Industrial Battery Group Xavier Delacroix Investor day – Jacksonville, November 2014

Industrial Battery
Group
Xavier Delacroix
Investor day – Jacksonville, November 2014
Industrial Battery Group
1. Industrial Battery Group overview
2. Stationary
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Industrial Standby
Telecommunication
Energy Storage System (ESS)
Takeaways
3. Transportation Markets
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Investor day – Jacksonville, November 2014
Aviation
Railway
Industrial Vehicles
Takeaways
1. Industrial Battery Group
overview
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Investor day – Jacksonville, November 2014
Industrial Battery Group
A solid and growing business
IBG Sales* in K€
CAGR: Transportation +2,0%, Stationary +7,7%
400 000
350 000
300 000
250 000
200 000
150 000
100 000
50 000
2005
*from continued activities
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Investor day – Jacksonville, November 2014
2006
2007
2008
Transportation
2009
Stationary
2010
Others
2011
2012
2013
Industrial battery market Overview
 Market totals 6,8 Bil EUR
 Market still dominated by Lead acid
 Li-ion starts to enter some markets
 Saft market share increased, particularly
in telecom and Motive power sectors
Industrial Battery Market Estimation
Mil €
2013
Market
Market
Share
Industrial StBy
(including transportation)
2 100
14,1%
Telecom networks
2 200
2,3%
Motive Power
2 500
0,4%
6 800
5,3%
Total
Source : Eurobat, 14th ELBC conference, various lead manufacturers
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Investor day – Jacksonville, November 2014
Industrial battery Market
(2013 estimate Mil EUR)
2. Stationary
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Investor day – Jacksonville, November 2014
Stationary: Accelerating growth in the past 3 years
Stationary Sales in K€
250 000
200 000
150 000
100 000
50 000
2005
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2006
2007
2008
2009
2010
2011
2012
2013
Industrial Standby: Growing faster than WW GDP thanks to Asia, US and Middle East
Telecom: Strong growth from US (Ni-Cd) and India (Li-ion)
Energy Storage systems: Currently taking off with commercial projects
Investor day – Jacksonville, November 2014
2. Stationary
Industrial Standby
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Investor day – Jacksonville, November 2014
Industrial Standby market trends
Building &
plants
Hospitals
Plants
Data centers
Telecom installations
Large public
buildings
Banks
Oil & Gas
Offshore platforms
Onshore production
sites
Pipelines upstream and
downstream facilities
Remote locations
Off-grid
photovoltaic
PV
Off-grid installations
Pipelines
Hybrid systems
Transport
infrastructures
Rail
Road
Marine buoys
Aviation beacons
Tunnels
Signaling
Generators
Utilities
Electricity generation
Gas turbine plants
T&D substations
Desalination plants
 This market is forecasted to grow at 5 to 6% CAGR to 2017(1)
 UPS, communications, infrastructure investments and will continue to drive
the stationary market
(1) Saft marketing estimate base on IMF May 2014,Eurobat, EBLC Conference, Frost & Sulivan battery Market report
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Investor day – Jacksonville, November 2014
Industrial Standby
Saft Market positioning
 Saft has a large and well performing product portfolio, industrial and commercial
footprint to address the growing stationary market demand.
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End user education of the advantages of Ni technologies against lead
 Developing regions are more demanding on batteries.
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Plant in Bangalore (India) began production in January 2013, servicing the growing and
demanding Indian Large Power plants End-Users
 Competitive landscape includes large US, Indian, German and some Chinese
manufacturers.
 Market potential exists in industrial UPS (>100 kVA) for Telecom (datacenters)
and industrial applications
> Saft Li-ion Intensium-Max has the right positioning for these demanding requirements.
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Investor day – Jacksonville, November 2014
Saft Standby
Recent notable advances
 Remote off-grid site
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Saft new Sunica.plus, with 5 490 Ah, combined with off grid PV, wind
turbine and co generation, will provide daily 250 kWh of energy of
the Hornlihütte in 2015 (Switzerland).
 Oil & Gas:
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Saft Ni-Cd “maintenance free” technology is used on oil and gas
platforms, to provide enough power to restore, or close down the
off-shore rig’s operation safely.
 Fire Pumps:
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High Power SPH/XHP product are used on Quad 204 FPSO in the north
sea, to start the 3 fire pumps engines.
 Power sector:
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Saft Ni-Cd batteries are unsed in the Qassimm 1 500 MW Power station to
support vital equipments with fail-safe power.
