/// On Track For Long-T erm Growth I n v e s t o r P r e s e n t a t i o n novembre 10, 2016 /// November 2017
/// FORWARD-LOOKING STATEMENTS Statements contained in this presentation, which are not historical facts, are forward-looking statements as that item is defined in the Private Securities Litigation Reform Act of 1995. This presentation contains forward-looking statements and certain information contained in this presentation involves risks and uncertainties that could result in actual results differing materially from expected results. Forward-looking statements represent the Company’s expectations and beliefs concerning future events, based on information available to the Company as of the date of this presentation. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this presentation. Additional information regarding these and other factors is contained in the Company’s SEC filings, including without limitation, the Company’s Form 10-K and Form 10-Q filings. 2 /// Investor Presentation, November 2017
/// A DIVERSE, GLOBAL RAIL INDUSTRY LEADER… • History dates to 1869 when George Westinghouse invented air brakes • A leading global provider of equipment, systems and value-added services for transit and freight rail, strengthened by acquisition of Faiveley Transport • Large, global installed base with operations in 30+ countries; sales in more than 100 • Diversity of revenue base across markets, products and geography offsets cyclicality of U.S. freight market • Strong platform of product and service capabilities in key global markets offers stability and growth opportunities • World-class lean manufacturing, process excellence and continuous improvement • 16% EPS CAGR since 2006 3 /// Investor Presentation, November 2017
/// …WITH SUCCESSFUL TRACK RECORD $ millions, unless indicated 9 Mos. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* Sales $1,088 $1,360 $1,575 $1,402 $1,507 $1,968 $2,391 $2,566 $3,044 $ 3,308 $2,931 $2,806 Income from $ 130 $ 180 $ 213 $ 180 $ 203 $ 281 $ 392 $ 437 $ 527 $ 608 $ 513 $ 375 Operations Operating Margin 11.9% 13.2% 13.5% 12.8% 13.5% 14.3% 16.4% 17.0% 17.3% 18.4% 17.5% 13.4% Net Income $ 85 $ 110 $ 131 $ 115 $ 123 $ 180 $ 252 $ 292 $ 352 $ 399 $ 352 $ 243 Diluted EPS from $ 0.88 $ 1.12 $ 1.34 $ 1.20 $ 1.28 $ 1.86 $ 2.59 $ 3.01 $ 3.62 $ 4.10 $ 3.85 $ 2.52 cont. ops ($) Cash from $ 151 $ 143 $ 159 $ 161 $ 176 $ 249 $ 237 $ 236 $ 472 $ 448 $ 449 $ 26 operations Debt net of cash $ (38) $ (85) $ 245 $ 203 $ 185 $ 109 $ 101 $ 165 $ 94 $ 267 $ 1,500 $1,646 * Excludes expenses related to Faiveley Transport acquisition and other adjustments 4 /// Investor Presentation, November 2017
/// ACQUISITION OF FAIVELEY TRANSPORT CREATES OPPORTUNITIES FOR SYNERGIES, GROWTH • Expected long-term annual synergies of at least $50M to be achieved by year three Supply chain efficiencies - Review of operations for efficiency and cost savings; operational excellence - Leveraging SG&A capabilities - • Estimated synergies of about $15-20M in first year with estimated one-time costs of $8-10M; to achieve at least $50M in annual synergies by year three will require additional restructuring and one-time costs • Significant long-term growth opportunities • Complementary geographic presence, products and engineering activities creates global scale and expertise • Strengthens technology and innovation initiatives to improve ability to offer safety, productivity and efficiency enhancements • Expands product and service capabilities in key global markets with blue-chip, global customers 5 /// Investor Presentation, November 2017
/// EXPERIENCED MANAGEMENT TEAM • Al Neupaver remains WAB Chairman • Ray Betler remains WAB President and CEO • Stéphane Rambaud-Measson is now a WAB Executive Vice President and Chief Operating Officer, reporting to Ray Betler • Faiveley Transport’s headquarters will remain near Paris, France and will be the headquarters of Wabtec's Transit Group • Wabtec's Transit Group encompasses all of Wabtec's worldwide transit activities, with combined revenues exceeding $2 billion 6 /// Investor Presentation, November 2017
/// DIVERSIFIED REVENUE BASE SEGMENT MARKET Freight OEM 35 % 43% After- Transit market 65% 57% GEOGRAPHY US 35% Rest of the world 65% 7 /// Investor Presentation, November 2017
