufactured locally<br />
in Brazil. In addition, <strong>Knorr</strong>-<strong>Bremse</strong> products stand for absolute reliability and very high quality, and<br />
these factors also played an important part in the purchase decision of the Brazilian customers.<br />
Asia/Australia<br />
Major order for metro project in Beijing<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has been awarded the contract to equip another metro line in Beijing in what is the<br />
largest single order in the metro sector for <strong>Knorr</strong>-<strong>Bremse</strong> in Asia. The company is to supply the braking<br />
systems for 64 eight-car metro units built by Chinese manufacturer CNR Changchun Railway Vehicles<br />
Co. Ltd. (CRC), destined to operate on the new metro line 6 in Beijing. This latest order has enabled<br />
<strong>Knorr</strong>-<strong>Bremse</strong> to further strengthen its market position in the high-growth metro segment in China.<br />
The order includes the supply of EP2002 brake control units, Type VV120 compressors and brake calipers<br />
for all 512 cars of the new multiple units. The components are to be manufactured at <strong>Knorr</strong>-<br />
<strong>Bremse</strong>’s Chinese plant in Suzhou. Metro line 6 links the eastern and western suburbs of Beijing, covering<br />
almost 43 kilometers and serving 27 stations. The first segment of 33 kilometers is due to become<br />
operational in 2012. The second construction phase is scheduled for completion in 2015.<br />
This further order is the next step in the successful partnership between <strong>Knorr</strong>-<strong>Bremse</strong> and CRC in<br />
China. Back in 2009, <strong>Knorr</strong>-<strong>Bremse</strong> won four orders for the metro network in Beijing and to date has<br />
supplied the brake equipment for seven metro lines in the Chinese metropolis.<br />
10,000th Chinese metro car equipped<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has further underpinned its strong position in the Chinese market. The order to equip<br />
240 cars for metro line 1 in Kunming, the capital of the Chinese province of Yunnan, ensured that<br />
<strong>Knorr</strong>-<strong>Bremse</strong> was able to supply the braking system for its 10,000th metro car in China. Total incoming<br />
orders in the Asian metro sector in the year under review covered equipment for more than 2,000<br />
cars.<br />
4 9
5 0 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
7,000 of the 10,000 metro cars with <strong>Knorr</strong>-<strong>Bremse</strong> brakes are in service in the three major conurbations<br />
of Shanghai, Beijing and Guangzhou alone. Outside the major conurbations, <strong>Knorr</strong>-<strong>Bremse</strong> has also<br />
supplied systems for the metro networks in numerous other Chinese cities, including Shenzhen, Nanjing,<br />
Tianjin, Hangzhou, Shenyang, Suzhou, Dalian and Xi’an. Given the planned expansion of the local<br />
mass transit networks in over 30 Chinese cities, <strong>Knorr</strong>-<strong>Bremse</strong> is anticipating further orders for the<br />
Chinese metro sector in the medium term.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> upgrades Indian freight car brakes<br />
The Indian national rail operator, Indian Railways, has launched a staged upgrade of its freight car fleet,<br />
installing modern bogie brakes that are easier to maintain, more efficient and more reliable.<br />
By the end of the year under review <strong>Knorr</strong>-<strong>Bremse</strong> India had shipped more than 10,000 bogie brakes<br />
to various vehicle builders for installation in new cars. At the same time Indian Railways started the<br />
process of retrofitting its existing fleet with the new systems.<br />
The braking systems were developed in cooperation between <strong>Knorr</strong>-<strong>Bremse</strong> India and <strong>Knorr</strong>-<strong>Bremse</strong>’s<br />
North American subsidiary New York Air Brake (NYAB). Along with modern bogie brakes, the <strong>Knorr</strong>-<br />
<strong>Bremse</strong> plant in India also continues to manufacture conventional brakes, but demand is progressively<br />
shifting toward the more technically advanced bogie brakes.<br />
Supplying the Japanese high-speed train market<br />
In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> supplied a large proportion of the braking components for the<br />
23 sets that make up the new E5 generation of Shinkansen trains. These high-performance brakes bring<br />
the high-speed trains operated by Japanese railroad company JR East safely to a halt from speeds of up<br />
to 360 km/h. To this end, <strong>Knorr</strong>-<strong>Bremse</strong> developed an ultra-compact lightweight type of brake caliper<br />
based on its tried-and-tested modular design. The brake discs and flexible Isobar sintered brake pads<br />
were specially designed to cope with the extreme demands of possible emergency braking in the<br />
event of an earthquake.<br />
The new E5 generation is rapidly becoming a genuine competitor for air travel. On the “Tohoku” Shinkansen<br />
line, the trains cover the route from Tokyo via Hachinohe to Aomori on the east coast of the<br />
main island of Honshu in less than three hours. This meant increasing operating speeds from 275 to<br />
320 km/h, which called for a much more powerful braking system. Some of the brake equipment<br />
supplied to JR East in <strong>2011</strong> is already in successful operation on scheduled services.<br />
Braking systems for coal wagons for Indonesia<br />
Indonesia’s largest state-owned railroad operator, PT. Kereta Api Indonesia (Persero), has ordered 1,200<br />
freight cars for the transportation of coal from Chinese rail vehicle manufacturer Baotou Beifang<br />
Chuangye Co. Ltd. <strong>Knorr</strong>-<strong>Bremse</strong> won the order to supply the braking systems.<br />
Following successful completion of negotiations, a supply contract for braking systems for the 1,200<br />
coal wagons for Indonesia was signed in April <strong>2011</strong>. A delegation from Baotou Beifang Chuangye Co.<br />
Ltd. visited <strong>Knorr</strong>-<strong>Bremse</strong>’s Suzhou site in China for the signing ceremony. The guests were officially<br />
welcomed by the COO of <strong>Knorr</strong>-<strong>Bremse</strong> Asia Pacific (Holding) Ltd., Domingo Mendieta. This project<br />
marks a milestone for Beifang Chuangye in its strategic drive to access additional markets in Asia. Over
R e p o R t<br />
the next few years, Beifang Chuangye is aiming to secure another order for between 7,000 and 10,000<br />
freight cars for the Indonesian market.<br />
Australian operators opt for <strong>Knorr</strong>-<strong>Bremse</strong><br />
<strong>Knorr</strong>-<strong>Bremse</strong> benefited during the year in question from growth in the Australian rail freight market,<br />
supplying braking systems for some 2,000 freight cars destined for the country’s railroad system. The<br />
main growth driver was the ongoing expansion of iron ore and mineral mining, particularly in the north<br />
and west of the country. The biggest project in <strong>2011</strong> involved an order by BHP Billiton Iron Ore from<br />
manufacturers Bradken and Qiqihar Railway Rolling Stock Co. Ltd. (QRRS) for 720 freight cars equipped<br />
with <strong>Knorr</strong>-<strong>Bremse</strong> EP60 or TMB60 braking systems. Over the course of the year <strong>Knorr</strong>-<strong>Bremse</strong> supplied<br />
braking systems for a total of 1,946 freight cars in Australia.<br />
The company was also successful in securing new orders including braking systems for 1,022 freight<br />
cars for the company Iron Ore and 360 freight cars for BHP Billiton Iron Ore for delivery over the next few<br />
months. <strong>Knorr</strong>-<strong>Bremse</strong>’s activities in Australia involve close cooperation with its North American subsidiary<br />
New York Air Brake (NYAB). For example the two companies have started jointly developing a braking<br />
system for the narrow-gauge railroads that are transporting increasing volumes of coal in the Australian<br />
state of Queensland.<br />
Sigma overhauls HVAC systems in Sydney<br />
370 Tangara Electric Multiple Units from the original fleet dating back to 1980 are currently in service<br />
with City Rail in Sydney, Australia. Because the HVAC systems in these popular urban trains were not<br />
5 1
5 2 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
functioning reliably, particularly in high summer temperatures, <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Sigma<br />
Coachair was tasked with bringing them up to the latest industry standards.<br />
After a detailed examination of operational failures, a review of the technological options and – in particular<br />
– consideration of City Rail’s specific fleet requirements, the design of the HVAC systems and the<br />
maintenance concept were completely upgraded. Following successful field testing, Sigma Coachair<br />
replaced large numbers of HVAC components – some of which were around 30 years old – with new<br />
ones during the course of <strong>2011</strong>. Amongst other things, compressors, heat exchangers, thermostats,<br />
switches and air intakes were replaced and refrigerant circuits and wiring layouts redesigned.<br />
The aim throughout was to improve the reliability of the units, increase maintenance periods and extend<br />
the life of the HVAC systems. Additional temperature sensors and a new automatic data logging<br />
system will also make it easier to identify overhaul requirements, plan maintenance work and avoid<br />
costly system failures.<br />
Systems for new metro trains in Delhi<br />
The metro system operated by Delhi Metro Rail Corporation (DMRC) has a total of 13 lines. As part of its<br />
program of modernization and expansion, DMRC recently increased the size of its order for new trains<br />
from Indian manufacturer Bharat Earth Movers Limited: instead of the 70 trainsets originally ordered<br />
each having four cars, they are now to be delivered with six.<br />
This has benefited <strong>Knorr</strong>-<strong>Bremse</strong>, as the company is supplying the electro-pneumatic braking systems,<br />
bogie equipment and door systems. The contracts were signed in late summer <strong>2011</strong> and the first deliveries<br />
are scheduled for spring 2012.<br />
CCB II deliveries for Indian diesel locomotives<br />
In November of the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> India delivered the CCB II braking systems for the first<br />
50 new diesel locomotives that the Indian State railway system is adding to its fleet. The delivery process<br />
will run continuously until the year 2013.<br />
CCB II is the standard brake control system for the AAR market and therefore for North America as well. For<br />
India, <strong>Knorr</strong>-<strong>Bremse</strong> has adapted the North American CCB II system to meet the special requirements of<br />
Indian operations.<br />
LEADER AutoPilot for Rio Tinto<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s LEADER system is a unique locomotive instrumentation and control technology that reduces<br />
fuel consumption while effectively managing trip time and minimizing in-train forces. LEADER operates<br />
in real time, evaluating the state of the train and determining driving strategies to improve the<br />
overall energy efficiency of the train movement. LEADER has proven capable of providing fuel savings of<br />
between 8 and 12%, reducing in-train force events by 50% and managing schedules to improve network<br />
throughput.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is currently engaged in six deployments of LEADER with key account customers around the<br />
globe, focused on heavy haul freight applications. The most ambitious project for LEADER is for the mining<br />
group Rio Tinto in Western Australia, where the goal is to achieve driverless trains by 2015, controlled by
R e p o R t<br />
LEADER. There are significant engineering developments necessary to reach the operational goal of driverless<br />
trains but the potential operational improvements are compelling.<br />
Rio Tinto’s application of LEADER extends the system’s capability from advising to full control – this has<br />
been titled LEADER AutoPilot. The system includes active communication links to the network control<br />
system and to the onboard locomotive control systems to directly actuate train commands. LEADER will<br />
optimize train movements including multi-locomotive consists and ECP braking systems.<br />
The system’s core software is capable of this type of control today, but currently issues only recommendations<br />
to the locomotive driver. To meet rigorous engineering requirements and the safety levels necessary<br />
for driverless trains, the entire software program is being rewritten to CENELEC standards. The Rio Tinto<br />
project started in <strong>2011</strong> with a series of studies and laboratory exercises. LEADER will deploy at Rio Tinto in<br />
assistant mode in 2012 and evolve to increasing stages of automation during the 2013/2014 period until<br />
driverless trains controlled by LEADER are achieved.<br />
Prizes and awards<br />
European Railway Award for <strong>Knorr</strong>-<strong>Bremse</strong><br />
The European Railway Award is presented annually by the Community of European Railways (CER), the<br />
Association of the European Rail Industry (UNIFE), and the European Rail Infrastructure Managers (EIM)<br />
in recognition of outstanding services to the railway sector. During the year in question, Dr. Stefan Haas,<br />
Head of Innovation and Technology at <strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle Systems, was presented with the<br />
Award in the “Technical Achievements” category for the development, industrialization and successful<br />
introduction of the linear eddy-current brake.<br />
The French physicist Léon Foucault first described the principle of the linear eddy-current brake back in<br />
the 19th century. However, before <strong>Knorr</strong>-<strong>Bremse</strong> was able to launch an eddy-current brake for rail vehicles<br />
in commercial operation there were numerous technical challenges to be resolved, not least in<br />
terms of braking force limits, signaling compatibility, power supply, availability, and mechanical installation<br />
in the bogie. Today the linear eddy-current brake offers an ideal complement for conventional<br />
friction brakes and regenerative brakes. It operates independently of any wheel-rail adhesion, is not<br />
subject to wear and tear and applies the braking force evenly and without delay.<br />
EEF Future Manufacturing Award<br />
In <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems (UK) Ltd., based in Wiltshire in the south of England, won the “Future<br />
Manufacturing Award” presented by the Engineering Employers Foundation (EEF). The EEF awards are<br />
designed to recognize innovation and excellence in the fields of manufacturing and technology. <strong>Knorr</strong>-<br />
<strong>Bremse</strong> received the award in recognition of its complete redesigning of the production cell and process<br />
for the manufacture of its EP2002 brake control system.<br />
Due to the rise in worldwide demand for the EP2002 system – for metro trains in China and Dubai, for<br />
example – <strong>Knorr</strong>-<strong>Bremse</strong>’s UK subsidiary needed to increase production capacity and output. In totally<br />
revamping the EP2002 production process, the company not only focused on increasing output but<br />
also adopted a far-reaching approach designed to minimize waste and potential error in the manufac-<br />
5 3
5 4 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
turing process as a whole. As well as enhancing productivity, the redesigned cell also provides a better<br />
working environment for the employees and at the same time raises the quality of the product even<br />
further.<br />
Three awards for <strong>Knorr</strong>-<strong>Bremse</strong> UK<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems (UK) Ltd. received three awards from Siemens during the course of the year<br />
in question. The “Going the Extra Mile“ award recognized the company’s problem-solving skills and<br />
rapid reaction times as well as the excellent partnership between Siemens and <strong>Knorr</strong>-<strong>Bremse</strong>. And the<br />
“<strong>2011</strong> Award for Class 444 Overhaul“ went to <strong>Knorr</strong>-<strong>Bremse</strong> in two areas: <strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems received<br />
it for its work as a partner in overhauling braking systems, and Sigma (Burton) received it for the<br />
overhaul of HVAC systems.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Poland wins TRAKO award<br />
The TRAKO <strong>2011</strong> International Railway Trade Fair took place in Gdansk, Poland, over a period of four days<br />
in October. During the course of this important European event <strong>Knorr</strong>-<strong>Bremse</strong> Poland was presented<br />
with the “TRAKO <strong>2011</strong> Trade Fair Polish Business Locomotive <strong>2011</strong> Award,” one of the most prestigious<br />
awards in the Polish rail industry. Every year since 2007, the trade journal Rynek-Kolejowy has singled<br />
out companies whose products and innovations have made a significant contribution to the Polish rail<br />
market. Presenting the award to Jacek Bilas, Managing Director of <strong>Knorr</strong>-<strong>Bremse</strong> Poland, the managing<br />
directors of the journal paid tribute to the role played by the company in helping to develop the Polish<br />
market.
R e p o R t<br />
5 5
Products<br />
R e p o R t<br />
During the course of <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle Systems launched new, innovative<br />
products in many areas with the aim of making rail transportation even more efficient, safe<br />
and environmentally friendly. In Russia, a distribution valve specially developed for the<br />
country’s freight transportation system achieved approval, and in Germany, <strong>Knorr</strong>-<strong>Bremse</strong><br />
collaborated with a partner to develop a system that paves the way for a condition-dependent<br />
approach to maintenance.<br />
Tests start on KAB60 control valve in Russia<br />
In terms of territory, Russia is the world’s largest country. Every day, huge volumes of freight, including<br />
many raw materials, are transported via the country’s 85,500 km of railroad track – and the rail network<br />
is constantly being expanded. As such, the country offers a promising market for <strong>Knorr</strong>-<strong>Bremse</strong>. At the<br />
end of October <strong>2011</strong>, the KAB60 control valve specially developed for the Russian freight market received<br />
official approval. <strong>Knorr</strong>-<strong>Bremse</strong> was initially commissioned to manufacture 1,500 of the valves<br />
for field-testing. The valves are compatible with the components used in the Russian market and during<br />
overhaul the current valves are replaced with the new ones, enabling them to be tested under real<br />
conditions.<br />
Official approval was preceded by several years of development work on ensuring the valves’ ability to<br />
function reliably at ambient temperatures down to minus 55 °C – conditions under which valves manufactured<br />
for other markets would quickly reach the limits of their capabilities. The new KAB60 valve<br />
developed by the <strong>Knorr</strong>-<strong>Bremse</strong> engineers can actually function down to minus 60 °C. Another priority<br />
was durability: whereas Russian valves currently have to be overhauled approximately every two<br />
years, laboratory tests showed that the <strong>Knorr</strong>-<strong>Bremse</strong> valves could function for six years – considerably<br />
reducing lifecycle costs. <strong>Knorr</strong>-<strong>Bremse</strong> also offers considerable advantages in terms of reliability and<br />
operation. The brakes can be controlled more rapidly and precisely, with reduced variation of brake<br />
5 7
5 8 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
cylinder pressure and shorter fill and release times. This makes it easy to operate the relatively long<br />
trains used in Russia.<br />
Once the initially limited quantity of <strong>Knorr</strong>-<strong>Bremse</strong> valves have demonstrated their reliability during<br />
two winter periods, restrictions can be lifted and the approval process completed, putting series production<br />
of the valves – planned to take place in Russia itself – firmly on the horizon.<br />
New sand separation for HVAC systems<br />
In desert regions, airborne sand and dust particles represent a serious problem when it comes to ensuring<br />
high air quality on board trains. <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Merak has responded by engineering an<br />
efficient sand separation system for HVAC systems that removes the sand and dust from the ambient<br />
air uptake.<br />
The new filtration system is based on three cleaning stages. First of all a fresh air grille prevents large<br />
particles or water droplets from entering the system. The air is drawn in from the more favorable side of<br />
the train depending on the wind direction and the direction of travel. In the event of a sandstorm, all of<br />
the grilles on both sides can also be closed. In the next step the air is directed through several cyclonic<br />
filters so that the sand is separated out and only clean air enters the system. A turbo ventilator removes<br />
the sand from the cyclonic filters automatically, keeping maintenance costs low. In the third and final<br />
stage the air passes through several filter bags with different size filters, removing any remaining particles.<br />
The result of this filtration architecture is that only entirely clean air enters the HVAC system, hugely<br />
improving air quality on board the train.<br />
Monitoring the sanding process<br />
Trains and streetcars use sand to increase the traction between wheel and rail and ensure safe braking<br />
even in poor weather conditions. To ensure that the sanding system always functions properly, it has to<br />
be checked – usually by the driver – every time the train goes into service. Now <strong>Knorr</strong>-<strong>Bremse</strong> has developed<br />
a sensor-based system that enables this checking routine to be carried out automatically in a<br />
few seconds. The sensors are currently being used on urban trains operated by the Berlin S-Bahn.<br />
The sand flow sensor is based on a principle developed 20 years ago that involves measuring the induction<br />
effect triggered by the electrostatically charged sand particles as they pass through a conductor<br />
loop. The system is used in industry, for example, to measure the mass flow of coal dust in power stations,<br />
where there is a need to detect blockages in the transport pipes.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle Systems has now adapted this principle for use in rail vehicles. Sensors monitor<br />
the volume of sand being blown between the wheel and the rail through the sand pipe, and if they<br />
identify any malfunctions in the sanding process, the driver is informed via a cab display. Thanks to the<br />
new automatic sensor-based monitoring system, lengthy manual checking of the sanding system is no<br />
longer required – saving time and helping make train operations more efficient.
R e p o R t<br />
Shared platforms for train simulators<br />
Up till now, the train simulator markets served by New York Air Brake (NYAB) and Sydac were clearly<br />
separated. With its TDS model series, NYAB developed and supplied an excellent platform for simulating<br />
extremely long freight trains that is currently used above all in NYAB’s home market of North<br />
America but also in similar markets elsewhere. Sydac, on the other hand, supplies simulators for passenger<br />
trains and is well known for its highly realistic, high-definition displays of tracks, controls and<br />
passengers. The company has a strong presence in Australia, Asia and the UK.<br />
The successful merger of the two companies’ platforms means that <strong>Knorr</strong>-<strong>Bremse</strong> is now in a position<br />
to combine the advantages of the two systems on a modular basis. Thus, for example, the high-definition<br />
display offered by Sydac’s passenger train simulators can be integrated into NYAB’s TDS simulators.<br />
And conversely, NYAB’s highly complex train models can be easily reproduced on Sydac simulators.<br />
This means that when operators are setting up customized simulators they can choose from a wide<br />
range of new options, making it easier to meet their specific demands. A further advantage is the fact<br />
that their regional supplier can now offer expertise in all types of simulator.<br />
In addition to enabling a wider range of simulators to be offered, integration of the two platforms has<br />
also enhanced their quality. Because the joint platform consists entirely of tried-and-tested modules<br />
from both systems, overall quality has been enhanced and duplication of effort avoided.<br />
5 9
6 0 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
On track for greater efficiency<br />
Microelettrica Scientifica S.p.A., a member of the <strong>Knorr</strong>-<strong>Bremse</strong> Group based in the Italian town of<br />
Rozzano, develops and manufactures ecometers for measuring electricity consumption on trains, identifying<br />
potential savings and ensuring maximum operating efficiency. To make sure the train operates<br />
at maximum efficiency, the energy consumption on the various networks has to be precisely measured<br />
and the data passed from the train to the operator’s control room. For some time, systems such as<br />
Eurometer, Integrameter and City Metering have offered reliable consumption data capture and management.<br />
But the new ecometer from Microelettrica Scientifica now combines all these functions into<br />
a single system.<br />
The ecometer measures the current and voltage on both AC and DC networks and can therefore be<br />
used on all European systems to calculate the vehicle’s consumption in relation to the current available<br />
from the catenary system. Combined with the <strong>Knorr</strong>-<strong>Bremse</strong> driver assistance system LEADER, Sydac<br />
simulators and appropriate consumption data management, it constitutes an important element in a<br />
comprehensive energy saving system for trains.<br />
Weighing in at less than 30 kg and with a height of no more than 480 mm, the Ecometer can be swiftly<br />
installed by a technician and is designed to be maintenance-free. With a mere 0.2% deviation it is particularly<br />
accurate, and its modular design makes it very good value for money. Data transfer can take<br />
place according to the needs of the particular operator via optical fiber cable, existing loops or radio<br />
frequency.
R e p o R t<br />
<strong>Knorr</strong>-<strong>Bremse</strong> launches Ecodesign<br />
From the point of view of both manufacturers and customers, the efficient use of resources is an important<br />
driver of innovation in the rail vehicle sector. The Ecodesign project launched by <strong>Knorr</strong>-<strong>Bremse</strong> in<br />
<strong>2011</strong> aims to further develop resource-efficient product solutions for rail vehicles. Specific products are<br />
selected on the basis of environmental criteria – for example energy consumption – and their impact<br />
on the environment during the entire lifecycle is analyzed with a view to improving product sustainability<br />
and minimizing overall energy requirements, for example by intelligent design and optimum<br />
operational management.<br />
In the course of various pilot projects, <strong>Knorr</strong>-<strong>Bremse</strong> looked at the materials it was using, focusing mainly<br />
on the scope for utilizing lightweight materials for certain components with a view to minimizing the<br />
vehicle’s overall energy requirements. Another aspect examined was the energy required to manufacture<br />
and process the products. Here, again, the idea was to reduce the use of resources to a minimum<br />
– while always ensuring the safety, quality and functionality of all products.<br />
6 1
6 2 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
Intelligent monitoring<br />
<strong>Knorr</strong>-<strong>Bremse</strong> and SKF, a specialist in rolling bearings and industrial monitoring<br />
systems, have joined forces to develop COMORAN, a system that combines<br />
safety monitoring for rolling stock sub-systems with comprehensive condition<br />
monitoring. The European TSI High Speed directive that came into force in<br />
February 2008 defines the requirements for monitoring critical safety-relevant<br />
systems. Damage to wheelset bearings, derailment, unstable running or hot<br />
axle boxes must be reliably identified and immediately reported to the locomotive<br />
engineer. For some years<br />
now, <strong>Knorr</strong>-<strong>Bremse</strong> systems have<br />
provided these functions in highspeed<br />
trains.<br />
Reducing lifecycle costs<br />
It is not just in terms of safety that the demands<br />
made on rail systems are growing. Fleet operators<br />
are increasingly calling for preventive diagnosis<br />
of wear and damage so as to prolong the<br />
life of components. In collaboration with SKF’s<br />
Condition Monitoring Center, <strong>Knorr</strong>-<strong>Bremse</strong> developed<br />
COMORAN (Condition Monitoring for<br />
Railway Applications) to meet this demand.<br />
COMORAN uses data already available from the<br />
train’s monitoring functions for an on-line diagnostic<br />
system that helps identify the first signs of<br />
wear or damage.<br />
The system facilitates long-term condition monitoring<br />
of critical components to identify wear or<br />
damage, with operational data being relayed to<br />
the maintenance specialists to enable them to<br />
carry out preventive maintenance throughout<br />
the system’s entire life.
Cooperation between <strong>Knorr</strong>-<strong>Bremse</strong> and SKF did<br />
not come about by chance. <strong>Knorr</strong>-<strong>Bremse</strong> has<br />
decades of experience in control and monitoring<br />
systems for rail vehicles, and SKF is a globally<br />
recognized leader in the field of industrial monitoring<br />
and machine diagnostics.<br />
Cost-effective<br />
In order to offer a cost-effective system it makes<br />
sense to combine the required functions with<br />
systems already installed in the vehicle. Integrating<br />
the system with the existing brake control<br />
and wheel slide protection system has obvious<br />
advantages: combining various individual systems<br />
reduces complexity and improves overall<br />
system availability. Extra power supplies, communication<br />
interfaces and pulse generators are<br />
not required. Information already generated by<br />
the wheel slide protection system – for example<br />
rotation speeds – can be drawn on directly by<br />
the diagnostic system.<br />
Permanent diagnostic function<br />
COMORAN consists of two main components –<br />
an additional 19” electronic monitoring board<br />
that can be integrated into the existing <strong>Knorr</strong>-<br />
<strong>Bremse</strong> ESRA system for brake control and wheel<br />
slide protection, and combined multifunctional<br />
sensors that measure revolutions, temperatures<br />
and acceleration, for example on axle bearings,<br />
transmissions or motors.<br />
The interplay of the various components is best<br />
illustrated using the example of the axle bearings,<br />
whose replacement represents a significant<br />
R e p o R t 6 3<br />
cost factor in rail vehicle maintenance. COMORAN<br />
axle bearing diagnostics enable the impulse<br />
generators for the wheel slide protection system<br />
and the additional acceleration data from the<br />
wheelset bearings to be used to continuously<br />
evaluate speed-related bearing frequencies. The<br />
frequency spectrums thus identified make it<br />
easy to differentiate between intact bearings<br />
and worn or faulty ones. Tools specially developed<br />
by SKF enable such defects to be portrayed<br />
graphically in the form of a trend analysis so that<br />
future performance can be predicted with maximum<br />
accuracy. A configurable parameter database<br />
ensures that bearings of any type or from<br />
any manufacturer can be monitored. Similar options<br />
exist for monitoring drive components,<br />
motors, shafts and clutches.<br />
The same sensors can be used to monitor wheel<br />
treads and flats. Here, too, using the same interfaces<br />
and sensor signals as the brake control system<br />
saves extra cost.
