Knorr-Bremse Acquires Alstom’s Rail Signalling Technology Business in North America

• Knorr-Bremse is strengthening especially its resilient rail business
• The acquisition is accretive from the beginning
• By acquiring one of the market leaders in North America, Knorr-Bremse is increasing its overall revenue share in the aftermarket business and the region
• By entering the global rail control, command, and signalling (CCS) technology market, the total addressable rail market volume for Knorr-Bremse will increase by up to € 20 billion in the medium term
• Acquisition underscores the clear plan for implementing the Group-wide “BOOST 2026” strategy program
• Transaction expected to close during summer 2024

Munich, April 19, 2024 – Knorr-Bremse AG, the global market leader for braking systems and a leading provider of other rail and commercial vehicle systems, today announced its acquisition of the conventional rail signalling technology business of Alstom Signaling North America. With this acquisition, Knorr-Bremse is successfully making an entry into the highly attractive control, command, and signalling (CCS) segment of the rail market. Alstom Signaling is a leading company in North America’s CCS market. For the Knorr-Bremse Rail Vehicle Systems division, the acquisition of this profitable business creates new prospects for profitable growth, technological competence, and future digital business models. The transaction is expected to close during summer 2024.

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “This acquisition is good for Knorr-Bremse and will drive our profitable growth further. With it, we are not just building on our highly profitable rail business. Rather, we will also become one of the US market leaders in North America in the rail control, command, and signalling segment, or CCS for short. The transaction pursues a compelling industrial logic and is a very good match for our development and growth path, as we announced in our ‘BOOST 2026’ strategy program. We at Knorr-Bremse are putting our plans into action. We are delighted that we will soon welcome new colleagues to the Knorr-Bremse team, too.”

The acquisition is a significant step in the transformation from a supplier of vehicle systems to a supplier of systems for the entire rail ecosystem, explains Dr. Nicolas Lange, member of the Knorr-Bremse AG Executive Board and responsible for the Rail Vehicle Systems division: “For Knorr-Bremse, the acquisition of Alstom Signaling North America means a successful entry to the CCS segment. The CCS market is of approximately € 20 billion globally, making it a highly attractive rail segment. For us as an international systems supplier, the transaction is a substantial step forward in electronics and digitalization in rail infrastructure. Brakes and signalling technology have a critical influence on the safety and capacity of rail transportation. The CCS segment fits into the DNA of the Knorr-Bremse Rail division amazingly.”

From today’s perspective, it is believed that the acquisition will be accretive right from the outset. The appeal of the CCS market comes from the market entry barriers, resulting from local approval and technology standards; a focus on safety in operation and availability, and large and continuous shares of the aftermarket. Knorr-Bremse has been intimately familiar with this market-specific environment for decades. This will be significant support for the integration of the company and future business development.

Alstom Signaling North America by far has the largest installed base of signal box technology, train detection, and rail crossings, especially in the freight segment, as well as a very large share of the aftermarket. In the future, Knorr-Bremse will be able to offer a CCS technology platform to operators and system providers in North America under one roof. Simultaneously, the acquisition strengthens the position of the Rail Vehicle Systems division in the digitalization business thanks to the access to a large volume of infrastructure data that can be provided to operators as a data service or “software as a service.”

A purchase price of around EUR 630 million was agreed. This includes a mid-double-digit million EUR amount for additional expected and highly profitable project business, which should support the revenue growth mid-term. Alstom Signaling North America attained revenues of about EUR 300 million and an EBIT margin of approximately 16% according to the preliminary results in the past fiscal year which ended on March 31, 2024. The acquisition is to be financed from available liquidity and debt and should not affect the credit rating.

Media Contacts:

Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com 

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market and technology leader for braking systems and a leading supplier 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 approximately 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.

Knorr-Bremse Signs Agreement on the Acquisition of Alstom’s Rail Signalling Technology Business in North America

Munich, April 19, 2024 – Knorr Brake Holding Corporation, a subsidiary of Knorr-Bremse AG (ISIN: DE000KBX1006), today signed an agreement with a subsidiary of Alstom S.A. on the acquisition of Alstom’s conventional rail signalling technology business in North America (Alstom Signaling North America).

As purchase price an enterprise value of around EUR 630 million was agreed. This includes a mid-double-digit million EUR amount for additional expected project business. Alstom Signaling North America attained revenues of about EUR 300 million and an EBIT margin of approximately 16% according to the preliminary results in the past fiscal year which ended on March 31, 2024.