Investor day – Jacksonville, November 2014
Market potential for new applications
for Advanced battery technologies
 Saft Li-ion Intensium® Flex (696V, 500 kW, 525kWh) finds its place for demanding
new O&G applications
 Intensium® Flex packaged in an Eco-H large hybrid containerized genset to help
level peak power during drilling.
 Benefits: O&G operators see reduced fuel consumption, emissions and operating
costs. A second generator is not needed for the peak power demands.
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Investor day – Jacksonville, November 2014
2. Stationary
Telecom
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Investor day – Jacksonville, November 2014
Telecom applications
A complete range of battery solutions for the multiple
needs of modern telecom networks
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Investor day – Jacksonville, November 2014
Telecom Market drivers
 Global market will reach 9,7bn connections
(including M2M) by 2017 with a 7,6% CAGR
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More data traffic than voice (data +66%per year)
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3G/4G rollout is expected to significantly influence the
need for more infrastructure, which will drive market
growth
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Internet of things (or of everything)
 Developping countries:
15
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Tougher operating conditions
(non reliable grid or no grid)
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Hybrid system solutions
Investor day – Jacksonville, November 2014
Strategy for growth in the telecom market
 2013 Telecom Battery market is
estimated at 2.2 Bil EUR
Telecom WW Market
Market
Saft
Conventional batteries
1 900
0%
 Very competitive market
Advanced batteries
250 to 300
20 to 25%
2 200
2,3%
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Lead acid leading this market
New players in Advanced Li-ion batteries
Total
Telecom 2013 Market (Mil EUR)
 Saft’s market share is between 20% to
25% in the Advanced Telecom Battery
Market
 Saft’s larger and stronger Customer base
in this market, is expanding.
 This is due to
Good growth in North America
 Deployment to 4G network in India
 New Li-ion Product range
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Investor day – Jacksonville, November 2014
Saft product strategy for Telecom
 Tel.X back-ups more OSP in the US due to its
outstanding life at high temperatures Large range of
Ni-Cd products to service Mission critical Plant with
reliable service.
 Evolion® (48V, 77Ah) powers ¼ of Inda’s new
18 000 BTS sites thanks to its compactness and
performance in these though operating conditions
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High number of cycles, partial SOC operation are meeting
the requirements of the weak grid to insure right wireless
service.
 4G/LTE deployments and new market potential will
be adressed with the extention of the Evolion range
 Data storage capacity must grow to meet the
demand, and Intensium® Flex is ready to provide the
right power for Mission Critical Facilities
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Investor day – Jacksonville, November 2014
2. Stationary
Energy Storage Systems
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Investor day – Jacksonville, November 2014
Global Drivers for ESS
 Confirmed increase of Renewables
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Lion-share of Investments
High share of EU energy mix by 2050
Driven by wind & solar
Share of electricity generated from variable
renewables (%) by region in the 2DS
 PV has reached competitiveness
in many areas
 Grids reach level of RES saturation
Variable Renewable Energies
Source : IEA Energy Outlook
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Investor day – Jacksonville, November 2014
 Need for more flexibilities
 Need for more ancillary services
 Need for local energy management
ESS markets in MW (Navigant, 2014)
Energy Storage technology Forecast, World markets: 2013-2023
Multiple Storage Technologies …
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11GW by 2020
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> 50% batteries
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> 30% Li-ion
Energy Storage by Application, World markets: 2013-2023
…compete for a variety of markets
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22% Grid Asset Optimization
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30% Renewable integration
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17% Decentralized Storage
Investor day – Jacksonville, November 2014
Trends - Lithium-ion positioning
 Specific needs of smaller devices
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Only few bulk storage projects are realized
Limited potential for pumped hydro
Renewables = decentralized ressource
Most PV/wind capacity connected
to LV/ MV grids
Short term storage (min – hours) adresses
current problems of intra-day variability,
peak management and grid stability and
has highest short term potential
Global energy storage capacity to be
commissioned in 2013 (MW)
164 MW
 Growing shares for Li-ion batteries
Navigant predicts 30% market share
 Li-ion fastest growing technology
 > 1/3 of project pipeline 2013 with Li-ion
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Investor day – Jacksonville, November 2014
Based on Bloomberg New Energy Finace
ESS – Saft’s main achievements
2010: Creation of Business Unit ESS - Energy Storage Systems
Li-ion storage systems for Renewable Integration and Smart Grids