Aftermarket<br />
R e p o R t<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s Rail Services bring together all the company’s aftermarket services for brakes<br />
and onboard systems into a single flexible program focused on efficiency, comfort, delivery<br />
reliability and spare parts availability. As part of the program the company has further developed<br />
its aftermarket logistics – an effort that paid off when it won a prestigious service<br />
contract from Russia.<br />
Servicing the “Peregrine”<br />
Bringing a train to a safe halt from 250 km/h calls for a high-performance braking system. But even the<br />
best brakes in the world cannot be guaranteed to work safely unless they are regularly serviced.<br />
Siemens, the company responsible for servicing the eight Velaro RUS high-speed trains operating in<br />
Russia, has opted to put this task in the hands of <strong>Knorr</strong>-<strong>Bremse</strong>, and has awarded the company a<br />
30-year contract for full servicing of the braking systems.<br />
“Sapsan,” which means “peregrine” in Russian, is the name given by Russian railway operator RZD to the<br />
Velaro RUS high-speed train that serves the important line between Moscow and St. Petersburg. Despite<br />
calling at several halts on the way, the Sapsan covers the 650-odd kilometers in a mere three<br />
hours and 45 minutes.<br />
One of the reasons Siemens awarded <strong>Knorr</strong>-<strong>Bremse</strong> the contract was that the company was able to<br />
offer its own local service center in St. Petersburg. This is already at the planning stage and will enable<br />
the company to carry out all the necessary technical work in modern workshops equipped with stateof-the-art<br />
assembly and testing technology operated by a team of highly trained specialist engineers.<br />
After it comes on stream in August 2014 the facility will be used over a period of 30 years to overhaul<br />
the air supply and brake control systems four times and the bogie equipment five times.<br />
6 5
6 6 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
With effect from <strong>2011</strong>, the contract also includes checking safety valves and pressure switches and<br />
overhauling the Isobar brake pads in addition to the regular overhauling of brake components. It also<br />
involves supplying <strong>Knorr</strong>-<strong>Bremse</strong> original spare parts and providing regular training in braking systems.<br />
If required, <strong>Knorr</strong>-<strong>Bremse</strong> specialists will travel to Russia to hold training courses in braking systems<br />
and commissioning for the Velaro RUS operators and Siemens employees.<br />
1,000th screw compressor block overhauled<br />
In the fall of <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> overhauled its 1,000th compressor despite having only launched the<br />
service three years ago. To avoid compressor failure, which could even put a vehicle out of service, it<br />
makes sense for operators to have the compressor block – the heart of any screw compressor – regularly<br />
overhauled. The process involves returning the compressors to an “as-new” condition in terms of<br />
wear, performance, service life and appearance.<br />
Specially trained technicians check what individual components can be reused. Casings and rotors are<br />
refurbished, seals and bearings are removed using a specially developed process, reusable parts are<br />
carefully cleaned and all seals and wear-prone parts such as roller bearings are replaced. But the most<br />
important step involves the precise adjustment of the rotors – crucial if the overall system, which is<br />
specially designed for the requirements of a rail vehicle, is to function reliably in the long term. At the<br />
end of the overhaul process, extensive testing under real conditions ensures that the compressor has<br />
been returned to an “as new” condition in the usual <strong>Knorr</strong>-<strong>Bremse</strong> quality.<br />
The customer benefits in many different ways from such a professional overhaul process. It offers better<br />
value for money than complete compressor replacement and improves vehicle availability by<br />
avoiding downtimes caused by compressor failure. It also saves office work, because in addition to the<br />
overhaul, the customer receives original spare part kits from a single source. Using screw blocks overhauled<br />
by <strong>Knorr</strong>-<strong>Bremse</strong> reduces the lifecycle costs for the customer without any concessions being<br />
made in terms of quality.<br />
The process was developed in Munich and established there on the basis of special assembly systems.<br />
Demand for local compressor overhaul in the Chinese market is on the increase, and <strong>Knorr</strong>-<strong>Bremse</strong><br />
responded in <strong>2011</strong> by setting up its own repair line based on company production standards. Chinese<br />
colleagues were provided with exhaustive training both in Munich and locally.<br />
Service contract for Merak in the United States<br />
In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Merak won the service contract for the overhaul of<br />
64 HVAC systems in New York‘s “AirTrain JFK.“ The AirTrain units provide the mass transit link between<br />
New York‘s John F. Kennedy Airport, the New York City Transit subway network and the Long Island<br />
Railroad.<br />
For some time now the U.S. market has been experiencing a rise in demand for HVAC system overhauls.<br />
One driving factor here is increasing system complexity, which means that train operators prefer<br />
to have the HVAC systems overhauled by specialists instead of by their own workshop personnel. Then<br />
there is the change in legislation prohibiting the use of the widespread R-22 refrigerant from 2014<br />
onward. This has led to operators using the opportunity of a scheduled overhaul to have their systems<br />
converted to more modern refrigerants.
R e p o R t<br />
Merak is expecting this kind of contract to account for a major proportion of the service business in<br />
the U.S. in the next five years.<br />
Aftermarket activities regrouped in Australia<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Australia and Sigma Coachair, the manufacturer of HVAC systems for rail vehicles and<br />
industrial applications acquired in 2010, began the process of merging their aftermarket activities in<br />
the year under review. The idea is that the two formerly separate manufacturers should in future present<br />
one face to the customer.<br />
The process of bundling the aftermarket business was accompanied by further progress in terms of<br />
service activities. Thus, for example, <strong>Knorr</strong>-<strong>Bremse</strong> Australia developed new training courses, based on<br />
which customers are no longer instructed in individual product areas but at cross-product level in a<br />
single course that covers the Group‘s braking, HVAC and door systems.<br />
New aftermarket partner in Brazil<br />
MRS Logistica is one of the biggest freight transportation companies in the Brazilian rail market. It<br />
operates some 18,000 freight cars and almost 700 locomotives on a network of more than 1,600 kilometers<br />
serving three federal states which together account for approx. 56% of Brazilian GDP. Most of<br />
the freight carried by MRS consists of products such as iron ore, finished steel products, cement and<br />
agricultural goods, which have to be transported reliably from A to B, often to tight deadlines. In order<br />
to ensure continuous vehicle availability, the Brazilian company has initially contracted <strong>Knorr</strong>-<strong>Bremse</strong><br />
Brazil to service the CCB II control valves on 254 of its locomotives up till spring 2013.<br />
Although this is the first such service contract, the two companies are not entirely unknown to each<br />
other – <strong>Knorr</strong>-<strong>Bremse</strong> is already extensively involved in providing equipment for the operator’s rolling<br />
stock, being responsible for all the CCB II valves for the locomotives and DB-60 systems for approximately<br />
70% of the freight cars.<br />
6 7
Site-specific Projects<br />
With a view to securing the company’s long-term success, <strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle<br />
Systems launched a large number of site-specific projects during the year under review.<br />
R e p o R t<br />
On virtually all continents the company either set up new facilities or expanded existing<br />
ones. In the Chinese city of Suzhou it opened a new service center, and in Italy the acquisition<br />
of a specialist manufacturer of ventilators and a well-known producer of electronics for<br />
rail vehicle applications enabled the division to further expand its product portfolio.<br />
New plant opened in England<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has relocated the UK and Eire business of the Australian rail vehicle HVAC systems<br />
manufacturer, Sigma Coachair, acquired in 2010, to a new factory in Burton upon Trent, Staffordshire,<br />
England.<br />
Now officially known as <strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems (Burton) Limited, the company will continue to<br />
pursue its established activities in the development and production of HVAC systems for rail vehicles<br />
and industrial applications. The portfolio of services also includes customer service and overhaul work<br />
for <strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Merak, as well as for several other manufacturers of rail vehicle HVAC systems.<br />
Comet Fans S.r.l. acquired<br />
<strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Microelettrica is pushing ahead with the vertical integration of its operations<br />
through the acquisition of Comet Axial Fans S.r.l., a niche supplier of fans for rail vehicle and industrial<br />
applications. Given the expansion of the portfolio beyond axial fans, the company has been renamed<br />
Comet Fans S.r.l. Based in Milan, Italy, this specialist manufacturer develops and produces not only fans<br />
but also ventilation systems, condensers, radiators and wet cooling towers.<br />
6 9
7 0 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
In the rail vehicle sector Comet fans are used, for example, in HVAC and air supply systems for passenger<br />
coaches, but also for cooling brake resistors. In the industrial sector the fans are used in a wide<br />
range of electrical machinery, heat exchangers and radiators, not least in refineries, chemical plants or<br />
the cement industry. In the year under review, Microelettrica began the integration of Comet into its<br />
own structures.<br />
Plan for new joint venture in Russia<br />
The Russian state railway company RZD set up its second freight car subsidiary back in 2010 in the<br />
form of the “Second Freight Company” (Vtoraya Gruzovaya Kompaniya, or WGK). As from 2015 the new<br />
company is to take over some 20% of Russian rail freight transportation. It is also planned for this<br />
wholly-owned subsidiary of RZD to be the partner in a new Russian joint venture being set up with<br />
<strong>Knorr</strong>-<strong>Bremse</strong>.<br />
During the course of the year in question, both companies laid the foundation for the joint venture in<br />
the form of a Declaration of Intent. An important element was the decision to set up and operate a<br />
joint production facility in Russia that will initially manufacture disc brakes, air supply systems for passenger<br />
trains and control valves for freight cars.<br />
Green light for new U.S. plant<br />
The positive development of business at <strong>Knorr</strong> Brake Corporation (KBC) in North America and the<br />
forecast mid-term demand were the main factors in the decision to start planning a new production<br />
shop in Westminster in the year under review, in the immediate vicinity of the existing plant. From<br />
2013 onwards this 18,000 square meter site will provide work for around 250 employees, manufacturing<br />
a portfolio including train brake systems, bogie equipment, compressors and air dryers, as well as<br />
HVAC systems.
R e p o R t<br />
In line with <strong>Knorr</strong>-<strong>Bremse</strong>’s strategy of localized production, the company will manufacture systems<br />
for the North American market in collaboration with certified local suppliers. Standardized processes<br />
anchored in the <strong>Knorr</strong>-<strong>Bremse</strong> Production System (KPS) will ensure the customary high quality of<br />
<strong>Knorr</strong>-<strong>Bremse</strong> products, from raw material processing to final quality control.<br />
Compliance with the LEED (Leadership in Energy and Environmental Design) guidelines means that<br />
the new facility will also be built to the latest environmental standards. These include measures to<br />
ensure minimum water consumption and the efficient use of energy in production operations and in<br />
the building’s HVAC systems. KBC will achieve a further reduction in its carbon footprint through the<br />
ingenious use of natural daylight for lighting purposes.<br />
Acquisition of Technologies Lanka<br />
<strong>Knorr</strong> Brake Corporation (KBC) has added to its product portfolio with the acquisition of Technologies<br />
Lanka, an innovative developer and manufacturer of rail vehicle electronics systems and components<br />
located in Quebec, Canada. The purchase will enable KBC to leverage its diverse product portfolio<br />
ranging from linear door systems to HVAC system controllers as well as its highly innovative Research<br />
& Development team. Since entering the rail industry in 1997, Lanka has had steady growth in revenues<br />
and profits. Now as a member of the <strong>Knorr</strong>-<strong>Bremse</strong> Group, Lanka has the opportunity for further<br />
growth through access to <strong>Knorr</strong>-<strong>Bremse</strong>’s extensive distribution channels, diverse inter-company relationships<br />
and industry expertise.<br />
Operations begin at Suzhou II+<br />
The <strong>Knorr</strong>-<strong>Bremse</strong> facility in Suzhou is the Group’s largest production plant in China. In the space of<br />
just twelve months, <strong>Knorr</strong>-<strong>Bremse</strong> Suzhou has doubled its output – which was one reason for the new<br />
extension to the plant, which was opened in March <strong>2011</strong>. <strong>Knorr</strong>-<strong>Bremse</strong> began production of rail vehicle<br />
systems in China by opening an assembly plant in Shanghai in 2000. With the start of production<br />
at the new Suzhou II+ plant, the company has developed into one of the largest suppliers in the Chinese<br />
rail vehicle market. By the end of the year under review, the addition of the new extension had<br />
brought the workforce at the plant to almost 800 employees.<br />
Through the extension, <strong>Knorr</strong>-<strong>Bremse</strong> created additional floor space for machining centers. Workpiece<br />
throughput was enhanced by optimizing the routing and machining times of the parts, with fixed<br />
cycles for everything from assembly to inspection and packaging. To respond to and foster the expansion<br />
of aftermarket activities in China, <strong>Knorr</strong>-<strong>Bremse</strong> also set up a new Service Center at the site, covering<br />
1,800 m 2 .<br />
The recently set-up Technical Solution Team is also supporting aftermarket activities. In direct contact<br />
with customers, the team works closely with them to draw up overhaul schedules, for example, and<br />
discuss technical details of agreements. At the same time, <strong>Knorr</strong>-<strong>Bremse</strong> expanded its Field Service<br />
Team for locomotives, extending the area covered from Suzhou to the west of the country. By the end<br />
of <strong>2011</strong> more than 100 service technicians were deployed covering a total of 51 cities. In addition, the<br />
company established a new Systems Engineering and Commissioning Center staffed by some 50 engineers<br />
and technicians.<br />
In the course of the expansion, <strong>Knorr</strong>-<strong>Bremse</strong> also took ecological aspects into account. A rainwater<br />
tank now provides water for watering the grounds. Solar modules for the production of hot water are<br />
7 1
7 2 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
installed on the roofs. And to ensure ideal conditions on site for up to 1,000 employees the company<br />
has also built a state-of-the-art canteen and new changing rooms and showers.<br />
IFE VICTALL joint venture grows<br />
Steady growth in demand meant that the IFE Victall joint venture in Qingdao, China, reached the limits<br />
of its capacity within a few years of first being set up in 2006. After expanding the facility to more than<br />
12,000 m², <strong>Knorr</strong>-<strong>Bremse</strong> relaunched production in the spring of <strong>2011</strong>. During the course of the year<br />
IFE Victall, with its workforce of 650, produced more than 28,000 access systems, making it the biggest<br />
manufacturer of door systems within the <strong>Knorr</strong>-<strong>Bremse</strong> Group.<br />
In line with <strong>Knorr</strong>-<strong>Bremse</strong>’s global KPS production system the plant is being equipped with state-ofthe-art<br />
machinery and modern workplaces, with particular emphasis put on the design of the production<br />
lines. The opportunity has also been taken to upgrade the existing production area with a view to<br />
saving energy and protecting the environment.<br />
A special feature of the IFE Victall plant in Qingdao is the fact that all production processes take place<br />
in one building, with even the paint shop integrated into the production chain. This makes it possible<br />
to achieve huge time savings.<br />
Merak expands in Shanghai<br />
Merak Railway Technologies Shanghai was founded by <strong>Knorr</strong>-<strong>Bremse</strong>‘s Spanish subsidiary Merak in<br />
January 2001. Operations began with a staff of ten, working on roughly 500 m 2 , but the plant was soon<br />
caught up in rapid growth. To meet the ongoing rise in demand for HVAC systems in the region, the<br />
Shanghai facility was expanded yet again in the year under review, so that today some 360 employees<br />
are engaged in operations on more than 13,000 m 2 .<br />
During the expansion, <strong>Knorr</strong>-<strong>Bremse</strong> implemented the highest international standards in terms of<br />
efficient logistics, excellent quality and optimal industrial safety in line with the <strong>Knorr</strong>-<strong>Bremse</strong> Production<br />
System (KPS). But the importance of the Shanghai plant for the region cannot be defined by sales<br />
figures and employee numbers alone. The plant is also responsible for coordinating the numerous<br />
HVAC system projects taking place in Asia, which are characterized by a high level of localization.<br />
Plants to merge in Australia<br />
The plans for the cross-functional merger of the four Australian locations that <strong>Knorr</strong>-<strong>Bremse</strong> has been<br />
operating since the acquisition of HVAC system manufacturer Sigma Coachair in 2010 have been finalized.<br />
The official groundbreaking ceremony for the expansion of the existing plant in Granville is<br />
scheduled to take place in the first quarter of 2012, with the move slated to follow approximately<br />
twelve months later. The main drivers of the expansion to almost 14,000 m 2 of office and production<br />
space are the growth in sales over recent years and the additions to the product range.<br />
Merging the different locations will make cross-functional cooperation far more efficient. <strong>Knorr</strong>-<br />
<strong>Bremse</strong> is keen to bring together the ongoing Australian development and production activities for<br />
Sigma Coachair HVAC systems and for rail and commercial vehicle brake components under one roof.<br />
In addition, the aftermarket business in the rail vehicle HVAC and brake systems segments will also be<br />
managed by the Granville plant from 2013 onwards.
R e p o R t<br />
7 3
7 4 R e p o R t | R A I L V e H I C L e S Y S t e M S<br />
New plant in India<br />
With more than a billion inhabitants – about half of them under the age of 25<br />
– robust economic growth and a steadily growing middle class that is keen on<br />
traveling and whose willingness to consume is stimulating the economy, India<br />
has the fastest growing rail transportation market in the world. In response to<br />
this, <strong>Knorr</strong>-<strong>Bremse</strong> started constructing a new plant in Faridabad in December<br />
<strong>2011</strong>.<br />
Levels of orders for <strong>Knorr</strong>-<strong>Bremse</strong> products are a<br />
good indication of the relatively steady economic<br />
growth enjoyed by the Indian subcontinent in<br />
recent years. And all the signs are that the high<br />
growth rates are set to continue in the medium<br />
and long term.<br />
One of the main drivers is the Indian government’s<br />
infrastructure expansion plan, which includes<br />
modernization of the rail network. Existing<br />
rail vehicles are being upgraded and orders<br />
placed for new ones – both areas in which <strong>Knorr</strong>-<br />
<strong>Bremse</strong> has played an active role in India for<br />
many years.
Close to the existing plant<br />
The existing plant in the north Indian city of<br />
Faridabad no longer has the capacity to cope<br />
with expected future levels of demand – which<br />
was why <strong>Knorr</strong>-<strong>Bremse</strong> began construction of a<br />
new plant during <strong>2011</strong>. The new facility is being<br />
built in the immediate vicinity of the current one<br />
– avoiding the loss of staff that usually results<br />
from relocation and retaining workforce skills.<br />
On a 22,000 m 2 site housing state-of-the-art production<br />
and office facilities, a workforce of some<br />
400 will produce brake control systems, bogie<br />
equipment, compressors and air dryers for rail<br />
vehicles. As part of <strong>Knorr</strong>-<strong>Bremse</strong>’s international<br />
strategy these components will be manufactured<br />
largely for the Indian market in close collaboration<br />
with certified regional suppliers.<br />
Improved working<br />
conditions and a green focus<br />
As elsewhere, <strong>Knorr</strong>-<strong>Bremse</strong> will be applying the<br />
principles of its global production system (KPS)<br />
to ensure uniform processes across the entire<br />
value chain from raw material processing via surface<br />
treatment right down to assembly and<br />
quality control.<br />
The new facility is state-of-the-art – and not just<br />
in terms of an improved working environment,<br />
easier communication between departments<br />
and offices situated close to the production areas.<br />
The design of the building also conforms to<br />
green building standards, with effective air conditioning<br />
and high levels of insulation considerably<br />
reducing carbon dioxide emissions.<br />
R e p o R t 7 5<br />
Involvement in development center in Pune<br />
Parallel to the construction of the new building<br />
in Faridabad, <strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle Systems<br />
is also involved in the new Technology Center<br />
India (TCI) currently being built in Pune by the<br />
Commercial Vehicle Systems division as a software<br />
development center for commercial vehicle<br />
products manufactured for the Asian market.<br />
In order to benefit from synergies, the new<br />
building will also house a software development<br />
center for the Rail division.
Commecial Vehicle<br />
Systems<br />
During the year under review <strong>Knorr</strong>-<strong>Bremse</strong> Commercial Vehicle Systems expanded its<br />
business in all regions and grew by 22% overall. Truck production in Europe and North<br />
America was up 30% and 54% respectively, but there was also strong growth in Asia and<br />
South America as the division benefited from the ongoing recovery in global commercial<br />
vehicle markets.
7 8 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S
Markets<br />
R e p o R t<br />
During the year in question the global commercial vehicle market recorded strong growth.<br />
Although levels of production in China declined, overall production figures around the world<br />
continued to rise compared with the previous year, and <strong>Knorr</strong>-<strong>Bremse</strong> won many tenders<br />
and orders in the sector.<br />
Europe<br />
The recovery in the Western European commercial vehicle market that had set in during the previous<br />
year continued in <strong>2011</strong>. Truck production was up 30% at a total of around 420,000 units, but the market<br />
still remained below the levels achieved before the crisis. Apart from disc brakes, the most important<br />
source of sales revenues for <strong>Knorr</strong>-<strong>Bremse</strong> was ABS and EBS systems.<br />
North America<br />
As in Europe, there was also a recovery in the North American commercial vehicle market, with production<br />
up 54% at 335,000 units. <strong>Knorr</strong>-<strong>Bremse</strong> used the favorable market conditions to adapt its production<br />
facilities in line with customer requirements. The company also opened a third plant in Acuña, Mexico.<br />
South America<br />
A positive boost also came from South America, where developments that had started in 2010 continued.<br />
The commercial vehicle market grew by some 14% to 209,000 units, driven in particular by the<br />
Brazilian market, where the planned introduction of the EURO 5 standard in 2012 triggered advance<br />
purchases of vehicles.<br />
Asia/Australia<br />
Intervention by the Chinese government in the capital markets had a dampening effect on the truck<br />
market in that country and levels of production were down 16% at 1,119,000 units. The successful<br />
launch of its joint venture in Chongqing was an important strategic step for <strong>Knorr</strong>-<strong>Bremse</strong> in the Chinese<br />
market. <strong>2011</strong> saw the Indian and Japanese markets grow by 11% and 5% respectively.<br />
7 9
8 0 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Selling systems to<br />
China and Russia<br />
The commercial vehicle markets in China and Russia are amongst the biggest<br />
in the world. In both regions <strong>Knorr</strong>-<strong>Bremse</strong> is using its years of experience and<br />
its skills in the field of braking systems to support local OEMs.<br />
When major OEMs in the traditional markets are<br />
planning new vehicle platforms, they often buy<br />
individual systems from various suppliers and<br />
then put these together in-house so that they fit<br />
perfectly into the architecture of the new vehicle.<br />
Up till now, however, manufacturers in China or<br />
Russia have tended to use the strengths of their<br />
own engineers to develop appropriate vehicle<br />
platforms for the market, with a main focus on<br />
the chassis and drivetrain. They often buy in entire<br />
braking systems from elsewhere, thereby ensuring<br />
that their vehicles are fitted with systems<br />
that are perfectly suited to the particular application.
Several system projects in<br />
development or already approved<br />
In both China and Russia, <strong>Knorr</strong>-<strong>Bremse</strong> is increasingly<br />
being brought in to supply entire systems,<br />
with the company assuming complete responsibility<br />
– including initial design, calcula-<br />
tions, layout and across-the-board technical<br />
consultancy. This means that although the markets<br />
are only beginning to show signs of growth,<br />
the local OEMS are already able to equip their<br />
vehicles with high-end products.<br />
Projects such as these have enabled <strong>Knorr</strong>-<br />
<strong>Bremse</strong> to build up business relations in both<br />
China and Russia and expand its share of these<br />
markets.<br />
During the year under review both countries<br />
saw the launch of various ABS and disc brake<br />
projects supervised by the regional <strong>Knorr</strong>-<br />
<strong>Bremse</strong> companies with the help of the parent<br />
company. Drum brakes and EBS systems – usually<br />
for heavy-duty trucks or buses – are also currently<br />
being developed by some manufacturers<br />
or have reached the approval stage.<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s close involvement in these projects<br />
is due above all to the company’s globally<br />
recognized role as a technological pacemaker in<br />
the development of braking systems. The manufacturers<br />
have ambitious plans and want their<br />
vehicles to be equipped with high-end technologies<br />
from trusted partners who deliver top<br />
quality.<br />
R e p o R t 8 1<br />
Growing markets require modern solutions<br />
All the indications are that the commercial vehicle<br />
sectors in China and Russia are set to grow<br />
further. New legislation in China means that ABS<br />
is increasingly being installed in trucks. And in<br />
Russia there is already a statutory requirement<br />
for commercial vehicles to be fitted with ABS.<br />
Furthermore the electronic stability program<br />
ESP is to become compulsory in all new trucks in<br />
Russia from 2016. As one the world’s leading<br />
manufacturers of electronic vehicle safety systems,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is once again the right partner<br />
to turn to.<br />
Demanding challenges<br />
for <strong>Knorr</strong>-<strong>Bremse</strong> experts<br />
When it comes to selling systems in China and<br />
Russia, one of the challenges – in addition to the<br />
need to bring together the right specialists for<br />
the various components, whatever their normal<br />
location or department – is that there is often<br />
also a requirement to source as many components<br />
as possible from local manufacturers. This<br />
is partly because imported products would seldom<br />
meet the strict cost objectives of the OEMs,<br />
but partly also because a certain level of local<br />
content enables manufacturers to qualify for<br />
government support.
Market Successes<br />
R e p o R t<br />
Against a background of market recovery, <strong>Knorr</strong>-<strong>Bremse</strong> Commercial Vehicle Systems<br />
achieved a number of important successes. For the first time the company provided an EBS<br />
electronic braking system for installation in heavy-duty trucks manufactured by Daimler AG.<br />
In Germany, the company was designated “Best Brand in<br />
the Truck Industry” in the “Brakes” category for the sixth<br />
Development of worldwide sales revenues<br />
for the Commercial Vehicle Systems divi- year in succession. And <strong>Knorr</strong>-<strong>Bremse</strong>’s North American<br />
sion in eUR millions<br />
subsidiary Bendix Commercial Vehicle Systems celebrat-<br />
2009 1,221<br />
2010 1,701 ed delivery of its 750,000th air compressor.<br />
<strong>2011</strong> 2,068<br />
Europe<br />
<strong>Knorr</strong>-<strong>Bremse</strong> drives forward business with SOEMs<br />
There are roughly 250 companies in the SOEM (Special Original Equipment Manufacturer) category in<br />
Europe, Russia, Turkey, the Middle East and North Africa. In addition to well-known manufacturers of<br />
trucks, buses and off-road vehicles, this sector also includes manufacturers of special-purpose vehicles<br />
used, for example, by airport fire services or for certain agricultural applications. In these specific cases,<br />
safety systems such as the electronic stability program ESP, the Autonomous Emergency Braking System<br />
AEBS or the Lane Departure Warning system LDW have an increasingly important role to play.<br />
Not least on account of the closely defined application areas of their products, many SOEMs build only<br />
a small number of their highly specialized vehicles and are therefore unlikely to have their own braking<br />
systems specialists on the staff. This is increasingly leading these manufacturers to engage the<br />
services of <strong>Knorr</strong>-<strong>Bremse</strong> as an experienced system supplier, to provide them with the necessary expertise,<br />
from the planning of their vehicles to final delivery. This professional, competent and customized<br />
support from <strong>Knorr</strong>-<strong>Bremse</strong> ensures that the braking system is perfectly geared to the respective<br />
application of the vehicle.<br />
8 3
8 4 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> deliberately intensified its efforts to bundle the expertise of the<br />
sales staff responsible for the various regions and to expand its technical support team. The resultant<br />
more intensive exchange of experience and knowledge is intended to help identify trends and developments<br />
in the SOEM sector early on, as well as generating the ideal response to the diverse range of<br />
customer needs.<br />
In total, <strong>Knorr</strong>-<strong>Bremse</strong>’s business with SOEMs showed an increase of around 35% over the previous<br />
year, thanks to numerous new orders that were successfully completed in <strong>2011</strong>. For instance, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> supplied the complete braking system for the new vehicle platforms of Nissan in Spain and<br />
Ford in Turkey. The company also obtained the orders to equip the state-of-the-art electric minibuses<br />
built by Gruau in France and the light trucks manufactured by SCAM of Italy. And buses manufactured<br />
by British builder Alexander Dennis for the New Zealand market are also being equipped with <strong>Knorr</strong>-<br />
<strong>Bremse</strong> EBS systems. But SOEM demand is not restricted to braking systems: <strong>Knorr</strong>-<strong>Bremse</strong> also supplies<br />
Belgian manufacturer Van Hool, for example, with ELC Electronic Level Control and the Tire Pressure<br />
Monitoring System TPMS for many of its new buses.<br />
500,000th drum brake made at <strong>Knorr</strong>-<strong>Bremse</strong> KAMA<br />
On December 1, <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> KAMA, a joint venture between <strong>Knorr</strong>-<strong>Bremse</strong> and the biggest<br />
Russian commercial vehicle manufacturer KAMAZ, produced the 500,000th drum brake at its Naberezhnye<br />
Chelny facility in the Russian Republic of Tatarstan. At a small celebration, Klaus Deller, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> Executive Board member responsible for the Commercial Vehicle Systems division, officially<br />
presented the brake to KAMAZ Director General Sergey Kogogin. Along with drum brakes, the joint<br />
venture in Naberezhnye Chelny also manufactures torsional vibration dampers for the Russian truck<br />
market.<br />
ABS for new Fendt 900<br />
During the year in question, vehicle manufacturer Fendt was the first company to install <strong>Knorr</strong>-<strong>Bremse</strong>’s<br />
newly developed ABS anti-lock braking system for agricultural vehicles as standard equipment in its<br />
tractors.<br />
As tractors become increasingly powerful and faster, this ABS system ensures reliable braking and a<br />
high degree of safety as well as better steering and control on both dry and wet surfaces. The vehicle<br />
can also brake safely on loose surfaces such as gravel or snow without any danger of the wheels locking.<br />
Long-term contracts with Polish vehicle manufacturers<br />
Five years on from the foundation of <strong>Knorr</strong>-<strong>Bremse</strong>’s Polish subsidiary <strong>Knorr</strong>-<strong>Bremse</strong> Polska SfN Sp. z o.o<br />
the company posted its best ever results. In both the aftermarket and trailer sectors the company was<br />
able to sign long-term contracts with the leading Polish commercial vehicle manufacturers, thereby<br />
creating a stable basis for future business development. With the companies Zaslaw, Wielton and Feber<br />
<strong>Knorr</strong>-<strong>Bremse</strong> signed contracts in particular for the supply of complete EBS braking systems and<br />
pneumatic suspension systems over several years.<br />
During the year in question, in addition to consolidating and expanding its market share, <strong>Knorr</strong>-<strong>Bremse</strong><br />
was particularly concerned to take action against product piracy and the use of non-original spare
R e p o R t<br />
parts which are increasingly being sold on the Polish market. The company provided comprehensive<br />
information to workshops on product liability and the risks involved in marketing and using nonoriginal<br />
spare parts.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> supplies complete braking systems to Nissan Europe<br />
Japanese automotive company Nissan’s European subsidiary NISSAN Motor Iberica S.A. is planning to<br />
launch a newly developed light truck on the European market in 2014. In order to meet rigorous market<br />
requirements, the vehicles are to be equipped with state-of-the-art braking technology and a<br />
whole range of safety features. <strong>Knorr</strong>-<strong>Bremse</strong> is developing and supplying the entire braking system<br />
for the new vehicles – including not only the ABS8 anti-lock system with integrated ESP electronic<br />
stability program but also the air control system and the disc brakes with brake cylinders for the front<br />
and rear axles.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> succeeded in winning this order because the company was able to support Nissan in<br />
meeting its delivery deadlines and supply complete solutions tailored to customers’ requirements. The<br />
company was heavily involved in designing and configuring the braking system for the new truck at<br />
an early stage in the project. As well as providing the axle-mounted pneumatic disc brakes, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> is also offering across-the-board technical support during the course of the project.<br />
For <strong>Knorr</strong>-<strong>Bremse</strong>, Nissan is one of the first customers in Europe to fit the new ABS8 system in conjunction<br />
with ESP as standard. With <strong>Knorr</strong>-<strong>Bremse</strong> as a competent supplier, the Japanese manufacturer<br />
hopes to expand its market share in Europe. Production is slated to start at the end of 2013.<br />
8 5
8 6 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Hasse & Wrede supplies visco-dampers for Audi and BMW<br />
During the year in question, <strong>Knorr</strong>-<strong>Bremse</strong>’s subsidiary Hasse & Wrede, manufacturer of visco-dampers<br />
and hydraulic dampers for passenger car, truck, marine and stationary engines, received further orders<br />
for visco-dampers for the new generations of engines being developed by leading automotive manufacturers.<br />
The company is to develop and design visco-dampers for Audi’s new V8 engines and parts<br />
of its V6 engines. Hasse & Wrede will also again be supplying visco-dampers for all BMW’s four and six<br />
cylinder diesel engines.<br />
Thanks to its excellent engineering and manufacturing skills, Hasse & Wrede posted strong growth in<br />
all regions of the world during <strong>2011</strong>.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> involved<br />
in new Daimler platform<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has enjoyed a close and constructive working relationship with<br />
Daimler AG for many years. The launch of volume production of various <strong>Knorr</strong>-<br />
<strong>Bremse</strong> components for the SFTP platform marks an important milestone in<br />
the successful partnership:<br />
The company will for the first time also be supplying Daimler with an EBS electronic braking system for<br />
the heavy-duty trucks – including the new Actros – produced by this world leader. <strong>Knorr</strong>-<strong>Bremse</strong> will<br />
be equipping the twin-axle semitrailer tractor units with an EBS5.1 electronic braking system. A variant<br />
of EBS5, the system was designed specifically for the requirements of the new vehicle platform and its<br />
new electronic architecture. It integrates a wide range of functions that are now regarded as essential<br />
for commercial vehicles into a single brake control system. In addition to driver assistance systems<br />
such as EPS and ABS, these include coupling force and wear control and retarder control.
