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© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.Laurent Troger
President
Market Analysis and
Company Strategy
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Bombardier Transportation business overview
We are transforming for profitable growth in an attractive rail market
2
1. Resilient market with steady
growth
2. Leading position in the market
3. Transformation strategy to
further grow profitability
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Solid growth for rail industry
Strong underlying sector trends
3
▪ Crisis resilient capital goods
market globally
▪ Favorable megatrends
– Population growth
– Urbanization
– Environmental awareness
▪ Public transport investments to grow
across geographies
Target market at €84B
3,6%
(2,1)%
2,3%
Total rail market (€B)Global GDP growth (%)
Forecast
€150B€146B
€37B
€123B
€159B
€176B
Total annual average rail market1 vs. global GDP growth
€B, 2005-2019
€159B
Key facts
1. Source: UNIFE 2014 World Rail Market Study; World Bank Data; Bombardier Transportation analysis
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Highest growth in services and systems
Rolling stock to remain largest segment and Europe largest region
4
Annual BT target market1
€B, 3-year average, 2011-2019
Source: BT management calculation based on UNIFE World Rail Market Study published in 2014
1. Based on total rail market as defined by UNIFE, excluding markets non-accessible for BT which are associated with contracts that are awarded to local players without
open-bid competition, and segments in which BT does not actively compete in, including the infrastructure segment, shunter segment and certain freight wagon services
2. RoW includes South America, Central America, Africa, the Middle East and CIS
3. North American region comprises United States, Canada and Mexico
+2.7
+0.7
+4.3
+3.3
+5.0
+1.9 +1.8
Total CAGR 2011-13 –2017E-19E
%
Services
Rolling
stock
Signalling &
Systems
Europe
Asia
Pacific
North
America3
RoW2
+3.4
Total CAGR 2011-13 –2017E-19E
%
+2.7
By product segment By geographical region
34 33 38
25 27
30
13 15
167275
84
2011–13 2014-16E 2017E–19E
28 29 31
14 1619
1314
1617
16
187275
84
2011–13 2014-16E 2017E–19E
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Strengthened financial position
Agreement with La Caisse de dépôt et placement du Québec
5
Bombardier Inc.
Bombardier Transportation
Impact on Bombardier TransportationCaisse de dépôt
et placement du
Québec
30%70%
Transaction strengthens Bombardier’s
overall financial position and provides
flexibility in liquidity
Transaction very well received from
customers and other stakeholders
The investment includes performance
incentives for Bombardier Transportation to
further drive improvement in execution
No changes to key operational procedures
Key facts
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Extended global presence
We secured orders in all segments and regions
61. Bombardier Sifang Transportation, a Chinese entity in which Bombardier holds a 50 % interest, has been awarded a contract
with China Railway Corp. (CRC) to supply 15 CRH380D very high-speed trains valued at $381 million
80 ELECTROSTAR
Class 387 vehicles for
Porterbrook
€150 M (2015)
10 years maintenance on
74 ELECTROSTAR
trains €196 M (2015)
Option for 19 SPACIUM
trains for SNCF
€160 M (2015)
Signalling for high-speed
rail lines for ADIF
€164 M (2015)3
INNOVIA APM for
Chicago O’Hare
International Airport
€161 M (2015)
62 FLEXITY trams for
the Rhineland region
€127 M (2015)
15 CRH380D trains for
China Railways
€339 M (2015)1
156 FLEXITY trams
for Vienna
€431 M (2015)
180 AVENTRA cars and
35 years of maintenance
for Transport for London
€505 M (2015)
62 TRAXX locomotives
for Israel Railways
€230 M (2015)
30 years maintenance
on FLEXITY trams for
Toronto
€282 M (2015)
162 MOVIA cars for
India’s Delhi Metro
€204 M (2015)2
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Confirmed market leadership
We have the broadest portfolio of rail solutions globally
7
1.Based on Bombardier Transportation management's tracking of published Rolling Stock orders in 2010-14 outside of China;
excluding Services, Systems and Signalling, and Diesel locomotives outside Europe
2.North America comprises United States, Canada and Mexico
In Europe,
Bombardier
Transportation is the
market leader in all
major rolling stock
segments
Market leader for
metros in North
America, the biggest
segment of the region
Strong in India and
leader in the fast
growing Australian
market
Highest global market
share, making
Bombardier
Transportation the
industry leader outside of
China
Queensland Rail
New Generation
R179 New YorkV300ZEFIROTRAXX South Africa
#2
#1 Bombardier
~32%
#2 #2#3
Bombardier
~38%
#3
Bombardier
~18%
OthersOthers
OthersCompetitor
#2
#3
Bombardier
~ 22%Others
Global Rolling Stock market1 Europe1 North America 1,2 Asia-Pacific excl. China1
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Strong backlog
We aim to continue outgrowing the market over the next 5 years
8
2012 2013 2014 2015 2016 2017 2018 2019 2020
Revenues from backlog Revenues from new contracts
€9.5B+ target ($10B+)
Revenue evolution target [€]
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Revenue conversion
Company growth is supported by strong backlog and future bid pipeline
9
FLEXITY
LRV for
Vienna
TRAXX
locomotives
platform
Strong bid pipeline with large
projects in all segments and
geographies
Differentiation factors and
total value proposition allow
Bombardier Transportation to
win with value-based pricing
MOVIA C30
Metro for
Stockholm
Examples of value-based ordersKey facts
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
55%
25%
20%1
Rolling Stock2
71%
14%
15%1
61%
29%
10%1
65%
18%
17%1
Business model enhancements
Better revenue mix to drive profitability
10
2014
Q3 2015 backlog at $30B
1. Excluding the Rolling Stock portion of Systems orders manufactured by the Rolling Stock division.
Signalling order backlog traditionally low due to short cycle of the business
2. Rolling Stock includes Bogies and Propulsion.
2010
Signalling & Systems
Services
2020 target
… and the future is already visible in backlog
Increasing Services revenue contribution today…
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Company transformation
Organizational framework to improve competitiveness
11
Head of Region
Critical A Projects / bids
A Projects / bids
Other projects
Head of Project Management
Portfolio Manager
Strategic panel suppliers
Other panel suppliers
Non-panel
suppliers
BT President
Rolling Stock Regions
Global Businesses
BT Core: Value Chain Functions
Group Headquarters (Governance, Finance, Human Resources,
Information Systems)
Increasing
standardization
Centralizing global
supply chain
Empowering project
management
Selective bidding
process
Stronger organization and
key account management
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
Innovation is a key differentiator
12
1.Total engineering cost including project development and R&D expenditure
2.RoW comprises South America, Central America, Africa, the Middle East and CIS
Self-funded R&D in percentage of sales
2013 2014 2015 2016 2016+
Significant engineering innovation investments of about
€2.8bn1 over past 3 years
Around 11.5m engineering hours contributed by
Bombardier Transportation engineers in 2014 alone
More than 8,000 employees in innovation and engineering
across 80 countries
Majority of engineering and design of critical components
for trains performed in Germany or at other European
sites to protect IP
Further IP protection, e.g. through patent registrations and
legal structuring of JVs
Engineers by region (2014)
72%
16%
9% 3%
Americas
Europe Asia-Pacific
RoW2
Increased R&D investments
Capabilities and capacities
© B
om
bard
ier
Inc. or
its s
ubsid
iarie
s. A
ll rig
hts
reserv
ed.
In summary
A clear strategy to remain market leader
13
Focus on company transformation to increase competitiveness
Secure key strategic orders to maintain market leadership
Enhancing the business model for profitable growth and execution
Stay in the lead in a consolidating industry
Current priorities
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