 Successful take-off
First MW containerized systems shipped early 2012
 More than 50 MW containers installed or projected
 Significant uptake of sales and orders 2014
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 Proven ability to win and execute large turnkey contracts
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Consortia with Power Conversion & Installation partners
Execution of service contracts: I&C, training, maintenance, full service
Bankability
 Project Wins beyond demonstration
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Multiple MW contracts, numerous customers, different geographic areas
Delivery of largest ESS in La Réunion: 9MWh
Investor day – Jacksonville, November 2014
Energy Storage installations 2012/14
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Lithium-ion technology, containerized systems only
Investor day – Jacksonville, November 2014
ESS – Saft’s Main Markets (1)
 Large Renewable plants & PV-Diesel
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Majority of current Saft project pipeline
Rationale: reach highest possible penetration of RES
in non interconnected or micro-grids, grid stability, fuel savings
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Examples:
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La Réunion Island: 9 MWh ESS for 9 MWp PV farm
Bolivia: 2 MW ESS for 10 MW PV-Diesel system
 Frequency Regulation
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Market Uptake has started through FERC regulation
Rationale: Cost effective alternative to fossil fuel based primary
reserves: CO2 savings, faster and more accurate response, free
production capacity
Examples :
SEPTA Philadelphia: 1 MW brake recovery &
frequency regulation
EDF France: 1 MW Frequency Regulation
Investors day – Jacksonville, November 2014
ESS - Main Markets (2)
 End customer energy efficiency
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Naissant market: smart buildings, residential PV & storage
Rationale: Optimized facility energy management,
Demand Response, PV self-consumption / autonomy
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Examples:
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Bosch BPT-S 5 Hybrid, 5kW with 4-13 kWh battery
SDEM Bretagne smart building, 50 kWh / 100 kW
solution coupled to Schneider building management
 Smart Distribution Grids
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Mainly Demonstration Projects & some early adopters
Rationale: Integrate storage with high level of energy production,
smart grid technologies and DSM at distribution level
Avoid / defer grid upgrades
Examples :
ERDF Nice Grid & Venteea in France
ENEL several smart grid projects
Investor day – Jacksonville, November 2014
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ESS Li-ion battery systems
Generation
Transmission
Distribution
Electricity
Customers
Energy Storage
Containers
ESSU
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Intensium Max 20+E 1MWh highest energy density on market
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Intensium Max 20 P 1.8 MW highest power density on market
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Products for residential, building & community segments
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Interfacing with leading power conversion brands :
ABB, Alstom, Ingeteam, S&C, SMA, …
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Investor day – Jacksonville, November 2014
Residential systems
Stationary market
Key Takeaways
 Industrial Standby market
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Strong, competitive, and leading Ni-Cd product line
Answering the needs of growing BRICS countries
Seizing new stationary applications with Li-ion
 Telecom segment
Growing Product offer in Ni based and Li-ion chemistries, recognized by the market
 Continue sales growth with 4G deployments and emerging countries
 Penetrate Datacenter Market with Intensium® Flex
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 Energy Storage Systems
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Successful take-off beyond demonstration projects
Positioned on a market with strong long term growth potential
Li-ion system solutions for a large application spectrum
 Saft’s mid term objective: growth of 11-13% per year
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Investor day – Jacksonville, November 2014
3. Transportation
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Investor day – Jacksonville, November 2014
Transportation: supported by growing mobility needs
Transportation Sales in K€
160 000
140 000
120 000
100 000
80 000
60 000
40 000
20 000
2005
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2006
2007
2008
2009
2010
2011
Aviation: Strong after market and OEM businesses with Li-ion take off
Railways: Market share recovery since 2010
Industrial Vehicles: in a starting phase
Investor day – Jacksonville, November 2014
2012
2013
3. Transportation
Aviation
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Investor day – Jacksonville, November 2014
Saft: world leader in aviation batteries
 One Saft battery taking off every two seconds
 Playing a key role in the aircraft safety chain, incl. emergency avionics
back-up power
 100% of aircraft produced by Airbus and majority of Boeing are equipped with
Saft battery
 Breakdown of Aviation 2013 sales worldwide
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Civil aircraft: 1st mount
Civil aircraft: aftermarket
Military aircraft: 1st mount and aftermarket combined
Investor day – Jacksonville, November 2014
20%
55%
25%
Aviation market is growing!