North and South America<br />
R e p o R t<br />
ACC in Prevost coaches<br />
Prevost, a leading North American manufacturer of premium touring coaches, has launched Prevost<br />
Aware – a system based on Adaptive Cruise Braking from <strong>Knorr</strong>-<strong>Bremse</strong>’s U.S. subsidiary Bendix – as an<br />
option for its H-series motor coach models. This makes Prevost the first coach manufacturer in the<br />
world to offer the option of Adaptive Cruise Control (ACC) with braking.<br />
The innovative technology of the ACC system delivers warnings and active interventions that help<br />
coach drivers avoid accidents and collisions. The system also includes Bendix ESP full stability to help<br />
drivers mitigate loss of control, particularly on wet or snow- and ice-covered roads, by acting on selected<br />
wheels to stabilize the vehicle. In addition, the Bendix Stationary Object Alerts system provides<br />
audible and visual driver alerts when the vehicle is approaching a stationary metal object such as a car.<br />
Thanks to ACC, the driver can respond to the impending hazard in a timely and appropriate way.<br />
Mercedes and Ford opt for <strong>Knorr</strong>-<strong>Bremse</strong> in South America<br />
In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> secured two substantial orders in Brazil. One of these involves<br />
the company supplying all the air control systems and pedal units for the new medium and heavyduty<br />
trucks built by Ford. The other concerns <strong>Knorr</strong>-<strong>Bremse</strong> Brazil equipping a proportion of the new<br />
buses and medium and heavy-duty trucks built by Mercedes-Benz with brake shoes for their drum<br />
brakes.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is also supplying the EAC2.5 intelligent electronic air control system and the compressors.<br />
The company had already supplied air control systems for the previous platform, but only some<br />
of the various vehicle types within the platform had been equipped with EAC. In the case of the current<br />
SFTP platform, virtually 100% are fitted with EAC systems – half of which are being supplied by<br />
<strong>Knorr</strong>-<strong>Bremse</strong>. In the case of the disc brakes for the new vehicles, <strong>Knorr</strong>-<strong>Bremse</strong> has complete responsibility,<br />
with the latest generation of SM and SL disc brakes being fitted to the front and rear axles.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Hasse & Wrede is also supplying visco-dampers for the entire range of engines.<br />
8 7
8 8 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Asia/Australia<br />
Volume production starts at Chinese OEMs<br />
Following on from initial shipments of air dryers from <strong>Knorr</strong>-<strong>Bremse</strong> India in 2010, relations with the<br />
Chinese truck manufacturer Foton continued to expand in the year under review. In June, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> began deliveries of power clutches for the current H3 generation of Foton vehicles. The clutch<br />
units are produced locally in China at the <strong>Knorr</strong>-<strong>Bremse</strong> Dalian plant. The next-generation H4 trucks<br />
are also to feature equipment from <strong>Knorr</strong>-<strong>Bremse</strong>. Back in 2010 an agreement was signed with Foton<br />
governing the development and supply of pedal units, power clutches and handbrake valves for the<br />
new H4 generation of heavy-duty trucks.<br />
Starting with the H4 platform, local assembly operations were joined by the increasingly localized<br />
procurement of numerous components. In this way, <strong>Knorr</strong>-<strong>Bremse</strong> has laid the foundation for the industrialization<br />
of additional product variants in China, which will enable the company to cover an<br />
even wider market for high-quality components.<br />
In addition, <strong>Knorr</strong>-<strong>Bremse</strong> also managed to step up its disc brake business in China. The company<br />
further strengthened its position with Yutong, the world‘s largest bus builder, where disc brakes are<br />
becoming more prominent in both buses and coaches. On top of this, <strong>Knorr</strong>-<strong>Bremse</strong> was able to engage<br />
in new disc brake projects for trucks with OEMs Foton and Shaanxi. To be ideally prepared for the<br />
breakthrough of the disc brake in the Chinese truck market, <strong>Knorr</strong>-<strong>Bremse</strong> also localized the entire assembly<br />
operation in Dalian in line with its own high production standards.
R e p o R t<br />
Important new orders from India<br />
In the year under review, a number of new production projects enabled <strong>Knorr</strong>-<strong>Bremse</strong> India to reinforce<br />
its position on the subcontinent. Among other projects, the company obtained a substantial<br />
order from Ashok Leyland for pedal units for the new generation of truck cabs that the Indian OEM will<br />
be manufacturing from 2012 onwards.<br />
The company also began volume production of exhaust brakes for truck builder Mahindra Navistar for<br />
their Type MN25, MN31 and MN40 heavy-duty trucks. For the MN40 models <strong>Knorr</strong>-<strong>Bremse</strong> is also supplying<br />
the entire braking system including anti-lock braking system (ABS). In <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> also<br />
received orders from numerous other OEMs, including one from Tata Cummins for air compressors<br />
and another from Ashok Leyland for drum brakes.<br />
Electronic braking systems for New Zealand<br />
British bus manufacturer Alexander Dennis Limited (ADL) won the order to supply 120 vehicles to bus<br />
operator NZ Bus in Auckland, New Zealand, one of the country’s leading passenger transport companies<br />
with a fleet of more than 1,000 vehicles. <strong>Knorr</strong>-<strong>Bremse</strong> is also benefiting from this order as the chosen<br />
electronic braking system (EBS) supplier. The NZ Bus project is of particular strategic significance for <strong>Knorr</strong>-<br />
<strong>Bremse</strong>, not only on account of its volume but also because one of the company’s main competitors is the<br />
incumbent electronics partner to ADL. This demonstrates the strong position that <strong>Knorr</strong>-<strong>Bremse</strong> has developed<br />
with ADL over the last few years. The order from the UK also documents the level of trust that ADL<br />
is investing in <strong>Knorr</strong>-<strong>Bremse</strong> as the supplier for the very first EBS-equipped models the manufacturer has<br />
ever supplied. The first of the new vehicles – all ADL’s single-deck Enviro 200 midi buses – were delivered<br />
in time for the Rugby World Cup hosted by New Zealand in the summer of <strong>2011</strong>, with the remainder to<br />
follow over the subsequent twelve months.<br />
Prizes and awards<br />
“Best Brand” – for the sixth year running<br />
The “Best Brand” award is regarded as a reliable indicator of quality and recognizes the reliability and<br />
safety of the products concerned. It is also an important indicator of the general acceptance of a brand<br />
and its image. In <strong>2011</strong>, readers of the trade journals trans aktuell, lastauto omnibus and FERNFAHRER<br />
were once again invited by publishers ETM and DEKRA, the vehicle inspection experts, to vote for the<br />
best vehicles and brands in the industry. More than 8,000 readers took part in the process, and <strong>Knorr</strong>-<br />
<strong>Bremse</strong> Commercial Vehicles Systems was again declared “Best Brand” in the “Brakes” category.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> was particularly pleased to receive this award as it comes from industry experts with a<br />
thorough knowledge of the business who deal with the vehicles, products and services on a daily<br />
basis. The fact that <strong>Knorr</strong>-<strong>Bremse</strong> has been designated “Best Brand” for six years running is a matter of<br />
considerable pride to the company. At the same time it is an incentive to continue to use the expertise<br />
and experience of its workforce to create even more innovative and competitive products and services<br />
that set the market standard and make an important contribution to road safety.<br />
8 9
9 0 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
<strong>Knorr</strong>-<strong>Bremse</strong> wins VDA Logistics Award<br />
The VDA Logistics Award is a widely-recognized accolade with which the German Association of the<br />
Automotive Industry (VDA) has honored forward-looking logistics concepts in the automotive supply<br />
chain since 2008. In the year in question this prestigious award went to <strong>Knorr</strong>-<strong>Bremse</strong> Commercial<br />
Vehicle Systems.<br />
The VDA sees the role of the award as being to draw attention to the importance of logistical processes.<br />
The assessment criteria for deciding on the winner include the visionary quality and innovativeness<br />
of their ideas as well as their economic usefulness. The jury congratulated <strong>Knorr</strong>-<strong>Bremse</strong> Commercial<br />
Vehicle Systems on its optimization of logistics processes along the entire value chain and the<br />
permanent impact this approach has had on the roles and duties of all concerned.<br />
As part of the Supply Chain Excellence initiative <strong>Knorr</strong>-<strong>Bremse</strong> succeeded in achieving an unprecedented<br />
degree of process-orientation through cross-location and cross-company supply chain management.<br />
By implementing a large number of innovative, high-quality projects to optimize flows of<br />
materials and information, the company has achieved considerable success. For example, inventories<br />
were reduced by more than 25% and schedule effectiveness was also significantly improved. By optimizing<br />
the transport network the company was also able to reduce carbon dioxide emissions by 16%.<br />
Bendix wins Frost & Sullivan Award<br />
In June <strong>2011</strong>, internationally renowned management consultants Frost & Sullivan presented their<br />
“North American Product Leadership of the Year Award” to <strong>Knorr</strong>-<strong>Bremse</strong>’s U.S. subsidiary Bendix Commercial<br />
Vehicle Systems. With this award, Frost & Sullivan recognize companies demonstrating outstanding<br />
achievement and superior performance in areas such as leadership, technological innovation,<br />
customer service and strategic product development.<br />
Bendix Commercial Vehicle Systems was singled out for its outstanding contribution to safety technologies<br />
in the North American commercial vehicle market and won the award for its Wingman Advanced<br />
technology, an innovative collision warning system with emergency brake assist. Wingman<br />
Advanced is a further development of Bendix Wingman Active Cruise with Braking (ACB) and combines<br />
adaptive cruise control with braking and collision mitigation technology. According to Frost & Sullivan,<br />
Bendix with Wingman Advanced takes the integrated safety systems market to the next level by combining<br />
three critical active safety technologies – electronic stability control, adaptive cruise control with<br />
braking, and forward collision mitigation braking and warning – into a single unit.<br />
István Lepsényi receives “Manager of the Year 2010” award<br />
The Managing Director of <strong>Knorr</strong>-<strong>Bremse</strong> Hungary, István Lepsényi, was named Manager of the Year<br />
2010 by the Hungarian National Association of Managers, Menedzserek Országos Szövetsége. At the<br />
presentation ceremony in January <strong>2011</strong>, the Association praised the company’s sustained success in<br />
Hungary, Mr. Lepsényi’s management skills, his effective market strategy, and his outstanding contribution<br />
to the health of the Hungarian economy and of the automotive industry in particular.<br />
Particular tribute was paid to the important part Mr. Lepsényi played in the economic development of<br />
the Hungarian region in which <strong>Knorr</strong>-<strong>Bremse</strong>’s operations are located. The Association also singled out<br />
his intensive cultivation and expansion of university links for special mention, as well as the successful<br />
implementation of corporate social responsibility programs at <strong>Knorr</strong>-<strong>Bremse</strong> Hungary.
R e p o R t<br />
<strong>Knorr</strong>-<strong>Bremse</strong> KAMA voted “Best Company of the Year <strong>2011</strong>” and wins quality award<br />
<strong>Knorr</strong>-<strong>Bremse</strong> KAMA, the joint venture between <strong>Knorr</strong>-<strong>Bremse</strong> and KAMAZ, the Russian market leader<br />
for commercial vehicles, received several honors in <strong>2011</strong>. It was voted “Best Company of the Year <strong>2011</strong>”<br />
in a competition set up by the president of the Russian Federation, Dmitry Medvedev, with a view to<br />
recognizing efforts to modernize the Russian economy.<br />
The managing director of <strong>Knorr</strong>-<strong>Bremse</strong> KAMA, Manfred Kindermann, was also presented with the<br />
Quality Prize of the regional government of the Republic of Tatarstan by Farid Mukhametshin, Chairman<br />
of the State Council of the Republic of Tatarstan. The prize is awarded annually by the Prime<br />
Minister of the Republic.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> KAMA voted “Well-doer of the Year”<br />
Since 2009 the charitable organization <strong>Knorr</strong>-<strong>Bremse</strong> Global Care e. V. and <strong>Knorr</strong>-<strong>Bremse</strong> KAMA have<br />
been supporting a local project in an old people’s home in the vicinity of the <strong>Knorr</strong>-<strong>Bremse</strong> site in Naberezhnye<br />
Chelny. In <strong>2011</strong> the <strong>Knorr</strong>-<strong>Bremse</strong> KAMA joint venture was once again voted “Well-doer of<br />
the Year” by the Republic of Tatarstan.<br />
With the help of <strong>Knorr</strong>-<strong>Bremse</strong>, several parts of the home have been renovated. In Russia, older people<br />
are usually cared for by the daughters of their family, but in cases where women are single parents or<br />
have to go to work it is difficult for them to do so. When old people’s homes are looking for help, they<br />
often find it difficult to compete with institutions for children or adolescents.<br />
The home being supported by <strong>Knorr</strong>-<strong>Bremse</strong> houses a total of 60 people, of whom 40 have a disability.<br />
They are now accommodated in two completely renovated blocks with rooms that have been adapted<br />
to cope with disabled patients. For the first time the home has also been equipped with multi-functional<br />
beds, which are more comfortable for the patients and facilitate the work of the staff. But the role of<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is not limited to financial support – <strong>Knorr</strong>-<strong>Bremse</strong> KAMA employees also regularly visit the<br />
home and spend time with the old people.<br />
9 1
Products<br />
Products from <strong>Knorr</strong>-<strong>Bremse</strong> have a reputation for reliability, safety, performance and effi-<br />
R e p o R t<br />
ciency. They are also precisely tailored to the specific requirements of international custom-<br />
ers. During the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> developed a special rear axle ABS module<br />
for the BRIC states and launched volume production of an ABS system for agricultural vehicles.<br />
In the aftermarket, the company launched its original remanufacturing service for the<br />
EBS2 braking system and the EAC1 electronic air control system.<br />
Growing demand for air dryers with OSC cartridges<br />
Air dryers for commercial vehicle braking systems fulfill an important function – they dry the compressed<br />
air supplied by the compressor and in so doing help to prevent corrosion of the braking system.<br />
Modern oil separating cartridges (OSCs) not only remove humidity from the air but also filter more<br />
than 95% of the aerosols and residues of the oil needed to ensure the smooth running of many compressors.<br />
This additional cleaning function plays a particularly important role in prolonging the life of<br />
modern ESP and ABS systems, as certain aerosols attack the rubber seals commonly used in these systems.<br />
In the year under review the trend to move from conventional filter cartridges to modern OSCs continued<br />
at <strong>Knorr</strong>-<strong>Bremse</strong>, with OSCs accounting for around a third of all filter cartridge production – an increase<br />
of some 26% compared with the previous year.<br />
9 3
9 4 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Jochen Hahn<br />
wins championship<br />
Jochen Hahn is the new Truck Race European Champion. At the final held at Le<br />
Mans on October 9, <strong>2011</strong> he achieved a superb victory – with a little help from<br />
<strong>Knorr</strong>-<strong>Bremse</strong>.<br />
By crossing the line in second place at the end of<br />
an exciting final race at France’s legendary Le<br />
Mans racetrack on October 9, <strong>2011</strong>, Jochen Hahn<br />
ensured that nobody could prevent him from<br />
securing the overall title of FIA European Truck<br />
Racing Champion <strong>2011</strong> for himself.<br />
His victory was celebrated by his entire team<br />
and countless fans as well as by <strong>Knorr</strong>-<strong>Bremse</strong>,<br />
which was delighted to have contributed to his<br />
success. The company has been pleased to support<br />
Jochen Hahn and his team continuously<br />
since 2001 and since 2003 has been an official<br />
sponsor.
Perfectly tuned<br />
23 men and one woman took part in the race<br />
this season. The event is a huge challenge for the<br />
drivers, as it takes considerable skill to steer a<br />
truck round a race track rather than an ordinary<br />
road. The equipment has to be right as well – the<br />
tires, engines and brakes must all be perfectly<br />
tuned. The latter in particular are crucial for ensuring<br />
that the drivers can brake with complete<br />
accuracy, circuit after circuit. According to<br />
Jochen Hahn, having the right brakes accounts<br />
for at least a third of the overall truck performance.<br />
The race is always led by drivers who are<br />
able to brake at the very last minute before the<br />
bends – and that calls for top-quality materials.<br />
In Jochen Hahn’s case the high-performance<br />
brakes come from <strong>Knorr</strong>-<strong>Bremse</strong>. The company<br />
uses the opportunity offered by the truck race to<br />
see how individual components react under extreme<br />
conditions and applies any insights thus<br />
gained to its volume production of braking systems.<br />
The FIA regulations for the European Truck<br />
Race championship require all the trucks’ components<br />
to be taken from normal series production,<br />
so the braking systems tested by <strong>Knorr</strong>-<br />
<strong>Bremse</strong> in conjunction with the Hahn Racing<br />
Team are not prototypes, as often happens in<br />
Formula One racing, for example.<br />
R e p o R t 9 5<br />
<strong>Knorr</strong>-<strong>Bremse</strong> organizes “Go & Stop”<br />
competition at Nürburgring<br />
At the race organized at the historic Nürburgring<br />
in early July the <strong>Knorr</strong>-<strong>Bremse</strong> logo was not just<br />
confined to the truck it was sponsoring. This is an<br />
event that attracts not only the truck racing elite<br />
of Europe, but also a veritable Who’s Who of<br />
manufacturers and suppliers, many of whom set<br />
up exhibition stands to showcase their products.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> had a double role, as a longstanding<br />
partner to Jochen Hahn’s racing team, and as<br />
the organizer of the “Go & Stop” competition – an<br />
event that never fails to draw the crowds. The Go<br />
& Stop competition is not just about maximum<br />
speeds but also driver skills: competitors need to<br />
cover the 400 meter-long straight as quickly as<br />
possible, but they cannot simply sweep past the<br />
grandstand and zoom across the finishing line.<br />
Instead, they have to stop precisely on a predetermined<br />
point. It is a tricky challenge that makes<br />
for a lot of fun for both drivers and spectators.<br />
Klaus Deller, Member of the Executive Board of<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG responsible for the Commercial<br />
Vehicle Systems division, presented the cup<br />
to the <strong>2011</strong> winner.
9 6 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Fuel savings achieved by PBS even higher than expected<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s Pneumatic Booster System (PBS), for which a global patent has been applied for, solves<br />
the problem of so-called turbo-lag in diesel-engined commercial vehicles, ensuring improved performance<br />
and reduced fuel consumption. At the end of November <strong>2011</strong>, the specialist journal lastauto<br />
omnibus measured the actual fuel savings in a series of independent tests carried out on a 27-kilometer<br />
circuit using an almost fully loaded 430 hp semitrailer roadtrain. The results were impressive: up to<br />
6.9% fuel savings – considerably more than <strong>Knorr</strong>-<strong>Bremse</strong>’s initial conservative estimate of between<br />
2% and 5%.<br />
A large turbodiesel can take several seconds to build up to maximum torque, so PBS blows compressed<br />
air from the braking system into the engine’s inlet manifold to briefly boost engine performance,<br />
thereby bridging the gap caused by turbo-lag at start-off, during overtaking or on gradients.<br />
PBS makes the engine respond much more rapidly, enabling the driver to change into a higher gear<br />
earlier on, reducing average engine revs and leading to a significant cut in fuel consumption.<br />
A vehicle equipped with PBS accelerates as though it had an engine with between 20% and 30% less<br />
cubic capacity. In other words, a smaller engine, provided it is equipped with PBS, can replace a larger<br />
one. For local delivery journeys or passenger transportation the reduced space requirements for the<br />
engine are advantageous – but PBS is also enormously useful in countries where commercial vehicles<br />
are traditionally equipped with smaller engines. The Pneumatic Booster System is due to go into volume<br />
production in 2012.<br />
New functions integrated into TEBS<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s TEBS electronic trailer braking system is now available in a second generation. TEBS<br />
combines almost all the braking functions for a vehicle and trailer into a single, compact mechatronic<br />
module. In addition to basic brake control, today’s market is increasingly looking for intelligent monitoring<br />
and control systems to improve the operational efficiency of vehicles. <strong>Knorr</strong>-<strong>Bremse</strong>’s response has<br />
been to create a clear added-value for vehicle operators by further developing functions that analyze<br />
and make intelligent use of the information available from the trailer. The focus is not just on developing<br />
new, safety-relevant functions but also ones that solve some of the problems faced by freight companies<br />
on a daily basis.<br />
During the year in question, two of these functions were developed under the names of iCargo and<br />
iCorner. The iCargo function kicks in when uneven loading means that either the drive axle of the tractor<br />
vehicle or the central trailer axle is overloaded. Trailer EBS distributes the load – figuratively speaking<br />
– by using the iCargo function to ensure that the trailer’s individual axles receive a different bellows<br />
pressure. The changed load distribution is also taken into account by the brake pressure control system<br />
so that each axle contributes precisely the right amount to the braking process.<br />
iCorner comes into play when a truck finds itself “in a tight corner.“ Every vehicle has to meet certain<br />
statutory requirements in terms of cornering ability in order to be able to negotiate the roundabouts<br />
that are becoming increasingly common on our road systems. If the vehicle design comes up against<br />
its limitations, the manufacturer can make use of steered axles, but this involves considerable unnecessary<br />
cost. iCorner offers an alternative by making intelligent use of the lift axles or by reducing the effective<br />
wheelbase in combination with iCargo, thus facilitating cornering on roundabouts.
R e p o R t<br />
<strong>Knorr</strong>-<strong>Bremse</strong> improves agricultural vehicle safety<br />
Agricultural tractors are becoming increasingly powerful and are therefore capable of pulling increasingly<br />
heavy trailers at ever higher speeds. As a result the demands made on agricultural trailers are<br />
more and more similar to those made on truck trailers, and safety-relevant products are becoming<br />
increasingly important. <strong>Knorr</strong>-<strong>Bremse</strong> was quick to respond to this trend and in <strong>2011</strong> launched a comprehensive,<br />
innovative braking system for agricultural vehicles based on its tried-and-tested electronic<br />
truck braking system.<br />
At the heart of the new braking system for agricultural trailers over 3.5 tons is the EBS G2.1 electronic<br />
braking system that includes ABS, load-related braking and the RSP roll stability program, which brakes<br />
individual wheels in critical situations, reducing speed and in particular lateral acceleration. During<br />
drastic avoidance maneuvers this can help prevent vehicle rollover caused by the high center of gravity<br />
of agricultural vehicles. TEBS G2.1 can operate on power systems between 8 and 32 volts and can<br />
therefore be used anywhere in the world. A system prototype was installed in a high-performance<br />
JUMBO trailer built by the Upper Austrian agricultural machinery manufacturer Pöttinger and first<br />
presented to the public at the Agritechnica trade fair.<br />
Trailer Roadtrain Module (TRM) for EuroCombis and Roadtrains<br />
Combined with TEBS G2, <strong>Knorr</strong>-<strong>Bremse</strong>’s Trailer Roadtrain Module (TRM) enables very long truck/trailer<br />
or tractor/semi-trailer combinations to be braked rapidly and safely. Now <strong>Knorr</strong>-<strong>Bremse</strong> has developed<br />
a version suited to so-called EuroCombi roadtrains.<br />
A EuroCombi is an extra-long combination of tractor, trailers and/or semitrailers that can be up to<br />
25.25 meters in length – more than the current European limit of 18.75 meters – and can weigh up to<br />
60 t. The EuroCombi is already authorized for use in some parts of Europe, and in Germany initial field<br />
testing is due to be running by 2012. In the USA, Canada and Australia, roadtrains can even reach<br />
lengths of up to 100 m. The idea is that by increasing the load volume and payload, transportation<br />
costs can be minimized and the efficiency of road transport increased.<br />
The length of the roadtrains and the changed payload means that the demands made on the braking<br />
system are also different. In the case of a 60 m transporter with a conventional pneumatic braking<br />
system, for example, this results in 75% of braking power only being available after a delay of 1.6 seconds.<br />
But by conveying the signal electronically, TRM combined with EBS can reduce that delay to less<br />
than a quarter of a second. And TRM can even be used on vehicle combinations in which the tractor<br />
unit does not have an electronic braking system. In this case the traditional pneumatic signal is converted<br />
into an electronic one by pressure sensors and relayed instantly to the TEBS unit via the CAN<br />
bus system.<br />
Remanufacturing of EBS2 and EAC1<br />
Remanufacturing, that is to say the reconditioning of used components, is a key topic across the entire<br />
automobile and commercial vehicle industry. From both economic and ecological angles it is becoming<br />
increasingly important to reduce the consumption of energy and resources. For many years now,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has been investing in the development and testing of solutions that enable the company<br />
to offer remanufactured options in the aftermarket – with a special focus on technically complex<br />
9 7
9 8 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Technological<br />
milestones<br />
30 years of ABS, 10 years of ESP – during the year under review <strong>Knorr</strong>-<strong>Bremse</strong><br />
celebrated two milestones in the history of the commercial vehicle industry in<br />
which the company had played a central role. The history of one of the most<br />
successful systems in the commercial vehicle sector – the ABS anti-lock braking<br />
system – started in 1968. Compared<br />
with the passenger car ABS<br />
systems that existed at the time, the<br />
requirements for an ABS system for<br />
commercial vehicles were much<br />
more demanding.<br />
Developing an ABS system for trucks was considerably<br />
more complicated because of the wide<br />
variety of different vehicle models and types of<br />
braking system involved, the extreme load<br />
changes and the more complex installation environment.<br />
Building on its wide experience with wheel slide<br />
protection systems for rail vehicles, <strong>Knorr</strong>-<br />
<strong>Bremse</strong>, together with MAN, was able to showcase<br />
an ABS system for trucks at the IAA Commercial<br />
Vehicles in 1969.<br />
Joint success<br />
From the 1970s onwards, <strong>Knorr</strong>-<strong>Bremse</strong> worked<br />
together with Bosch on commercial vehicle ABS<br />
development. The two companies pooled their<br />
expertise, with Bosch working on the control<br />
unit and <strong>Knorr</strong>-<strong>Bremse</strong> developing the 2-chan-
nel pressure modulator valve. But it was still<br />
many years before a concept finally emerged – a<br />
simplified 4-channel system with an innovative<br />
2-channel axle valve module – that met the ambitious<br />
targets in terms of vehicle stability, steerability<br />
and stopping distance, as well as offering<br />
value for money. Volume production by the two<br />
companies started in 1981, and a year later this<br />
electronic safety device was already making rapid<br />
advances in the European market.<br />
From 1985 onwards, <strong>Knorr</strong>-<strong>Bremse</strong> worked on its<br />
own, developing a new, microprocessor-based<br />
control unit that was not only more cost-efficient<br />
but could also be more easily modified to<br />
meet new market requirements. The fact that<br />
ABS has been fitted on virtually all European<br />
commercial vehicles since the early 1990s is not<br />
just down to common sense on the part of vehicle<br />
manufacturers and their customers. Since<br />
1991 there has also been a legal requirement for<br />
new trucks over 3.5 tons, all buses seating more<br />
than eight people, and trailers to be fitted with<br />
this system. In the late 1990s, <strong>Knorr</strong>-<strong>Bremse</strong><br />
Commercial Vehicle Systems took over the Bosch<br />
and Bendix activities in the field of air-braked<br />
commercial vehicles, which allowed the various<br />
different ABS solutions to be united into a single<br />
global product family.<br />
The addition of many new functions, combined<br />
with ongoing further development of the system<br />
and – last but not least – close consultation<br />
with customers, has enabled <strong>Knorr</strong>-<strong>Bremse</strong> to<br />
become one of the world’s leading suppliers of<br />
commercial vehicle ABS systems. In technical<br />
terms, though, this is no coincidence: ABS is a<br />
R e p o R t 9 9<br />
product that brings together all the company’s<br />
main areas of expertise: brake control, air pressure<br />
regulation and wheel brakes.<br />
ABS experience as the<br />
basis for developing ESP<br />
In 1996, parallel to <strong>Knorr</strong>-<strong>Bremse</strong>’s ongoing development<br />
of ABS, the company also embarked on<br />
another major project in the field of electronic<br />
safety systems for commercial vehicles – the electronic<br />
stability program ESP. The challenges were<br />
similar to those the company had faced with ABS<br />
– ESP for commercial vehicles is also much more<br />
complex than for passenger cars. But because the<br />
approach was similar to that used for ABS, it took a<br />
mere five years before ESP for commercial vehicles<br />
was ready for volume production.<br />
Initially the system was only used for 4x2 semitrailers,<br />
but over the years <strong>Knorr</strong>-<strong>Bremse</strong> achieved a<br />
further breakthrough with the development of an<br />
ESP system for 8x4 trucks and combinations with<br />
pony trailers – a difficult challenge because of the<br />
even more complex acceleration forces involved.<br />
To this day <strong>Knorr</strong>-<strong>Bremse</strong> remains the only supplier<br />
for this category of truck.<br />
Looking well beyond Europe<br />
Throughout this period <strong>Knorr</strong>-<strong>Bremse</strong> had more<br />
than just Europe in mind. Nowadays the company’s<br />
North American subsidiary Bendix sells<br />
many more EPS systems – adapted to local requirements<br />
– than are sold in Europe. And <strong>Knorr</strong>-<br />
<strong>Bremse</strong> ESP systems can be found all over the<br />
world.
