2010 proved another successful year for Stadler Rail Group. Sales stand at CHF 1,077 million, slightly above the levels of previous years. Incoming orders of CHF 2,866 million represent a record result.

In recent years the German Division has recorded especially good progress. Its achievements include winning one order each from Berlin’s commuter railway system and the Luxembourg State Railways (CFL) for KISS, the double-decker multiple-unit train. Thus the division has introduced the new vehicle series into two additional markets. These and other successes, especially in the tram segment of the market, have enabled the German Division to increase its capacity by around 50%. This will create 300 new jobs between now and 2013.

Capacity utilisation at the three Swiss sites is good until at least mid-2013. However, the Swiss Division is increasingly feeling the burden of the strong Swiss franc. It is therefore uncertain whether production levels can be maintained here after mid-2013. This applies especially to the largest site, Bussnang.

Dr Christoph Franz and Rolf Friedli have joined the Board of Directors.

Stadler’s new flagship products first rolled out onto the rail network in 2010. They are the new double-decker KISS (the acronym stands for “comfortable innovative speedy suburban train”) for the Swiss Federal Railways (SBB) and the Intercity FLIRT for the Norwegian State Railways (NSB). FLIRT, the Fast Light Innovative Regional Train, boasts a top speed of 200 km/h. Total sales volume amounted to CHF 1,077 million, up by CHF 38 million on 2009. The budget for the current year, 2011, allows for a leap in sales to CHF 1.45 billion with commencement of deliveries of the production editions of the FLIRT for NSB and the KISS for SBB. The changeover of timetables also sees commencement of passenger service by seven Intercity KISS trains (top speed 200 km/h) for Austria’s Westbahn, plying between Vienna and Salzburg.

During the past year, Stadler Rail was very disappointed to note that SBB placed its order for mainline double-deckers with Bombardier. The Swiss Division would have felt the full impact of this order from 2013, and its loss must be compensated by orders from abroad. Indeed, Stadler Rail has been winning such orders successfully over the past year. Whether the strong Swiss franc will allow this to continue after mid-2013 remains extremely uncertain. With an order book worth CHF 2.87 billion, Stadler Rail has achieved the highest level of incoming orders in its history: well over CHF 200 million higher than the previous record value in 2008.

– Eight KISS trains for the Luxembourg State Railways (CFL) for cross-border service between Luxembourg and Germany. This means that, in the space of just two years, KISS has gained a foothold in four countries (Switzerland, Austria, Germany and Luxembourg), in both the suburban and intercity train segments.

– Broad-gauge FLIRT for Belarus and Estonia: the broad-gauge FLIRT for Helsinki has opened further doors eastwards. Estonia and Belarus were convinced by FLIRT Helsinki’s ability to fulfil the requirements of severe winters (down to –40°C). The two countries have ordered a total of 48 vehicles.

– Further FLIRT orders flowed in from the Czech Republic, Italy, Germany and Switzerland. Up to mid-May 2011, 669 FLIRT trains had been sold since launching in 2004.

– The successful tram business has also forged ahead. In 2010 the cities of Stuttgart, Geneva, Bergen and Bochum/Gelsenkirchen all ordered Stadler trams.

– The world’s biggest and strongest rack-and-pinion locomotive: Stadler is supplying seven locomotives to Brazilian freight company MRS Logistica S.A. for the freight line from São Paulo to the port of Santos.

– Hybrid locomotives for delivery and marshalling service: SBB Cargo ordered 30 of these newly developed, environmentally friendly locomotives.

Deliveries of the Belarus FLIRT commenced in March 2011. This is the first time Stadler Rail has manufactured vehicles for a country of the former Soviet Union, and the company hopes this broad-gauge FLIRT will gain it a foothold in other CIS states. The potential is vast, as existing fleets are approaching renewal.

In April 2011 Stadler Rail opened a subsidiary in the USA. Stadler Rail was persuaded to strengthen its North American presence by past successes on the US market. Contracts have been concluded for a total of 37 articulated multiple-unit trains in New Jersey and Texas (Austin and Denton).

