Annual Results 2008/2009

Financial statements The market Strategy Outlook

Contents

Financial statements The market Strategy Outlook

Financial statements

The market

Faiveley Transport

Outlook

Financial statements The market Strategy Outlook Financial statements The market Strategy Outlook

Strong sales and profitability 

growth in 2008/2009

Financial statements

Key figures

2008/2009 % change Sales

852.0

+23% Order backlog

1,139

+13% Ebitda

129.2

+27% Net profit ‐ Group share

51.5

+42%

Financial year sales 

By type of activity Original equipment growth: + 26% Customer service growth:  + 16% Electromecanic 3% On‐Board Doors 12% Platform Screen  Doors 4% Air  Conditionning 18% Electronics 6% Brake Systems 25% Cust. Services 30% Couplers 2% Par ligne de produits Europe 79% Asia Pacific 14% Americas 7% Par zone géographique

Group consolidated income statement (1/2)

> A highly dynamic financial year (sales up 18.5% on a like‐for‐like basis) and  strong growth in operating profit (€ millions) 31/03/2009 31/03/2008 % change Published Published Sales 852.0 692.9 23.0%

Profit from operations 114.5 90.4 26.7%

as % of sales 13.4% 13.0%

Other operating income and expenses (0.7) (1.9)

Operating profit 114 88 28.7%

as % of sales 13.4% 12.8%

EBITDA (1) 129.2 101.7 27.0%

as % of sales 15.2% 14.7%

Group consolidated income statement (2/2)

> Strong growth in Net profit – Group share Subsidiary minority interests (excluding Sagard and Managers): € 1.5 million > The shareholding reorganisation carried out in December 2008 had a 13%  earnings enhancing effect on net profit for the year. (€ millions) 31/03/2009 31/03/2008 % change Published Published Operating profit 113,8 88,4 28,7% as % of sales 13,4% 12,8% Financial Cost (14) (5) Income tax (28) (26) Net profit 71,2 57,6 23,6% as % of sales 8,4% 8,3% Minority interests (20) (21) Group share 51,5 36,3 41,8% as % of sales 6,0% 5,2%

Earnings per share (€)(1) 4,06 2,98 36,4%

(€ millions)

Cash inflow

Interest received 1,6

Net exchange gains 1,5

3,1

Net cost of borrowing (17,7) Cash outflow

Other income 42,2 Interest and related hedging (17,9) Interest and cash expense (18,6) Other expenses (38,9) Guarantees and other bank charges (2,0) Exchange gains 5,5 Net finance result (14,4) Net premium on options (0,2) Non-cash items (1,4)

(20,1) (14,4)

Non-cash transactions

Unrealised exchange gains + IAS32/39 4,0 Interest on pension commitments (1,5)

Others 0,1

2,6

Focus on foreign exchange: Operations mainly in the Euro zone

Modest sensitivity: 

> Impact of 10% increase in value of all currencies against the Euro: Sales : 3.0% of sales; Operating profit: 0.3% in sales

Analysis of sales by currency 31/03/2009 %

(€ millions) EUR 593 69.6% CNY 65 7.6% GBP 44 5.2% INR 24 2.8% USD 41 4.8% SEK 12 1.4% CZK 24 2.9% Other 48 5.7% Consolidated sales 852

Group consolidated balance sheet

> Impact of shareholding reorganisation and acquisitions

> Trade receivable deconsolidation programme increased to € 98 million 

(€ 58 million at 31/03/08)

(€ millions) 31/03/2009 31/03/2008 31/03/2008 31/03/2009

Published Published Published Published

ASSETS EQUITY & LIABILITIES

Group equity 290.1 169.9

Goodwill 535.9 241.4 Minority interest equity 6.8 116.9

Property, plant and equipment 125.6 86.2 Equity 296.9 286.8

Deferred tax assets 28.8 19.5 Non-current provisions 42.4 47.0

Non-current assets 690.3 347.1 Deferred tax liabilities 19.7 15.2

Non-current borrowings 420.0 45.3

Inventories 136.1 118.3 Non-current liabilities 482.2 107.5

Operating receivables 226.3 209.6 Current provisions 62.9 56.0

Current financial assets 3.2 2.3 Current borrowings 40.5 61.1

Cash and cash equivalents 164.1 114.4 Overdraft + non-deconsolidated factoring 18.9 3.3

