THE WORLDWIDE MARKET FOR RAILWAY INDUSTRIES 2016€¦ · Overview Akiem • Allco ... AG •...

Maria Leenen, Andreas Wolf, Tobias Blätgen, Hamburg, September 2016

THE WORLDWIDE MARKET FOR RAILWAY INDUSTRIES 2016

DISCLAIMER

• The holder of the copyright and intellectual property rights for this report is SCI Verkehr.

• The statements, forecasts and recommendations in this report refer exclusively to the status of the analyses as of August 2016. SCI Verkehr has compiled the report to the best of its knowledge and with the utmost care and diligence. SCI Verkehr shall accept no liability or warranty – to the extent legally permissible – for the forecasts, estimates and recommendations put forth in this report. The statements made by SCI Verkehr do not represent guarantees in the legal sense.

SCI Verkehr GmbH / Hamburg Office/ +49 (40) 50 71 97-0 / September 2016

DISCLAIMER

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AGENDA

I: SCI VERKEHR AND ITS METHODOLOGY 3

II: WORLDWIDE MARKET FOR RAILWAY INDUSTRIES – RESULTS 11

III: STRATEGIC CHALLENGES 18


AGENDA

3

STRATEGIC CONSULTANCY


COMPETENCIES

SCI VERKEHR is an independent consultancy company specialized in the transport sector

SCI VERKEHR is focused on strategic advice regarding assets, markets and strategies

SCI VERKEHR supports industrial players, operators, investors, banks, and public bodies in their strategic decisions

4

worldwide range of customers

SCI Verkehr GmbH / Hamburg Office / +49 (40) 50 71 97-0

Overview

Akiem • Allco Leasing GmbH • Allianz pro Schiene • Alpha Trains • Alstom S.A. • Amphenol Air LB • AmstedRail • Ansaldo Signal N.V. • Ansaldobreda S.p.A. • Arriva International • Ascendos Rail Leasing • Axis Communications AB • Axtone Sp. z o.o.. • AZ Espana S.A. • Balfour Beatty Rail GmbH • BASF SEn • Bayer MaterialScience AG • BBSR • Beacon Rail Leasing Limited • Berliner Verkehrsbetriebe • BNP Paribas • Bochumer Verein Verkehrstechnik GmbH • Bombardier Transportation • Bonatrans a.s. • Brunel GmbH • Bundesverkehrsministerium • Captrain Deutschland GmbH • Capvis Equity Partners AG • Caterpillar Inc. • China CNR Corporation Limited • China Railway Rolling Stock Corporation • CIT Group Inc. • CKD Vagonka • Coca-Cola Erfrischungsgetränke AG • Commerz Real AG • Commonwealth Bank • Contitech Luftfedersysteme GmbH • CSR Corp. Ltd. • Danish State Railways • DB Cargo AG• DB Fahrzeuginstandhaltung GmbH • DB Regio AG • Dellner Kupplungen GmbH • Deutsche Bank AG • Deutsche Beteiligungs AG • Deutsche Leasing Finance GmbH • Deutz AG • DHL Management • Duisport AG • Durtrack AG • ELIN EBG traction GmbH • Eurofima • Euromaint Rail GmbH • Europorte SAS • Extel Systems Wedel • Faiveley Transport SA • Firema Transporti S.p.A. • Freudenberg Schwab GmbH • Funkwerk • Furrer+Frey AG • GE Transportation • Getzner Werkstoffe GmbH • Greenbrier Germany GmbH • Groupe Ermewa SA • GSI Fonds GmbH & Co. KG • Gutehoffnungshütte Radsatz GmbH • Hamburger Sparkasse AG • Hanning & Kahl GmbH • Hitachi Ltd. • HSH Nordbank AG • Huawei Technologies Co., Ltd. • Hübner GmbH • Hyundai Rotem • IG Metall • Industriewaggon GmbH • Interfleet Technology Ltd. • Interpipe • IVECO • Kapsch CarrierCom AG • Keolis Deutschland GmbH & Co. KG • KfW IPEX-Bank GmbH • Kiepe Elektrik GmbH • Knorr-Bremse AG • Knürr AG • Korea Railroad Research Institut • Kummler&Matter AG • Leonhard Moll Betonwerke • Letsema • Liebherr Transportation Systems GmbH • Lloyds Banking Group • Logistik Initiative Hamburg e.V. • LOGISTIK.NRW • Macquarie Rail • MAN AG • McKinsey & Company, Inc. • Melecs MWW GmbH & Co. KG • Metzeler Schaum GmbH • Microelettrica Scientifica Spa • Mitsubishi Heavy Industries • Mitsui Rail Capital Europe B.V. • Morgan Stanley • MTU Friedrichshafen • Nanjing Kangni Mechanical & Electrical C. Ltd. • National Australia Bank Limited • Norgren Ltd., UK • NS Reizigers B.V. • ÖBB AG • Paribus-SK-Rail Management GmbH • Patentes Talgo S.A. • PE Arriva AG • Penn Machine Company • PESA Bydgoszcz SA • Pintsch Bamag GmbH • PKP • Plasser & Theurer • PORR AG • Postbank Leasing GmbH • Powerlines Group GmbH • Progress Rail Services • Prysmian Spa • RAIL ONE GmbH • Railpool • Rose Systemtechnik GmbH • Royal Bank of Scotland • SBB • Schaeffler Technologies GmbH & Co. KG • Schaltbau AG • Scheidt & Bachmann GmbH • Schwab Verkehrstechnik AG • Schweizer Elektronic AG • Secheron Ltd. • Selectron Systems AG • Siemens AG • Sika Schweiz AG • Societe General Group • SOLARIS Bus & Coach S.A. • Stadler Rail AG • Stemmann-Technik GmbH • Südleasing GmbH • Sumitomo • Thales • Thermo King • Thyssen Krupp • GfT Gleistechnik GmbH • Tiefenbach GmbH • Toshiba Corporation • Toyo Engineering Corporation • Traktionssysteme Austria GmbH • Transmashholding • Trinity Rail GmbH • TÜV Süd • UGL Rail • US Government • VAE GmbH • Veolia Transport • Verband der Bahnindustrie • Voestalpine Bahnsysteme GmbH • Voith Turbo • Vossloh AG •VR Leasing AG • VTG Aktiengesellschaft • Wabtech Corporation • Wascosa AG • Webasto AG • ZELISKO Ges.m.b.H. • ZF Friedrichshafen AG

