Interim Results 2008/2009 Significant events Financial statements Strategy and outlook
Key figures 1 st semester 2008/2009 Change from 1 st semester 2007/2008 Sales 383.7M + 21.3% Percentage of sales outside France 73.4% Order book 1,055M + 5% Ebitda 54 M + 28.7% Financial result (group share) 18.3M + 26.4% 2 Interim Results 2008/2009-2 December 2008
Interim Results 2008/2009 Significant events Continuation of sustained growth Capital restructuring
In M Continued sustained growth in sales during the period Growth during the period: + 21,3% In the second quarter: + 29,6% Holding scope constant: + 21,6% 4 Interim Results 2008/2009-2 December 2008
The order book continues to grow In M Orders Continued growth in Europe Milan Metro: platform gates for line 5 (2010) First heavy equipment orders in Asia China: Shanghai Metro, doors, air conditioning, and brakes for lines 2, 6 and 8 India: 425 cars for the Delhi Metro New Zealand: outfitting 45 two-car trains (2009/10) 5 Interim Results 2008/2009-2 December 2008
The Faiveley Transport / Sab Wabco acquisition: an industrial success story Sales volume Order book Net income Net debt of Faiveley Transport (M ) 171.8 693 M 1 000 M 55 M X 2.7 X 2.4 X 3.7 253 M 415 M 15 M 31/03/2004 31/03/2008 31/03/2004 31/03/2008 31/03/2004 31/03/2008 (19.8) 31/03/2005 31/03/2008 With the active support of the Sagard investment fund, in the space of four years Faiveley has become one of the world s three leading rail equipment manufacturers 6 Interim Results 2008/2009-2 December 2008
Departure of Sagard and simplification of holding structures Stock ownership post-closing Faiveley Family 55.4 % Sagard 9.5 % Managers 4.9 % Free float and treasury stock 30.2 % Faiveley SA shareholders postclosing # actions % # droits de vote % Famille Faiveley 8 113 020 55,4% 15 846 340 70,7% Flottant 4 078 650 27,9% 4 467 666 19,9% Autocontrôle 337 915 2,3% - 0,0% Sagard 1 400 000 9,5% 1 400 000 6,2% Managers 711 000 4,9% 711 000 3,2% Total 14 640 585 100,0% 22 425 006 100,0% 100% Source: Faiveley SA, based on the Annual Report for 31/03/2008 and the issue of 2,111,000 shares Bank loans Operating subsidiaries 7 Interim Results 2008/2009-2 December 2008
Custom-tailored financing that demonstrates the markets confidence in the visibility of the rail sector and in the Faiveley Transport project Establishment of a 490 M credit line provided by a syndicate of nine banks Debt parameters: 441M in medium-term and 49M in revolving Declining spread as a function of the ratio of net financial debt to EBITDA Maturity: December 2013 (50% amortising, 50% balloon) Covenants : ratio of net financial debt to EBITDA no greater than 3.5 and ratio of net financial debt to capital no greater than 1.8 on 31/03/09 8 Interim Results 2008/2009-2 December 2008
A pure player in rail transport, ideally structured to pursue global growth Simplified holding structures Strengthened family control Optimal use of the capital of the Faiveley group through the use of debt at moderate leverage levels Significant investment on the part of management in Faiveley SA, representing nearly 5% of its capital Next steps 23/12/2008 General shareholders meeting to approve the transactions Faiveley SA changes its name to Faiveley Transport 9 Interim Results 2008/2009-2 December 2008
Interim Results 2008/2009 Financial statements Income statement Foreign exchange Consolidated balance sheet Cash flow statement and financial structure
Sales volume for the period: 383.7 M 11 Interim Results 2008/2009-2 December 2008
Consolidated Group income statement (1/2) In millions 31 9 08 31 9 07 Variation Published Published Sales 383,7 316,5 21,3% Operating profit 47,3 37,3 27,0% % of sales 12,3% 11,8% Other operating income & expenses -0,4-1,9 Operating Income 46,9 35,4 32,6% % of Sales 12,2% 11,2% EBITDA (1) 54,0 42,0 28,7% % of Sales 14,1% 13,3% (1) : Operating Income + depreciation Significant increase in sales (20% at constant group structure) Significant increase in operating income 12 Interim Results 2008/2009-2 December 2008
Consolidated Group income statement (2/2) In millions 31 9 08 31 9 07 Variation Published Published Operating Profit 46,9 35,4 32,6% % of sales 12,2% 11,2% Financial Result -4,1-4,0 Income Tax -12,6-8,6 Result from discontinued companies 0,0 0,0 Net Profit 30,2 22,8 32,1% % of sales Minority Interests -11,9-8,4 Group Net Profit 18,3 14,4 26,4% 4,8% 4,6% Profit per share (euros) (1) Profit per share (euros) (2) 1,46 1,15 26,4% (1) : Before neutralising auto control shares 1,50 1,19 26,2% (2) : After neutralising auto control shares Significant increase in group net profit Applied fiscal rate : 29.5% compared to 27.3% at 30 09 2007 13 Interim Results 2008/2009-2 December 2008