1 0 0 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
products and modules – thus keeping service costs down for the customer. In the year under review,<br />
the <strong>Knorr</strong>-<strong>Bremse</strong> plant in Aldersbach began remanufacturing of the electro-pneumatic modules for<br />
the EBS2 electronic braking system and the EAC1 electronic air control unit.<br />
Original parts returned from the field are disassembled, cleaned, inspected and processed at <strong>Knorr</strong>-<br />
<strong>Bremse</strong>’s UK subsidiary in Bristol. The re-usable parts are then shipped to Aldersbach for use in volume<br />
production of remanufactured products. <strong>Knorr</strong>-<strong>Bremse</strong> uses the same assembly equipment for the<br />
remanufactured products as for original equipment, so that the modules undergo the same end-ofline<br />
quality and safety tests as original parts. The overriding principle is that remanufactured products<br />
must always comply with the same standards in terms of functionality and quality as the comparable<br />
OEM parts.<br />
As products become increasingly complex, <strong>Knorr</strong>-<strong>Bremse</strong> endeavors to offer its customers service options<br />
that meet their requirements and guarantee complete functionality of the parts concerned.<br />
Bendix launches new spring brake<br />
In the year under review, Bendix Spicer Foundation Brake – a joint venture between <strong>Knorr</strong>-<strong>Bremse</strong>’s<br />
North American subsidiary Bendix Commercial Vehicle Systems and the manufacturer of truck components<br />
Dana Commercial Vehicle products LLC – launched the Bendix EverSure, a new double-diaphragm<br />
spring brake for drum brakes that sets new standards. The Bendix EverSure is significantly<br />
lighter and therefore offers better fuel efficiency. It is also considerably more robust and requires less<br />
maintenance while at the same offering enhanced performance.<br />
Trucks and trailers fitted with the lighter Bendix EverSure spring brake can carry an increased payload.<br />
At the same time the lightweight design helps compensate for the increased weight of commercial<br />
vehicle engines as a result of the requirement to comply with stricter emissions regulations. Another<br />
positive effect of the lighter weight is the brake’s greatly superior vibration resistance. The very low vibration<br />
levels help prolong the life of the spring brake and its supporting components substantially.<br />
Another key advancement in the Bendix EverSure spring brake is the elimination of contact between<br />
the power spring coils. This “no-touch technology” means that the protective coating remains intact,<br />
enabling the Bendix EverSure to offer far better corrosion resistance than competitive products. The<br />
spring brake also sets new standards of performance: the new diaphragm design means the Bendix<br />
EverSure delivers higher braking power during both normal and prolonged braking.<br />
750,000th compressor from Bendix<br />
<strong>Knorr</strong>-<strong>Bremse</strong> subsidiary Bendix Commercial Vehicle Systems, the top supplier of compressors in North<br />
America, celebrated another production milestone at the start of <strong>2011</strong> when the company’s Acuña<br />
plant in Mexico manufactured the 750,000th Bendix BA-921 air compressor – less than ten years after<br />
production of the compressor first began in 2002. Fleet operators and freight companies value the<br />
BA-921 on account of its robust design and high performance as a compressor for pneumatic braking<br />
systems.<br />
The single-cylinder air compressor was originally designed to reduce weight and oil consumption despite<br />
the higher system pressure. The BA-921 model also features a long service life and low mainte-
R e p o R t<br />
nance costs. It ensures better air quality and a high delivery rate to the vehicle tanks with minimum fuel<br />
consumption. The compressor has a boost capability up to 3 bar for turbo compressors and generates<br />
torque of up to 170 Nm, for example for an auxiliary power-steering pump.<br />
New Wingman Advanced active safety system launched<br />
In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong>’s North American subsidiary Bendix Commercial Vehicle Systems<br />
launched the new Bendix Wingman Advanced system, an innovative active safety system that<br />
combines adaptive cruise control with new collision mitigation technology.<br />
Using a radar sensor mounted to the front of the vehicle, Wingman Advanced constantly measures the<br />
distance to the forward vehicle. The radar sensor can also detect stationary objects in the vehicle’s lane<br />
of travel. If the distance to the forward vehicle or stationary object closes too fast, the system first provides<br />
audible and visual alerts to the driver. If the driver fails to respond adequately and the distance<br />
continues to close, Wingman Advanced acts to initiate emergency braking. Wingman Advanced remains<br />
available even when – in inclement weather or heavy traffic – the driver deactivates the adaptive<br />
cruise control function that helps maintain a safe following distance.<br />
The Wingman Advanced collision mitigation feature delivers about two-thirds of the available braking<br />
power of the vehicle to minimize the risk of a rear-end collision or reduce its severity. This compares<br />
with about one-third of the available braking power delivered through Bendix Adaptive Cruise Control<br />
with Braking. Wingman Advanced uses the Bendix electronic stability program not only to prevent<br />
rear-end collisions but also to mitigate loss of control and roll-over. Numerous major truck manufacturers<br />
in North America have shown an interest in the system. As a result, in the year under review,<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s U.S. subsidiary was already engaged in discussions with OEMs regarding the possible<br />
launch of volume production of the new active safety system.<br />
Lift axle system for India developed<br />
Towards the end of the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> India successfully completed preparations for<br />
volume production of the second generation of a pneumatic lift axle system for the Indian market.<br />
Start of production for a variety of OEMs is scheduled for the first quarter of 2012.<br />
Lift axles are additional axles that are usually lifted but can be lowered to distribute the weight of a<br />
heavy payload more evenly across the axles. This not only helps reduce tire wear but also serves to<br />
provide better grip, which is important for the optimal performance of the braking system.<br />
With the second generation of the pneumatic lift axle system, <strong>Knorr</strong>-<strong>Bremse</strong> was able to further reduce<br />
the number of parts and the overall system costs. In addition, the company has also developed<br />
an anti-tire-theft system. The new lift axle system is also backward-compatible with existing applications,<br />
as well as with systems from other manufacturers.<br />
Anti-Roll-Back System for conventional trucks<br />
High-end commercial vehicles never encounter the problem of rolling back as they move off uphill.<br />
Their electronic braking systems have a functionality that ensures they can pull away from a standstill<br />
on even steep gradients with no risk of rolling back. In more conventional trucks, such as those fre-<br />
1 0 1
1 0 2 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
quently encountered on Indian roads, moving off uphill is often a risky business, particularly with a<br />
full payload. If the driver is too slow on the gas as he lets in the clutch, he risks rolling back into the<br />
vehicle behind. Now <strong>Knorr</strong>-<strong>Bremse</strong> India has developed an Anti-Roll-Back System (ARB) that effectively<br />
minimizes this risk.<br />
At the heart of the Anti-Roll-Back System is a mechatronic valve module. If the driver is intending to<br />
move off uphill, he activates the ARB system with a manual switch. When he then releases the brakes,<br />
the front brakes are released as usual, but thanks to the ARB system the rear brakes are only released<br />
with a delay of around three seconds. That gives the driver plenty of time to drive off normally uphill,<br />
without rolling back.<br />
ABS rear axle module developed for BRIC states<br />
ABS anti-lock braking systems for the BRIC states have to meet special requirements. As well as being<br />
extremely robust, they have to be cost-effective in design and cover the entire spectrum from simple<br />
ABS systems to complex EBS electronic systems. This was the brief for <strong>Knorr</strong>-<strong>Bremse</strong>’s development of<br />
the Compact Rear Axle Module (CRAM ), which completed beta-testing during the year in question. The<br />
first modules are due for delivery to two customers for field testing in 2012.<br />
The module combines all the components into a single, compact system that can be manufactured<br />
with a high local added value and installed at relatively low cost by manufacturers, as there is no need<br />
for individual systems to be linked up to the vehicle.<br />
New 20-inch disc brake for China<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has been successfully marketing its 22.5-inch brake disc for Chinese commercial vehicles<br />
for some years. But as 20-inch wheels with tube-type tires are still commonly used in China, particularly<br />
for off-road vehicles, <strong>Knorr</strong>-<strong>Bremse</strong> also developed a new 20-inch disc brake specially designed for Chinese<br />
conditions during <strong>2011</strong>. At the same time, the company started negotiating with potential Chinese<br />
suppliers to ensure local content and also began the process of transferring an entire disc brake<br />
production line from Aldersbach (Germany) to Dalian (China) in a bid to ensure uniform high quality<br />
standards worldwide.<br />
One of the main drivers of demand for disc brakes in China is the need to improve braking performance,<br />
particularly on urban roads. Rapid infrastructure expansion has meant that trucks and buses are operating<br />
at increasing speeds, and there is a need for ways to improve road safety. One of the main advantages<br />
of the disc brake is that the braking force can be applied very precisely, which improves bus<br />
safety and comfort – factors that are of increasing importance for fleet operators. In any case the law<br />
now requires buses over 12 m in length to be fitted with ABS and disc brakes on their front axles.
R e p o R t<br />
1 0 3
Aftermarket<br />
R e p o R t<br />
Customized, value-for-money solutions, superbly trained personnel and a strong regional<br />
presence are the basic elements of <strong>Knorr</strong>-<strong>Bremse</strong>’s comprehensive service offer to dealerships,<br />
workshops and fleet operators. During the year under review the company further<br />
improved the excellent aftermarket service, for which it has gained an enviable reputation.<br />
Active Service<br />
Everything at <strong>Knorr</strong>-<strong>Bremse</strong> – from the development of its products to their installation, operation and<br />
maintenance – is designed to offer top quality and service throughout their lifecycle. The company<br />
has brought together its entire range of services for dealerships, repair shops, fleet managers and drivers<br />
under the title of “Active Service,” with the aim of enabling them to achieve maximum efficiency<br />
and economy in all aspects of their operational and business processes. The service portfolio is based<br />
on the criteria of safety, quality and economy.<br />
Active service offers a concept tailored to each particular application and designed for the increasing<br />
complexity of commercial vehicle systems. The efficiency of the servicing carried out by repair shops<br />
is ensured by the use of OEM-quality products, the provision of technical training to enhance practical<br />
skills and the availability of telephone and on-line support. Despite the increasing variety of products<br />
involved, standardization reduces inventory costs and capital tie-up and ensures product availability<br />
in the case of servicing.<br />
Service manuals and a wide range of other technical information can be rapidly consulted on the Internet,<br />
and the availability of other web-based services such as product catalogues with full technical<br />
details means all the required servicing information can be easily found.<br />
1 0 5
1 0 6 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Linking of product searches, web shop, legacy parts and warranty information via SAP makes for easy<br />
access right across the board. European warranty information is also directly relayed to <strong>Knorr</strong>-<strong>Bremse</strong>’s<br />
QSYS quality system.<br />
Training capacity significantly expanded<br />
In response to rising demand for technical training, <strong>Knorr</strong>-<strong>Bremse</strong> significantly expanded its training<br />
capacity and range of courses in <strong>2011</strong>, especially in the field of EBS electronic braking systems. A total<br />
of 1,500 people received training during the course of the year.<br />
The main beneficiaries are repair shops and dealerships, for whom the courses offer an opportunity to<br />
acquire important practical skills for servicing safety-critical systems. Building on basic theoretical<br />
knowledge, the courses use functional models to explain how the braking system works and interacts<br />
with the entire vehicle. Such realistic, practical training improves the efficiency and quality of service<br />
offered by repair shops.<br />
Further development in e-services<br />
Web shop, training portal, warranty processing and reporting, legacy parts management or downloads<br />
of software updates are just some of the many services on offer from the e-services department at<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Commercial Vehicle Systems. Over the years, the range of content and functions has<br />
steadily increased – in line with the need to respond rapidly to the precise requirements of the customer.<br />
In <strong>2011</strong> a comprehensive strategy was drawn up for further developing the existing e-services. It includes<br />
targeting the portals at the various groups, improving the systems’ user-friendliness and establishing<br />
a uniform graphical design. One vital element – albeit invisible to the on-line user – is a system<br />
architecture that enables future functions to be simply and rapidly integrated.<br />
Modified European warehousing system improves parts availability<br />
Reliable delivery performance and constant availability are the basis for any successful business. In the<br />
aftermarket service sector the availability of spare parts is particularly crucial. In the year under review<br />
<strong>Knorr</strong>-<strong>Bremse</strong> therefore focused on the structure of its European warehousing. The existing distribution<br />
warehouses in Sweden and the Czech Republic were merged with the Berlin one, and – in close consultation<br />
with customers – a new materials disposition system was introduced for the German, Austrian<br />
and Swiss aftermarkets. This has brought lasting improvement to the availability of spare parts for servicing<br />
operations.<br />
Integration of the Swedish and Czech warehousing locations with the one in Berlin, which supports not<br />
only the aftermarket but also trailer sales, SOEMs (Special Original Equipment Manufacturers) and exports,<br />
means that customers can benefit from the existing wide range of products and also enjoy an<br />
excellent delivery performance. The distribution warehouse in Berlin coped smoothly with the increased<br />
throughput volumes and turnover of articles.<br />
The basic idea of the new warehousing and distribution strategy is a carefully balanced division of labor<br />
and responsibilities between <strong>Knorr</strong>-<strong>Bremse</strong> and its partners. A highly transparent ordering system in
R e p o R t<br />
terms of logistical throughout and replacement times increases efficiency for both parties, enhances<br />
parts availability across the entire portfolio and ensures reliable delivery performance.<br />
EAC diagnostics included in NEO platform<br />
NEO System Diagnostics is an electronic diagnostic platform developed by <strong>Knorr</strong>-<strong>Bremse</strong> for commercial<br />
vehicles that provides rapid, comprehensive, professional support for servicing of electronic vehicle systems.<br />
NEO either communicates directly with the vehicle’s electronic control module or via a diagnostic<br />
interface. It covers a wide range of functions from error code diagnostics down to complete system analysis,<br />
enabling even complex faults to be rapidly identified and localized. Using state-of-the-art hardware<br />
and software, testing procedures are carried out step by step, providing information on faults and how to<br />
rectify them.<br />
Regular software updates ensure that repair shops provide a service that is based on the very latest technology.<br />
During the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> made the testing software for all Electronic Air Control<br />
(EAC1) applications available on the diagnostic platform. This also includes the service functions for<br />
the OSC desiccant cartridges for the EAC electronic air control unit, which have to be regularly replaced<br />
and recalibrated, as well as diagnostics for all applications related to the EBS5.X electronic braking system.<br />
In addition to basic functions, they offer data mirroring, enabling the repair shop to reliably replace the<br />
electronic control unit itself. The software can also be used to carry out calibration of the sensors.<br />
New service concept for the SM and SL generation of disc brakes<br />
During the year under review the company started to introduce a service concept for Type SM and SL<br />
pneumatic disc brakes, following their successful incorporation as original equipment. The service<br />
philosophy for SM-SL brakes is very much on the same lines as the approach taken in the past, which<br />
means the service kits can be used for most application scenarios. These consist of brake pad, tappet<br />
and carrier guide seal kits, caliper units and brake carriers. As the service and maintenance units have<br />
remained the same, no additional training is required in using the kits. There is one important difference<br />
in the case of the SL brake – the format of the brake pads is not compatible with the existing<br />
generation of SB, SN and SK brakes.<br />
The SM and SL brakes are all fitted with the new ProTecS brake pad holders, which offer improved<br />
economy and greater safety thanks to optimum application of the brake pads.<br />
In order to enable the advantages of ProTecS to be applied to braking systems already in service,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has also developed backward-compatible, OEM-quality brake pads with ProTecS for SN-<br />
SB brakes.<br />
EAC2 concept for excellent service<br />
The demands made on truck and bus air supply systems have continued to evolve over time. In addition<br />
to the increasingly compact design of systems, further functions – for example aimed at reducing<br />
fuel consumption – have been incorporated. In response to all these requirements, <strong>Knorr</strong>-<strong>Bremse</strong> developed<br />
the EAC2 electronic air control unit, the first of which were used for the new Daimler Actros<br />
platform during the year under review.<br />
1 0 7
1 0 8 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Even during the development phase of the EAC2, <strong>Knorr</strong>-<strong>Bremse</strong> focused on the entire product lifecycle,<br />
paving the way for creating a product that retains its value. Depending on requirements, the vehicle<br />
owner can opt for the entire mechatronic unit to be replaced or for a repair to be carried out<br />
using <strong>Knorr</strong>-<strong>Bremse</strong> Original Service Kits. This new service concept is now being applied as part of the<br />
market launch of this product and is available to OEMs and independent repair shops alike.<br />
Service collaboration with Scania<br />
Commercial vehicle manufacturers are increasingly extending the range of services offered by their<br />
repair shop networks to cover other products and brands. In response to this trend Scania is determined<br />
to extend the range of services offered by its approved service centers. One potential area<br />
identified by the company is trailers and semi-trailers pulled by Scania trucks. To put this idea of “Vehicle<br />
Related Parts” (VRPs), as Scania calls it – into practice, the company requires additional systemspecific<br />
expertise as well as the necessary parts for all current trailer systems.<br />
During the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> and Scania agreed to work closely together in this field. In<br />
future, the equipping of repair shops and the training of service personnel will be shared between<br />
Scania, <strong>Knorr</strong>-<strong>Bremse</strong>’s Munich headquarters and its European sites. <strong>Knorr</strong>-<strong>Bremse</strong> customers will have<br />
access to Scania network, thus ensuring high uptime. Under a joint implementation plan the repair<br />
shops are already being prepared for these additional service tasks, and their personnel is undergoing<br />
training. The project will enable <strong>Knorr</strong>-<strong>Bremse</strong> to further expand its existing specialist aftermarket support<br />
network in Europe.<br />
Significant increase in Chinese aftermarket sales<br />
The rapid development of the Chinese economy has triggered equally rapid growth in the commercial<br />
vehicle population. In the last five years alone, the number of trucks and buses has increased by<br />
some 37% to around 8 million vehicles. As a result, demand for spare parts for these vehicles is now<br />
also beginning to grow.<br />
In response to this, <strong>Knorr</strong>-<strong>Bremse</strong> launched an extensive program in <strong>2011</strong> aimed at strengthening its<br />
aftermarket service to Chinese fleet operators and persuading them to rely on the company’s triedand-tested<br />
OE spare parts. The program was an immediate success, with sales in the Chinese aftermarket<br />
rising by more than 50% compared with the previous year. As well as the growing vehicle population,<br />
the innovative technologies involved have resulted in new approaches and increased demand<br />
for servicing. Growing numbers of urban bus operators and logistics companies in particular are investing<br />
in <strong>Knorr</strong>-<strong>Bremse</strong> OE spare parts to minimize downtimes and keep their vehicles on the road.<br />
Expansion of Southeast Asian service network<br />
During the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> succeeded in further expanding its aftermarket service<br />
network in Southeast Asia. Developments in the fields of trailer ABS, electronic braking systems, tire<br />
pressure and temperature monitoring systems and original spare parts kits for trailer brakes were particularly<br />
encouraging – helped by the fact that the market remained relatively stable despite the Japanese<br />
tsunami and the flooding in Thailand.
R e p o R t<br />
Nevertheless, widespread sales of non-original parts and product counterfeits remained a challenge,<br />
despite the fact that these are of lower quality, are potentially dangerous and reduce vehicle availability.<br />
Local <strong>Knorr</strong>-<strong>Bremse</strong> staff made great efforts to raise awareness of this issue amongst dealers and<br />
repair shops. Many operators see spare parts as a “necessary evil,” involving expenditure that they are<br />
anxious to keep to a minimum. It is therefore a major task to convince dealers and repair shops of the<br />
advantages of the <strong>Knorr</strong>-<strong>Bremse</strong> systems in their vehicles and to inform them of the risks involved in<br />
using non-refurbished components and non-original parts and in delaying overdue servicing.<br />
1 0 9
Site-specific Projects<br />
R e p o R t<br />
During the year under review a number of site-specific projects enabled <strong>Knorr</strong>-<strong>Bremse</strong><br />
Commercial Vehicle Systems to further strengthen its market position. The division expanded<br />
its plant in Liberec, Czech Republic in order to increase its capacity and flexibility; in China,<br />
Russia and the USA it developed extra production capacity; and in India it started the construction<br />
of a new manufacturing and development center.<br />
Production capacity expanded in Liberec<br />
During <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> expanded its plant in the Czech town of Liberec, increasing capacity for<br />
manufacturing current products and also creating scope for additional ones. During the construction<br />
process back in 2009 an option for further expansion had already been included, and <strong>Knorr</strong>-<strong>Bremse</strong><br />
made use of this in the year under review.<br />
In all an area of 7,500 additional square meters was added to the plant, around a third of which was put<br />
to immediate use. The Czech plant set up new production lines for bayonet filter cartridges and Type<br />
NG4 double-diaphragm brake cylinders and also took over the processing of compressor crank cases<br />
from Aldersbach, with air dryers being transferred from Liberec to Kecskemét.<br />
To generate further synergies, <strong>Knorr</strong>-<strong>Bremse</strong> is also planning to transfer production of further crank<br />
cases from various external suppliers to Liberec, thereby increasing its own value creation. In addition,<br />
further insourcing projects are due to be implemented in the near future. To make full use of the remaining<br />
5,000 m 2 on the new site, <strong>Knorr</strong>-<strong>Bremse</strong> has brought in an external logistics provider whose<br />
services the company can make cost-effective use of. But as its space requirements grow over the<br />
years, <strong>Knorr</strong>-<strong>Bremse</strong> has an option to take over these parts of the site itself at short notice, enabling it<br />
to respond swiftly to any changes in the market.<br />
1 1 1
1 1 2 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
New production lines in Russia<br />
<strong>Knorr</strong>-<strong>Bremse</strong> KAMA, the joint venture set up by <strong>Knorr</strong>-<strong>Bremse</strong> and Russian truck manufacturer KAMAZ,<br />
started manufacturing three new products in Russia in September <strong>2011</strong>: mechanical slack adjusters,<br />
clutch servos and master cylinders.<br />
The three assembly lines were relocated from KAMAZ subsidiary OOO KAMAZ Autotekhnika Zainsk to<br />
the joint venture’s production site in Naberezhnye Chelny, following complete modernization to bring<br />
them up to <strong>Knorr</strong>-<strong>Bremse</strong>’s production and logistics standards. To ensure that the new products were<br />
manufactured by experienced personnel, many of the assembly specialists previously employed on<br />
the lines were re-employed by <strong>Knorr</strong>-<strong>Bremse</strong> KAMA. They also received a thorough introduction to<br />
<strong>Knorr</strong>-<strong>Bremse</strong> standards that has already resulted in improved quality and productivity.<br />
New plant in Acuña, Mexico<br />
In January <strong>2011</strong>, Bendix Commercial Vehicle Systems celebrated the opening of its new manufacturing<br />
facility in Acuña, Mexico, which is already the company’s third plant in Acuña. At the Acuña III site Bendix<br />
manufactures actuator products including spring brakes and service chambers for the commercial vehicle<br />
market.<br />
The former brownfield site on which the new plant was built was first refurbished and upgraded to<br />
meet the company’s rigorous and globally applicable manufacturing and quality standards for facilities<br />
and equipment. In another preparatory measure, lean manufacturing experts reviewed the entire production<br />
process using a Systematic Layout Planning model to ensure maximum efficiency.<br />
By opening the new plant at the end of <strong>2011</strong>, Bendix Commercial Vehicle Systems was able to add 112<br />
jobs to the regional economy. Expanding the existing Acuña operations also enabled the company to<br />
further leverage corporate shared services while maintaining lean and cost-effective manufacturing<br />
processes to allow Bendix to operate competitively in the marketplace.<br />
Bendix acquires systems from Iteris<br />
To reinforce its market position as a leading supplier of effective safety solutions, <strong>Knorr</strong>-<strong>Bremse</strong>’s North<br />
American subsidiary Bendix has acquired the SafetyDirect system and the AutoVue Lane Departure<br />
Warning system from the renowned U.S. supplier of traffic management technologies, Iteris LCC. Within<br />
the <strong>Knorr</strong>-<strong>Bremse</strong> Group the acquisitions round out a suite of leading safety systems that already includes<br />
the ESP electronic stability program, Bendix Wingman Advanced collision mitigation technology,<br />
and SmarTire, a tire pressure monitoring system. The integration of the technologies and associated research,<br />
development, sales and service operations into the electronics business units at Bendix and<br />
<strong>Knorr</strong>-<strong>Bremse</strong> had been largely completed by the end of the year under review.<br />
SafetyDirect is a Web portal that allows fleet owners the opportunity to analyze safety information about<br />
their vehicles that is wirelessly transmitted – in real time – via existing fleet communication systems. The<br />
system can provide an immediate warning to fleet operators if their drivers are braking too hard when<br />
cornering or traveling too fast. This helps fleet managers identify risky driver behavior and provide drivers<br />
with targeted training.