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WORLDWIDE EXPERIENCE IN YOUR BUSINESS


HISTORY

24 Business Experts

3 LOCATIONS

Maria Leenen

Shareholder & CEO

Rail Business 1994

founded in

3.500 more than

consulting project

Logistics

6

worldwide network of

expert

detailed analysis builds the basis for a profound and comprehensive advise on strategic decisions


Approach

7

Customers

Markets

Processes

Team

Strategy

Business planning by comprehensive consulting

working Centred on customers needs


working areas

Strategy Market

• Mergers & acquisitions

• Process optimization

• Business plan

• Portfolio assessment

• Public strategic advice

• Market entry strategies

• Competition analyses

• Geographical assessment

• Sector analysis

• Asset valuation (IFRS conform)

• Benchmarking

• Product analyses

8

Assets

THE SCI VERKEHR TEAM

SCI Verkehr GmbH / Hamburg Office/ +49 (40) 50 71 97-0 / September 2016 9

TEAM

Experts @ SCI Verkehr

CONSULTING PRODUCTS OF SCI VERKEHR

SCI Verkehr GmbH / Hamburg Office/ +49 (40) 50 71 97-0 / September 2016 10

PRODUCTS

Strategic Consulting

Permanent Market Monitoring

Data Analysis & Evaluation

Aggregation of Information

4 STEPS OF THE SCI MARKET FORECAST


FORECAST METHODOLOGY

11

• Awarded and documented projects

• Periods (delivery known) Contracted

• Established and announced projects

• Options Announced

• Expected projects

• General announcements Virtual

• Replacement purchase and maintenance demand (based on installed base)

• Development of railways and transport

• Megatrends

• Macroeconomic development

• Railway affinity

Long-term drivers

Project-based

THE SCI MARKET FORECAST TOOL CALCULATES THE MARKET VOLUME OF THE WORLDWIDE MARKET FOR RAILWAY TECHNOLOGY


FORECAST METHODOLOGY

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Schematic Illustration of SCI Market Forecast Tool (* project-based forecast)

© SCI Verkehr GmbH

Mark

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150

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T0 T1 T2 T3 T4 T5 T6 T7 T8 T9 T10

Contracted Announced

Virtual

Long-term drivers

AGENDA


AGENDA

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80

100

120

140

160

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Europe North America Asia CIS