Foreign exchange: reduced impact of U.S. dollar exchange rate Currency exposure 30 9 08 % EUR 270.5 70.5% CNY 22.3 5.8% GBP 24.2 6.3% INR 5.9 1.5% USD 9.8 2.5% SEK 11.2 2.9% CZK 15.8 4.1% Other currencies 24.1 6.3% Consolidated sales volume 383.7 Activity mainly in the Euro zone : limited exposure to foreign currency 14 Interim Results 2008/2009-2 December 2008
Consolidated Group balance sheet In millions 30 9 08 31 3 08 30 9 08 31 3 08 Published GW Adjusted Published GW Adjusted ASSETS EQUITY & LIABILITIES Group Equity 180,8 169,9 Goodwill 273,9 241,3 Minority Interest 126,3 116,9 Property, plant & equipment 118,2 86,3 Equity 307,1 286,8 Deferred tax assets 21,5 19,5 Long-term Provisions 45,8 47,0 Non-Current Assets 413,6 347,1 Deferred tax liabilities 15,4 15,2 Non current borrowing 74,1 45,3 Inventories 142,9 118,3 Non Current Liabilities 135,3 107,5 Trade & other receivables 246,2 209,6 Short Term Provisions 64,0 56,1 Short term debt 1,2 2,3 Borrowing due within one year 100,3 61,1 Cash & Cash equivalent 93,9 114,4 Overdraft + factor not consolidated 15,9 3,3 Current assets 484,3 444,6 Operating Liabilities 275,2 277,0 Current Liabilities 455,4 397,5 TOTAL ASSETS 897,8 791,7 TOTAL EQUITY & LIABILITIES 897,8 791,7 Impact of acquisitions on property, plant & equipment, working capital and debt 15 Interim Results 2008/2009-2 December 2008
Working capital requirements 30 9 08 31 3 08 Variation Working Capital in millions 113,9 50,9 63,0 Neutralisations Perimetre -14,7 Variation assignment of receivables -12,3 Variation provision for onerous contracts -2,1 Variation working capital performance 33,9 Volume effect 13,4 Ratio effect 20,5 Stocks 3,4 Clients 17,2 Payables -0,1 Improvement in working capital performance compared to the first semester 2007/2008 despite temporary increase in working capital requirements 16 Interim Results 2008/2009-2 December 2008
Cash flow statement In millions 30 9 08 31 3 08 Publié Publié Self-financing ability (1) 37,7 64,3 Change in working capital (2) -45,5 8,1 Cash flow from operations -7,8 72,4 Capital expenditure -6,5-10,1 Acquisition / disposal of subsidiaries -69,9-2,1 Cash flow from investments -76,4-12,2 Increase in capital 0,2 0,0 Share acquisition -0,2 0,4 Other Variations (cash-flow hedge) -1,4 0,0 Dividend distributions -4,9-10,3 Variation in loans 60,6-30,0 Cash flow from financing 54,4-39,9 Impact from exchange rate movements -3,9-5,8 Change in cash and cash equivalents -33,7 14,5 Cash and cash equivalents - opening 111,7 97,1 Cash and cash equivalents - closing 78,0 111,7 (1) : after restatement of movements in provision for onerous contracts (2) : after restatement for provisions for onerous contracts 17 Interim Results 2008/2009-2 December 2008
Financial structure FAIVELEY GROUP NET DEBT In millions 30 9 08 31 3 08 Variation Cash & cash equivalent 93,9 114,4-20,5 Financial receivables 7,3 4,3 3,0 Financial debts 184,8 108,8 76,0 Auto-control restatement 10,5 10,5 0,0 NET DEBT 73,1-20,5 93,6 FAIVELEY TRANSPORT NET DEBT In millions 30 9 08 31 3 08 Variation Cash and cash equivalents 93,8 112,9-19,1 Financial receivables 19,5 13,7 5,8 Financial debts 182,8 106,8 76,0 NET DEBT 69,5-19,8 89,3 18 Interim Results 2008/2009-2 December 2008
Share price Market capitalisation on 27/11/2008 (share price = 48.72 ): 604M CAC MID 100 Index from 27/11/08 Number of shares: 12,529,585 12 month high: 56.42 (22/08/08) / 12 month low: 30.44 (22/01/08) Average daily volume over one year: 19,615 shares traded 19 Interim Results 2008/2009-2 December 2008
Interim Results 2008/2009 Strategy and outlook Deeper and more global markets Product line suited to market developments Ambitious growth objectives
Interim Results 2008/2009 Strategy and outlook Deeper and more global markets 21 Interim Results 2008/2009-2 December 2008
An accessible market of more than 85B En B Average annual market volume 2005-2007 140 120 10 100 22 80 10 37.2 60 18 Rail control Infrastructure Rolling Stock Services Annual increase trend 2008-2016 Rolling Stock: +2,4% High Speed : +7,2% 40 31 20 0 52.7 total 27 accessible Services: + 4,0% Source: unife 2008/Roland Berger 22 Interim Results 2008/2009-2 December 2008
An accessible market that is increasingly global Central Europe 5B NAFTA 21B Western Europe 29B CIS 6B Rest of the Americas 3B Source: unife 2008/Roland Berger Africa/Middle East 4B Asia Pacific 18B All markets are growing, particularly in Asia 23 Interim Results 2008/2009-2 December 2008
