Financial Overview

(in million euros)

	FY2011	FY2010	Rate of change (%)	Factors
Sales	4,240.8	3,712.2	14.3
Net Income	329.3	239.4	37.7
Commercial Vehicle Systems
Sales	2,068.2	1,700.7	21.6	1)

Factors
1)
-In 2011 the Commercial Vehicle Systems division grew its business across all regions and posted sales of EUR 2,068.2 million (2010: EUR 1,700.7 million). In Europe and North America in particular, the division benefited from the ongoing positive development of the commercial vehicle markets.

Joint Ventures

-The Company and the Chinese manufacturer Chongqing CAFF Automotive Braking & Steering Systems Co. Ltd. have founded a joint venture for the production of commercial vehicle brake system and powertrain components. Knorr-Bremse holds a 66 percent stake in Knorr-Bremse CAFF Systems for Commercial Vehicles Chongqing Ltd., as the joint venture is known, with the remaining 34 percent being held by its Chinese partner. The joint venture is to manufacture brake components such as air dryers and valves, as well as transmission and clutch control components. The entire production process, from manufacture of the diecast aluminum parts to machining, surface treatment and assembly will take place at a single location. (From a press release on January 20, 2011)

R&D Expenditure

(in million euros)

	FY2011	FY2010	FY2009
Total	209	175	153

-In line with the Company's regional strategy, in 2011 the proportion of the Group's development capacity located in emerging markets such as India and China was further increased. At year-end 2011, the Knorr-Bremse Group employed a worldwide total of 2,486 people in the field of research, development and project planning (2010: 2,059).

Product developments

-In the commercial vehicle sector, development activities in FY2011 focused on the next-generation ABS, EBS and ESP systems and on the further enhancement of the electronically controlled air treatment system (EAC2). Also on the development agenda were the Pneumatic Booster System (PBS) and the mechatronic control system for automatic transmissions. In addition, work began on the development of a new generation of disc brakes.

Capital Expenditures by Division

(in million euros)

	FY2011	FY2010
Commercial Vehicle Systems	74.7	50.4
Rail Vehicle Systems	65.9	61.2
Other	18.2	1.8
Overall	158.9	113.4

-In 2011, investment activity focused primarily on the expansion of worldwide production capacities and on replacement investments, as well as on the start of construction of new production plants in India (Faridabad/Pune), the US (Westminster) and Brazil (Itupeva).