RAIL FREIGHT TRANSPORT UNDER PRESSURE – ASIA WITH SIGNIFICANTLY LOWER PERFORMANCE


RAIL PERFORMANCE

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• Rail freight performance is almost equally distributed in Asia, North America and CIS

• Biggest markets see decreases in recent years with Asia loosing the biggest share

• Worldwide market lost 5% volume from 2014 to 2015; SCI Verkehr expects further decrease in 2016

• Structural changes (less heavy goods are transported) are cause strategic challenges for freight operators

• Despite huge efforts to shift transportation to rail in Europe, market shares of rail freight couldn't be increased

© SCI Verkehr GmbH

Worldwide rail freight performance development [Index 100 = 2005]

Worldwide rail freight performance 2015 (tkm, %)

30%

30%

27%

4% 9%

Asia

North America

CIS

Europe

Others

80

100

120

140

160

180

200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Asia Europe CIS

75%

13%

6% 6%

Asia

Europe

CIS

Others

ASIA MAKES UP THE BIGGEST AND FASTEST GROWING RAIL PASSENGER MARKET – EUROPE WITH SOLID GROWTH


RAIL PERFORMANCE

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• Asia makes up 75% of the worldwide passenger performance

• Asia is also the market with the highest growth rates – grounded in huge investment projects of recent years (due to big population and high growth rates especially in cities)

• Europe with solid growth – decrease in Eastern Europe has been stopped; solid growth in metropolitan areas; further investments required to increase modal split and to maintain growth

• CIS as third biggest market loosing shares – decrease in passenger performance in the last 2 years

© SCI Verkehr GmbH

Worldwide passenger/urban performance development [Index 100 = 2005]

Worldwide passenger rail performance 2015 (pkm, %)

Volume BN 169 EUR

Growth +2.3 %

OEM LOSES GROUND TO AFTER-SALES – OVERALL MARKET OF BN 169 EUR WILL GROW BY 2.3% P.A. UNTIL 2020


PRODUCT SEGMENTS

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• Growth rates of OEM slow down leaving a peak that has to be maintained in future resulting in an increasing after sales market which makes up 53% of the overall market

• Development of rail market is reflecting overall economic tendency of lower growth rates and more conservative investment

• Urbanisation, demand for security, efficiency and environmental compatibility are main incentives in the market

• Manufacturers and operators are challenged to work on life-cycle costs

© SCI Verkehr GmbH

Share of After-Sales and OEM segment of the world market [%] and market growth until 2020 [% p.a.]

47% 53%

After-Sales +3.2% p.a.

OEM + 1.3% p.a.

URBAN RAIL REMAINS MOST DYNAMIC SEGMENT OF GLOBAL RAIL AND ROLLING STOCK MARKET


PRODUCT SEGMENTS

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• Urban rail

– Long term importance of urban rail is persisting

– Demand still high but development less dynamic than in recent years

• Passenger rail: Finalisation of high-speed lines and decreasing investment in China hamper market

• Freight rail: Loss of overall economic dynamic leads to lower transport volumes and puts pressure on freight rail rolling stock

Mark

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Market volume [EUR billion] Growth rate [CAGR in %]

Rolling stock market volume and development until 2020 for OEM and After-Sales by transport mode [EUR billion/CAGR in %]

0%

2%

4%

6%

0

20

40

60

Urban rail Passenger rail Freight railG

row

th r

ate

[C

AG

R in

%]

© SCI Verkehr GmbH

ASIA BIGGEST MARKET WITH SOLID GROWTH, AFRICA/MIDDLE EAST HIGHEST DYNAMICS, EUROPE REGISTERS UPWARD TREND


GLOBAL MARKET VOLUMES AND MARKET GROWTHS

18

© SCI Verkehr GmbH; MV = average market volume 2014-2016

Current market volume (MV) and growth rate (CAGR) by regions until 2020

MV = average market volume 2014-2016

Africa/Middle East:

- MV: € 7.1bn

- CAGR: 7.1% Australia/Pacific:

- MV: € 3.4bn

- CAGR: 2.6%

North America:

- MV: € 25.7bn

- CAGR: 1.4%

South/Central America:

- MV: € 5.3bn

- CAGR: -2.0%

Western Europe:

- MV: € 44.4bn

- CAGR: 3.2%

CIS:

- MV: € 20.2bn

- CAGR: 0.8%

Asia:

- MV: € 51.6bn

- CAGR: 2.6%

Eastern Europe:

- MV: € 11.4bn

- CAGR: 0.6%

© SCI Verkehr GmbH

TOP-5 MAKE UP 50% OF THE MARKET – GERMANY WITH HIGHEST, CHINA WITH LOWEST SHARE OF AFTER-SALES AMONG TOP-10


TOP TEN COUNTRIES

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• Chinese rail market at very high level

OEM loses significantly to After-Sales

Urban Rail with highest growth perspective

• Abrupt end of fracking boom in US stopped investments in rail freight rolling stock

• Germany is picking up with 70% After-Sales rate with solid growth perspectives

• Increasing investments in existing infrastructure in Europe drives After-Sales market 0 10 20 30 40

China

USA

Russia

Germany

France

India

Japan

UK

Italy

Canada

OEM market volume After-Sales market volume

© SCI Verkehr GmbH

Top-10 worldwide railway markets for OEM and After-Sales [EUR billion]

AGENDA


AGENDA

20




SCI RAIL INDEX: RAILWAY INDUSTRY IN AN AMBIVALENT CLIMATE - HIGH DEMAND SEEN BY DECISION MAKERS


STRATEGIC CHALLENGES

21

© SCI Verkehr GmbH

Positive effects

• Decision makers see an increasing demand for products and services

• Low interest rates lost momentum in recent month are now evaluated balanced

Negative Effects

• Exchange rates, price development and constraints imposed by authorities are evaluated negative

• Especially regulatory restrictions seem to affect the market -20

-10

0

10

20

30

40

50

60

70

SCI Rail Business Index

Source: SCI Verkehr GmbH

CRRC IS LEADING THE MARKET – SCI VERKEHR EXPECTS FURTHER CONSOLIDATION IN THE RAILWAY INDUSTRY



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• SCI Verkehr applies new methodology to rank companies and now includes most important suppliers Knorr Bremse and Wabtec

• CRRC has same annual revenue as transportation branches of Bombardier, Alstom and Siemens accumulated

• Because of boom in the North American rail freight business the two freight wagon manufacturers Trinity Rail and Greenbrier are in the Top 10

• Chinese suppliers are pushing heavily into the world market

1 Financial years ending in the first half of 2016 have been assigned to the year 2015 2 Foreign currencies have been converted with the average daily exchange rate of the reporting period 3 Revenue share rail not published and therefore estimated

Top-10 railway industries manufacturers ranked by railway revenue 2015 [EUR billion]

0 5.000 10.000 15.000 20.000 25.000

Greenbrier³

Hitachi Rail Systems

Wabtec

Knorr Bremse Schienenfahrzeuge

TrinityRail

GE Transportation

Siemens Mobility³

Alstom Transport

Bombardier Transportation

CRRC

© SCI Verkehr GmbH

investment in

DIGITALISATION

essential for competitiveness

DIGITALISATION – NECESSARY TO KEEP COSTS LOW AND TECHNOLOGY UP-TO-DATE



• Rail business needs to stay up-to-date

• Higher market complexity causes need for digital solutions

• Suppliers and customers are using digital solutions which need to be embedded

• Value chains must be improved to stay competitive

Need for modernisation

• Railway operators with low overall margins (e.g. in the European freight business)

• Ever-growing cost pressure on both suppliers and operators generate the need for improved supply chains

• Enabling control of life cycle costs

• Predictive maintenance by monitoring of maintenance cycles

Cost pressure

23

CONTACT


CONTACT

24

Andreas Wolf

Project Manager

SCI Verkehr GmbH

Vor den Siebenburgen 2

50676 Cologne

Tel.: +49 (221) 931 78-16

Fax: +49 (221) 931 78-78

E-Mail: [email protected]

Maria Leenen

CEO

SCI Verkehr GmbH

Schanzenstraße 117

20357 Hamburg

Tel.: +49 (40) 50 71 97-0

Fax: +49 (40) 50 71 97-20


Ann Kathrin Arntz

Marketing & Sales

SCI Verkehr GmbH

Vor den Siebenburgen 2

50676 Cologne

Tel.: +49 (221) 931 78-20

Fax: +49 (221) 931 78-78


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THE WORLDWIDE MARKET FOR RAILWAY INDUSTRIES 2016€¦ · Overview Akiem • Allco ... AG •...

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