R e p o R t<br />
AutoVue – the market-leading visual Lane Departure Warning (LDW) system in North America – alerts<br />
truck drivers if they inadvertently drift out of lane. The system contains a camera that tracks visible lane<br />
markings and continually detects when the vehicle begins to drift toward an unintended lane change.<br />
When this occurs, AutoVue automatically emits an alarm signal, alerting the driver to make a correction.<br />
Joint venture in China starts production<br />
First set up in early <strong>2011</strong> as a joint venture between <strong>Knorr</strong>-<strong>Bremse</strong> Asia Pacific (Holding) Ltd. and Chinese<br />
manufacturer Chongqing CAFF Automotive Braking & Steering Systems Co. Ltd., <strong>Knorr</strong>-<strong>Bremse</strong> CAFF<br />
Systems for Commercial Vehicles Chongqing Ltd. started production at the end of April <strong>2011</strong>. <strong>Knorr</strong>-<br />
<strong>Bremse</strong> has a 66% share in the new company and its Chinese partner 34%.<br />
Founded in 1952, Chongqing CAFF Automotive Braking & Steering Systems Co. Ltd. was one of the first<br />
manufacturers of automotive components in China. It enjoys an excellent reputation in the country and<br />
has helped shape the Chinese automobile and truck industry over the last few decades.<br />
Based in Chongqing, the joint venture manufactures components in the air supply (e.g. air dryers) and<br />
brake control (e.g. valves) segments as well as transmission and clutch control components for medium-<br />
and heavy-duty trucks. The entire production process – from manufacture of die-cast aluminum parts to<br />
machining, surface treatment and assembly – takes place in Chongqing. The joint venture is also responsible<br />
for sales and marketing. The medium-term plan is to develop the joint venture into one of the leading<br />
suppliers to the truck industry in the People’s Republic of China.<br />
The process of integrating two companies from very different cultural backgrounds is a great challenge<br />
for all concerned, but both joint-venture partners are driving it forward with great energy. In addition to<br />
renovating the buildings and upgrading the plant equipment, <strong>Knorr</strong>-<strong>Bremse</strong> is also focusing on training<br />
the local staff to ensure that the company’s uniform global production and quality standards are adhered<br />
to in China. But a priority at the outset was providing customers with information about this latest development.<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s customer portfolio in China includes well-known vehicle builders such as<br />
Shaanxi Heavy Truck, CNHTC, SIH, North Benz, Dongfeng and in the bus segment Kinglong, Ankai,<br />
Huanghai – as well as the transmission manufacturer Fast.<br />
New production and development center in India<br />
In November <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> began construction of a new production and development center for<br />
commercial vehicle products just a few hundred meters from the existing plant in Pune, India. The new<br />
buildings will not only enable current processes to be optimized but will also increase the level of vertical<br />
production at the plant. Options for additional vertical integration within the product portfolio are also<br />
being examined. The new plant in Pune is taking its lead from the value stream factory that <strong>Knorr</strong>-<strong>Bremse</strong><br />
set up in Liberec in the Czech Republic in 2010. Consequently, all processes at the new Indian plant will<br />
also be geared rigorously to value creation.<br />
At the same time, the new facilities will open up extensive expansion opportunities for the company. All<br />
production modules can be expanded separately with no negative impact on structures at the plant,<br />
making it possible to respond quickly to changes in market needs. The new plant will also permit further<br />
product lines to be added to the portfolio made in India. To date this has been prevented by a lack of<br />
space at the existing plant.<br />
1 1 3
1 1 4 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
Expansion<br />
in Brazil<br />
It is already the largest joint facility for rail and commercial vehicle systems<br />
within the <strong>Knorr</strong>-<strong>Bremse</strong> Group. In response to significant growth in recent<br />
years and the expectation of positive business developments in the medium<br />
term, the <strong>Knorr</strong>-<strong>Bremse</strong> Group is investing in a new facility in South America<br />
that offers considerably greater capacity.<br />
In the rail vehicle sector <strong>Knorr</strong>-<strong>Bremse</strong> will use<br />
the new plant to manufacture brake control systems,<br />
bogie equipment for freight and mainline<br />
passenger trains and also onboard systems. And<br />
in the truck sector <strong>Knorr</strong>-<strong>Bremse</strong> Brazil will produce<br />
the entire <strong>Knorr</strong>-<strong>Bremse</strong> product portfolio<br />
for the local market, including brake control, air<br />
supply and treatment, brake cylinders, disk and<br />
drum brakes and torsional vibration dampers.<br />
The move to the city of Itupeva, some 85 kilometers<br />
from the current site, is necessary because<br />
the latter has reached the limits of its capacity.<br />
The restricted production space available in the<br />
current buildings offers little scope to make additional<br />
products or to improve processes. And<br />
further expansion is no longer permitted because<br />
the surrounding area is increasingly turning<br />
into a residential district.
Capacity significantly expanded<br />
The new site has enabled <strong>Knorr</strong>-<strong>Bremse</strong> to significantly<br />
expand its capacity in production and<br />
equipment refurbishment, surface treatment,<br />
functional and endurance testing and vehicle<br />
testing. The offices and staff facilities have also<br />
been extended and upgraded as part of the rebuild.<br />
As the new site is not far from the old one, many<br />
of the 750-strong workforce will be moving to<br />
Itupeva with <strong>Knorr</strong>-<strong>Bremse</strong>, so the company will<br />
be able to rely on their experience and expertise<br />
to maintain the same high standards of quality<br />
and product reliability as before.<br />
New logistics concept<br />
In addition to an optimal layout and improved<br />
production processes, the main focus in the new<br />
facility has been on installing an in-house surface<br />
treatment plant and introduction of a new<br />
logistics concept based on the <strong>Knorr</strong>-<strong>Bremse</strong><br />
KPS production system. In collaboration with<br />
suppliers these measures should considerably<br />
reduce manufacturing throughput times and<br />
achieve significant cost savings. Care was taken<br />
during the planning process to ensure that the<br />
product development section and all production-related<br />
departments were located directly<br />
inside the new plant.<br />
With its consistent focus on the products, the<br />
new facility features attractive, functional architecture<br />
and was especially designed to have a<br />
reduced energy requirement and a minimal environmental<br />
footprint.<br />
R e p o R t 1 1 5
1 1 6 R e p o R t | C o M M e R C I A L V e H I C L e S Y S t e M S<br />
The <strong>Knorr</strong> <strong>Bremse</strong> Technology Center India (TCI) is to be located directly alongside the new production<br />
plant. At the TCI, <strong>Knorr</strong>-<strong>Bremse</strong>’s Commercial Vehicle Systems and Rail Vehicle Systems divisions will be<br />
bundling their software development activities for products for the Asian market. By 2015 the Center is<br />
expected to employ some 200 people. Pune is a leading IT and software center in India, which means<br />
there is a good local supply of highly qualified software development engineers.<br />
Tried-and-tested production standards worldwide<br />
In <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> drove forward the expansion of its production capacity by establishing local assembly<br />
operations in all the relevant markets. After adaptation to local requirements, two long-serving<br />
disc brake lines in Aldersbach were transferred to Bowling Green, USA and Dalian, China with the aim of<br />
ensuring uniformly high production and quality standards at all <strong>Knorr</strong>-<strong>Bremse</strong> sites worldwide. The assembly<br />
line in the USA went into operation in <strong>2011</strong>, and production start-up in China is slated for 2012.<br />
Creation of the new production line in Dalian is <strong>Knorr</strong>-<strong>Bremse</strong>’s response to growing demand for a disc<br />
brake specially designed for the Chinese market. The new plant, which was established using the expertise<br />
of experienced specialists at Aldersbach and at the Disc Brake Center of Competence in Munich, is<br />
capable of turning out up to 300,000 disc brakes per year. As well as supervising the establishment of<br />
production in Dalian, the <strong>Knorr</strong>-<strong>Bremse</strong> experts also provided training for the personnel who assisted<br />
them. Large numbers of Chinese maintenance engineers and operators also received training on the<br />
new machines in Aldersbach.<br />
In the summer of <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong> brought on stream a disc brake line specially designed for the U.S.<br />
market at the Bowling Green site operated by its North American subsidiary Bendix Commercial Vehicle<br />
Systems. Again this was part of <strong>Knorr</strong>-<strong>Bremse</strong>’s strategy of offering products with a maximum of local
R e p o R t<br />
content. The new assembly line has considerably increased production capacity in Bowling Green – as<br />
in China, up to 300,000 disc brakes can now be produced each year.<br />
One of the special features of both the new assembly lines is the fact that they are directly linked to the<br />
Aldersbach site. If any problems occur with the equipment or control systems, colleagues in Aldersbach<br />
can, if necessary, offer remote support in real time.<br />
1 1 7
<strong>Knorr</strong>-<strong>Bremse</strong> Group<br />
In addition to the targeted pursuit of product innovations, the key success factors for the<br />
future of <strong>Knorr</strong>-<strong>Bremse</strong> include process optimization, employee development, corporate<br />
responsibility, environmental protection and social engagement, aspects which remained<br />
among the top priorities for this family-owned company in <strong>2011</strong>.
<strong>Knorr</strong> Excellence<br />
R e p o R t<br />
Under the heading of <strong>Knorr</strong> Excellence (KE), <strong>Knorr</strong>-<strong>Bremse</strong> has introduced a standardized<br />
model for all its management systems and has merged all process optimization initiatives<br />
across the entire Group. The declared aim of KE is to achieve excellence in all corporate<br />
processes. <strong>Knorr</strong>-<strong>Bremse</strong> works continuously to improve the Group’s performance, not least<br />
with a view to ensuring higher levels of customer satisfaction. In <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> continued<br />
the program, focusing in particular on the FIT (Finance & IT Excellence) initiative.<br />
PEX<br />
PEX<br />
The PEX – People Excellence – initiative was re-launched in <strong>2011</strong> with human resources and executive<br />
development projects. Development of the initiative continued in the reporting period with a view to<br />
systematically describing all human resources work throughout the employee life cycle and successively<br />
improving the worldwide human resources organization on this basis.<br />
Initial focus processes were defined for the PEX key elements “Strategy,” “Source,” “Development,“ “Place“<br />
and “Administration“ and a self-assessment exercise to determine the current status was carried out in<br />
cooperation with the various sites. Plans envisage adding to this process landscape in 2012. At the<br />
same time, the implementation of the focus processes at the sites is to be evaluated at regular intervals<br />
and further local improvements are to be made. Within the human resources function, PEX represents<br />
a future-oriented basis on which to take the quality of human resources work forward around<br />
the world. PEX thus defines the basic principles of excellent people management in HR.<br />
Q-First<br />
Within the Q-First quality campaign, in the year under review <strong>Knorr</strong>-<strong>Bremse</strong> once again defined a large<br />
number of specific measures to ensure that each and every component developed and supplied by<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is of the highest possible quality. Q-First comprises a raft of measures covering areas<br />
such as management, human resources, development, production, supplier development, complaints<br />
1 2 1
1 2 2 R e p o R t | K n o R R - B R e M S e G R o U p<br />
management and customer relations. As a manufacturer of safety-critical products, <strong>Knorr</strong>-<strong>Bremse</strong> considers<br />
these measures indispensable.<br />
One fundamental principle of the <strong>Knorr</strong>-<strong>Bremse</strong> quality management policy is prevention rather than<br />
cure. Potential errors must be detected and eliminated in good time before they lead to defects in<br />
product components in service. In <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> therefore once again dedicated its efforts to<br />
ensuring that safety-relevant requirements were taken into consideration from the beginning of the<br />
development process. In addition, the company again conducted a large number of Product Safety<br />
Audits (PSA) throughout the world. These especially strict audits that are specific to <strong>Knorr</strong>-<strong>Bremse</strong> ensure<br />
that internal and external suppliers comply with the Group’s very high quality standards.<br />
Supply Chain Excellence<br />
In <strong>2011</strong>, the Supply Chain Excellence (SCE) project focused on the global development and harmonization<br />
of logistics performance levels. In both divisions, further progress was made with the optimization<br />
of processes from suppliers through factories to the customer, and flexibility was improved. The<br />
measures taken correspond to the steadily mounting challenges faced as a result of the growing importance<br />
of the BRIC countries, with their longer supply chains and more volatile demand behavior.<br />
Finance &<br />
IT Excellence<br />
The FIT (Finance & IT Excellence) initiative is one of the cornerstones of the <strong>Knorr</strong><br />
Excellence Program. In the year under review, the initiative was mainly focused on<br />
one major project: the new company <strong>Knorr</strong>-<strong>Bremse</strong> IT-Services GmbH, a direct<br />
subsidiary of <strong>Knorr</strong>-<strong>Bremse</strong> AG, which started operations on January 1, <strong>2011</strong>.<br />
The IT units in Germany, which were previously spread across the divisions, have now been combined<br />
in a single organization. Since the beginning of <strong>2011</strong>, the new company has been responsible for<br />
providing the IT services required by the divisions throughout the world.<br />
Despite this fundamental change, the launch of the new company was more of an evolution than a<br />
revolution. A number of preparatory steps had already been taken in previous years and technicallyoriented<br />
areas such as applications development and support for Human Resources, Finance and<br />
Controlling had been brought together in Corporate IT at cross-divisional level.
R e p o R t<br />
Experience at the 5-day factory operated by <strong>Knorr</strong>-<strong>Bremse</strong> Rail Vehicle Systems in Budapest and the<br />
value stream factory of <strong>Knorr</strong>-<strong>Bremse</strong> Commercial Vehicle Systems in Liberec was very important in<br />
this context. This experience was used consistently for the planning and implementation of plant optimization<br />
and construction projects and played a key role in the further development of the global<br />
<strong>Knorr</strong>-<strong>Bremse</strong> production and logistics network.<br />
In <strong>2011</strong>, the SCE initiative received the Logistics Award of the Association of the German Automobile<br />
Industry, VDA.<br />
KPS<br />
In <strong>2011</strong>, the main focus of the <strong>Knorr</strong>-<strong>Bremse</strong> Production System (KPS) was on the introduction of a<br />
uniform shop floor management system throughout the Group. This ensures that the opportunities<br />
for process improvements in production are identified and systematically realized day by day. In the<br />
Rail and Commercial Vehicle Systems divisions, value streams were optimized with a view to reducing<br />
throughput times and making processes more flexible. One of the key aspects was the more intensive<br />
involvement of suppliers.<br />
In the Rail Vehicle Systems division, <strong>Knorr</strong>-<strong>Bremse</strong> standardized its approaches for measuring and improving<br />
machinery utilization. A uniform production material supply system was developed that already<br />
takes account of the production sector’s zero-defect approach at the material supply stage.<br />
Faster financial statements<br />
Another key focus of the FIT initiative in <strong>2011</strong> was the “Fast Close” project, which combines all the procedures<br />
and methods needed for the fast completion of annual financial statements soon after the<br />
end of the financial year. The project is challenging because faster processing must not be allowed to<br />
have any adverse effect on quality. Despite the faster close, the quality of the information provided<br />
must be just as high as in the past. After Fast Close had been implemented for the first time in 2010,<br />
work in <strong>2011</strong> focused on process stabilization.<br />
1 2 3
1 2 4 R e p o R t | K n o R R - B R e M S e G R o U p<br />
In the Commercial Vehicle Systems division, value stream planning was further intensified at various<br />
sites including the Dalian plant in China. In addition, the company laid the foundation for employees<br />
and managers to be trained at a <strong>Knorr</strong>-<strong>Bremse</strong> Value Stream Academy in the future.<br />
GPE<br />
Supplier management is a key success factor in the <strong>Knorr</strong>-<strong>Bremse</strong> value chain. All measures for the<br />
further improvement of supplier management are grouped together in the Global Purchase Excellence<br />
program. Further improvement of processes, methods and resources was consistently pursued<br />
in <strong>2011</strong> and will continue to drive the ongoing worldwide improvement of efficiency and quality in<br />
the future.<br />
PROGRESS<br />
In <strong>2011</strong>, the optimization and harmonization of business processes on the basis of improvements resulting<br />
from <strong>Knorr</strong> Excellence initiatives was continued under the PROGRESS program. To support<br />
business processes, SAP was introduced in nine further projects in <strong>2011</strong>. Almost all <strong>Knorr</strong>-<strong>Bremse</strong><br />
Group sites now utilize SAP or SAP-harmonized processes. This has proven its worth and will be continued<br />
going forward.<br />
In addition, in the year under review <strong>Knorr</strong>-<strong>Bremse</strong> adopted the latest version of SAP and migrated its<br />
IT platform to state-of-the-art technology. This represents an important milestone in safeguarding the<br />
future and ensuring process efficiency at <strong>Knorr</strong>-<strong>Bremse</strong>.<br />
ECCO 2<br />
Under its ECCO 2 (Efficient Cut of CO 2 ) initiative, <strong>Knorr</strong>-<strong>Bremse</strong> had already set Group-wide climate<br />
protection targets based on the 20/20/20 formula in 2009. By 2020, the energy efficiency of the Group<br />
is to be improved by 20% and CO 2 emissions thereby cut by 20%. In <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> again deployed<br />
a variety of measures to help reach this target. In addition, the CO 2 balance of new buildings<br />
was made a major consideration in the planning and construction of new facilities.<br />
External ratings again outstanding<br />
The globally-oriented strategy of the <strong>Knorr</strong>-<strong>Bremse</strong> Group, its broad-based positioning in numerous<br />
markets and regions and an intelligent and prudent financial policy have again led to outstanding<br />
ratings from two prominent rating agencies. These creditworthiness ratings again placed <strong>Knorr</strong>-<br />
<strong>Bremse</strong> among the highest-rated automotive and commercial vehicle suppliers worldwide. After rating<br />
agency Standard & Poor‘s had already upgraded <strong>Knorr</strong>-<strong>Bremse</strong> from “BBB+/Outlook positive” to “A-/<br />
Outlook stable” in 2010 and confirmed this in <strong>2011</strong>, in the year under review Moody’s followed suit,<br />
awarding the company an upgrade from “Baa1 Outlook positive” to “A3 Outlook stable.” Both rating<br />
agencies thus reaffirmed the Group’s investment grade status.<br />
In their ratings the two agencies acknowledged in particular the intelligent financial management<br />
and stable cash flow generation at <strong>Knorr</strong>-<strong>Bremse</strong>. Based on a very robust and conservative financial<br />
policy, the agencies reported, even under what were at times difficult economic conditions the com-
R e p o R t<br />
pany was able to further consolidate and strengthen the liquidity base it put down in 2010. <strong>Knorr</strong>-<br />
<strong>Bremse</strong>’s rapid and rigorous response to the sharp downturn in the world’s commercial vehicle markets<br />
in 2009 proved vital in positioning the Group to benefit when the market recovery began to pick<br />
up speed in 2010.<br />
The expansion and targeted ongoing development of the Group’s geographic presence, with local<br />
companies in all of the major countries and markets, was also expressly mentioned by both rating<br />
agencies as a particular strength of <strong>Knorr</strong>-<strong>Bremse</strong>. The company’s continued systematic expansion of<br />
its rail vehicle systems activities in Asia came in for special mention in this respect. In addition, both<br />
Standard & Poor’s and Moody’s again pointed to product diversification at <strong>Knorr</strong>-<strong>Bremse</strong> as a decisive<br />
stability factor. The Group’s separate business areas, rail vehicle and commercial vehicle systems, are<br />
subject to different economic cycles that can take very different courses in terms of time and from one<br />
region to the next. In times of crisis this makes a substantial contribution to minimizing risk. In addition,<br />
the intensification of activities in the aftermarket sector in both divisions was seen to help mitigate<br />
the impact of the economic cycles in the OEM sector.<br />
1 2 5
1 2 6 R e p o R t | K n o R R - B R e M S e G R o U p<br />
A successful combination:<br />
Deutsche Bank and<br />
<strong>Knorr</strong>-<strong>Bremse</strong> 100 years on<br />
The partnership between <strong>Knorr</strong>-<strong>Bremse</strong> and Deutsche Bank is marked by<br />
solidarity, constancy and reliability. The two companies now have a 100-year<br />
history of successful cooperation.<br />
In May <strong>2011</strong>, senior figures from Deutsche Bank<br />
met with Heinz Hermann Thiele, the proprietor<br />
of <strong>Knorr</strong>-<strong>Bremse</strong> and Chairman of the Supervisory<br />
Board, as well as members of both the Executive<br />
and Supervisory Boards to mark this special<br />
anniversary. The high-ranking guests from<br />
Deutsche Bank included Dr. Josef Ackermann,<br />
Chairman of the Board and of the Group Executive<br />
Committee, as well as Jürgen Fitschen,<br />
Member of the Management Board of Deutsche<br />
Bank.<br />
Close ties for many years<br />
“The rapport between Deutsche Bank and<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has always been more than just a<br />
run-of-the-mill business relationship based on<br />
financial participation,” Heinz Hermann Thiele<br />
underlined in his anniversary address. Over the
past century a trusting and constructive working<br />
relationship has sprung up between the<br />
two companies. From 1929 onwards, the former<br />
Director General of and Partner in <strong>Knorr</strong>-<strong>Bremse</strong>,<br />
Johannes Philipp Vielmetter, was both a shareholder<br />
and a Supervisory Board member at<br />
Deutsche Bank. As the financial crisis of the day<br />
reached its peak, Vielmetter and other members<br />
of the bank’s Supervisory Board acquired substantial<br />
portions of equity, supporting Deutsche<br />
Bank through the troubled economic times. In<br />
1931 <strong>Knorr</strong>-<strong>Bremse</strong> itself also held a stake in<br />
Deutsche Bank. For its part, in the 1930s<br />
Deutsche Bank was the majority shareholder in<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG, with 51% of the company‘s<br />
share capital.<br />
Shared success in internationalization<br />
In times of rapid economic growth too, the two<br />
companies continued to stand side-by-side. In<br />
the post-war years, with the support of Deutsche<br />
Bank, <strong>Knorr</strong>-<strong>Bremse</strong> drove forward the internationalization<br />
of its business.<br />
For Heinz Hermann Thiele it was the close personal<br />
ties between the companies and their representatives<br />
that invariably held the key to their<br />
shared success. And over recent decades, starting<br />
roughly in the 1970s, Thiele noted ever-closer<br />
and decidedly amicable relations between<br />
the two companies. In 1985, Dr. Hans-Peter Binder<br />
– a member of the Board of Management at<br />
Deutsche Bank’s Munich branch – became a<br />
member of the Supervisory Board of <strong>Knorr</strong>-<br />
R e p o R t<br />
<strong>Bremse</strong> AG, placing his expertise and experience<br />
at the company’s disposal. “He was a decisive figure<br />
in the development of the company from a<br />
medium-sized supplier to what is today a profitable<br />
technology group with sales of over EUR 4<br />
billion. From the outset, his personal advice and<br />
support were crucial to the development of<br />
<strong>Knorr</strong>-<strong>Bremse</strong>,” declared Thiele.<br />
Positive outlook for future collaboration<br />
In the opinion of the proprietor of <strong>Knorr</strong>-<strong>Bremse</strong>,<br />
relations between the two companies will draw<br />
closer still in the future. “Our mutual solidarity in<br />
both turbulent and successful times, our reciprocal<br />
personal involvement in the various development<br />
phases of the two enterprises and the resultant<br />
close ties are something special and a<br />
characteristic feature of the relationship between<br />
our companies.“<br />
1 2 7<br />
Deutsche Bank AG, Historisches Institut
Responsibility<br />
R e p o R t<br />
Sustainability and corporate responsibility are important priorities for a forward-looking<br />
family business like <strong>Knorr</strong>-<strong>Bremse</strong>. For more than 100 years the company has been assuming<br />
responsibility for its products, employees, business partners, society and the environment.<br />
Corporate Responsibility (CR)<br />
Operating in a manner that is both sustainable and socially responsible is an important element in<br />
<strong>Knorr</strong>-<strong>Bremse</strong>’s corporate philosophy. Confidence in the company is increased by responsible behavior<br />
towards the workforce, customers and suppliers – and society in general. With a view to maintaining<br />
this, <strong>Knorr</strong>-<strong>Bremse</strong> is actively working on a program of environmental sustainability and social responsibility<br />
as well as innovation and value creation.<br />
CR strategy<br />
The CR strategy launched by the company in 2010 represents a logical extension of its commitment to<br />
responsible corporate governance. It systematizes the company’s responsibilities for its employees,<br />
the environment and society in general, and determines the main focus of its activities in the area. The<br />
strategy is based on the Group’s core values and the internationally recognized principles of the UN<br />
Global Compact, which sets standards for companies and organizations in the fields of human rights,<br />
labor, environment and anti-corruption. The <strong>Knorr</strong>-<strong>Bremse</strong> Group signed up to the UN Global Compact<br />
in 2010, and by doing so signaled its commitment to adhering to the Compact’s ten basic principles.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has defined six areas as the central focus of its CR strategy: CR Management, Products,<br />
Workforce, Environmental and Climate Protection, Social Commitment and CR Communication. These<br />
are described in greater detail below.<br />
1 2 9
1 3 0 R e p o R t | K n o R R - B R e M S e G R o U p<br />
CR Management<br />
CR Management involves systematic implementation of the CR strategy within the company – identifying<br />
areas of focus, defining goals and developing specific measures for implementation within the<br />
various departments. For the purpose of discussion and decision-making the company has set up a CR<br />
Council consisting of a representative of the Executive Board, two members of management from<br />
each of the two divisions and the head of the Corporate Responsibility department.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> draws ideas for the further development of its CR management from a regular dialogue<br />
with internal and external stakeholders. For example the company regularly analyzes customer requirements<br />
and future market trends with a view to incorporating these into the various CR management<br />
areas and developing appropriate measures. During the year under review, the company set up<br />
a Group-wide network to discuss CR issues – the CR Round Table – in order to promote an exchange<br />
of ideas amongst the regions represented within the Group. The Round Table makes it possible for<br />
regions and divisions/departments to talk to internal CR representatives about strategic goals, current<br />
CR projects and their operational implementation.<br />
A car for DocStop<br />
<strong>Knorr</strong>-<strong>Bremse</strong> not only contributes towards greater road safety with its<br />
products – the company also sponsors the organization “DocStop for<br />
Europeans.”<br />
DocStop was launched in 2007 in order to provide truck drivers at home and abroad with easy access<br />
to professional medical care. As well as continuing to sponsor the DocStop project during the year<br />
under review, <strong>Knorr</strong>-<strong>Bremse</strong> also donated a VW Golf to this mobile emergency medical service. Since<br />
June <strong>2011</strong>, staff at DocStop have been able to use the vehicle for their travel needs.<br />
It might be toothache, migraine or sudden eye problems – whatever the complaint, professional truck<br />
drivers tend to just grit their teeth and keep going. The pressure to meet deadlines makes them reluctant<br />
to go to a doctor and they often either ignore medical symptoms or try to treat them themselves.