With this acquisition, Knorr-Bremse is successfully making an entry into the highly attractive control, command, and signalling (CCS) segment of the rail market. Alstom Signaling is a leading company in North America’s CCS market. From today’s perspective, it is believed that the acquisition will be accretive right from the outset.

The transaction is subject to customary conditions and is expected to close during summer 2024.

The acquisition is to be financed from available liquidity and debt capital and should not affect the credit rating.

Media contact:  

Alexander Stechert-Mayerhöfer    

Head of Corporate Communications

+49 89 3547 1942    

alexander.stechert-mayerhoefer@knorr-bremse.com 

Contact Investor Relations:

Andreas Spitzauer

Head of Investor Relations

+49 89 3547 182310

+49 175 528 1320

investor.relations@knorr-bremse.com

Knorr-Bremse Plans to Raise Dividend by a Significant 13% to € 1.64

• Strong business development in 2023 is to be reflected in increased dividend
• Executive and Supervisory Boards will propose a dividend of € 1.64 per share at the Annual General Meeting
• Knorr-Bremse is publishing its Annual Report for the 2023 fiscal year

Munich, March 21, 2024 – The Executive Board and Supervisory Board of Knorr-Bremse AG have decided to propose a dividend of € 1.64 per share at the Annual General Meeting following a highly challenging and yet extremely successful fiscal year. The proposed dividend represents a significant 13% increase year over year. The payout ratio is approximately 46% of the consolidated net income for 2023 and is therefore consistent with the existing dividend policy of distributing 40% to 50% to shareholders.

The dividend payment requires the shareholders’ approval at the virtual Annual General Meeting, for which invitations have been sent for April 30, 2024: Investor Relations / Annual General Meeting. In addition to the appropriation of the net profit, the shareholders will be presented proposals for approval of matters such as modifications to the Executive Board remuneration system.

Information about the previous fiscal year can be found in the 2023 Annual Report, which is available to download at www.knorr-bremse.com.

Media contact: Claudia Züchner, Spokesperson Finance

Phone: +49 89 3547 2582
e-Mail: claudia.zuechner@knorr-bremse.com

Investor Relations: Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310
e-Mail: 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 supplier 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 approximately 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.

Record Year for Knorr-Bremse: Revenues, Order Intake, and Order Book at Historic Highs, Turnaround Achieved, EBIT Margin Risen

• 2023 guidance met in full
• Strongest revenues in company’s history: revenues up 10.9% at approx. € 7.9 billion thanks to strong demand
• Order intake at all-time high at € 8.3 billion
• Order book of € 7.1 billion provides security for developments in 2024
• Similar positive trend for operating EBIT margin of 11.3% (previous year: 11.1%)
• Strong free cash flow of € 553 million
• “BOOST 2026” program: portfolio adjustment launched successfully; cost control and strategic alignment remain top priorities
• Guidance for 2024: revenues of € 7.7 billion to € 8.0 billion, operating EBIT margin between 11.5% and 12.5%, and free cash flow between € 550 million and € 650 million

Munich, February 22, 2024 – Knorr-Bremse has proved its resilience and power, even in a more challenging economic environment like the previous year’s. Its revenues, order intake, and order book have climbed further to reach new record levels. The global market and technology leader for braking systems and leading supplier of other rail and commercial vehicle systems presented its preliminary results for the 2023 fiscal year in Munich today.

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “We have every reason to be proud as our excellent results for 2023 demonstrate the commitment of our workforce. The new records reached on our key financial performance indicators as well as the successful market launches and product developments also give us motivation for the upcoming challenges, given the excellent foundation that Knorr-Bremse has. With our ‘BOOST 2026’ strategy program, we are strengthening the company for the future. We are determinedly pushing ahead with measures such as the necessary portfolio optimization and Fix It program, paying strict attention to our cost control, and always keeping track of how our employee numbers are developing, too.

Frank Markus Weber, Chief Financial Officer of Knorr-Bremse AG: “We are very satisfied with the development of our financial performance indicators in the 2023 fiscal year. We have successfully managed to fully offset the inflation-driven cost increases of just under € 300 million. The cost control measures we implemented with discipline, the pricing negotiations we completed successfully, and the inventory and receivables management we optimized further all contributed to an improvement in profitability and excellent free cash flow. Our robust balance sheet puts us in a position where we can respond to the diverse macroeconomic challenges while simultaneously enjoying a great degree of financial flexibility to seize opportunities. The low net debt and our cash and cash equivalents of roughly € 1.4 billion underscore our company’s solid foundation.”

