SHAPING MOBILITY Facts & Figures 2017

Contents

02 At a Glance

04 Company Profile

06 Executive Board

08 Supervisory Board

10 Shaping Mobility

12 Sustainable Prospects

14 Investments and Innovations

16 Rail Vehicle Systems

18 Commercial Vehicle Systems

20 Responsibility

22 History

At a Glance

KNORR-BREMSE GROUP 2013 2014 2015 2016 2017

Sales EUR mill. 4,303 5,206 5,831 5,494 6,236

Net income EUR mill. 367 560 645 550 580

Employees (as per Dec. 31)* Number 20,833 23,916 24,275 24,565 27,705

Personnel costs EUR mill. 907 1,038 1,213 1,197 1,336

Balance-sheet total EUR mill. 2,869 3,543 4,002 4,604 4,800

Equity EUR mill. 1,107 1,443 1,736 1,819 1,859

Capital expenditure** EUR mill. 159 161 210 195 186

Depreciation** EUR mill. 125 169 199 179 208

Incoming orders EUR mill. 4,752 5,510 5,668 5,723 6,657

Research and development expenditure EUR mill. 253 296 347 328 359

Group sales by region

Americas

22.1%

Europe/Africa

50.7%

Asia/Australia

27.2%

Net income Sales

Sales and net income for Knorr-Bremse Group in EUR millions

2013

2014

2015

2016

2017

367 4,303560 5,206

550 5,494645 5,831

580 6,236

* Including HR leasing.** Not including investments in financial assets.

2 3

Knorr-Bremse makes mobility safe. By rail and road. Every day. Across the globe.

Knorr-Bremse is the leading manufacturer

of braking systems and supplier of addi-

tional sub-systems for rail and commer-

cial vehicles, with sales totaling over

EUR 6 billion in 2017. In 30 countries, some

28,000 employees develop, manufacture,

and service braking, entrance, control,

and energy supply systems, HVAC and

driver assistance systems, as well as steer-

ing systems, and powertrain and trans-

mission control solutions. As a technology

leader, through its products the Company

has been making a decisive contribution

to greater safety by rail and road since

1905.

Company Profile

4 5

Klaus Deller

Chairman of the Executive Board, also

responsible for the Rail Vehicle Systems

division.

Ralph Heuwing

Member of the Executive Board responsible

for Finance, Controlling, and IT.

New opportunities are opening up for

Knorr-Bremse to play its part in shaping

the fundamental transformation of the

mobility of the future. Influential factors

in this change process will include further

advances in connectivity and digitaliza-

tion, as well as automated driving and

electrification. These topics have more

than just a technological dimension, be-

cause with them the very nature of our

business is changing: More and more

companies are entering the market; the

pace of technological change is rapidly

increasing, and trailblazing new concepts

are totally transforming the value chains be-

tween supplier, manufacturer, and operator.

In this volatile environment, we are sticking

to our chosen course: Knorr-Bremse is

a family-owned company that targets

sustainable commercial success and is

focused on maintaining its long-term

competitiveness and future viability.

So Knorr-Bremse can look to the future

with confidence, a future that the Compa-

ny with its approximately 28,000 employ-

ees worldwide is determined to master.

Shaping Mobility

Executive Board

Dr. Peter Laier

Member of the Executive Board responsible

for the Commercial Vehicle Systems division.

6 7

Supervisory Board

* Employee representative.