Current assets 529.6 444.6 Operating liabilities 318.5 277.0

Current liabilities 440.8 397.4 TOTAL ASSETS 1,220 792 TOTAL EQUITY & LIABILITIES 1,220 792

Consolidated balance sheet – Main changes

CHANGE IN GOODWILL FT Gennevilliers 1.0 Ellcon National 28.6 Faiveley Transport 265.6 Other (0.7) % change 294.5 CHANGE IN FINANCIAL DEBT

Refund of existing debt (89.7)

New debt 440.7

Other changes (1.7)

% change 349.3

CHANGE IN EQUITY

Share capital increase + premiums 87.1 Cash dividends (4.9) Translation adjustment (21.0) Net profit for the year 71.2 Reduction in minority interest (121.6) Other movements (0.6)

Working capital requirement

>

Well controlled WCR in spite of strong sales growth

31/03/09 31/03/08 Change

WCR (€ millions) 43,8 50,9 (7,1)

Eliminations Group structure change (10,6)

Var. Disposal of receivables 40,7 Var. Losses on completion (2,1) Var. Impact IAS 32/39 projects 5,6

Change in management WCR 26,5

Volume effect 25,8

Features of new bank debt

> Covenants:  Max Net Debt/EBITDA = 3.5   Value at 31.03.09 = 2.33 Max Net Debt /Equity = 1.8    Value at 31.03.09 = 0.99 

> Estimated borrowing costs over 2009/2010:  3.4% (including hedges and margins)

EUR USD

Loan 407 million 50 million

Revolving loan (undrawn) 49 million

-Half-yearly amortisation 50% over 5 years 50% over 5 years

Repayment deferral 6 months

-Bullet 50% over 5 years 50% over 5 years

Maturity December 2013 December 2013

Rate Euribor Libor $

Cash flow statement

(€ millions) 31/03/2009 31/03/2008

Published Published

Self-financing capacity (1) 77.8 64.3

% change in WCR (2) 28.8 8.1

Cash flow from operating activities 106.5 72.4

Capital expenditure (15.6) (10.1)

Acquisition / disposal of subsidiaries (457.6) (2.1)

Cash flow used in investing activities (473.3) (12.2)

Share capital increase 87.1 0.0

Acquisition of treasury shares (0.0) 0.4

Other equity movements (1.3) 0.0

Cash dividends paid (4.9) (10.3)

Increase (decrease) in borrowings 345.9 (30.0)

Cash flow from (used in) financing activities 426.9 (39.9)

Exchange losses / change in value of cash equivalents (26.7) (5.8)

Net increase in cash and cash equivalents 33.5 14.5

Cash and cash equivalents at start of period 111.7 97.1 Cash and cash equivalents at end of period 145.1 111.7

(1) : after restatement for movements in provisions for losses on completion (2) : after restatement of provisions for losses on completion

Financial structure

> Capacity to make acquisitions  

> Dividend proposed to the Annual General Meeting: € 1.00 / share

(€ millions) 31/03/09 31/03/08 Change

Cash and cash equivalents 164.1 114.4 49.6

Financial receivables 7.8 4.3 3.5

Financial debt 473.8 108.8 364.9

Restatement for treasury shares 11.0 10.5 0.5

Sound shareholding structure

Analysis of the 

float

29% 71% France International 5.6% 56.3% 38.1%

Shareholders holding more than 0.01% of the share capital

Number of shareholders by nationality Faiveley Family Operating Subsidiaries Float 29% 71%

Share performance

> Market capitalisation at 26/06/2009 (closing: € 54.94): € 791 million > CAC MID100 index  > Number of shares 14,404,711 > 12 month high: € 57.73 (02/04/09) / 12 month low: € 30.44 (08/10/08) > Average daily trading over three months: 30,000 shares vs 13,400 shares in July 2008 0,0 10,0 20,0 30,0 40,0 50,0 60,0 sept .-04 déc .-04 mars -05 juin-0 5 se pt.-05 déc .-05 mars -06 juin-0 6 se pt.-06 déc .-06 mars -07 juin-0 7 se pt.-07 déc .-07 mars -08 juin-0 8 se pt.-08 déc .-08 mars -09 juin-0 9 Faiveley