R e p o R t<br />
When it comes to the actual integration of ecological and social aspects into corporate processes, the<br />
latter are first analyzed from the point of view of sustainability before appropriate measures are drawn<br />
up. For example, during the year in question, the principles of the UN Global Compact were integrated<br />
into the company‘s procurement structures, with the requirements of the Compact being incorporated<br />
into the quality management guidelines for the area. The company intends to use audits and<br />
self-disclosure forms to check the extent to which individual suppliers adhere to these principles.<br />
Products<br />
As one of the leading companies in its sector, <strong>Knorr</strong>-<strong>Bremse</strong> develops solutions that combine maximum<br />
customer benefit with lasting value-added. Its innovative technologies are known to offer high<br />
levels of safety, quality and functionality, but criteria such as energy and resource efficiency and environmental<br />
compatibility are also becoming increasingly important for both products and production<br />
processes. <strong>Knorr</strong>-<strong>Bremse</strong> is therefore concentrating on developing manufacturing processes and<br />
product applications that have a minimal impact on the environment. As part of its drive towards<br />
developing sustainable products, the company launched the Ecodesign project in <strong>2011</strong> with the aim<br />
of analyzing the ecological footprint of selected products during their entire lifecycle and using the<br />
information to further enhance their environmental compatibility. During the year in question, analyses<br />
of the value-added process for individual products in the Rail Vehicle Systems division yielded<br />
important insights into the use of materials and resources, environmental compatibility and product<br />
use. The next step involves implementing specific improvement measures.<br />
This is where DocStop comes in. Any truck driver on trans-European roads who experiences medical<br />
problems can contact DocStop at any time of day or night. The DocStop hotline is staffed 24 hours a<br />
day, 365 days a year by trained personnel who are able to speak most European languages and can<br />
provide information about a DocStop partner, usually with opening times, contact details and availability<br />
of parking. The contact points are normally located at service areas or medical practices and<br />
hospitals in direct proximity to motorway slip roads. The service staff then help the driver to find a suitable<br />
doctor.<br />
1 3 1
1 3 2 R e p o R t | K n o R R - B R e M S e G R o U p<br />
Workforce<br />
The <strong>Knorr</strong>-<strong>Bremse</strong> Group is concerned to offer an attractive and responsibly managed working environment<br />
to its entire global workforce of over 20,000 employees, wherever they are and whatever area<br />
they work in. Committed, well-trained employees form the company’s backbone and are the key to its<br />
future success. That is why <strong>Knorr</strong>-<strong>Bremse</strong>’s global human resources strategy aims to encourage and<br />
motivate current employees and ensure their long-term loyalty, as well as enhancing the company’s<br />
attractiveness to potential recruits.<br />
During the year under review, <strong>Knorr</strong>-<strong>Bremse</strong> once again carried out a global employee survey aimed<br />
at measuring levels of satisfaction within the Group and identifying possible areas for improvement.<br />
The results and the insights they offer are currently being analyzed and evaluated, and the first improvements<br />
are due for introduction in 2012.<br />
It is crucial for a globally operating company like <strong>Knorr</strong>-<strong>Bremse</strong> to maintain common values and an<br />
active corporate culture throughout the Group. To this end, <strong>Knorr</strong>-<strong>Bremse</strong> continued to work on developing<br />
its corporate and management culture during the year in question. As part of a constructive<br />
dialogue with international specialists and managers, the existing corporate culture was analyzed –<br />
with a focus on current and future challenges – and new approaches were identified. This enabled<br />
new corporate values and management guidelines to be developed, and during the coming year<br />
these will be communicated to all members of the workforce and integrated into management training<br />
measures.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> puts great store by workplace health and safety for its employees. The year under review<br />
saw a wide variety of health-promotion campaigns and activities at the company’s various sites, including<br />
health days, examinations by the company doctors, advisory sessions on health and sports<br />
programs. As part of its comprehensive health and safety and environmental protection policy the<br />
company takes a systematic approach to safety management, carrying out extensive workplace risk<br />
assessments, promoting safety awareness amongst employees, analyzing any accidents that occur<br />
and planning appropriate measures to avoid them in the future. The majority of its European sites are<br />
also certified under the OHSAS (Occupational Health and Safety Series) 18001 standard. During the<br />
year in question IFE North America and the Johannesburg site in South Africa also achieved OHSAS<br />
18001 certification.<br />
Environmental and Climate Protection<br />
<strong>Knorr</strong>-<strong>Bremse</strong> also acts responsibly in the field of environmental and climate protection. The company’s<br />
aim is to minimize the environmental impact of the manufacture and use of its products. To ensure<br />
that this happens throughout the company, <strong>Knorr</strong>-<strong>Bremse</strong> organizes initiatives aimed at increasing<br />
employees’ awareness of the issue.<br />
This responsibility for environmental and climate protection is laid down in the official Group-wide<br />
health and safety and environmental protection policy, which covers aspects such as resource efficiency,<br />
ecological awareness-raising, environmental management and product responsibility. To put<br />
this commitment into practice <strong>Knorr</strong>-<strong>Bremse</strong> has set up a mandatory environmental management<br />
system covering internal and external environmental regulations and standards. The Group’s production<br />
and service sites in Europe and the Americas – and most of those in the Asia/Pacific region – are<br />
already certified to the ISO 14001 environmental management standard, and further sites will be un-
R e p o R t<br />
dergoing the certification process over the next few years. In the year under review, <strong>Knorr</strong>-<strong>Bremse</strong>’s<br />
subsidiary IFE North America also achieved ISO 14001 certification.<br />
In addition to this, the energy efficiency initiative ECCO 2 (Efficient Cut of CO 2 ) is designed to contribute<br />
to climate and environmental protection. <strong>Knorr</strong>-<strong>Bremse</strong> has set itself the ambitious target of increasing<br />
energy efficiency by 20% and achieving a 20% reduction in CO 2 emissions by the year 2020 (base<br />
year: 2009), and during the year under review the company came significantly closer to achieving this<br />
goal. The main focus of activities under the ECCO 2 initiative in <strong>2011</strong> was on improving waste heat recovery,<br />
increasing the use of energy-saving lighting, adapting and optimizing assembly lines and<br />
launching an across-the-board awareness-raising campaign amongst the workforce. The measures<br />
adopted in <strong>2011</strong> enabled CO 2 emissions to be cut by 11% compared with the base year and energy<br />
efficiency to be increased by 15%.<br />
Social Commitment<br />
For <strong>Knorr</strong>-<strong>Bremse</strong>, the concept of corporate responsibility also includes social commitment. The company<br />
perceives its role as participating in the life of the community and helping to shape and positively<br />
influence its social environment. Social commitment for <strong>Knorr</strong>-<strong>Bremse</strong> covers both local and<br />
international projects.<br />
The charitable organization <strong>Knorr</strong>-<strong>Bremse</strong> Global Care e. V. supports people all over the world who are<br />
in need as a result of environmental disasters, accidents, armed conflict, poverty or illness. The main<br />
focus of the aid programs run by the charity is on medium- and long-term education and infrastructure<br />
projects, but it also offers rapid emergency relief in the aftermath of natural disasters.<br />
The company also organizes so-called Local Care Initiatives – social projects run in the neighborhood<br />
of company sites that rely on the involvement of local <strong>Knorr</strong>-<strong>Bremse</strong> employees. Local Care projects<br />
1 3 3
1 3 4 R e p o R t | K n o R R - B R e M S e G R o U p<br />
can range from financial support for social institutions to so-called Corporate Volunteering Projects, in<br />
which individual employees become involved on a voluntary basis. During the coming year, <strong>Knorr</strong>-<br />
<strong>Bremse</strong> intends to systematize its local support activities and increase awareness of them within the<br />
company. The aim is to have an exchange of information about successful initiatives, generate new<br />
ideas for further projects, create synergies and – last but not least – establish local commitment as an<br />
integral part of corporate culture.<br />
CR Communication<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is aware of the importance of communicating the strategies and goals of its corporate<br />
responsibility program and providing information about progress made in achieving them. In order to<br />
strengthen confidence in the company it welcomes dialogue with its various stakeholders – employees,<br />
customers, business partners and representatives of civil society.<br />
The company attaches particular importance to internal communication and uses a variety of different<br />
channels to strengthen employee awareness of its sustainability goals and activities. It organizes<br />
regular internal presentations and publishes articles on specific CR activities in its in-house magazine<br />
as well as running training sessions in corporate responsibility and corporate values for new members<br />
of staff. The company also presents annual Group-wide CR Awards for outstanding projects in the<br />
fields of environment and social commitment. The <strong>2011</strong> winner in the “Environment” category was the<br />
<strong>Knorr</strong>-<strong>Bremse</strong> site in Aldersbach for its project to optimize the energy efficiency of an assembly line.<br />
The CR Award in the “Social Commitment” category went to <strong>Knorr</strong>-<strong>Bremse</strong> KAMA in Russia for the<br />
long-term involvement of its employees in an old people’s home in the vicinity of the production facility.
R e p o R t<br />
In order to keep external stakeholders informed, <strong>Knorr</strong>-<strong>Bremse</strong> is increasingly publishing reports on its<br />
CR activities. The UN Global Compact Progress <strong>Report</strong> published for the first time in <strong>2011</strong> documented<br />
annual measures taken and results achieved in relation to the ten principles of the UN Global Compact.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is also working on providing more information about its sustainability achievements<br />
on the Internet, so that the various interest groups can receive a more complete picture of the<br />
company’s adherence to its corporate responsibilities.<br />
1 3 5
1 3 6 R e p o R t | K n o R R - B R e M S e G R o U p<br />
Long-term<br />
aid worldwide<br />
A regular income, a roof over your head, access to medical care and education<br />
– all these things cannot be taken for granted in many countries of the world.<br />
Which is why, for the past six years, the charity <strong>Knorr</strong>-<strong>Bremse</strong> Global Care e. V.<br />
has been supporting people affected by environmental disasters, accidents,<br />
armed conflict, poverty or illness. Ever since the charity was first set up in 2005,<br />
the <strong>Knorr</strong>-<strong>Bremse</strong> Group has been<br />
expanding its social commitment<br />
year on year.<br />
During <strong>2011</strong>, <strong>Knorr</strong>-<strong>Bremse</strong> Global Care e. V. was<br />
provided with additional resources that enabled<br />
it to expand its social commitment and increase<br />
the number of projects it implemented. The<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group stepped up its annual funding<br />
of the charity by EUR 500,000 to EUR 1.5 million<br />
– boosting the motivation of members of<br />
the organization to continue improving the lives<br />
of people in need.<br />
Faced with steady growth in the number of projects,<br />
higher levels of donations and the challenge<br />
of ambitious quality targets, <strong>Knorr</strong>-<strong>Bremse</strong><br />
Global Care decided to carry out a review of its<br />
internal processes during <strong>2011</strong>, as a result of<br />
which the charity revised and expanded its project<br />
selection criteria. To receive funding, projects<br />
have to aim to help people in need to achieve<br />
greater self-reliance. Only carefully planned,<br />
long-term measures can identify new possibilities<br />
and achieve long-lasting change. <strong>Knorr</strong>-
<strong>Bremse</strong> Global Care e. V. focuses on providing<br />
support to groups and entire communities in a<br />
bid to achieve far-reaching structural change.<br />
Members of the organization endeavor to help<br />
people to improve their lives and determine<br />
their own destinies. That is why – wherever possible<br />
– future projects will entail hands-on involvement<br />
by members of the <strong>Knorr</strong>-<strong>Bremse</strong><br />
workforce.<br />
Long-term aid for some 65,000 people<br />
During the year under review, <strong>Knorr</strong>-<strong>Bremse</strong><br />
Global Care e. V. ran 42 projects in 24 countries<br />
– 24 of them carried over from 2010 and 18 new<br />
ones. Some 65,000 individuals all over the world<br />
benefited from total funding of EUR 1.73 million.<br />
In no fewer than 21 of the projects, the commitment<br />
of <strong>Knorr</strong>-<strong>Bremse</strong> colleagues at local level<br />
was crucial to their successful implementation.<br />
The organization’s aim is always to support projects<br />
that have a long-term impact and promote<br />
self-reliance, enabling those affected to become<br />
economically independent. But <strong>Knorr</strong>-<strong>Bremse</strong><br />
Global Care e. V. also takes action in the aftermath<br />
of unforeseen disasters, providing rapid<br />
support to ensure the survival of those affected.<br />
For example, in <strong>2011</strong> the organization provided<br />
emergency aid following the tsunami in Japan<br />
and the famine in East Africa.<br />
Examples of the organization’s activities during<br />
the year under review include the construction<br />
of a new children’s home near Nairobi, in Africa,<br />
and also an important aid project in India.<br />
R e p o R t<br />
Training Center in Faridabad, India<br />
The aim of the training center for young people<br />
in the vicinity of the <strong>Knorr</strong>-<strong>Bremse</strong> site in Faridabad,<br />
India is to enable young people to become<br />
independent and determine their lives for<br />
themselves.<br />
The local organization Prayas Social Welfare Society<br />
(Prayas SWS) already provides free elementary<br />
education to a total of some 6,000 children<br />
from poor backgrounds by making use of unused<br />
school facilities in the afternoons.<br />
In a bid to offer the children a chance to receive<br />
vocational training as well, Prayas SWS and<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Global Care e. V. are supporting<br />
the construction of a training center that will<br />
give them the prospect of making a living for<br />
themselves. Learning a trade would normally be<br />
beyond the means of these children and adolescents.<br />
Together with some of his colleagues, A. P. Garg,<br />
Managing Director of <strong>Knorr</strong>-<strong>Bremse</strong> India Private<br />
Ltd., a subsidiary of the <strong>Knorr</strong>-<strong>Bremse</strong> Group, has<br />
energetically supported and supervised the<br />
project.<br />
1 3 7
Employees<br />
R e p o R t<br />
Thanks to the outstanding work ethic and motivation of its employees, in <strong>2011</strong> <strong>Knorr</strong>-<strong>Bremse</strong><br />
again achieved significant sales growth in both its divisions. <strong>Knorr</strong>-<strong>Bremse</strong> sees this work<br />
ethic as the basis for its long-term success. During the year under review the Group therefore<br />
made significant efforts to further enhance its attractiveness as an employer and to give its<br />
employees the opportunity to participate in shaping the company’s future – through its<br />
employee survey, for example, which was repeated in <strong>2011</strong>.<br />
Employment situation<br />
By the end of <strong>2011</strong>, the workforce of the <strong>Knorr</strong>-<strong>Bremse</strong> Group had risen from 18,053 employees in the<br />
previous year (16,277 excluding leasing) to 20,050 (18,143 excl. leasing). This represents an 11.1% increase<br />
in staffing levels compared to 2010.<br />
Employee numbers rose in both divisions, reflecting the positive growth trend in <strong>Knorr</strong>-<strong>Bremse</strong>’s business.<br />
In the Rail Vehicle Systems division the number of employees grew from 10,824 (9,523 excl. leasing)<br />
to 11,083 (9,955 excl. leasing). In the Commercial Vehicle Systems division the number of employees<br />
rose from 7,063 (6,590 excl. leasing) in 2010 to 8,636 (7,858 excl. leasing) in <strong>2011</strong>. The number of<br />
employees in the holding companies also increased, from 166 (164 excl. leasing) to 331 (330 excl. leasing)<br />
at the end of <strong>2011</strong>.<br />
Employees in the regions<br />
In the European region – which also includes Africa and the Middle East in <strong>Knorr</strong>-<strong>Bremse</strong>’s organization<br />
– the Group employed 10,442 people on December 31, <strong>2011</strong> (9,957 excl. leasing). This represents an<br />
increase of 5.9% over the previous year. Europe therefore accounted for 52.1% of all Group employees,<br />
compared with 54.6% in the previous year.<br />
1 3 9
1 4 0 R e p o R t | K n o R R - B R e M S e G R o U p<br />
The number of employees in Germany at the end of the year under review was 3,848 (3,587 excl. leasing),<br />
12.2% more than one year previously. Germany therefore accounted for 19.2% of the <strong>Knorr</strong>-<strong>Bremse</strong><br />
workforce. In the rest of Europe excluding Germany the number of employees grew from 6,430 (6,008<br />
excl. leasing) to 6,594 (6,370 excl. leasing), which equates to 32.9% (2010: 35.6%) of the total workforce.<br />
The Group had 3,758 employees in North America on December 31, <strong>2011</strong> (3,558 excl. leasing), up 24.1%<br />
from the previous year. This represents an increase in the proportion of group employees in North<br />
America from 16.8% to 18.7%. The Group had 826 employees in South America in 2010 (806 excl. leasing),<br />
compared to 811 in <strong>2011</strong> (805 excl. leasing).<br />
The Asia/Australia region saw another rise in staffing levels, from 4,339 employees at the end of 2010<br />
(3,478 excl. leasing) to 5,039 on December 31, <strong>2011</strong> (3,823 excl. leasing). This represented an increase of<br />
16.1%. The proportion of the Group workforce employed in the Asia/Australia region grew from 24.0%<br />
to 25.1%.<br />
Human resources development<br />
Outstanding, globally recognized products, processes and services can only be delivered by an outstanding<br />
workforce. The human resources policy plays a vital supporting role here by providing systematic<br />
and targeted human resources development and placing particular emphasis on international<br />
job assignments around the entire globe.<br />
A comprehensive talent management program, which was further enhanced during the year under<br />
review, develops qualified successors for key management positions and offers high potentials attractive<br />
career opportunities across the whole of the Group. Development Centers are held several times<br />
each year, allowing <strong>Knorr</strong>-<strong>Bremse</strong> to identify individual strengths and areas for improvement and to<br />
define targeted and systematic professional development measures for each participant.
R e p o R t<br />
Management Evolution Program (MEP)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> has been running its successful Management Evolution Program (MEP) for 13 years now,<br />
giving recent graduates the opportunity to participate in three important projects as management<br />
trainees, gaining valuable insights into operations in different parts of the Group.<br />
In the year under review the number of trainees was increased from 10 to 16, reflecting the ongoing<br />
internationalization of the Group’s business. The three six-month placements develop trainees’ hard<br />
and soft skills in a professional context. Direct project responsibility and a structured, rotating training<br />
program teach the young people how to handle responsibility in an international environment at an<br />
early stage in their career.<br />
Global Employee Survey (GES)<br />
Any company’s long-term success in the marketplace is crucially dependent on its ability to subject its<br />
own actions to critical scrutiny. In September of the year under review the Group conducted its fourth<br />
Global Employee Survey. The high response rate of 77% indicates that many employees took this opportunity<br />
to play an active part in shaping their future and the future of the business.<br />
All Group employees worldwide were invited to complete one of the questionnaires, which were<br />
available in 14 languages. The completed questionnaires were evaluated anonymously, ensuring that<br />
individuals could not be identified in the process. Representatives of the specialist departments and<br />
the works council were involved in updating the questionnaires from previous years. The aim was to<br />
ensure comparability with the key findings of previous employee surveys, while at the same time incorporating<br />
new subject areas such as Corporate Responsibility (CR).<br />
In the year under review the questionnaires could also be completed online for the first time. Employees<br />
without internet access were able to participate using paper questionnaires, as in previous years.<br />
In future the Employee Survey will take place every two years, alternating with the Leadership Feedback<br />
survey in which employees evaluate their managers.<br />
Staff Dialogue (SD)<br />
Growing together, learning from each other – the performance review process is an active dialogue,<br />
not a one-way street. This dialogue is more than just an important human resources management tool<br />
– it is also the basis and prerequisite for successful working relationships between managers and their<br />
teams. <strong>Knorr</strong>-<strong>Bremse</strong> therefore continued to implement its Staff Dialogue program systematically in<br />
the year under review. Managers across the entire Group are required to conduct a comprehensive<br />
review dialogue with each of their employees at least once a year, during the first quarter.<br />
During the dialogue, manager and employee review the previous year’s work together. The aim is to<br />
identify, in concrete terms, how far the employee has fulfilled his or her objectives and responsibilities,<br />
their strengths and weaknesses, the challenges that lie ahead and career development prospects for<br />
the future.<br />
The Staff Dialogue focuses on professional performance and also on people skills. But these regular<br />
dialogues fulfill other important functions, too: setting targets for the coming year, discussing further<br />
development opportunities and above all building a relationship of trust between manager and employee.<br />
1 4 1
1 4 2<br />
R e p o R t | K n o R R - B R e M S e G R o U p<br />
Focus on leadership<br />
Good leadership is the basis for a contented workforce and efficient teamwork.<br />
Numerous studies have also demonstrated a significant correlation between<br />
leadership and corporate success. Leadership Development was therefore one<br />
of the top priorities of <strong>Knorr</strong>-<strong>Bremse</strong>’s human resources policy during the year<br />
under review, with greater emphasis<br />
placed on this topic across a diverse<br />
range of human resources instruments<br />
in order to strengthen and<br />
enhance the Group’s management<br />
culture.<br />
A new management development concept<br />
They must be conversant with the latest management<br />
techniques, they must be consistent,<br />
they must allow their staff appropriate levels of<br />
autonomy, and they must always be ready to listen<br />
to their employees’ concerns. These are just<br />
some of the skills effective managers need to<br />
possess. <strong>Knorr</strong>-<strong>Bremse</strong> is dedicated to supporting<br />
a systematic development and training process<br />
in order to achieve this goal – a process that<br />
was reconfigured during the year under review.<br />
The new development program focuses on<br />
leadership at all management levels – from the<br />
newly appointed team leader through to managers<br />
with many years of experience behind<br />
them. This leadership initiative was launched<br />
with training events for senior executives in the<br />
top management tier which were rolled out dur-
ing the year under review. One of the primary<br />
aims was to deliver a focused program to update<br />
senior managers on the latest leadership tools<br />
and strategies, to build awareness of the corporate<br />
values and develop new leadership guidelines<br />
– helping to establish a uniform approach<br />
to leadership throughout the Group. Following<br />
the completion of this initiative, the next step in<br />
2012 will be to provide systematic training for<br />
the lower management tiers, which will be<br />
aligned with globally harmonized standards.<br />
High potentials<br />
programs for future managers<br />
The focus was also on leadership in tailored<br />
training programs for high potentials in the mid<br />
and upper management tiers.<br />
In <strong>Knorr</strong>-<strong>Bremse</strong>’s newly launched Senior Potential<br />
Program – designed to train potential candidates<br />
for departmental management roles –<br />
participants were able to select the modules<br />
most appropriate to their needs from a package<br />
of training offers, putting together a program<br />
tailored to their individual requirements. Leadership<br />
skills were a core element in all the modules<br />
provided, although building and developing an<br />
international network was another key aim of<br />
this program.<br />
The Group has also staged two International<br />
Management Promotion Groups to date, inviting<br />
international high potentials for specialist<br />
departmental management roles to Germany<br />
R e p o R t<br />
for training in line with a comprehensive, timetabled<br />
curriculum covering self-management,<br />
strategic thinking and leadership skills.<br />
Leadership Feedback<br />
promotes team cohesion<br />
The Leadership Feedback initiative, which was<br />
successfully completed in November 2010, for<br />
the first time featured a uniform international<br />
questionnaire and made use of a supporting online<br />
program. Approximately 1,000 managers in<br />
over 50 locations were evaluated by around<br />
13,000 employees. The second part of this initiative<br />
followed during the year under review:<br />
drawing on the Feedback results, teams took<br />
part in workshops, joining forces to develop<br />
strategies for improving and optimizing their<br />
teamwork in the future.<br />
1 4 3
Trade Fairs<br />
R e p o R t<br />
Local presence as a global player: <strong>Knorr</strong>-<strong>Bremse</strong> was represented by expert teams at all the<br />
major trade fairs in the rail and commercial vehicle sectors and presented its innovative<br />
products to an international audience. Over the next few years, the business of both <strong>Knorr</strong>-<br />
<strong>Bremse</strong> divisions will be influenced by the megatrends of energy efficiency, safety, urbanization<br />
and globalization.<br />
Rail Vehicle Systems<br />
In the coming years, major global trends will have a significant impact on the rail vehicle industry and<br />
will pose considerable challenges. With its focus on energy efficiency, safety, urbanization and globalization,<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is already developing the products and systems that will be needed in the future.<br />
As a global player, in <strong>2011</strong> the company again presented its systems expertise to a broad-based<br />
specialist audience throughout the world.<br />
UITP, Dubai, April <strong>2011</strong><br />
Under the motto of “Boosting public transport: Action!,“ a large number of exhibitors from around the<br />
world presented their latest solutions for the rail market. The <strong>Knorr</strong>-<strong>Bremse</strong> Group and its subsidiaries<br />
displayed ground-breaking products to make rail transportation more efficient, more environmentally<br />
compatible and, most important, safer.<br />
Railways & Harbours, Johannesburg, April <strong>2011</strong><br />
This event comprised two components: a conference with a large number of presentations on the<br />
background to and specific features of the South African rail market and a trade fair, where more than<br />
80 exhibitors showcased their products.<br />
1 4 5
1 4 6 R e p o R t | K n o R R - B R e M S e G R o U p<br />
SIFER, Lille, April <strong>2011</strong><br />
Since its return to Lille, the only French trade fair solely for the rail sector has increasingly become a<br />
platform for the exchange of ideas and experience, which is why it is a firm fixture in the events calendar<br />
of <strong>Knorr</strong>-<strong>Bremse</strong>.<br />
Korea Railways & Logistics Fair, Busan, June <strong>2011</strong><br />
“RailLog” in Busan is Korea‘s only rail trade fair, as well as being one of the few held in Asia. Apart from<br />
product presentations, the event concentrates on the logistics sector. In <strong>2011</strong>, one of the main issues<br />
at RailLog was how to ensure the efficient organization of the growing volumes of rail traffic in Asia.<br />
Railtex, London, June <strong>2011</strong><br />
In <strong>2011</strong>, Britain‘s largest railway technology exhibition was once again a key venue for the international<br />
rail industry. The exhibition for rail equipment, systems and services was held at London‘s Earls<br />
Court exhibition center.<br />
Conference on Modern Rolling Stock, Graz, September <strong>2011</strong><br />
The conference has become a popular meeting-point for many international rail experts. The two and<br />
a half days of the event included a large number of technical presentations with topics ranging from<br />
new results of basic research on rolling stock technology to questions of infrastructure and approval.<br />
Innovative products from components to systems and even entire vehicles were also on show.<br />
EXPO 1520, Moscow, September <strong>2011</strong><br />
At the third International Salon of Rolling Stock and Rail Technologies, “EXPO 1520,” record orders were<br />
placed in <strong>2011</strong>. The Russian rolling stock market is growing and so too is EXPO 1520: compared with<br />
the previous event, there was an increase of about 50% in the exhibition space used by manufacturers<br />
from around the world to showcase their products.<br />
IREE, New Delhi, September <strong>2011</strong><br />
Every day, the Indian rail network carries some 20 million passengers and about 2.5 million tons of<br />
freight. This was one of the reasons why the International Railway Equipment Exhibition attracted<br />
more than 300 exhibitors to New Delhi, where they showcased their solutions for the modern rail vehicle<br />
market on a total exhibition area of 11,000 m². <strong>Knorr</strong>-<strong>Bremse</strong> and many of its subsidiaries were<br />
among the exhibitors.<br />
Alstom Tech-Day, Paris, September <strong>2011</strong><br />
Alstom invited <strong>Knorr</strong>-<strong>Bremse</strong>, as one of its top suppliers, to the Alstom Tech-Day at the company‘s<br />
headquarters in Paris. <strong>Knorr</strong>-<strong>Bremse</strong> took advantage of the day to refresh contacts with the French rail<br />
vehicle producer and made a number of technical presentations. The “Little Oktoberfest” organized by<br />
<strong>Knorr</strong>-<strong>Bremse</strong> rounded off the event in convivial Bavarian style.
R e p o R t<br />
APTA, New Orleans, October <strong>2011</strong><br />
Some 17,000 rail vehicle industry decision-makers met in New Orleans in <strong>2011</strong> at the exhibition held<br />
to coincide with the <strong>Annual</strong> Meeting of the American Public Transportation Association (APTA). Together<br />
with a large number of other suppliers, <strong>Knorr</strong>-<strong>Bremse</strong> showcased its latest developments in the<br />
rail sector.<br />
Nordic Rail, Jönköping, October <strong>2011</strong><br />
Nordic Rail focused on special requirements for rail solutions in the Nordic countries. Demand for<br />
speedy and efficient rail transport in the Far North has been at a high level for many years.<br />
TRAKO, Gdansk, October <strong>2011</strong><br />
The “Trade Fair Trako <strong>2011</strong>,” which took place over four days in <strong>2011</strong>, is the second-largest European rail<br />
vehicle showcase after Innotrans. As one of more than 400 exhibitors, <strong>Knorr</strong>-<strong>Bremse</strong> Poland presented<br />
a wide variety of products relevant to the Polish market.<br />
Metro China, Beijing, November <strong>2011</strong><br />
The largest metro event of the year in China covered all aspects from planning and design through to<br />
operation and maintenance and attracted considerable attention from Chinese metro operators. They<br />
were not only interested in <strong>Knorr</strong>-<strong>Bremse</strong> braking systems but also in IFE doors, Westinghouse platform<br />
screen doors and Microelettrica switchgear.<br />
AusRAIL PLUS, Brisbane, November <strong>2011</strong><br />
The largest annual specialist event for rail traffic in the Asia-Pacific region offered decision-makers a<br />
first-class platform for the discussion of technological developments and investment opportunities.<br />
More than 300 exhibitors made use of this forum to present their latest products and services.<br />
<strong>Knorr</strong>-<strong>Bremse</strong> also took part in the 5th Public Transport Innovation Congress in Freiburg, as well as<br />
presenting its products at Public Transport/Interiors in Berlin; Suissetraffic in Geneva; Czech Raildays in<br />
Ostrava; Railway Interchange in Indianapolis; and the 13th International Conference on Rail Transportation<br />
in Saragossa.<br />
1 4 7
1 4 8 R e p o R t | K n o R R - B R e M S e G R o U p<br />
Commercial Vehicle Systems<br />
Safety and efficiency combined with tailor-made solutions for highly diverse markets are essential requirements<br />
in today’s commercial vehicle sector. <strong>Knorr</strong>-<strong>Bremse</strong> Commercial Vehicle Systems presented<br />
its solutions in this field to a wide specialist audience in <strong>2011</strong>.<br />
Comtrans, Moscow, September <strong>2011</strong><br />
Russia is a huge country posing a whole host of transport challenges. International commercial vehicle<br />
manufacturers continue to be highly interested in the Russian market. At this trade fair, which is to<br />
be held in alternating years with the commercial vehicle IAA in Hanover in the future and has thereby<br />
anchored its position as the leading commercial vehicle showcase in Eastern Europe, <strong>Knorr</strong>-<strong>Bremse</strong><br />
presented a selection of products geared to the special requirements of the Russian market.<br />
Equip Auto, Paris, October <strong>2011</strong><br />
The biennial trade fair for car and commercial vehicle equipment held at the Villepinte Exhibition<br />
Center in the north of Paris has become one of the key venues for manufacturers, dealers and suppliers<br />
to present new products and services. In <strong>2011</strong>, 1,800 exhibitors from 50 countries took part in the<br />
event, including <strong>Knorr</strong>-<strong>Bremse</strong>.<br />
TATA Motors Technology Day, Pune, October <strong>2011</strong><br />
At the technology day held by Indian automaker TATA, <strong>Knorr</strong>-<strong>Bremse</strong> not only presented a wide variety<br />
of products developed for the Indian market but also gave live demonstrations of some systems including<br />
the Anti-Roll-Back System (ARB), the Autonomous Emergency Brake System AEBS and the<br />
electronic stability program ESP.<br />
Presence at aftermarket fairs<br />
Ensuring optimum long-term safety and efficiency levels in safety-critical commercial vehicle systems<br />
demands outstanding levels of after-sales service. <strong>Knorr</strong>-<strong>Bremse</strong> presented its wide range of services<br />
at the Trost-Schau in the new Stuttgart exhibition center, at the tenth Carat-Leistungsmesse in Kassel,<br />
at PV Automotive in Hanover and at Wessels und Müller in Osnabrück.