Profitability Up

The global economy continued to face pressure in the 2023 fiscal year, and inflation only went down slowly in many regions. Moreover, the negative impacts of Russia’s war on Ukraine remain a burden on the global markets. Knorr-Bremse was able to increase its consolidated revenues due to the sustained, pleasing customer demand and saw a 10.9% rise to € 7,925.6 million (previous year: € 7,149.7 million). Both divisions contributed equally to these positive developments. Profitability also improved through the cross-divisional Profit & Cash Protection Program (PCPP) in particular, with the operating EBIT margin reaching a value of 11.3% (previous year: 11.1%) and operating EBIT coming in at € 893.1 million (previous year: € 794.6 million). The free cash flow, which has risen to € 553.1 million (previous year: € 219.3 million), also demonstrates the positive effects of the active countermeasures. Thanks to a strong second half and a remarkable fourth quarter in particular, the cash conversion rate reached 93% and therefore slightly above the desired target range of 80% to 90%.

New Records for Order Intake and Order Book

Knorr-Bremse continued to record high customer demand in the previous fiscal year. At € 8,252.2 million (previous year: € 8,114.1 million), the order intake is approximately 1.7% higher than the previous year. The order book of roughly € 7,082.3 million as at December 31, 2023, saw a 2.5% increase year over year (previous year: € 6,907.5 million) and thus reached a new all-time high at year end.

Strong Revenue Development in Rail Vehicle Systems Division (RVS)

Demand in the rail vehicle market was robust in all regions. Europe and North America performed particularly positively, while China was assisted by a return to rising passenger numbers. During the 2023 fiscal year, the RVS division increased its revenues by 10.2%
from 2022, bringing them to € 3,747.5 million (previous year: € 3,401.9 million). Due to economies of scale, the efficiency measures implemented, pricing measures on the part of customers, and an improved share of aftermarket revenue, the operating EBIT margin reached 14.3% (previous year: 14.9%). The division’s order intake of € 4,042.5 million represented a slight decline of 2.9% (previous year: € 4,161.9 million). The order book of € 5,132.3 million as at December 31, 2023 (previous year: € 4,918.9 million), had also grown.

Significant Revenue Increase and Record Order Book in Commercial Vehicle Systems Division (CVS)

Demand in the global commercial vehicle market was at a good level in the previous year. Truck production rates in Europe and North America developed positively year over year while China boasted an increase of more than 50%. With a significant 11.5% increase in revenue to € 4,180.2 million (previous year: € 3,750.0 million), the division achieved strong results in the 2023 fiscal year as well. The division’s profitability was exceedingly positive with an operating EBIT margin of 10.0% (previous year: 9.0%). Order intake was up 6.5% at € 4,212.2 million (previous year: € 3,954.3 million). The order book was valued at € 1,951.7 million at year end (previous year: € 1,989.8 million).

BOOST Strategy: Portfolio Adjustment Launched Successfully

With “BOOST 2026” (Knorr-Bremse Operational Optimization Strategy and Transformation), Knorr-Bremse has launched an array of strategic initiatives and measures to ensure sustainable and profitable growth over the coming years. They include an ongoing review of the business portfolio in relation to performance and business fit.

As part of this process, Knorr-Bremse sold Kiepe Electric, an RVS business unit based in Düsseldorf, to Heramba, with the transaction closing in late January 2024.

Sustainable Corporate Strategy: Climate Protection Targets Expanded

Rating agencies such as CDP, ISS ESG, Sustainalytics, and S&P Global are recognizing the further reinforcement of ESG structures, the ongoing implementation of climate protection projects, and the steady entrenchment of sustainability in decision-making processes at Knorr-Bremse during the previous fiscal year and are awarding significantly improved ratings.

In terms of climate protection, Knorr-Bremse has committed to a long-term target of net zero emissions (Scopes 1 to 3) by 2050. Moreover, expanded climate targets^[1] validated by the Science Based Target initiative (SBTi) were set in 2023 and comprise direct production emissions (Scopes 1 and 2) as well as significant emissions from the supply chain and product usage (Scope 3).

Guidance for 2024

Assuming that exchange rates remain stable and that the geopolitical and macroeconomic environments remain mostly stable, the company expects revenues between € 7,700 million and € 8,000 million (excluding Kiepe Electric revenues), an operating EBIT margin of 11.5% to 12.5%, and free cash flow between € 550 million and € 650 million for the 2024 fiscal year.