(up 35.22% over 1 year) CAC Mid100

Financial statements The market Strategy Outlook Financial statements The market Strategy Outlook

The railway market :

Crisis or no crisis

The market

Eastern Europe

Current market size: € 11 billion AGR* 3.4%

Western Europe

Current market size: € 38.5 billion AGR* 3.1%

CIS

Current market size: € 12.8 billion AGR* 6.6%

Asia

Current market size: € 29.8 billion AGR* 5.6%

Australia / Pacific

Current market size: € 2.4 billion AGR* 5.4%

Central & South America

Current market size: 2,5 billion AGR* 18.4%

North America

Current market size: € 24.7 billion

AGR* 4.1%

Africa / Middle East

Current market size: € 3.6 billion AGR* 3.7%

Medium‐term market outlook

A growing global market

* AGR: Average Growth Rate

2008/2016 growth

2% to 3% annual growth

of which + 7% for high speed trains Unife‐ Roland Berger study  June 2008

SCI Verkehr GmbH

> Global economic scenario • A long and significant economic crisis • Economic depressions avoided due to recovery plans > Railway scenario • The railway industry will be less affected by the crisis than other industries  • Risks are different depending on the region and market segments: » Sharp reduction in freight over the coming 3 to 5 years » The Chinese market still experiencing strong growth due to its high potential  domestic market and recovery plans • Average growth between 2% and 3% until 2016; “certain projects deferred?" • Protectionism risk:  » Preference for local industries » Slowdown in liberalisation of transactions

Limited impact of the crisis 

based on the most likely “U” scenario

U

U

2008 2013+ 2009 2012 Boston Consulting study  Group Scenario April 2009

Growth supported by the States’

recovery plans over the next 5 years

> China: € 85 billion • 30% infrastructure • 70% rolling stock > Western Europe: € 20 billion • 30% infrastructure • 25% rolling stock • 45% Services & Maintenance > USA: US$ 11 billion • 30% infrastructure • 50% rolling stock • 20% service and modernisation >Investments spread over 5 ‐ 10 years >Segments: passenger, underground, locomotives  & high speed Investments spread over 5 years  > France: € 600 million > Germany: € 11 billion > Italy:  € 1.4 billion > Spain: € 140 million > UK: £ 1 billion > EU: € 5 billion > Investments spread over 5 years from 2009/10 > Segments: passenger, underground   & high speed trains Boston Consulting study  Group Scenario April 2009

A diversified portfolio that guarantees sales growth

> Original equipment: 20 months of sales; Customer services: 6 months of 

sales

> Increase in order backlog to benefit sales in the medium term

Project portfolio (€ millions) 31/03/08 31/03/09 % change

Order backlog 1,005 1,139 +13.4% •Original equipment backlog  874 990 +13.3% •Customer Services (CS) backlog 131 149 +13.7% Number of original equipment  contracts > € 1 million ‐ 377 Number of CS contracts > € 1 million ‐ 23

Financial statements The market Strategy Outlook Financial statements The market Strategy Outlook

An international Group 

profiled for varied, 

complex and evolving 

markets

Faiveley Transport

An accessible market of over € 85 billion

Faiveley Transport  market (€ billions) 122 86 Source:  Roland Berger – Unife 2008 Car Builders Operators Average global market 2005‐2007 52.7 27 37.2 31 22 18 10 10 0 20 40 60 80 100 120 140 total accessible Track Infrastructure Rolling stock Services

Rolling stock and services

Faiveley Transport’s core market

High Speed Trains Passenger carriages Locomotives Electrical, electrical diesel hydraulic diesel Freight Wagons Light Cars Trams Underground People Movers Mini-underground Airport shuttles Customer Services

A leading player 

Current Collection 3rd_worldwide On‐board access doors 2nd_worldwide 1st_{high‐speed doors} Air conditioning systems 1st_worldwide Electronics Integrated into all Faiveley  equipment Braking systems 2nd_worldwide Couplers 3rd_worldwide Platform doors 1st_worldwide