In India, Stadler is participating with ABB and Titagarh (the Indian rolling stock manufacturer) in an invitation to tender for around 1,000 high-floored trains for the Indian State Railways, for use in West Bengal.

Apart from the consortium including Stadler Rail, another seven providers have achieved pre-qualification. A decision on the tender is expected in 2012. If Stadler Rail gets a look-in here, it will build the necessary production capacity on location in India.

Having invested around CHF 100 million in the expansion of its Swiss Division in the past two years, expansion is now under way in Germany. This is possible due to the German Division’s many successes. Headed by Michael Daum and his team, the plant taken over from Adtranz in 2000 has flourished. At the time it had 197 employees and was threatened with closure. Now it employs 800 people, and the next stage of its expansion has already begun. By 2013, capacity will be expanded in Berlin and Brandenburg, and the number of employees will rise by around 300, to more than 1,100. Two new sites will be created. There will be an additional assembly site in Berlin-Hohenschönhausen, increasing final assembly capacity by around 50%. An aluminium bodyshell production unit and paint shop will open in Berlin-Reinickendorf. This is where the KISS carriage bodies for Germany and Luxembourg will be welded in future.

By this new expansion, Stadler Rail will have created 650 new jobs each in its Swiss and Germany Divisions since 2009.

Growing numbers of customers want to procure services as well as vehicles. Stadler Rail wishes to increase its engagement with this growing field of business. To meet the specific needs of these customers in the best possible way, a Service Division has been formed. This combines all service and maintenance plants which used to be grouped under International Division. They comprise Stadler Algiers (Algeria), Stadler Pusztaszabolcs (Hungary) and Stadler Merano (Italy). In the next few weeks, Stadler Linz will be formed to handle the maintenance of the Intercity KISS trains for Austria’s Westbahn.

The remaining sites of the former International Division, namely final assembly in Siedlce (Poland), bodyshell construction in Szolnok (Hungary) and engineering in Prague (Czech Republic), have been grouped together into the Central Europe Division. Jürg Gygax heads both divisions.

At today’s annual general meeting Dr Christoph Franz, Chairman of the Board of Directors of Deutsche Lufthansa AG, and Rolf Friedli, Partner in Capvis Private Equity AG, were elected to the Board of Directors.

As Chairman of its Board of Directors, Dr Christoph Franz successfully heads Deutsche Lufthansa AG, one of the world’s largest airlines. However, he is also a proven expert in the railway vehicle industry. As former CEO of the passenger transport division at Deutsche Bahn, he has abundant knowledge and experience and a broad network in this field. Rolf Friedli replaces Dr Alexander Krebs, who left Capvis Private Equity AG as a partner this year. Dr Beat Lüthi is not standing for re-election. Peter Spuhler concluded, “I wish to thank Beat Lüthi and Alexander Krebs very much for their strong commitment and cooperation in finding solutions.”

Hans Kubat began his well-earned retirement at the end of 2010, after successful management activity in the railway vehicle industry. Kubat had served as CEO of Stadler Altenrhein since 1997.

It is difficult to estimate how the order book will develop in the medium term. The strong Swiss franc weighs heavily on Stadler Rail, especially on its Swiss Division. On average, around two-thirds of vehicles from that division are exported. At present, this capacity is fully utilised until mid-2013. Whether production can continue at this level thereafter is extremely uncertain, in view of the exchange rate trend.

To reduce cost pressure, Stadler Rail has taken preliminary measures to increase equipment procurement in the Eurozone. Given the high volume of incoming orders, there is no change to purchasing volumes from Swiss suppliers. The Board of Directors and Group Executive Board are keeping a constant eye on developments and will take further action if necessary.

Stadler Rail will do its utmost to keep the capacity and jobs it has built up. In doing so, it relies on innovation and product improvement, to meet customer requirements. Stadler Rail will participate fully in the impending major invitations to tender, such as the procurement of trams for Zurich (Verkehrsbetriebe Zürich, VBZ) and Basel (Basler Verkehrsbetriebe, BVB).