① Werner Ratzis berger*

Project engineerKnorr-Bremse Systeme für Nutzfahrzeuge GmbH, Munich

② Erich Starkl*

Deputy Chairman of the IG Metall Trade Union, Passau Office,Passau

③ Wolfgang Tölsner

Management consultant, Uetersen

⑦ Julia Thiele-Schürhoff

Chair of the Executive Board of Knorr-Bremse Global Care,Munich

⑧ Hans-Georg Härter

Chairman of the Supervisory Board, former Chairman of the Executive Board of ZF Friedrichshafen AG, Munich

⑨ Franz-Josef Birkeneder*

1st Deputy Chairman of the Supervisory Board, Plant Manager Aldersbach

④ Günter Wiese*

Chairman of the Works Council of Knorr-Bremse Systeme für Schienen- fahrzeuge GmbH, Berlin

⑤ Michael Jell*

Deputy Chairman of the Works Council of Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, Knorr-Bremse AG, KB Media GmbH, Knorr-Bremse Services GmbH,Munich

⑥ Georg Weiberg

Retired Head of Development, Daimler Trucks,Stuttgart

⑩ Dr. Wolfram Mörsdorf

Retired Member of the Executive Board of Thyssen-Krupp AG,Essen

⑪ Sebastian Roloff*

Attorney-at-law with IG Metall Trade Union, Munich Office,Munich

① ② ③④

⑤⑥ ⑦ ⑧

⑨⑩

⑪

8 9

Drawing on our core competences, we develop pioneering digitalization and networking solutions that pave the way for automated driving and electrification. Thus we are actively helping to shape tomorrow’s mobility.

SHAPING MOBILITY

We create solutions for safe, comfortable and

sustainable mobility on rail

and road.

SAFEAssistance systems like ABS or automatic

emergency braking, together with predictive maintenance,

simply make driving safer.

AUTOMATEDSmart, networked assistance systems

combined with technically mature braking and steering systems are paving the

way for fully automated drive mode for trucks.

DIGITALDigitalization is part and parcel of

Knorr-Bremse’s strategy.

ELECTRIFIEDElectrical systems from Knorr-Bremse enable

emission-free operation of buses and rail mass transit systems.

WELL TRAINEDTop-quality training provisions around the world prepare a new generation of skilled

workers and managers for working at Knorr-Bremse.

RESPONSIBLEIn 2017, Knorr-Bremse Global Care helped more than 36,000 people

in 60 projects.

HELPFULKnorr-Bremse Local Care encourages

voluntary work by employees at all sites.

ECO-FRIENDLYQuiet, efficient, and sustainable:

Knorr-Bremse helps make rail and road transportation more

eco-friendly.

10 11

Knorr-Bremse creates an attractive working environment in which trust, team-work, diversity, equality of opportunity, and mutual respect are valued and practiced. The basis for this is provided by the corporate values: Entrepreneur-ship, Technological Excellence, Reliability, Passion, and Responsibility.

Knorr-Bremse is an attractive employer.

At our sites around the world we offer

young people opportunities to undergo

training in a variety of technical and com-

mercial occupations. Among the most

popular of these are industrial technology,

machining technology, electronics, me-

chatronics, and IT. Depending on the

sites where they are employed, staff are

also offered a range of voluntary extra

benefits such as meal allowances, subsi-

dized travel, and sport and health provi-

sions. Within the framework of what is

locally feasible, Knorr-Bremse also offers

voluntary contributions to a company

pension. As a global market leader, Knorr-

Bremse can only succeed if it attracts the

best talents and experts in the sector. It

already has – and is constantly seeking –

Sustainable Prospects

high-performing, hard-working employees

who are willing and able to sustain its

success. When such specialists join Knorr-

Bremse they discover fascinating tech-

nologies, state-of-the-art workplaces, a

flexible working environment, and exciting

opportunities to build and shape a career

at home or abroad.

Knorr-Bremse deliberately offers employ-

ees a variety of programs and measures

designed to achieve a good work/life

balance. Whether it is a question of high-

ly-qualified women wishing to stay at

work after having children, fathers want-

ing to play a bigger part in bringing up

their offspring, or families with sick de-

pendents temporarily requiring extra

care: Knorr-Bremse responds to the needs

of its employees, not least by offering

them flexible working time models and

teleworking.

At the end of 2017, the Knorr-Bremse

Group had a global workforce of 27,705

(24,925 excl. HR leasing).