R e p o R t<br />
1 4 9
Notes to the<br />
Consolidated<br />
Financial Statements
1 5 2<br />
1<br />
Principles and methods<br />
The consolidated financial statements have been drawn up in accordance with generally accepted<br />
accounting principles, complying with the accounting requirements of the German Commercial Code<br />
(HGB) and additional statutory provisions. Figures in the consolidated financial statements are shown<br />
in thousands of euros (TEUR). Certain items on the balance sheet and in the statement of income are<br />
combined for the sake of greater clarity. These items are explained separately in the Notes to the Consolidated<br />
Financial Statements.<br />
Accounting and valuation<br />
The financial statements of the companies included in the consolidated financial statements are prepared<br />
according to uniform principles of accounting and valuation applied to the Group. For the purposes<br />
of consolidation according to the equity method, any valuations in the financial statements of<br />
the associated companies that deviate from the uniform principles applied to the Group are retained.<br />
Purchased intangible assets are valued at acquisition cost less scheduled depreciation; additional depreciation<br />
is taken where necessary.<br />
Fixed assets are recorded at acquisition or production cost, less scheduled depreciation in the case of<br />
items subject to wear and tear; additional depreciation is taken where necessary. Depreciation on<br />
fixed assets is generally applied using the linear method, based on useful life. In the case of German<br />
companies included in consolidation, additions prior to January 2008 and after January 2009 are for<br />
the most part depreciated using the declining balance method, switching over to the linear method<br />
as soon as the latter results in higher depreciation. Minor fixed assets are depreciated to the maximum<br />
extent permissible under the respective countries’ tax provisions.<br />
Interests in affiliated, associated and related companies and miscellaneous investments are stated at<br />
cost or, in the event of a probable sustained diminution in value, at fair value (where the latter is lower).<br />
Materials and supplies are carried in inventories at the lower of average acquisition cost or replacement<br />
cost. Provision against realization risks is made where necessary.<br />
Work in process and finished products are stated at production cost, but in no case higher than the<br />
projected sales revenues less any costs accruing prior to sale. Production cost includes direct cost of<br />
materials and labor, as well as production overhead. A reasonable allowance is made where there is a<br />
risk of a decline in inventory values. Receivables are stated at their nominal value, less any necessary<br />
provisions against specific debts. Receivables bearing no or low interest are stated at their net present<br />
value. General charges have been made to cover the general credit risk.<br />
Other assets are stated at the lower of average acquisition cost, net present value or fair value.
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 5 3<br />
Earnings or disbursements prior to the balance sheet date are shown as prepaid income or prepaid<br />
expenses where they represent revenues or expenses for a certain period after the balance sheet date.<br />
Foreign currency items are valued at the rate existing at the transaction date or – if less favorable – at<br />
the rate at the balance sheet date. Where foreign currency items have been hedged, they are valued<br />
at the corresponding hedging rate. Where the remaining term is one year or less, foreign currency<br />
items are valued at the mean spot rate at the final balance sheet date.<br />
Rate-hedging and option transactions are performed selectively and exclusively for hedging purposes.<br />
Wherever possible, financial derivatives covering assets, borrowings, open contracts or transactions<br />
with a high probability of closure are bundled together as single items for valuation purposes (“macro<br />
hedges”).<br />
Accrued liabilities include reasonable and sufficient allowance for all perceivable risks and any contingent<br />
liabilities. Accruals are valued in accordance with § 253 (1) and (2) of the German Commercial<br />
Code (HGB), whereby use has been made of the options for retention of control laid out in Article 67<br />
(1) clause 2 and (3) clause 1 of the Act Introducing the German Commercial Code (EGHGB). Transfers<br />
to accrued liabilities are made using the net method.<br />
In Germany, pension plan accruals and similar commitments are set up according to actuarial principles<br />
based on realistic assumptions. Assumptions included in the calculations include future salary<br />
increases and future pension adjustments, as defined in § 16 of the German Law on Occupational Pensions<br />
(BetrAVG), as well as assumptions relating to staff turnover. The calculations are based on the<br />
biometric reference values devised by Klaus Heubeck (mortality tables RT 2005 G). The following parameters<br />
were applied:<br />
Interest rate: 5.13% p.a.<br />
Salary increases: 3.00% p.a.<br />
Annuity trend: 1.50% p.a.<br />
Pension plan accruals are determined using the modified discount value method. Our foreign subsidiaries<br />
cover pension plans and similar commitments by accruals that are calculated according to principles<br />
similar to those used in Germany. Only in the United States of America are pension plans and<br />
similar commitments of major significance to the net worth, financial position and results of the<br />
Group. Here the projected unit credit method has been used, based on the following parameters:<br />
Interest rate: 6.12% p.a.<br />
Salary increases: 3.50% p.a.<br />
Annuity trend: up to 2.50% p.a.<br />
Liabilities are stated at their settlement value.
1 5 4<br />
Consolidated companies<br />
In addition to <strong>Knorr</strong>-<strong>Bremse</strong> AG, 19 German and 99 foreign subsidiaries over which <strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
can exert a direct or indirect controlling influence are included in the consolidated financial statements.<br />
Investments in one German and two foreign companies are shown in the consolidated financial statements<br />
as investments in associated companies. One German and eight foreign subsidiaries have not<br />
been included in consolidation because of their minor significance in relation to the net worth, financial<br />
position and results of the Group. Two German companies are not shown as associated companies,<br />
but instead are stated at acquisition cost.<br />
During fiscal year <strong>2011</strong> the Group acquired the following companies, which are included in consolidation:<br />
Comet Fans S.r.l., Solaro, Milan/Italy<br />
Kalmar Tågkompetens AB, Kalmar/Sweden<br />
<strong>Knorr</strong> Brake Corporation Canada Holdings Ltd., Montreal/Canada<br />
MSA Electroteknik Sanayi ve Ticaret Limited Şirketi, Serifali, Istanbul/Turkey<br />
Technologies Lanka Inc., La Pocatière/Canada<br />
The following companies are also newly established or included in consolidation for the first time:<br />
<strong>Knorr</strong>-<strong>Bremse</strong> CAFF Systems for Commercial Vehicles Chongqing Ltd., Chongqing/China<br />
Microelettrica do Brasil Comercialização e Importação de Produtos Eletromecânicos Ltda.,<br />
Barueri, São Paulo/Brazil<br />
<strong>Knorr</strong> Brake Realty LLC, Westminster, Maryland/USA<br />
The following companies have been renamed:<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Brasil (Holding) Administração e Participação Ltda., São Paulo/Brazil<br />
(formerly Indústria Freios <strong>Knorr</strong> Ltda., São Paulo/Brazil)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems (Burton) Ltd., Stretton, Burton upon Trent/Great Britain<br />
(formerly Sigma Coachair (UK) Ltd., Newhall/Great Britain)<br />
Sigma Air Conditioning Pty. Ltd., Wetherill Park, Sydney/Australia<br />
(formerly Sigma Coachair Group Pty. Ltd., Wetherill Park, Sydney/Australia)<br />
The following companies have been merged or wound up:<br />
EMC Traction S.r.l., Milan/Italy<br />
Officine de Zan S.r.l., Rozzano, Milan/Italy<br />
MicroEner S.A.S., Noisy le Grand/France
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 5 5<br />
This means that compared to the previous year, the number of companies included in consolidation<br />
has increased by six foreign companies. On the following pages, a detailed list of affiliated and associated<br />
companies appears in a separate breakdown of the Group’s shareholdings.<br />
The above-mentioned changes in the scope of consolidation had no significant impact on the Group’s<br />
net assets, financial position and operating results. The newly consolidated companies caused the<br />
balance sheet total to increase by EUR 17.9 million.<br />
Principles of consolidation<br />
Until December 31, 2009, the book value method was used to consolidate investments in subsidiaries.<br />
This entailed offsetting book values against the value of our interests in the shareholders’ equity of the<br />
subsidiaries at the time of the initial consolidation. Companies were included in consolidation at the<br />
date of acquisition or at the balance sheet date. Since fiscal year 2010, investments in subsidiaries have<br />
been consolidated using the revaluation method. This entails reporting shareholders’ equity at the<br />
value corresponding to the market value of the assets and borrowings to be included in the consolidated<br />
financial statements. Companies are included in consolidation at the date of acquisition. Since<br />
2002, any resulting goodwill has been capitalized in compliance with GAS standards. Scheduled depreciation<br />
is applied on the basis of operational considerations relating to useful life; within the Group,<br />
this may not exceed 20 years. The useful life of goodwill is determined using the subsidiaries’ longerterm,<br />
strategic business models.<br />
Wherever possible, a negative goodwill resulting from the consolidation in investments is released for<br />
the year in which it arises, as permitted by German commercial law and accounting standards.<br />
Associated companies are consolidated using the equity method, with goodwill generally included as<br />
part of the cost of acquiring interests in associated and related companies. Associated companies acquired<br />
prior to January 2010 were consolidated at the date of acquisition or the balance sheet date. As<br />
from fiscal year 2010, companies are included in consolidation at the date of acquisition.<br />
Our share in the annual results of companies consolidated in accordance with this method, including<br />
amortization on goodwill, is shown in the statement of income under Financial results. Receivables<br />
and liabilities between consolidated companies are netted. Unrealized intercompany profits resulting<br />
from intercompany trade in goods and services are eliminated in the consolidated statements. In the<br />
consolidated statement of income, revenues from intercompany sales and other intercompany income<br />
are offset against the corresponding expenses.
1 5 6<br />
Foreign currency translation<br />
The individual financial statements of the foreign companies included in consolidation are translated<br />
into euros at the mean spot rate at the balance sheet date, with the exception of shareholders’ equity,<br />
which is translated into euros at the historic rate. Income statement items are translated into euros at<br />
the mean rate. Any resulting translation difference is reported under Group equity and noted in the<br />
statement of changes in group equity.<br />
Deferred taxes<br />
Deferred taxes as defined under §§ 274 and 306 of the German Commercial Code (HGB), resulting from<br />
temporary differences between the amount stated in the tax accounts of individual group companies<br />
and the amount stated in the consolidated balance sheet (including differences arising as a result of<br />
accounting and valuation adjustments or during the consolidation process), are netted wherever possible,<br />
in accordance with legal requirements. In the individual balance sheets prepared according to the<br />
uniform principles of accounting and valuation applied to the Group (“Financial statements II”), the option<br />
to capitalize assets to the amount of probable tax relief in the following years is used in individual<br />
cases. The calculation of deferred taxes is based on the tax rates that are expected to be valid at the time<br />
of their realization.<br />
Deferred taxes on losses carried forward are capitalized in individual cases, where there is sufficient<br />
probability that the tax benefits can be realized. At each balance sheet date, the book value of deferred<br />
tax assets is reviewed and, if necessary, adjusted as appropriate.
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 5 7
1 5 8<br />
2<br />
In EUR thousands (TEUR) Carried forward<br />
Jan. 1, <strong>2011</strong> *)<br />
Additions *) Reclassifications *) Disposals *)<br />
Industrial property rights/trademarks 261,714 14,102 21 (4,493)<br />
Goodwill 256,750 32,137 (593)<br />
Purchased intangibles 518,464 46,239 21 (5,086)<br />
Land, equivalent rights to real property, and buildings,<br />
including buildings on land not owned<br />
303,391 19,845 1,515 (8,520)<br />
Technical equipment and machinery 476,149 41,399 19,845 (23,820)<br />
Other equipment, plant and office equipment 403,646 37,268 14,658 (16,286)<br />
Advances to suppliers and construction in<br />
progress<br />
Changes in intangibles, fixed assets and investments<br />
Acquisition or production cost<br />
Additions to purchased fixed and intangible assets amounted to TEUR 205,579 in fiscal year <strong>2011</strong>. This<br />
figure includes investments in the amount of TEUR 158,864.<br />
54,856 60,828 (36,039) (1,481)<br />
Fixed assets 1,238,042 159,340 (21) (50,107)<br />
Investments in affiliated companies 6,610 94 0 0<br />
Investments in associated companies 4,570 0 (44) (200)<br />
Miscellaneous investments 73,254 6,855 44 (263)<br />
Investments 84,434 6,949 0 (463)<br />
Intangibles, fixed assets and investments 1,840,940 212,528 0 (55,656)<br />
*) valued at acquisition or production cost
Currency<br />
differences *)<br />
Balance<br />
Dec. 31, <strong>2011</strong> *)<br />
Accrued<br />
depreciation/<br />
amortization<br />
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 5 9<br />
Net value<br />
Dec. 31, <strong>2011</strong><br />
Net value<br />
Dec. 31, 2010<br />
Depreciation/<br />
amortization during<br />
the fiscal year<br />
3,851 275,195 (199,313) 75,882 82,133 (20,850)<br />
5,816 294,110 (180,654) 113,456 135,144 (54,534)<br />
9,667 569,305 (379,967) 189,338 217,277 (75,384)<br />
(5,357) 310,874 (124,958) 185,916 181,487 (7,162)<br />
(2,963) 510,610 (313,432) 197,178 174,314 (43,195)<br />
(1,980) 437,306 (323,129) 114,177 112,282 (38,724)<br />
(1,420) 76,744 (5,847) 70,897 48,918 (154)<br />
(11,720) 1,335,534 (767,366) 568,168 517,001 (89,235)<br />
130 6,834 (2,793) 4,041 3,822 0<br />
0 4,326 0 4,326 4,570 0<br />
(1,358) 78,532 (16,083) 62,449 57,177 (6)<br />
(1,228) 89,692 (18,876) 70,816 65,569 (6)<br />
(3,281) 1,994,531 (1,166,209) 828,322 799,847 (164,625)
1 6 0<br />
3<br />
4<br />
5<br />
Intangibles<br />
This heading includes primarily the acquisition of goodwill, patents, rights to the use of names and<br />
trademarks, and IT software. IT software and goodwill account for the majority of additions. Any resulting<br />
goodwill is subject to scheduled depreciation over a period of not more than 20 years. Other intangibles<br />
are subject to scheduled depreciation over periods of between three and 10 years.<br />
In fiscal year <strong>2011</strong> an additional provision in the amount of EUR 28.8 million was made against Sigma<br />
Group goodwill. All intangible assets have a limited useful life.<br />
Fixed assets<br />
Movements of fixed assets are presented in the compilation on the preceding pages. To take technical<br />
and economic factors into account, scheduled depreciation was applied to acquisition costs.<br />
During the fiscal year, additional depreciation amounting to TEUR 264 was applied to a plot of land.<br />
Investments<br />
Investment movements are set out in the compilation above. Miscellaneous investments consist of<br />
miscellaneous loans (TEUR 18,931), loans to affiliated companies (TEUR 41,546), long-term investments<br />
(TEUR 1,823), and investments in other companies (TEUR 149).<br />
The Group’s shareholding in OLB Oberlandbahn Fahrzeugbereitstellungs GmbH, Munich/Germany<br />
was sold during the fiscal year under review.<br />
List of shareholdings<br />
1 Consolidated affiliated companies Share in<br />
capital in %<br />
Albatros GmbH, Munich/Germany 100.0<br />
Anchor Brake Shoe Company LLC, West Chicago, Illinois/USA 100.0<br />
BCVS Canadian Holdings LLC, Anjou, Quebec/Canada 100.0<br />
BCVS Mexican Holdings LLC, Cd Acuña, Coah/Mexico 100.0<br />
Bendix Commercial Vehicle Systems LLC, Elyria, Ohio/USA 100.0<br />
Bendix CVS Canada Inc., Anjou, Quebec/Canada 100.0<br />
Bendix CVS de Mexico SA de CV, Cd Acuña, Coah/Mexico 100.0<br />
Bendix Spicer Foundation Brake Canada, Inc., Kingston, Ontario/Canada 100.0<br />
Bendix Spicer Foundation Brake LLC, Elyria, Ohio/USA 80.0<br />
Bost Ibérica S.L., Madrid/Spain 100.0<br />
BSFB Holdings, Inc., Elyria, Ohio/USA 100.0<br />
Comet Fans S.r.l., Solaro, Milan/Italy 100.0<br />
Dr. techn. Josef Zelisko Ges.m.b.H., Mödling/Austria 100.0<br />
Freinrail Systèmes Ferroviaires S.A., Reims/France 100.0<br />
Hasse & Wrede CVS Dalian, China Ltd., Dalian/China 70.0
1 Consolidated affiliated companies<br />
(continued)<br />
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 1<br />
Share in<br />
capital in %<br />
Hasse & Wrede GmbH, Berlin/Germany 100.0<br />
Heine Resistors GmbH, Dresden/Germany 51.0<br />
Heine Resistors (Suzhou) Co. Ltd., Suzhou/China 100.0<br />
IFE CR a.s., Brno/Czech Republic 100.0<br />
IFE North America LLC, Westminster, Maryland/USA 100.0<br />
IFE-Tebel Australia Pty. Ltd., Granville/Australia 100.0<br />
IFE-Tebel Technologies B.V., Leeuwarden/The Netherlands 100.0<br />
IFE-VICTALL Railway Vehicle Door Systems (Qingdao) Co., Ltd., Qingdao/China 59.0<br />
IGE-CZ s.r.o., Brno/Czech Republic 100.0<br />
Kalmar Tågkompetens AB, Kalmar/Sweden 70.0<br />
KB Gamma Beteiligungs GmbH, Munich/Germany 100.0<br />
KB Lambda Beteiligungs GmbH, Munich/Germany 100.0<br />
KB Media GmbH Marketing und Werbung, Munich/Germany 100.0<br />
KB Sigma Beteiligungs GmbH, Munich/Germany 100.0<br />
KB Omikron Beteiligungs GmbH, Munich/Germany 100.0<br />
<strong>Knorr</strong>-Amabhiliki (Pty.) Ltd., Kempton Park/South Africa 74.0<br />
<strong>Knorr</strong> Brake Corporation Canada Holdings Ltd., Montreal, Quebec/Canada 100.0<br />
<strong>Knorr</strong> Brake Corporation, Westminster, Maryland/USA 100.0<br />
<strong>Knorr</strong> Brake Holding Corporation, Watertown, New York/USA 89.3<br />
<strong>Knorr</strong> Brake Ltd., Kingston, Ontario/Canada 100.0<br />
<strong>Knorr</strong> Brake Realty LLC, Westminster, Maryland/USA 100.0<br />
<strong>Knorr</strong> Brake Truck Systems Company, Watertown, New York/USA 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> / Nankou Air Supply Unit (Beijing) Co., Ltd., Nankou/China 55.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Asia Pacific (Holding) Ltd., Hong Kong/China 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Australia Pty. Ltd., Granville/Australia 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Benelux B.V.B.A., Heist-op-den-Berg/Belgium 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Beteiligungsgesellschaft mbH, Munich/Germany 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Brake Equipment (Shanghai) Co., Ltd., Shanghai/China 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Braking Systems for Commercial Vehicles (Dalian) Co., Ltd., Dalian/China 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Brasil (Holding) Administração e Participação Ltda., São Paulo/Brazil 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> CAFF Systems for Commercial Vehicles Chongqing Ltd., Chongqing/China 66.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> CARS LD Vehicle Brake Disc Manufacturing (Beijing) Co., Ltd., Daxing/China 50.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Commercial Vehicle Systems Japan Ltd., Tokyo/Japan 80.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Fékrendszerek Kft., Kecskemét/Hungary 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Ges.m.b.H., Mödling/Austria 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> India Pvt. Ltd., Faridabad/India 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> KAMA Systems for Commercial Vehicles OOO, Naberezhnye Chelny/Russia 50.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Investment GmbH, Munich/Germany 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> IT-Services GmbH, Munich/Germany 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Nordic Rail Services AB, Lund/Sweden 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Polska SfN Sp. z o.o., Warsaw/Poland 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems Italia S.r.l., Campi Bisenzio/Italy 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems Japan Ltd., Tokyo/Japan 94.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems Korea Ltd., Seoul/South Korea 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems OOO, Moscow/Russia 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems (Burton) Ltd., Stretton, Burton upon Trent/Great Britain 100.0
1 6 2<br />
1 Consolidated affiliated companies<br />
(continued)<br />
Share in<br />
capital in %<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems (Machining) Ltd., Melksham, Wiltshire/Great Britain 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Rail Systems (UK) Ltd., Melksham, Wiltshire/Great Britain 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> SA Holding Company (UK) Ltd., Melksham, Wiltshire/Great Britain 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> S.A. (Pty.) Ltd., Kempton Park/South Africa 75.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> S.R.L., Bucharest/Romania 70.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Sistemas para Veículos Comerciais Brasil Ltda., São Paulo/Brazil 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Sistemas para Veículos Ferroviários Ltda., São Paulo/Brazil 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Sistemi per Autoveicoli Commerciali S.p.A., Arcore/Italy 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> System för Tunga Forden AB, Malmö/Sweden 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systeme für Nutzfahrzeuge GmbH, Munich/Germany 80.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systeme für Schienenfahrzeuge GmbH, Munich/Germany 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systeme für Schienenfahrzeuge Ibero Holding GmbH, Munich/Germany 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systèmes pour Véhicules Utilitaires France S.A., Lisieux/France 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systems for Commercial Vehicles India Pvt. Ltd., Pune/India 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systems for Commercial Vehicles OOO, Moscow/Russia 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systems for Commercial Vehicles Ltd., Bristol/Great Britain 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systems for Rail Vehicles (Suzhou) Co., Ltd., Suzhou/China 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systemy dla Kolejowych Srodków Lokomocji PL Sp. z o.o., Cracow/Poland 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Systémy pro uzitková vozidla CR s.r.o., Hejnice/Czech Republic 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Ticari Arac Fren Sistemieri Limited Şirketi, Istanbul/Turkey 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> US Beteiligungs GmbH, Munich/Germany 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> US Investment GmbH, Munich/Germany 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Vasúti Jármü Rendszerek Hungária Kft., Budapest/Hungary 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Verwaltungsgesellschaft mbH, Munich/Germany 100.0<br />
Maquiladora de Acuña SA de CV, Cd Acuña, Coah/Mexico 100.0<br />
Merak Jinxin Air Conditioning Systems (Wuxi) Co., Ltd., Wuxi/China 51.0<br />
Merak <strong>Knorr</strong> Climatización S.A., Buenos Aires/Argentina 100.0<br />
Merak North America LLC, Westminster, Maryland/USA 100.0<br />
Merak Railway Technologies (Shanghai) Co., Ltd., Shanghai/China 100.0<br />
Merak Sistemas Integrados de Climatización S.A., Getafe/Spain 100.0<br />
Microelettrica do Brasil Comercialização e Importação de Produtos Eletromecânicos Ltda.,<br />
Barueri, São Paulo/Brazil<br />
90.0<br />
Microelettrica Power Devices (Pty) Ltd., Johannesburg/South Africa 100.0<br />
Microelettrica Power (Pty) Ltd., Johannesburg/South Africa 74.0<br />
Microelettrica Scientifica (Pty) Ltd., Johannesburg/South Africa 100.0<br />
Microelettrica Scientifica S.p.A., Rozzano/Italy 100.0<br />
Microelettrica USA LLC, Randolph, New Jersey/USA 100.0<br />
MSA Electroteknik Sanayi ve Ticaret Limited Şirketi, Serifali, Istanbul/Turkey 51.0<br />
M.S. Resistances S.A.S., Saint Chamond/France 51.0<br />
New York Air Brake Corporation, Watertown, New York/USA 100.0<br />
Oerlikon-<strong>Knorr</strong> Eisenbahntechnik AG, Niederhasli/Switzerland 100.0<br />
Sigma Air Conditioning Pty. Ltd., Wetherill Park, Sydney/Australia 100.0<br />
Sigma Coachair Group (China) Co. Ltd., Changzhou/China 100.0<br />
Sigma Coachair Systems (US) Inc., Chicago, Illinois/USA 100.0<br />
Sigma Transit Systems Pty. Ltd., Wetherill Park, Sydney/Australia 100.0
1 Consolidated affiliated companies<br />
(continued)<br />
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 3<br />
Share in<br />
capital in %<br />
Skach Ges.m.b.H., Mödling/Austria 100.0<br />
Sociedad Española de Frenos, Calefacción y Señales S.A., Getafe/Spain 100.0<br />
Stahlwerk Volmarstein GmbH, Wetter (Ruhr)/Germany 100.0<br />
STE Schwingungs-Technik GmbH, Klieken/Germany 100.0<br />
Sydac Pty. Ltd., Adelaide/Australia 100.0<br />
Sydac Ltd., Manchester/Great Britain 100.0<br />
Technologies Lanka Inc., La Pocatière, Quebec/Canada 75.0<br />
Techtrain Associates Limited, Doncaster/Great Britain 100.0<br />
Unicupler GmbH, Niederurnen/Switzerland 100.0<br />
Westinghouse Brakes Australia Pty. Ltd., Concord West/Australia 100.0<br />
Westinghouse Platform Screen Doors (Guangzhou) Ltd., Guangzhou/China 65.0<br />
Westinghouse Platform Screen Doors Ltd., Walsall/Great Britain 100.0<br />
2 Associated companies valued using the equity method Share in<br />
capital in %<br />
Gorilla Brake & Components, Inc., Brantfort, Ontario/Canada 20.0<br />
Icer Rail S.L., Pamplona/Spain 25.0<br />
Webasto Kiekert Bustüren GmbH, Karlsfeld/Germany 50.0<br />
3 Affiliated companies not included in consolidation Share in<br />
capital in %<br />
Black River Air Logistics Corp., Watertown, New York/USA 100.0<br />
Di-Pro LLC., Fresno, California/USA 100.0<br />
Freios <strong>Knorr</strong> Argentina S.A., Buenos Aires/Argentina 100.0<br />
KB Investment UK Ltd., Chippenham/Great Britain 100.0<br />
<strong>Knorr</strong>-<strong>Bremse</strong> RUS OOO, Nizhny Novgorod/Russia 100.0<br />
Metco Technical Consulting AG, Zug/Switzerland 100.0<br />
Sigma Coachair (UK) Holdings Ltd., Newhall, Swadlincote/Great Britain 100.0<br />
Sigma Transit Systems (Taiwan) Co. Ltd. Taipei/Taiwan 100.0<br />
ITERIS Europe GmbH, Bietigheim-Bissingen/Germany 100.0<br />
4 Associated companies valued without using the equity method Share in<br />
capital in %<br />
Megalith Grundstücksverwaltungsgesellschaft mbH & Co. Vermietungs KG, Mainz/Germany –<br />
Deutsche-Anlagen-Leasing GmbH holds majority voting rights<br />
Sanctor Grundstücks-Vermietungsgesellschaft mbH & Co. Objekt Marzahn KG, Düsseldorf/Germany<br />
– Deutsche-Immobilien-Leasing GmbH holds majority voting rights<br />
100.0<br />
99.0
1 6 4<br />
6<br />
7<br />
8<br />
9<br />
10<br />
Inventories<br />
Receivables and other assets<br />
Cash and cash equivalents<br />
This item includes cash at bank, checks and cash on hand.<br />
Prepaid expenses<br />
Group prepaid expenses amounted to TEUR 12,337 (2010: TEUR 12,182).<br />
<strong>2011</strong> TEUR <strong>2011</strong> TEUR 2010 TEUR<br />
Remaining term<br />
more than 1 year<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Materials and supplies 244,436 184,402<br />
Work in process 58,010 60,164<br />
Finished products, merchandise 214,838 195,916<br />
less advances received on orders (227,500) (221,145)<br />
Total 289,784 219,337<br />
in total in total<br />
Accounts receivable, trade 413 695,183 689,066<br />
Other assets 8,955 109,341 92,133<br />
Total 9,368 804,524 781,199<br />
Deferred taxes<br />
At the balance sheet date deferred tax assets amounted to TEUR 63,030 (2010: TEUR 68,713), while deferred<br />
tax liabilities totaled TEUR 0 (2010: TEUR 1,636).<br />
In compliance with the legal requirements, deferred tax assets and liabilities are stated at the netted<br />
amount. Of the deferred tax assets, TEUR 32,728 (2010: TEUR 39,169) relate to deferred taxes on individual<br />
balance sheets of group companies and TEUR 30,302 (2010: TEUR 29,544) relate to consolidation<br />
entries affecting net income. Deferred tax assets on individual balance sheets result primarily from temporary<br />
differences in accrued liabilities, receivables and other assets. Deferred tax assets relating to<br />
consolidation adjustments are primarily the result of eliminating unrealized intercompany profits. Deferred<br />
tax liabilities relate solely to deferred taxes on individual balance sheets of group companies.<br />
At individual company level and at Group level, deferred taxes are stated at the projected tax rate in the<br />
respective countries at the time of realization. Tax rates range from 0% to 40%, while the rate on consolidation<br />
activities is ca. 35%.
