Rail transport is becoming increasingly attractive: megatrends such as population growth and increasing urbanisation worldwide are fuelling higher demand for trains. At the same time, railway vehicles are becoming increasingly sophisticated, with more and more systems now being controlled via a central network.

The global market for railway vehicles has been reporting constant growth rates of between two and three percent in recent years, driven by the expan sion of high­speed lines and inner­city underground railway systems. As the world’s population continues to grow – particularly in densely populated regions –  the demands in terms of mobility and sustainability are increasing as well. We expect this trend to continue. Railway vehicles are also becoming more technically complex as a result: the proportion of trains equipped with a TCN (“train communication network”) is increasing, as is the number of systems that have to be connected to the TCN and reconciled with each other in these trains. This development offers additional growth potential for duagon in its role as a “complexity manager”. Ultimately, communication between a rail vehicle’s numerous subsystems relies on duagon’s products.

duagon AG, which has its registered office in the Swiss city of Dietikon, was established in 1995 and has since become a leading inde-pendent provider of network components for data communication in railway vehicles. The company’s products allow individual railway vehicle systems, such as doors, brakes, air conditioning systems and the primary control computer, to communicate via what is known as the TCN (“train communication network”). This makes it easier to integrate these systems into the train manufacturers’ networks and limits sources of errors in the process. This allows suppliers to concentrate on their core competencies, namely the development of the individual railway vehicle components. duagon products are used by virtually all train manufacturers and system suppliers.

duagon has established strong relationships with customers in China, the world’s largest market for railway vehicles, over the last ten years. In order to exploit the existing growth potential, the company intends to further expand its sales network, its development capacities and its supporting functions, particularly in China and in other foreign markets. duagon aims to establish itself as a specialist in providing solutions for data communication in railway vehicles by offering a broader product portfolio and via acquisitions in both the immediate and extended competitive environment.

Given the positive development witnessed in the first half of the year and that incoming  orders remain strong, duagon expects its revenues for 2017 to be up in a year-on-year comparison. Despite the push for measures to expand capacities and the associated  expenses, earnings are also expected to be up on the previous year.

DBAG and DBAG Fund VII acquired a majority stake in duagon in July 2017. At the start of the investment, the focus of the management is on expanding the company’s sales and production capacities. This will allow duagon to respond to the sustained high demand, particularly among its Chinese customers. The company’s aim to expand its product range will require the reinforcement of personnel resources working in development. In the medium term, duagon’s management also aims to forge ahead with establishing the company as a one-stop shop and to identify potential targets for add-on acquisitions.