Number of employees (incl. HR leasing) worldwide on Dec. 31, 2017

Distribution of employees (incl. HR leasing) by region on Dec. 31, 2017

Americas

18.4%

Europe/Africa

57.4%

Asia/Australia

24.2%

2013

2014

2015

2016

2017

20,833

23,91624,275

27,705

24,565

12 13

Sustainability is an important part of Knorr-Bremse’s business model. The Company combines the creation of long-term economic value with environmental and social responsibility.

Knorr-Bremse systematically integrates

aspects of sustainability into the product

creation process – from the initial vision,

via product development and manu-

facturing, all the way to sales, product

maintenance, and remanufacturing.

Knorr-Bremse applies sustainability criteria

when evaluating product ideas and also

takes the results of life cycle analyses into

account, so that negative environmental

impacts can be avoided as far as possible.

With research and development invest-

ment amounting to EUR 359 million, the

Company further strengthened its long-

term innovative capabilities in 2017. This

is reflected in an extensive portfolio of

patents, with a current total of some

Investments and Innovations

6,800 active industrial property rights

worldwide. On December 31, 2017, the

Company employed more than 3,700

people in the field of R&D (2016: over

3,200). The IT sector is caught up in

far-reaching change. Digitalization in the

shape of Industry 4.0 and the Internet of

Things (IoT) is driving a rethink of IT

strategies and a remodeling of IT systems

and applications. The ongoing trend is

toward mobility and the Cloud, opening

the door to the utilization of technolo-

gies such as augmented reality, Big Data

and machine learning.

The Knorr-Bremse Group’s investments

in fixed and intangible assets reflect the

importance assigned to growth and

Consolidated research and development expenditure in EUR millions

2013

2014

2015

2016

2017

253

296347

359328

innovation across the Group. In the year

under review, these totaled EUR 185.6

million. Investment activity focused

primarily on machines and equipment

related to the introduction of new prod-

uct generations, as well as on expanding

capacity in high-growth fields of business

and locations. Investments were also

made in the establishment of the Guo

Tong site in China, the new Business

Services Center in Liberec, Czech Republic,

and IT infrastructure projects worldwide.

Replacement investments were also

regularly undertaken.

14 15

Knorr-Bremse is the leading manufacturer of braking systems for mass transit and mainline trains. The Company’s systems are used in high-speed trains, multi-ple units, metros, light rail vehicles, locomotives, and freight cars. At the end of 2017, the Rail Vehicle Systems division employed 16,051 people and generated sales of EUR 3.33 billion.

All over the world, Knorr-Bremse systems

ensure greater safety and comfort for rail

transportation. In addition to braking

systems, important elements in Knorr-

Bremse’s portfolio are train entrance sys-

tems from IFE, platform doors from

Westinghouse Platform Screen Doors,

and HVAC systems from Merak. With the

iCOM family, Knorr-Bremse has developed

an open digital platform – Platform 4.0.

Applications such as condition monitor-

ing, driver assistance systems, and energy

metering help operators increase the

availability of their vehicles and enable

them to introduce lower-cost predictive

maintenance. The product portfolio is

rounded off with energy supply systems,

sanding units, and additional equipment

such as derailment detectors, as well as

brake pads, modern drive technologies,

and electrical systems from Kiepe Electric.

Increasing competition, pressure on prices,

and passengers’ growing expectations

regarding modernity and comfort are

changes that are increasingly impacting

on the maintenance, repair, and overhaul

of rail vehicles. Knorr-Bremse has bundled

its global service activities under the

RailServices brand in order to be able to

offer a customized service package to

meet all requirements.