A market supported by excellent structural factors Excellent Structural Factors Dynamic emerging countries : Central Europe and Asia Material renewal in Europe until 2015 Favorable Environment Opening up / privatisation of railway transport in Europe Sustainable development Concentrated Market High barriers to entry (technology, security, reliability) Consolidation of railway system suppliers Strategic trends Big projects with complex job specifications Consolidation of railway system suppliers Pricing Power Big projects with complex job specifications Consolidation of railway system suppliers Uncertainties Difficulties in financing certain large projects State protectionism Currency exchange risks 24 Interim Results 2008/2009-2 December 2008
Rolling Stock, at the heart of Faiveley Transport s market 7 Segments High Speed TGV Locomotives Electric, electric diesel, Hydraulic diesel Passenger, Single decker, Double decker, Couchette, Bar Freight Wagons Light rail Tramway Metro, People mover, VAL, Mini-metro Customer Services 25 Interim Results 2008/2009-2 December 2008
Very favourable outlook for growth Annual growth forecast for 2007/2016 in real terms: Global accessible market + 2.9% Rolling stock + 2.4% High speed +7.2% Services +3.5% 26 Interim Results 2008/2009-2 December 2008
Many new project announced Europe Americas Asia Pacific CIS Middle East Very high speed Passenger cars Locomotives Metro Tramway AGV(Italy), TGV(France) RENFE (Spain) Thameslink(UK) SNCF Regional DB main lines DB) RATP (France) Madrid (Espagne) Nottingham (Uk) Netherlands Argentina MOR (China) Russia Mecca (Saudi Arabia) NJT Commuterr (USA) EMU (China) Pendolino (Poland) WMATA( Washington) NYC metro (New York) Argentina China India Hyderabad (India) Bucharest Abu Dhabi Warsaw Russia Dubai Source: unife 2008/Roland Berger 27 Interim Results 2008/2009-2 December 2008
Interim Results 2008/2009 Strategy and outlook A product line ideally suited to market developments 28 Interim Results 2008/2009-2 December 2008
The widest range of products offered in the market Current Collection On-board Electronics Air conditioning Platform Screen Doors Customer Services Couplers On-Board Doors Braking Sysytems 29 Interim Results 2008/2009-2 December 2008
Industrial and commercial sites located close to customers 2 3 8 2 3 3 2 2 7 Staffing Europe Asia Americas 22 countries 40 sites 40 agents 2 30 Interim Results 2008/2009-2 December 2008
Strong focus on innovation Demetra Revolutionary energy meter Compact Simple and rapid installation (only 7 hours, 5 times less than competing products) Energy efficient (savings of up to 30%) Dedication to continued progress 31 Interim Results 2008/2009-2 December 2008
Flexible structure Sites built on a human scale Concentration of engineering resources in Europe 82% of the research group is based in Europe 689 engineers and R&D workers Low capital intensity 20% increase in business in Q2 without any impact on capital expenditures 32 Interim Results 2008/2009-2 December 2008
Tools for internal progress Management of multi-site projects Purchasing platforms in China and India Moving Forward Data integration and data sharing Optimisation of structure costs Dedication to continued progress 33 Interim Results 2008/2009-2 December 2008
Interim Results 2008/2009 Strategy and outlook Ambitious growth objectives 34 Interim Results 2008/2009-2 December 2008
Strong growth potential Expand market share Become a reference supplier to all the major global rail manufacturers within five years GE, Expand Faiveley s presence in large tender offers More than 800M in tenders over the next three years are currently under review, including: Italy: 250 AGV cars Brussels: 1,200 cars for the Réseau Régional Russia: 1,200 two-level cars Canada: 350 cars for the Montreal Metro Brazil: 250 cars for the Sao Paolo Metro India: 1,000 locomotives for India Railways 35 Interim Results 2008/2009-2 December 2008
Growth objective: better than the market Order Book M Faiveley Target A realisable goal Market trend +2.5%¹ 1 Source: unife 2008/Roland Berger 36 Interim Results 2008/2009-2 December 2008
Outlook for 2008/2009 and beyond Favourable market context Sustainable sales levels through a full and well-diversified order book and identification of new projects Expansion of Faiveley s offre through the integration of acquisitions Strengthening of Faiveley s market position in North America Be a key player in the consolidation of the market 37 Interim Results 2008/2009-2 December 2008
2008/2009 Calendar Date Event 23 December 2008 General shareholders meeting to approve capital restructuring 20 January 2009 Sales 3rd quarter 2008/2009 38 Interim Results 2008/2009-2 December 2008