 All commercial aircraft OEMs display historically high backlog
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Boeing and Airbus combined have 8,000 aircraft on order
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Estimates based on +4% global GDP growth predict airliner fleet to grow by 5%/year, while
IATA project passenger traffic to grow +6% in 2014
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Growth in number of commercial flights stimulates aftermarket
> -2% CAGR over last 5 years in USA
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(Source: FAA)
is compensated by rapid growth in Asia and Middle-East
Overall, total fleet projected to grow +2.6%/year over 2013-2023 (source: ICF sh&e)
 Business Jet Aviation recovers from 2008 crisis
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BA sector driven by high-end, large biz jets
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Teal Group Corp forecasts 700 units delivered in 2014, 800 in 2015 (vs 620 in 2013)
 Military aviation: flat or slightly negative growth
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Investor day – Jacksonville, November 2014
Aviation batteries: competitive landscape
 Saft market share (on Ni-Cd and Li-ion combined): 63%
Lead-Acid
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Investors day – Jacksonville, November 2014
Ni-Cd
Li-ion
Saft reinforces its leading position
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General Aviation: Small private planes
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Business Jet Aviation and helicopters
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Ni-Cd strategy = Leverage the recovery of this segment,
driven by the USA, since 2013
Li-ion strategy = Capture dominant market share in nascent niche
Saft delivers ULM® batteries to Gulfstream Aerospace for the G650®
and G550®
Airliners & military aircraft
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Nearly exclusively lead-acid (not a technology Saft carries):
mostly inaccessible to Saft
Saft is on board the Airbus A350XWB aircraft with Ni-based
and Li-ion batteries
Ni-Cd: differentiate Saft’s OEM-approved against Parts Manufacturer
Approval(PMA) batteries
Saft will provide maintenance-free nickel-based batteries on the KAI T-50/A-50
Military strategy: become preferred provider for Large Unmanned Aircraft
Vehicles (UAVs)
Multi-million Contract to Pioneer High Power Li-ion Battery Capabilities for F-35
Investor day – Jacksonville, November 2014
Li-ion introduction
 Smart, Lighter, Smaller, easier to maintain Li-ion fit perfectly the Aviation needs
 Increase the battery value/plane by 3 to 4
 Saft is delivering 3 battery systems for 2 major aviation programs
48v Li-ion System
for Airbus A350
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Investor day – Jacksonville, November 2014
270V Battery for LockheedMartin’s Joint Strike Fighter
(JSF F-35)
3. Transportation
Railway
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Investor day – Jacksonville, November 2014
Railway market overview
 The current market grew by ±1,5% CAGR over the previous period (2009-2011),
achieving growth despite already high past market volumes
 Rolling stock will grow from 47,9 Bil € (2011-2013) to 54,6 (2017-2019) ;
+2,2% per year
 Drivers are population growth, urbanization, road congestion, and increased
demand for mobility, combined with climate change and environmental concerns
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Urban rolling Stock growth is +5,9%, driven my metro, and Asia Pacific, CIS, Europe
 Regions with key significance will be Latin America, Asia pacific, Africa /middle
east and NAFTA.
Source: Unife World Market 2014 to 2019
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Investor day – Jacksonville, November 2014
Saft increasing it’s leading position in the Railway
market
 Saft continues to lead the Nickel
based Railway battery market
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On board: Emergency Back-up,
engine starting
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Trackside: signaling
 Li-ion will foster growth on new
Regen Traction Market & applications
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Light Rail Vehicles, hybrid locomotives
 Technology trend : rather
conservative approach to new
technology adoption
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lengthy qualification processes
stringent standards…
 Market need is there, and growing
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Investor day – Jacksonville, November 2014
2013 Rail Est. market share
(On-board batteries)
Saft strengthening its position
 Saft MSX batteries step-up to the reliability challenge
for Hitachi’s Class 80 series UK trains
 MRX in the Singapore MRT metropolis driverless trains
 SRM+ batteries pack high energy into a compact package
for the Chennai metro
 Saft Batteries deliver reliable back-up power for
Hyderabad’s new Metro Rail system
 Extreme temperature batteries to keep trains running
during 2014 winter olympics
Business driven by strong urban area’s development
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Investor day – Jacksonville, November 2014
Li-ion opens new applications
 Cleaner cities, with esthetic urban public transport solution are drivers for on
board kinetic energy storage solutions.
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Light Rail and tram market is EUR 2,3 Bil/year
 Saft is delivering 2 battey systems for 2 autonomous new trams projects

energy savings from storing Regen energy and associated infrastructure costs can provide
up to 25% energy savings for Light Rail Vehicle Operator.