Rail Vehicle Systems Products and services

BRAKING SYSTEMS Air supply

Bogie equipment Brake control

RAILSERVICES Maintenance

On-site service Customer training Modernization and engineering Spare parts and logistics

2013

2014

2015

2016

2017

3,3412,990

3,325

Global sales in the Rail Vehicle Systems division in EUR millions

2,982

2,247

ONBOARD SYSTEMS Entrance systems

HVAC systems Power electronics Power supply systems Train control management systems iCOM family

OFFBOARD SYSTEMS Platform screen doors

Driving simulators Signaling systems for grade crossings

16 17

Knorr-Bremse supplies braking systems for trucks, buses, trailers, and agricultural vehicles and is a market leader for electronic brake control and driver assistance systems. Other product areas are steering and powertrain-related systems. In 2017, the division employed 11,082 people and generated sales of EUR 2.93 billion.

Knorr-Bremse has a reputation for pio-

neering solutions aimed at ensuring

greater safety and efficiency of commer-

cial vehicle systems – today and tomor-

row – in an increasingly mobile society.

The Company contributes in particular to

paving the way for automated driving, re-

ducing the volume of resources required

for manufacturing processes, and continu-

ously improving the components used.

By offering innovative solutions with lower

weight, greater fuel efficiency, and longer

service lives, Knorr-Bremse ensures greater

safety, sustainability, and economy. Another

area of focus is the development of drive

components that reduce emissions – for

example by electrification. Knorr-Bremse

has successfully established itself in the

market with safety-critical systems such

as brake control, stability regulation, and

driver assistance systems. And it contin-

ues to increase its competence in the

commercial vehicle sector, with a new

offer of steering systems and automated

driving functions, as well as an extended

engine air management portfolio. Knorr-

Bremse has bundled its aftermarket ser-

vices under the TruckServices brand

name. It also cooperates with Bosch and

ZF in operating the Alltrucks full-service

workshop system.

Commercial Vehicle Systems

Products and services

BRAKING AND DRIVER ASSISTANCE SYSTEMS Compressors and air treatment

Electronic brake control Drive stability control Driver assistance systems Valves and actuators Disc and drum brakes Slack adjusters

STEERING SYSTEMS Conventional hydraulic steering systems

Superimposed steering systems

CHASSIS Leveling valves

Electronic pneumatic suspension

POWERTRAIN Torsional vibration dampers

Engine air control valves Clutch actuators Electric and electro-pneumatic transmission control

TRUCKSERVICES Value-based service solutions

Product training Technical hotline Technical documentation Diagnostics and tools Digital product catalogue Telematics

2013

2014

2015

2016

2017

2,492

2,5232,928

Global sales in the Commercial Vehicle Systems division in EUR millions

2,228

2,070

18 19

Knorr-Bremse involves itself in social issues and is engaged worldwide as a good corporate citizen.

Responsibility is a Knorr-Bremse corporate

value and one that the Company lives

by on a daily basis – not only through its

products, which make global mobility

safer, and through its endeavors to make

its production methods as resource-

efficient and climate-friendly as possible,

but also through its active involvement in

community affairs. Taking part in the life of

the community, having a positive impact

in the areas around our sites, and playing a

constructive role in shaping them are a key

part of our identity.

Knorr-Bremse’s social commitment is based

on two pillars: Local Care and Global Care.

Local Care covers all the local community

activities at Knorr-Bremse sites, whereas

Knorr-Bremse Global Care is a charitable

organization that promotes longer-term

projects with bigger financial implications

all over the world – in countries with Knorr-

Bremse sites and in ten other developing

countries. Both pillars offer our employees

a wide range of opportunities to become

involved in community projects.

Networked projects involving both Local

Care and Knorr-Bremse Global Care are

common. Two current examples that

demonstrate how the two pillars can be

combined in a meaningful way are the re-

furbishment of a women’s refuge in Austria

and planting and maintaining a community

garden in Hungary. Both projects were

funded by Knorr-Bremse Global Care and

supported by local employees, who in-

vested considerable time and effort in

them. The Knorr-Bremse site in Budapest

created a community garden in a suburb

of the capital, which is run and maintained

by Knorr-Bremse staff. The garden is for the

benefit of socially disadvantaged people,

a local home for the elderly, and a facility

for people with disabilities. In Mödling,

the residents of the women’s refuge are

delighted with their refurbished kitchen

area. Staff at the Knorr-Bremse and Zelisko

sites in Mödling worked hard to create

an attractive temporary home for women

and children who have been the victims of

domestic violence.