/// COMPELLING INDUSTRY DYNAMICS • Global, accessible rail supply market exceeds $100 billion annually, with average annual growth of about 3% through 2021 - New rolling stock expected to grow at 3.5% CAGR, mainly in Europe (high-speed, very high-speed and urban segments) - Services expected to grow at 3.1% CAGR, mainly in Asia Pacific (driven by growth of installed base in recent years) • Secular trends also driving investment - Urbanization - Focus on safety - Awareness of environmental issues/benefits • Efficient transportation system/infrastructure essential to global economic growth in developed, emerging countries Source: World Rail Market Study 2016 - UNIFE/ Roland Berger. 8 /// Investor Presentation, November 2017
/// FREIGHT SEGMENT • Overall economic activity (GDP) drives freight traffic volumes and capital investment • NAFTA sets technology standards • Majority of rolling stock outside of NAFTA, where Wabtec share is smaller • Headwinds in new locomotive and freight car markets continue in 2017 Locomotives Freight Cars (Global installed base of ~ 114,000) (Global installed base of ~ 5.5 million) Other Other 5% 8% NAFTA Europe 25% 12% Europe 18% NAFTA 37% Russia - Russia - CIS CIS 26% Asia - 17% Asia - Pacific Pacific 32% 20% Source: World Rail Market Study 2016 - UNIFE/ Roland Berger. 9 /// Investor Presentation, November 2017
/// FREIGHT SEGMENT : Locomotive 10 /// Investor Presentation, November 2017
/// FREIGHT SEGMENT : FreightCar 11 /// Investor Presentation, November 2017
/// TRANSIT SEGMENT • Overall markets driven by government funding and ridership levels, with Europe setting technology standards • Europe/Asia Pacific significantly larger than NAFTA; Faiveley Transport strengthens Wabtec share in these markets • Strongest growth through 2021 expected to be in Western Europe (Germany, France, UK) and Asia Pacific (India, Australia) • Record backlog in 2017 Transit Cars (Global installed base of ~ 569,000) Other NAFTA 6% 5% Europe 32% Russia - CIS Asia – Pacific 14% 43% Source: World Rail Market Study 2016 - UNIFE/ Roland Berger. 12 /// Investor Presentation, November 2017
/// TRANSIT SEGMENT : Transit Cars 13 /// Investor Presentation, November 2017
/// TRANSIT SEGMENT : Buses 14 /// Investor Presentation, November 2017
/// WABTEC’S VISION FOR THE FUTURE TO AVERAGE DOUBLE-DIGIT EP S GROWTH THROUGH THE BUSINES S C YC LE (Actual Performance, 2006-16: Sales growth CAGR of 10% • EPS growth CAGR of 16%) 15 /// Investor Presentation, November 2017
/// PERFORMANCE-DRIVEN GROWTH STRATEGIES Wabtec Excellence Program drives our investment in these Growth Strategies: PRODUCT GLOBAL AFTERMARKET INNOV A TION AND MARKET ACQUISITIONS PRODUCTS & NEW EXP ANSION AND SERVICES TECHNOLOGIES 16 /// Investor Presentation, November 2017
/// WABTEC EXCELLENCE PROGRAM D r i v e s T h e B u s i n e s s • Goal to generate more cash from operations than net income annually • Corporate Business Councils foster culture of continuous improvement in all key processes and disciplines, including lean manufacturing, supply chain, quality and innovation • Drives cash flow, reduces costs and improves efficiency to help manage through cycles 17 /// Investor Presentation, November 2017
/// PRODUCT INNOVATION AND NEW TECHNOLOGIES • Product breadth and engineering expertise provide unique ability to help customers use technology to improve safety, productivity and efficiency • Continued investment to expand capabilities in signaling and train control, an annual global market of about $20B • Increased focus on innovation and R&D by leveraging global footprint for best-in-class engineering solutions - More than 20 Centers of Competence with specialized expertise - Nearly 1,500 engineers worldwide - More than 4,000 active patents; nearly 100 annual new applications • A leading innovator in brakes, electronics, doors and HVAC, with an active pipeline of new products and upgrades - Signaling and train control, Tier IV cooling systems, oil-free compressors, axle-mounted brake discs 18 /// Investor Presentation, November 2017
/// GLOBAL AND MARKET EXPANSION • Expanded geographic platforms in key transit markets - Stronger presence in Europe, Asia Pacific (especially India and China) and South Africa • New, state-of-the-art production facility in Czech Republic • Freight market opportunities in key natural resources markets • Selective opportunities in adjacent markets where we offer competitive advantages - About 10% of sales (power generation and other industrial) 19 /// Investor Presentation, November 2017
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