790V 210kW Li-ion System
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Investor day – Jacksonville, November 2014
515V 216kW Li-ion System
3. Transportation
Industrial Vehicles
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Investor day – Jacksonville, November 2014
2012
2015
2020
A fast growing electrification trend
Source: IdTech industrial and Commercial vehicles, 2013 2023, Saft internal market analysis
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Investor day – Jacksonville, November 2014
Industrial Vehicle Market
This market has the following trends:
 existing lead acid applications, switching to Li-ion: e.g. forklifts
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Saft strategy is to position Li-ion unique advantages in the intense (24/7) warehousing
activities (e.g. food logistics, pharmaceuticals, chemical industry…)
 New application requiring electrification or hybridization: busses, trucks,
Ground Support Equipment
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Several technologies are being evaluated : advanced Lead, super capacitors,
fly wheels, fuel cells…
Li-ion provides advanced solution that conventional batteries cannot provide (weight &
space, lifetime, TCO, quick charge…)
Investor day – Jacksonville, November 2014
Forklifts
Market Drivers for “more electric”
 Manufacturers want « green logistics »
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Investigate alternative power sources Hybrid, fuel-cells, Li-ion
Very Narrow isle truck with alternative drive technologies
 Avoid conventional L/A maintenance
 Fast charge = time saving
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better shift utilization
No battery swapping
Reduction of fleet size
 These features translate into TCO savings up to 20%.
 Li-ion penetration is this market is estimated
between 5 to 10%
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Investor day – Jacksonville, November 2014
Off-Road: Ground Support Equipment (GSE)
Market drivers for hybridization
 GSE market is 91 k vehicles/year, > 30% xEVs,
forecasted to grow +15%/year by 2020 (with >50% xEVs)
 Driven by:
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Electrify the idling time:
typically, short period of high load -> extended periods of idle or engine off
Reducing Fuel and Maintenance costs
Allowing in door usage (Aircraft in warehouse)
Decrease Airport CO2 emission taxes and noise level (greener image)
All are strong drivers to hybridize (or electrify) Ground Support Equipment
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Investor day – Jacksonville, November 2014
Ground Support Equipment (GSE)
Aircraft pusher
TBL 800: 1st hybrid tractor for jumbo jets (A380)
 Saft Li-ion battery: 740 V, ±200 kWh
 Total cost of ownership benefits
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2,500 hours / year
2 to 3 years pay back
CO2 emissions halved
Investor day – Jacksonville, November 2014
On road vehicles
Market and drivers
 Industrial markets are developing

Following Environmental initiative / commitment from Cities
> RATP (Paris City bus operator) strategy communicated early 2014 is to operate 100% of
its fleet without diesel bus by 2025
> Other European cities have already made a step by introducing hybrids and plug-in
hybrids (Bordeaux, Hamburg, Stockholm, Luxembourg, Helsinki,…)
> Specific incentives programs in some US states such as in California, New-York,
Pennsylvania, Connecticut, Illinois, etc…
> Ex of California with CARB posted funding plan for FY14-15
– Hybrid and Zero Emission Truck and Bus Voucher Incentive Project (HVIP) – $10-15 million
– Zero-Emission Truck and Bus Pilot Projects –$20-25 million
To reduce operating costs (fuel & maintenance)
 To reduce Noise and CO2 emission
 To match Euro 6 regulation for heavy duty vehicles (bus and trucks)

> 80% less NOX – 66% less particles compare to Euro V (2009)
 Bus Market xEV
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2012 estimated @ <10k vehicles
2020 forecast to reach ± 90 k xEV vehicles
2014 investors day - Nov 2014 - Jacksonville, FL, USA. DRAFT
Saft Li-ion product solution
Bus example
 Saft 630V Li-ion Bus battery, 19 kWh, 170 kW
 PHEV Bus operation advantages
Provides Stop & Start function
 Regen energy storage
 Fast charge
 Full electric drive mode (up to 10 km)
 Up to 30% fuel savings
 Noise reduction in city center

 Version for Full EV bus also available (26 kWh)
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Investor day – Jacksonville, November 2014
Transportation
Key Takeaways
 Aviation
Structural growth in Airliner segment and tailwind in Business jet segment
 Is already benefiting from F-35 and A350 Li-ion contracts
 Saft well positioned to capture new, More Electric Aircraft platform, in particular with Li-ion
systems
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 Railways
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Stronger market share, in a conservatively growing market
Positionned to capture emerging countries needs
Li-ion adoption for Regen will strengthen Saft’s market leadership
 Industrial Vehicles

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Li-ion answers this market changing needs for better energy utlilization
Industrial vehicle market is scheduled to grow…
Saft is already penetrating this market with main players in Forklifts & Bus
 Saft mid term objective: Growth of 8-10% per year
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Investor day – Jacksonville, November 2014
Conclusion
 IBG has entered in rapid and diversified growth phase supported by
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Traditional business
Li-ion moving from demonstration to commercial
 Profitability is improving
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Maintain strong profitability of the traditional business
Improvement of Li-ion link with volume increase
Investor day – Jacksonville, November 2014
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