11<br />
12<br />
13<br />
14<br />
15<br />
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 5<br />
Capital stock<br />
The capital stock of <strong>Knorr</strong>-<strong>Bremse</strong> AG is divided up into 2,600,000 bearer shares, each with a nominal<br />
value of EUR 26. Stella Vermögensverwaltungs-GmbH and KB Holding GmbH, both based in Grünwald/<br />
Germany, have informed <strong>Knorr</strong>-<strong>Bremse</strong> AG that directly or indirectly, they hold a majority interest in<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG.<br />
Capital reserves<br />
Capital reserves are unchanged from the previous year. Like the legal reserve, they are subject to the<br />
restrictions of § 150 of the German Corporation Law (AktG).<br />
Retained earnings<br />
In addition to the legal reserve, Retained earnings include the accumulated earnings of the companies<br />
included in consolidation, where these have not been distributed. Furthermore this heading reflects all<br />
Group items that exert an influence on shareholders’ equity. The legal reserves amounted to TEUR 8,883<br />
(2010: 8,680). The statutory reserves (TEUR 6,869) rose by TEUR 748 compared to the previous year<br />
(TEUR 6,121). Miscellaneous retained earnings amounted to TEUR 415,978 (2010: TEUR 298,207) at the<br />
balance sheet date. The capitalization of deferred tax assets meant that an amount of TEUR 63,030<br />
(2010: 67,077) was subject to the payout restriction laid down in § 268 (8) clause 2 of the German Commercial<br />
Code (HGB).<br />
Pension plan accruals<br />
Pension plan accruals are valued according to the provisions of the German Accounting Law Modernization<br />
Act.<br />
The shortfall in cover for pension funds in Great Britain amounted to TEUR 17,479 as at year-end <strong>2011</strong>.<br />
Other accrued liabilities<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Pension plan accruals 199,667 192,257<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Provisions for taxes 78,940 59,109<br />
Miscellaneous accruals 564,351 469,412<br />
Total 643,291 528,521<br />
The taxation provisions include projected income tax payments for the year under review or, where the<br />
fiscal year diverges from the financial year, an income tax charge allocated on an accrual basis. Tax charges<br />
are also shown for preceding assessment periods. Miscellaneous accruals relate primarily to warranty<br />
and product liability commitments, personnel costs, restructuring activities, anticipated losses on contracts<br />
and other risks in connection with current operations, as well as invoices outstanding.
1 6 6<br />
16<br />
17<br />
Liabilities<br />
<strong>2011</strong> TEUR <strong>2011</strong> TEUR 2010 TEUR<br />
Remaining term<br />
less than 1 year<br />
Contingencies and miscellaneous financial commitments<br />
in total in total<br />
Accounts payable, banks 33,188 135,394 110,615<br />
Accounts payable, trade 513,263 514,410 492,782<br />
Other liabilities:<br />
Liabilities from accepted bills 6,063 6,063 114<br />
Miscellaneous liabilities 124,697 126,319 111,353<br />
(thereof for taxes) (51,513) (51,513) (37,281)<br />
(thereof for social security) (11,443) (11,443) (11,530)<br />
130,760 132,382 111,467<br />
Total liabilities 677,211 782,186 714,864<br />
(thereof with a remaining term of more than<br />
5 years)<br />
(2,075) (101,758)<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Warranties 8,262 8,601<br />
Guarantees 14,332 8,474<br />
Land charge 0 11,000<br />
Leasing commitments 190,669 195,697<br />
As required by § 314 (1) no. 2a of the German Commercial Code (HGB), it should be noted that the<br />
Group has retained options to purchase the remaining shares in three companies acquired in <strong>2011</strong>, including:<br />
Microelettrica do Brasil Comercialização e Importação de Produtos Eletromecânicos Ltda.,<br />
Barueri, São Paulo/Brazil,<br />
Kalmar Tågkompetens AB, Kalmar/Sweden and<br />
Technologies Lanka Inc., La Pocatière/Canada.<br />
The options are not included in the book values of the affiliated companies because it is not possible to<br />
provide a meaningful estimate of their value at the present time. The <strong>Knorr</strong>-<strong>Bremse</strong> Group has entered<br />
into leasing contracts primarily for office buildings and production facilities in which the leased asset is<br />
assignable to the lessor. These off-balance-sheet leasing transactions represent an alternative form of<br />
finance to borrowing. Commitments associated with these leasing agreements are carried under Miscellaneous<br />
financial commitments and amount to TEUR 190,669; maturities range from one year or less<br />
(TEUR 31,291), to between one and five years (TEUR 86,517), to over five years (TEUR 72,861). The agreements<br />
do not include any unusual termination or renewal options. A long-term purchase agreement<br />
exists between Group company Bendix Spicer Foundation LLC, Elyria, Ohio/USA and Gorilla Brake &<br />
Components, Inc., Brantford, Ontario/Canada. Under the terms of this agreement, Bendix Spicer Foundation<br />
LLC undertakes to purchase from Gorilla Brake & Components, Inc. 85% of the spare part deliveries<br />
made within the latter company’s regional sphere of influence.<br />
Thanks to the risk management system in place, the risk of a claim arising on contingent liabilities is<br />
rated as minimal.
18<br />
19<br />
20<br />
21<br />
22<br />
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 7<br />
Other operating income<br />
Other operating income consists primarily of gains on currency exchange, income from the reversal of<br />
reserves, income from disposals of fixed assets and rental income. The heading also carries gains on<br />
currency differences amounting to TEUR 65,237 (2010: TEUR 70,799), as well as income relating to other<br />
accounting periods in the amount of TEUR 42,531 (2010: 16,016), primarily from the reversal of reserves.<br />
Cost of materials<br />
Personnel expenses/staff<br />
Depreciation<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Expenditure on materials, supplies and merchandise 2,123,014 1,836,789<br />
Expenditure on services purchased 88,709 75,956<br />
Total 2,211,723 1,912,745<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Wages and salaries 649,496 580,733<br />
Statutory social welfare contributions and expenses relating to<br />
pensions and employee benefits<br />
155,320 140,131<br />
Personnel costs 804,816 720,864<br />
(thereof for retirement benefits) (39,788) (33,225)<br />
Average number of employees during the fiscal year Number Number<br />
Wage earners 8,634 7,211<br />
Salary earners 8,669 7,851<br />
Apprentices 205 201<br />
Total 17,508 15,263<br />
Depreciation and amortization on purchased intangibles and on<br />
fixed assets<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
164,619 146,863<br />
In addition, rental and leasing expenses totaling TEUR 51,079 (2010: TEUR 47,499) were incurred during<br />
the reporting period.<br />
Other operating expenses<br />
Other operating expenses consist primarily of maintenance costs, direct sales costs, legal and consulting<br />
fees, commissions, travel expenses and miscellaneous administrative expenses. Other taxes for the<br />
Group amount to TEUR 15,420 (2010: TEUR 12,078). Expenses resulting from foreign exchange fluctua-
1 6 8<br />
23<br />
24<br />
25<br />
26<br />
27<br />
tions during the fiscal year amounted to TEUR 62,346 (2010: TEUR 72,354). The fee paid to the independent<br />
auditors, KPMG AG Wirtschaftsprüfungsgesellschaft and their affiliates, amounted to TEUR 632 for<br />
fiscal year <strong>2011</strong>. Of this TEUR 502 was paid out for audit services and TEUR 130 for other services.<br />
Financial results<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Miscellaneous interest and similar income 14,065 6,163<br />
Depreciation on investments (6) (2,078)<br />
Interest and similar expenses (18,005) (14,818)<br />
(thereof for discounts on accruals) (9,932) (8,044)<br />
Income from associated, affiliated and other companies (181) (239)<br />
Total (4,127) (10,972)<br />
Extraordinary result<br />
Extraordinary expenses reflected the one-off effect of adjustments in the previous year required to<br />
comply with the German Accounting Law Modernization Act.<br />
Taxes on income<br />
Taxes on income and earnings amounted to TEUR 168,794 (2010: TEUR 130,295), and included deferred<br />
taxes in the amount of TEUR 9,340 (2010: TEUR 8,842).<br />
Net income<br />
Financial derivatives<br />
Financial instruments are not held for trading purposes.<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Net income 329,296 239,381<br />
Minority interests in earnings of consolidated subsidiaries (38,198) (30,690)<br />
Retained earnings brought forward from the previous year (after<br />
distribution of dividends)<br />
106,556 180,670<br />
Withdrawals from retained earnings (133,730) (126,805)<br />
Unappropriated consolidated net income (<strong>Knorr</strong>-<strong>Bremse</strong><br />
AG unappropriated retained earnings)<br />
263,924 262,556<br />
Underlying transactions and their derivatives are bundled together as single items for valuation purposes<br />
(“macro hedges”). These bundled derivatives are netted out without affecting net income wherever<br />
the respective impact on income of the underlying transaction (hedged item) and the related<br />
hedge offset each other (net hedge presentation method).
N O T E S T O T H E C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S 1 6 9<br />
Forward exchange and option transactions are performed purely and exclusively in order to hedge current<br />
and future foreign currency payables and receivables from the sale and purchase of goods and<br />
services and the elimination of exchange rate risk for selected assets. The aim of hedging operations at<br />
<strong>Knorr</strong>-<strong>Bremse</strong> is to reduce the risks posed by foreign exchange fluctuations to the ordinary course of<br />
business. Currency hedging is based on the volume of open commitments arising or expected to arise<br />
from core business activities. Maturities are based on the lifespans of the underlying business transactions,<br />
whereby highly probable transactions are hedged over a rolling three-year planning period. Because<br />
the conditions and parameters of the hedges match those of the hedged items, any payment<br />
flows or changes in value are offset in full. The <strong>Knorr</strong>-<strong>Bremse</strong> Group uses forward exchange contracts,<br />
currency options, interest rate swaps and cross currency swaps as hedging instruments. Not included<br />
in the hedging report are forward exchange derivatives with a nominal value of EUR 34.6 million.<br />
Financial instruments amounting to EUR 907.1 million in total (representing hedged risks) are included<br />
in macro hedges. Of this amount, EUR 258.5 million is attributable to the hedging of assets (micro<br />
hedges), EUR 128.6 million to the hedging of open contracts (micro hedges) and EUR 520.0 million to<br />
the hedging of high-probability transactions (portfolio hedges). Commodity futures contracts are used<br />
exclusively to hedge price risks arising on fluctuations in the purchase prices of raw materials used in<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group products (portfolio hedges). The volume of underlying transactions (hedged<br />
items) is calculated on the basis of high-probability requirements for raw materials over a rolling twoyear<br />
planning period. The derivatives are based on reference indices traded on commodity futures exchanges.<br />
The effectiveness of the hedging relationship is retrospectively analyzed using statistical correlation<br />
techniques, showing a correlation in excess of 80%. Concluded contracts totaling EUR 7.4<br />
million are carried in full in macro hedges.<br />
The nominal and market values of financial instruments as at December 31, <strong>2011</strong> break down as follows:<br />
Total<br />
Dec. 31, <strong>2011</strong><br />
Total<br />
Dec. 31, <strong>2011</strong><br />
Total<br />
Dec. 31, 2010<br />
Total<br />
Dec. 31, 2010<br />
in EUR millions Nominal value Market value Nominal value Market value<br />
Foreign exchange contracts<br />
Forward exchange transactions 611 (26) 652 (8)<br />
Currency options 170 (3) 113 1<br />
Interest rate contracts<br />
Cross currency swaps 125 (30) 140 (26)<br />
Interest rate swaps 36 (4) 0 0<br />
Commodity-related contracts<br />
Swaps 7 (1) 14 1<br />
Negative market values correspond to the risks associated with financial derivatives; of these, EUR 0.7<br />
million are recorded under accrued liabilities. Positive market values are offset by risks associated with<br />
the underlying transactions (hedged items) in the respective macro hedges.<br />
While cross currency swaps generally come under the heading of interest rate instruments, in terms of<br />
content they are used exclusively to hedge foreign currency risks, because the interest rates in the underlying<br />
currencies are exchanged at fixed rates. The market value of financial derivatives is best defined<br />
as the price one party is prepared to pay in order to assume the rights and/or obligations of another<br />
party. Market values are calculated on the basis of market information available at the balance sheet<br />
date and by applying standard market valuation methods as follows:<br />
• Currency hedging contracts are valued on the basis of reference rates, taking account of<br />
forward premiums and discounts.
1 7 0<br />
28<br />
29<br />
30<br />
Munich, March 2, 2012<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
Executive Board<br />
• Cross currency swaps are valued analogously to pure interest rate contracts or currency<br />
hedging contracts, on the basis of discounted, projected cash-flows using market interest<br />
rates and reference rates for the remaining lifespans of the instruments.<br />
• The lease payments for one real estate leasing contract were hedged by an interest rate<br />
swap.<br />
• Commodity contracts are used to hedge risks associated with steel and aluminum price<br />
fluctuations. The contracts are valued at market price.<br />
• Options are valued using recognized models for calculating option prices (e.g. Black-Scholes).<br />
Paid option premiums are carried under Other assets. As at the balance sheet date, the book value of call<br />
option premiums paid out amounted to EUR 2.5 million.<br />
Research and development expenditure<br />
In fiscal year <strong>2011</strong>, Group expenditure on research and development amounted to TEUR 208,823 (2010:<br />
TEUR 175,284).<br />
Miscellaneous<br />
The Group financial statements are published in the official electronic Federal Gazette and in the Commercial<br />
Register at the local first-instance court in Munich, Germany. Under the terms of § 264 (3) of the<br />
German Commercial Code (HGB), the subsidiary companies <strong>Knorr</strong>-<strong>Bremse</strong> Systeme für Schienenfahrzeuge<br />
GmbH, Munich/Germany, and Hasse & Wrede GmbH, Berlin/Germany, are exempt from the obligation<br />
to publish their figures pursuant to § 325 of the German Commercial Code.<br />
Total remuneration of the Supervisory Board and Executive Board<br />
The total remuneration of members of the Supervisory Board amounted to TEUR 345 and the total remuneration<br />
of the Executive Board to TEUR 5,916. Pension commitments to former members of the<br />
Executive Board and their surviving dependents are covered by an accrual of TEUR 24,766; payments in<br />
the fiscal year amounted to TEUR 2,823.<br />
Klaus Deller Dr. Dieter Wilhelm Dr. Lorenz Zwingmann
C O N S O L I D A T E D C A S H F L O W S T A T E M E N T<br />
Consolidated Cash Flow Statement in Compliance with GAS 2<br />
(German Accounting Standard)<br />
Cash funds are comprised of the Group’s cash and cash equivalents, and marketable securities.<br />
<strong>2011</strong> TEUR 2010 TEUR<br />
Result for the period (including minority interests in consolidated<br />
results)<br />
329,296 239,381<br />
Depreciation and amortization on/Additions to intangibles and<br />
fixed assets<br />
164,625 148,941<br />
Increase in accruals 110,699 134,927<br />
Income from disposals of intangibles, fixed assets and investments (25,542) 1,908<br />
Increase in inventories, receivables and other assets not related to<br />
investing or financing activities<br />
(70,092) (208,489)<br />
Increase in payables and other liabilities not related to investing or<br />
financing activities<br />
33,315 139,716<br />
Cash flows from operating activities 542,301 456,384<br />
Disbursements for investments in intangible assets (10,472) (8,344)<br />
Proceeds from disposals of intangible assets 854 1,294<br />
Disbursements for investments in fixed assets (148,391) (105,025)<br />
Proceeds from disposals of fixed assets 36,669 2,313<br />
Disbursements for investments in financial assets (6,855) (27,347)<br />
Proceeds from disposals of financial assets 592 0<br />
Disbursements for the acquisition of consolidated companies and<br />
other business units<br />
(52,423) (42,672)<br />
Cash flows from investing activities (180,026) (179,781)<br />
Proceeds from additions to shareholders’ equity 114 956<br />
Disbursements to company owners and minority shareholders (177,415) (64,737)<br />
Proceeds from borrowings 59,463 43,557<br />
Disbursements for the redemption of borrowings (36,938) (118,491)<br />
Cash flows from financing activities (154,776) (138,715)<br />
Change in cash funds resulting from exchange rate movements<br />
and changes in group structure<br />
12,018 20,335<br />
Changes in cash funds resulting from cash-relevant<br />
transactions<br />
219,517 158,223<br />
Cash funds at the beginning of the period 312,879 154,656<br />
Cash funds at the end of the period 532,396 312,879<br />
Interest paid out in fiscal year <strong>2011</strong> amounted to TEUR 7,588, interest received to TEUR 11,759.<br />
Income tax paid out in <strong>2011</strong> amounted to TEUR 111,577, tax refunds received to TEUR 12,760.<br />
1 7 1
1 7 2 S E G M E N T R E P O R T<br />
Segment <strong>Report</strong> in Compliance with GAS 3<br />
(German Accounting Standard)<br />
In order to comply with GAS 3, <strong>Knorr</strong>-<strong>Bremse</strong> AG has compiled the following report on three segments<br />
that are subject to reporting requirements. The breakdown by segment is based on the Group’s activities<br />
in the three major geographical regions that provide the geographical framework for the Group’s<br />
internal organizational and reporting structures. The operating segments cover three regions: Europe,<br />
the Americas and Asia/Australia, each of which is characterized by different market and customer demands.<br />
The <strong>Knorr</strong>-<strong>Bremse</strong> Group’s main product lines – braking systems for rail and commercial vehicles<br />
– are represented in all three regions.<br />
Fiscal Year <strong>2011</strong> Europe America Asia/<br />
Australia<br />
in EUR thousands (TEUR)<br />
<strong>Knorr</strong>-<strong>Bremse</strong><br />
Group<br />
Sales by region 2,582,660 1,064,929 1,078,656 4,726,245<br />
thereof net sales with third parties 2,169,485 1,020,007 1,051,305 4,240,797<br />
thereof net sales with other segments 413,175 44,922 27,351 485,448<br />
Net income 173,881 76,043 79,372 329,296<br />
Income tax charge 89,130 38,979 40,685 168,794<br />
Investments (excluding financial investments) 85,307 38,086 35,471 158,864<br />
Depreciation (excluding financial investments) 76,145 33,269 55,205 164,619<br />
Result for associated companies (200) 0 0 (200)<br />
Result for affiliated and other companies 19 0 0 19<br />
Assets 1,235,951 602,726 691,716 2,530,393<br />
Fiscal Year 2010 Europe America Asia/<br />
Australia<br />
in EUR thousands (TEUR)<br />
<strong>Knorr</strong>-<strong>Bremse</strong><br />
Group<br />
Sales by region 2,288,048 891,346 1,041,295 4,220,689<br />
thereof net sales with third parties 1,886,009 826,977 999,177 3,712,163<br />
thereof net sales with other segments 402,039 64,369 42,118 508,526<br />
Net income 109,783 47,320 82,278 239,381<br />
Income tax charge 59,754 25,758 44,783 130,295<br />
Investments (excluding financial investments) 74,751 21,337 17,281 113,369<br />
Depreciation (excluding financial investments) 72,350 33,134 41,379 146,863<br />
Result for associated companies 0 (252) 0 (252)<br />
Result for affiliated and other companies 13 0 0 13<br />
Assets 998,130 523,777 672,250 2,194,157
Fiscal Year <strong>2011</strong> Net sales Investments<br />
(excluding<br />
financial<br />
investments)<br />
in EUR thousands (TEUR)<br />
S E G M E N T R E P O R T<br />
The analysis does not show borrowings or interest payable by region, because these items are controlled<br />
centrally across the Group by the parent company, thus are not dependent on regional decisions<br />
associated with day-to-day business operations.<br />
The usual prices apply as agreed between counterparties.<br />
Depreciation<br />
(excluding<br />
financial<br />
investments)<br />
Assets<br />
Rail vehicle systems 2,186,898 65,932 97,738 1,476,974<br />
Commercial vehicle systems 2,068,223 74,686 60,776 1,136,804<br />
Miscellaneous/consolidations (14,324) 18,246 6,105 (83,385)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group 4,240,797 158,864 164,619 2,530,393<br />
Fiscal Year 2010 Net sales Investments<br />
(excluding<br />
financial<br />
investments)<br />
in EUR thousands (TEUR)<br />
Depreciation<br />
(excluding<br />
financial<br />
investments)<br />
Assets<br />
Rail vehicle systems 2,024,389 61,236 82,941 1,435,022<br />
Commercial vehicle systems 1,700,682 50,361 61,043 967,908<br />
Miscellaneous/consolidations (12,908) 1,772 2,879 (208,773)<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Group 3,712,163 113,369 146,863 2,194,157<br />
1 7 3
1 7 4 S T A T E M E N T O F C H A N G E S I N G R O U P E Q U I T Y<br />
Statement of Changes in Group Equity in Compliance with GAS 7<br />
(German Accounting Standard)<br />
Changes in group equity <strong>2011</strong> Capital stock Capital<br />
reserves<br />
in EUR thousands (TEUR)<br />
Retained<br />
earnings<br />
Group equity includes capital differences arising on foreign currency translation in the amount of<br />
TEUR -443, of which TEUR -16 relates to minority interests.<br />
Other changes in minority interests result primarily from the purchase of former minority interests in<br />
<strong>Knorr</strong>-<strong>Bremse</strong> Nordic Rail Services AB, Lund/Sweden. Following the purchase, the Group holds a 100%<br />
interest as at the balance sheet date.<br />
Minority interests also reflect the first-time inclusion in consolidation of<br />
Net income Minority<br />
interests<br />
<strong>Knorr</strong>-<strong>Bremse</strong><br />
Group<br />
As at Dec. 31, 2010 67,600 153 313,008 262,556 110,544 753,861<br />
Dividend payments (156,000) (21,415) (177,415)<br />
Net income <strong>2011</strong> 291,098 38,198 329,296<br />
Transfers to retained earnings 133,730 (133,730) 0<br />
Currency fluctuations (1,371) 1,031 (340)<br />
Other fluctuations (13,637) 10,610 (3,027)<br />
As at Dec. 31, <strong>2011</strong> 67,600 153 431,730 263,924 138,968 902,375<br />
Changes in group equity 2010 Capital stock Capital<br />
reserves<br />
in EUR thousands (TEUR)<br />
Retained<br />
earnings<br />
Net income Minority<br />
interests<br />
<strong>Knorr</strong>-<strong>Bremse</strong><br />
Group<br />
As at Dec. 31, 2009 67,600 153 153,717 232,670 78,639 532,779<br />
Dividend payments (52,000) (9,882) (61,882)<br />
Net income 2010 208,691 30,690 239,381<br />
Transfers to retained earnings 126,805 (126,805) 0<br />
Currency fluctuations 37,319 4,565 41,884<br />
Other fluctuations (4,833) 6,532 1,699<br />
As at Dec. 31, 2010 67,600 153 313,008 262,556 110,544 753,861<br />
Kalmar Tågkompetens AB, Kalmar/Sweden<br />
<strong>Knorr</strong>-<strong>Bremse</strong> CAFF Systems for Commercial Vehicles Chongqing Ltd., Chongqing/China<br />
Microelettrica do Brasil Comercialização e Importação de Produtos Eletromecânicos Ltda.,<br />
Barueri, São Paulo/Brazil<br />
MSA Electroteknik Sanayi ve Ticaret Limited Şirketi, Serifali, Istanbul/Turkey<br />
Technologies Lanka Inc., La Pocatière/Canada.
I N D E P E N D E N T A U D I T O R ’ S R E P O R T<br />
Independent Auditor’s <strong>Report</strong><br />
We have audited the consolidated financial statements prepared by <strong>Knorr</strong>-<strong>Bremse</strong> Aktiengesellschaft,<br />
Munich – comprising the balance sheet, income statement, notes to the financial statements, cash flow<br />
statement, statement of changes in equity and segment report – as well as the group management<br />
report for the business year from January 1 to December 31, <strong>2011</strong>. The preparation of the consolidated<br />
financial statements and the group management report in accordance with German commercial law is<br />
the responsibility of the parent company’s management. Our responsibility is to express an opinion on<br />
the consolidated financial statements and on the group management report based on our audit.<br />
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB<br />
[German Commercial Code] and German generally accepted standards for the audit of financial statements<br />
promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan<br />
and perform the audit such that misstatements materially affecting the presentation of the net assets,<br />
financial position and results of operations in the consolidated financial statements in accordance with<br />
German principles of proper accounting and in the group management report are detected with reasonable<br />
assurance. Knowledge of the business activities and the economic and legal environment of<br />
the Group and expectations as to possible misstatements are taken into account in the determination<br />
of audit procedures. The effectiveness of the accounting-related internal control system and the evidence<br />
supporting the disclosures in the consolidated financial statements and the group management<br />
report are examined primarily on a test basis within the framework of the audit.<br />
The audit includes assessing the annual financial statements of those entities included in consolidation,<br />
the determination of entities to be included in consolidation, the accounting and consolidation principles<br />
used and significant estimates made by management, as well as evaluating the overall presentation<br />
of the consolidated financial statements and group management report. We believe that our audit<br />
provides a reasonable basis for our opinion.<br />
Our audit has not led to any reservations.<br />
In our opinion, based on the findings of our audit, the consolidated financial statements comply with<br />
the legal requirements and give a true and fair view of the net assets, financial position and results of<br />
operations of the Group in accordance with these requirements. The group management report is<br />
consistent with the consolidated financial statements and as a whole provides a suitable view of the<br />
Group’s position and suitably presents the opportunities and risks of future development.<br />
Munich, March 2, 2012<br />
KPMG AG<br />
Wirtschaftsprüfungsgesellschaft<br />
signed Rupprecht<br />
Independent auditor<br />
signed Peth<br />
Independent auditor<br />
1 7 5
1 7 6 C O N S O L I D A T E D B A L A N C E S H E E T<br />
Consolidated Balance Sheet as at December 31, <strong>2011</strong><br />
Assets Notes Dec. 31, <strong>2011</strong> TEUR Dec. 31, 2010 TEUR<br />
Purchased intangibles (3) 189,338 217,277<br />
Fixed assets (4) 568,168 517,001<br />
Investments (5) 70,816 65,569<br />
Intangibles, fixed assets and<br />
investments<br />
828,322 799,847<br />
Inventories (6) 289,784 219,337<br />
Accounts receivable, trade (7) 695,183 689,066<br />
Other assets (7) 109,341 92,133<br />
Other marketable securities 18 12<br />
Cash and cash equivalents (8) 532,378 312,867<br />
Current assets 1,626,704 1,313,415<br />
Prepaid expenses (9) 12,337 12,182<br />
Deferred tax assets (10) 63,030 68,713<br />
Balance sheet total 2,530,393 2,194,157<br />
Equity and Liabilities Notes Dec. 31, <strong>2011</strong> TEUR Dec. 31, 2010 TEUR<br />
Capital stock (11) 67,600 67,600<br />
Capital reserves (12) 153 153<br />
Retained earnings (13) 431,730 313,008<br />
Unappropriated consolidated net income (26) 263,924 262,556<br />
Minority interests 138,968 110,544<br />
Group equity 902,375 753,861<br />
Pension plan accruals (14) 199,667 192,257<br />
Other accrued liabilities (15) 643,291 528,521<br />
Accruals 842,958 720,778<br />
Accounts payable, banks 135,394 110,615<br />
Accounts payable, trade 514,410 492,782<br />
Other liabilities 132,382 111,467<br />
Liabilities (16) 782,186 714,864<br />
Deferred income 2,874 3,018<br />
Deferred tax liabilities (10) 0 1,636<br />
Balance sheet total 2,530,393 2,194,157
C O N S O L I D A T E D S T A T E M E N T O F I N C O M E<br />
Consolidated Statement of Income for the Fiscal Year from January 1<br />
to December 31, <strong>2011</strong><br />
Notes <strong>2011</strong> TEUR 2010 TEUR<br />
Net sales 4,240,797 3,712,163<br />
Changes in inventories 11,756 2,832<br />
Own work capitalized 395 272<br />
Total operating performance 4,252,948 3,715,267<br />
Other operating income (18) 191,467 154,943<br />
Cost of materials (19) (2,211,723) (1,912,745)<br />
Personnel expenses (20) (804,816) (720,864)<br />
Depreciation and amortization on purchased<br />
intangibles and fixed assets<br />
(21) (164,619) (146,863)<br />
Other operating expenses (22) (761,040) (677,250)<br />
Financial results (23) (4,127) (10,972)<br />
Income before taxes 498,090 401,516<br />
Extraordinary expenses (25) 0 (31,840)<br />
Taxes on income (168,794) (130,295)<br />
Net income (26) 329,296 239,381<br />
Minority interests in results of consolidated<br />
subsidiaries<br />
38,198 30,690<br />
1 7 7
Contact<br />
<strong>Knorr</strong>-<strong>Bremse</strong> AG<br />
Moosacher Straße 80<br />
80809 Munich<br />
Germany<br />
www.knorr-bremse.com<br />
Corporate Communications<br />
Christoph Günter<br />
Tel: +49 89 3547-1402<br />
Fax: +49 89 3547-1403<br />
E-Mail: public.relations@knorr-bremse.com