Responsibility

20 21

22

1905

Georg Knorr founds Knorr-Bremse GmbH

in Berlin.

1918 – 1926

Knorr-Bremse sets new technological

standards for freight trains with its

pneumatic brakes. Knorr-Bremse

becomes Europe’s biggest manufacturer

of braking systems for rail vehicles.

1922

Development of the pneumatic braking

system for commercial vehicles begins.

1931 – 1939

The Hildebrand-Knorr braking system for

rail vehicles (Hik brake) sweeps the mar-

ket and becomes the standard system

in 17 different countries. By 1939, some

90% of all German trucks from 7 – 16t

are equipped with Knorr-Bremse brakes.

1945

The Knorr-Bremse plant in Berlin is

expropriated and dismantled at the

end of the Second World War.

1945 – 1953

Development and manufacture of

braking equipment resume in the

western part of Germany. Company

headquarters move to Munich.

1960 – 1980

Knorr-Bremse establishes the new

UIC standard with its KE control valve.

1985

Heinz Hermann Thiele gradually becomes

sole owner of Knorr-Bremse. As well as

giving the Company an increasingly

international orientation, he focuses it

on two divisions, Rail Vehicle Systems

and Commercial Vehicle Systems.

1999

The commercial vehicle brakes division

of Robert Bosch GmbH is integrated

into Knorr-Bremse, complementing

the Company’s activities in the field

of electronic brake control.

2002

Knorr-Bremse acquires Bendix Commercial

Vehicle Systems, one of the leading U.S.

manufacturers of air brakes and ABS

anti-lock braking systems for commercial

vehicles.

2005

Knorr-Bremse celebrates its centenary.

In response to the tsunami disaster in

Southeast Asia, Knorr-Bremse sets up

the charity Knorr-Bremse Global Care.

2010

Knorr-Bremse opens new production

plants in the Czech Republic and

Hungary featuring state-of-the-art

production and logistics concepts.

Knorr-Bremse signs up to the UN Global

Compact and adopts a Group-wide

Corporate Responsibility Strategy.

2011

30 years of ABS (anti-lock braking

systems) and 10 years of ESP (electronic

stability program) – Knorr-Bremse

celebrates two important anniversaries.

2012

Knorr-Bremse introduces new corporate

values which describe what the Company

is about: Entrepreneurship, Technological

Excellence, Reliability, Passion, and

Responsibility.

2013

Knorr-Bremse continues its extensive

program of investment in state-of-the-art

production plant and buildings by open-

ing six new facilities around the world.

2014

Knorr-Bremse launches the new

Knorr-Bremse PowerTech brand for

power supply systems, and sets up

a truck joint venture in China with

Dongfeng Motor Group Co., Ltd.

2015

With the integration of Selectron,

Knorr-Bremse expands its expertise

in train control management systems.

The Company celebrates its 110th

anniversary and the 10th anniversary

of the charity Knorr-Bremse Global Care.

2016

Knorr-Bremse triggers six acquisitions

in order to offer customers connected

systems from a single source.

2017

Knorr-Bremse posts record sales of

EUR 6.24 billion.

History

22 23

Knorr-Bremse AG

Moosacher Str. 80

80809 Munich

Germany

www.knorr-bremse.com

public.relations@knorr-bremse.com

Basic information on the Company’s

products and projects can be found in

the Knorr-Bremse AG Annual Report:

“Shaping Mobility”.

Further information on sustainability

management at Knorr-Bremse can be found

in the Knorr-Bremse AG Communication on

Progress Report: “Shaping Sustainability”.

Details on the work of Knorr-Bremse Global

Care can be found in the organization’s

annual report: “Shaping Futures”.