Financial Overview

(in million euros)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	Rate of change (%)	Factors
Sales	4,300.1	4,240.8	1.4
Net Income	295.0	329.3	(10.4)
Commercial Vehicle Systems
Sales	2,098.2	2,068.2	1.5	1)

Factors
1)
-In 2012, the Commercial vehicle Systems division posted a slight increase in sales. The division benefited from the positive development of the commercial vehicle markets in North America and Japan in particular, which more than offset minor declines in Europe and South America.

Recent Development Outside Germany

-In 2012, Knorr-Bremse KAMA Systems for Commercial Vehicles OOO in Naberezhnye Chelny (Russia), the joint venture between the Company and the Russian commercial vehicle manufacturer KAMAZ, began series production of drum brakes for truck trailers in the year under review. The brakes are destined for KAMAZ subsidiary NEFAZ, one of the largest manufacturers of trailers in Russia.

<China>
-In the first half of 2012, at the Dalian plant in China, a disc brake production line came on stream. The line turns out pneumatic 22.5-inch disc brakes for customers including Yutong, the world's largest bus manufacturer with an annual output of some 47,000 units. The brakes are mainly installed in Yutong buses over ten meters long, a segment in which Knorr-Bremse increased its supply position for 22.5-inch disc brakes to 80%.

R&D Expenditure

(in million euros)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Total	250	209	175

R&D Facilities

-In November 2012, On November 26, 2012, the Knorr-Bremse Technology Center India Private Ltd., Pune (India), was founded as a cooperative venture between Knorr-Bremse Systeme für Nutzfahrzeuge GmbH, Munich (Germany) and Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, Munich (Germany). The object of the company is to perform development services for the Knorr-Bremse Group.

Product developments

Electronic Braking System
-In 2012, the Company developed the TEBS electronic braking system especially for use on trailers. It combines electronic control, pneumatic control and part of the sensor technology into one central module. Market launch of new TEBS functions is planned for 2013.

Gearbox and Clutch Module for Volvo
-In 2012, the Company developed gearbox and clutch module for Volvo's new heavy truck platform. From mid-2013 onwards, the company will be supplying the gearbox and clutch module to Volvo.

Capital Expenditures by Division

(in million euros)

	FY ended Dec. 31, 2012	FY ended Dec. 31, 2011	FY ended Dec. 31, 2010
Commercial Vehicle Systems	56.9	74.7	50.4
Rail Vehicle Systems	79.5	65.9	61.2
Other	29.4	18.3	1.8
Overall	165.8	158.9	113.4

-In 2012, investment activity focused primarily on the expansion of worldwide production capacities and on replacement investments, as well as on the ongoing construction of new production plants in India (Faridabad and Pune), the US (Westminster), Australia (Granville) and Brazil (Itupeva).