Knorr-Bremse Records Strong Operational Developments

Knorr-Bremse Records Strong Operational Developments 

• Demand in rail division remains high: Group order intake in the first nine months of 2024 remains stable year over year at € 6.2 billion
• Order book remains at a high level at € 7.1 billion
• Profitability increased further: operating EBIT at € 724.8 million, operating EBIT margin at 12.3% (9M 2023: 10.9%)
• Free cash flow rises to € 248 million (9M 2023: € 65 million)
• BOOST 2026 strategy program progressing as planned: acquisition of Alstom’s signaling technology business in North America completed
• Guidance for 2024 raised slightly

Munich, October 31, 2024 – Knorr-Bremse AG, the global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems, today published its results for the first nine months and third quarter of 2024.

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “We are very happy with our operational business performance. Knorr-Bremse is demonstrating its resilience, even in times of geopolitical tension, and our crisis-proof rail division in particular is supporting this development. Our BOOST 2026 program is making rapid progress, and our initiatives are showing significant success. We are lowering our costs, adjusting our product portfolio, and investing in profitable segments such as the rail signaling technology business in North America. In doing this, we are also compensating our cyclical commercial vehicle business. Our customers are confirmation of our strategy, with many at the major, leading IAA Transportation and InnoTrans trade fairs being enthusiastic about our innovation, especially in connection with the development of the sustainable transportation of the future.”

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “Our most important operational metrics this fiscal year are developing positively in line with our expectations. We are particularly pleased that our BOOST strategy is making a decisive contribution to a lasting, continuous increase in profitability. In addition, we successfully secured long-term refinancing in September with our latest successful bond issue, which included our first green bond.” 

The operational results for the first nine months of 2024 are again evidence of Knorr-Bremse’s resilience. The strong performance of the Rail Vehicle Systems division (RVS) made a significant contribution to comprehensive income. The Commercial Vehicle Systems division (CVS) performed robustly considering the challenging market environment for the commercial vehicle industry, which was expected. The order intake of € 6,182 million was largely stable and in line with the previous year’s level (9M 2023: € 6,216 million). The order book, adjusted for Kiepe Electric, increased by 7.0% to € 7,058 million as at September 30, 2024 (September 30, 2023: € 6,598 million excluding Kiepe Electric). Consolidated revenues grew by 2.3% to € 5,883 million (9M 2023: € 5,748 million excluding Kiepe Electric).

Profitability in the Group increased, being influenced by positive economies of scale from the increased sales in the rail division, targeted efficiency initiatives, and active portfolio management. Operating EBIT improved significantly by 13.5% to € 724.8 million, and the margin grew accordingly from 10.9% in the previous year’s period to 12.3%, an increase of 1.4 percentage points. Free cash flow improved significantly in the first nine months of the year to € 248 million (9M 2023: € 65 million). The cash conversion rate in the third quarter was 132%, and 55% in the first nine months.

Overview of Developments in Both Divisions

Rail Vehicle Systems Division (RVS):

• Order intake increased due to the persistently high demand in the global rail market, up a robust 9.2% to € 3,323 million (9M 2023: € 3,044 million)
• The order book increased to € 5,222 million (September 30, 2023: € 4,575 million excluding Kiepe Electric)
• Revenues improved 12.3% to € 2,962 million (9M 2023: € 2,638 million excluding Kiepe Electric)
• Operating EBIT rose by a significant 19.4% to € 463 million (9M 2023: € 387 million)
• The operating EBIT margin increased to 15.5% (9M 2023: 14.1%)

Commercial Vehicle Systems Division (CVS):

• Order intake amounted to € 2,861 million (9M 2023: € 3,174 million)
• Given the challenges in the commercial vehicle market, the order book remained at a high level of € 1,838 million as at September 30, 2024 (September 30, 2023: € 2,024 million)
• Sales in the first nine months of the year, at € 2,922 million, remained 6.1% behind the comparable period of the previous year purely for market-related reasons (9M 2023: € 3,112 million)
• Operating EBIT improved by a solid 4.7% to € 314 million (9M 2023: € 300 million)
• The operating EBIT margin increased accordingly to 10.7% (9M 2023: 9.6%)

Guidance for 2024 Raised Slightly

Taking into account the purchase of Alstom Signaling North America, which closed successfully in early September, the Executive Board is now raising its revenue guidance, as already announced, to € 7,800 million to € 8,100 million (previously € 7,700 million to € 8,000 million). Due to the positive operational developments, especially in the Rail Vehicle Systems division, Knorr-Bremse is continuing to expect an operating EBIT margin between 11.5% and 13.0% and free cash flow between € 550 million and € 650 million.

The interim report for the January to September 2024 period is available on the Knorr-Bremse AG website. Notes to and reconciliations with the financial indicators used can be found in the 2023 Annual Report of Knorr-Bremse AG.

Knorr-Bremse Group Key Performance Indicators:

Key Figures for the Knorr-Bremse Divisions:

¹ Each adjusted for Kiepe Electric

Media Contacts:

Claudia Züchner | Spokeswoman, Financial Communications | Knorr-Bremse AG

T +49 89 3547 2582; E claudia.zuechner@knorr-bremse.com

Investor Relations contact:

Andreas Spitzauer | Head of Investor Relations | Knorr- Bremse AG

T +49 89 3547 182 310; E andreas.spitzauer@knorr-bremse.com 

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market and technology leader for braking systems and a leading provider of other rail and commercial vehicle systems. Knorr-Bremse’s products make a decisive contribution to greater safety and energy efficiency on rail tracks and roads around the world. 33,000 employees at over 100 locations in some 30 countries develop and produce innovative solutions and services that meet the highest technological standards. In 2023, Knorr-Bremse’s two divisions together generated revenues of approximately € 7.9 billion. For almost 120 years, the company has been at the cutting edge of its industries, driving innovation in mobility and transportation technologies with a leading edge in connected system solutions. Knorr-Bremse is one of Germany’s most successful industrial companies and profits from the key global megatrends: urbanization, sustainability, digitalization, and mobility.

DISCLAIMER

This publication has been independently prepared by Knorr-Bremse AG. It may contain forward-looking statements which address key issues such as strategy, future financial results, events, competitive positions, and product developments. These forward-looking statements – like any business activity in a global environment – are always associated with uncertainty. They are subject to a number of risks, uncertainties, and other factors, including, but not limited to, those described in Knorr-Bremse’s disclosures. Should one or more of these risks, uncertainties or other factors materialize, or should underlying expectations not occur or should assumptions prove incorrect, the actual results, performances, or achievements of Knorr-Bremse may vary materially from those described in the relevant forward-looking statements. Such forward-looking statements may be identified by words such as “expect,” “want,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “will,” “project” or words of similar meaning. Knorr-Bremse does not intend, nor does it assume any obligation, to update or revise its forward-looking statements regularly in light of developments which differ from those anticipated.

This publication may include supplemental financial measures – not clearly defined in the applicable financial reporting framework – that are or may be alternative performance measures (non-GAAP measures). Knorr-Bremse’s financial position, financial performance, and cash flows should not be assessed solely on the basis of these alternative supplemental financial measures. Under no circumstances do they replace the performance indicators presented in the consolidated financial statements and calculated in accordance with the applicable financial reporting framework. The calculation by other companies that report or describe similarly titled alternative performance measures may vary despite the use of the same or similar terminology.

^[1] Each adjusted for Kiepe Electric

² Adjusted in 2023