Market realities 

Public / private transport >Passenger >Freight >Traction A specific solution  to each manufacturer >Technology >Safety >Reliability >Cost >Aesthetics Equipment manufacturers 3 global players  Long‐term performance  objectives (30 years+) Long‐term performance 

objectives (30 years+) Guaranteed long‐term serviceGuaranteed long‐term service A specific solution for each type of railway transport requirement Operator National and private operators Manufacturer 30 manufacturers in the world Research of a high  differentiation level   System offering Specific added value  for each solution An answer to  differentiation needs

A sound business model

R&D System  Engineering Project engineering Purchases Manufacturing Key processes Management of    international  projects Customer services ‐ Maintenance ‐ Spare parts ‐ Renovation     Original  equipment ‐ Integration ‐ Tests ‐ Commissioning

C

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Asia ● 12 sites, including: ● 8 production sites ● 4  commercial sites ● 1,122 employees Australia ● 2 production sites,  including 1 centre of  excellence ● 92 employees South America ● 1 production site ● 87 employees North America ● 1 production and centre of excellence site ● 289 employees 39 sites in 22 countries Western Europe ● 19 sites: ● 16 production sites, including 6  centres of excellence ● 3 commercial sites ● 2,658 employees Eastern Europe ● 4 sites: ● 3 production sites, including  1 centre of excellence ● 1 commercial site ●371 employees 

A flexible, global network close to customers 

In order to anticipate the trends of the railway market:

The performance‐driven Moving Forward plan

ERP

IT infrastructure

Guaranteeing profitable sales growth

Sales Project

Management

> A performance assessment system • Rolling out good practices in each business:  45 basic rules > 11 industrial sites have rolled out the FMS since September 2008 > Objective: Comprehensive audit over the next 2 years of: • 90% of centres of excellence • 70% of sites > Examples of steps implemented following an audit • Reduction in production time of blower parts in Italy • 30% reduction in floor area in workshops, shipping areas and engineering & design  department in Spain • Display of customer complaints:  “the faults library“: Operational responsiveness

Faiveley Management System (FMS)

Moving Forward 

Moving Forward 

Delivery on schedule >Group planning process  >Supplier & production  performance Inventory management and reduction of  production time  > Sales & operations planning >Change of engineering process >ERP implementation (Movex) >Reduction in the number of suppliers

Supply chain

Moving Forward 

Moving Forward 

* On Time Delivery = O days delay for all parts Inventories (days)* 60 64 65 50 52 54 56 58 60 62 64 66 2006/07 2007/08 2008/09 2009/10

Example: Faiveley performance for a major customer (ppm: faulty parts per million) > Focus on the quality function (project, engineering, production, suppliers) > Focus “0 km” Quality & Reliability > Reduction of COPQ (Cost of Poor Quality)

Quality

Moving Forward 

Moving Forward 

21,491 _18 567 4,140 _3 000 0 5,000 10,000 15,000 20,000 25,000 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11

> Transfer of operations from the Philadelphia site to Ellcon: 5 months > Re‐shaping of Ellcon’s freight business: 3 months > Transfer of technology from Amiens to Qingdao and € 50 million contract  carried out in 18 months

Flexibility and Responsiveness

Moving Forward 

Moving Forward 

> Performance interview and support > Promotion of multi‐skilled personnel > Strong responsibilities given to local managers > Significant commercial and industrial responsiveness > Opportunism in acquisitions

Ambitious management 

Moving Forward 

Moving Forward 

Organic growth potential to develop…

> A potential of new or still under‐represented clients • Siemens, General Electric, EMD > Strengthened international coverage and agents network > Ongoing partnership agreements in new markets  • Russia, Romania, US, Iran, etc.

Opportunities to grow through acquisitions

> Product and geographic complementarity

Faiveley Transport, positive dynamics

> Stable sales level in 2009/2010

> A sustained order intake to prepare for the future

> Maintained economic and financial performance

Shareholders’ agenda 2009/2010

Date Event 22 July 2009 22 September 2009 26 October 2009 30 November 2009 19 January 2010 Q1 sales Annual General Meeting Half‐year sales Half‐year results Q3 sales