The figures presented here are preliminary and unaudited. The full annual financial statements and annual report will be published on www.knorr-bremse.com on March 21, 2024.

A video recording of the annual press conference with Chief Executive Officer (CEO) Marc Llistosella and Chief Financial Officer (CFO) Frank Markus Weber on the preliminary figures for the 2023 fiscal year will be provided in the Knorr-Bremse Newsroom section of our website.

A webcast for investors with Chief Executive Officer (CEO) Marc Llistosella and Chief Financial Officer (CFO) Frank Markus Weber on the preliminary figures for the 2023 fiscal year will be held today at 1 p.m. (CET). The presentations are available on our website at www.knorr-bremse.com.

Knorr-Bremse Group Key Performance Indicators:

Media:

Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Claudia Züchner, Spokeswoman Financial Communications

Phone: +49 89 3547 2582, e-mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: 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 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 approximately 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] Knorr-Bremse AG commits to reduce absolute scope 1 and 2 GHG emissions 75% by 2030 from a 2018 base year. Knorr-Bremse AG also commits to reduce absolute scope 3 GHG emissions from purchased goods and services, upstream transport and distribution and use of sold products 25% by 2030 from a 2021 base year.

Knorr-Bremse sells Kiepe Electric to Heramba

Munich, February 6, 2024 – Knorr-Bremse has sold Kiepe Electric, based in Düsseldorf, to Heramba. In doing this, Knorr-Bremse is optimizing its portfolio and consistently aligning its business activities with core competencies and performance. The transaction closed in late January 2024.

Dr. Nicolas Lange, member of the Knorr-Bremse AG Executive Board and responsible for the Rail Vehicle Systems division: “With its focus on electric vehicle equipment, Kiepe Electric has proved to be a dynamic, efficient business unit. Overall, however, only a small amount of synergy could be achieved between Kiepe Electric and the Rail Vehicle Systems division, which is why we made the decision to separate from Kiepe Electric. This process has now reached a successful and final conclusion following the sale. We thank all the Kiepe employees for their fantastic dedication and wish them all the best for their future under the new owner.”

Frank Markus Weber, Chief Financial Officer of Knorr-Bremse AG, added: “The ongoing review of our business portfolio’s performance and its fit with our strategy is going successfully. With the sale of Kiepe Electric, we have now reached another important milestone, and Kiepe Electric will be able to focus clearly on its own strengths and business”.

The transaction consists of the acquisition of all Kiepe Electric business activities and all employees by Heramba GmbH, based in Berlin. In October 2023, Heramba entered into a business combination agreement with Project Energy Reimagined Acquisition Corporation (PERAC). Following consummation of the business combination, the combined company’s securities are expected to be listed on The Nasdaq Stock Market LLC.

The sale of Kiepe Electric is an important step for Knorr-Bremse in its BOOST program. On the whole, Knorr-Bremse is seeking to grow sustainably and profitably over the next few years by applying a range of strategic initiatives and measures. Knorr-Bremse will continue to hold a 15 percent interest in Kiepe Electric’s capital.

Kiepe Electric is a global leader in the electrification of road and rail urban transportation applications, including designing, manufacturing and implementing power electronics products, electric drives and vehicle controls hardware for rail vehicles and electric buses. There is also intelligent software for fleet management and energy management. The company's software provides a holistic end-to-end dashboard from the charging systems to the end-vehicle. Kiepe Electric is also a specialist in vehicle charging solutions and is a leading supplier of In-Motion Charging solutions for buses. In 2022, Kiepe Electric introduced its proprietary High Power Charging platform, which facilitates vehicle fast charging and energy management for battery-electric buses. Kiepe Electric employs more than 550 people at six international locations in Europe and North America, developing efficient and ecologically sustainable concepts for the mobility transition in public transport.

Captions: Knorr-Bremse is optimizing its portfolio with the sale of Kiepe Electric and is continuing to consistently align its business with its core competencies and performance. | © Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading provider of other systems for rail and commercial vehicles. Knorr-Bremse’s products make a decisive contribution to improving safety and energy efficiency on rail tracks and roads around the world. Some 32,600 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2022, Knorr-Bremse’s two divisions together generated global revenues of EUR 7.1 billion. For more than 115 years, the company has been the industry innovator, driving developments in mobility and transportation technologies with an 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.

About Heramba

Heramba GmbH, founded in January 2023 and headquartered in Berlin, Germany and Atlanta, United States, is a special-purpose company focused on investing in companies with technologies and capabilities that can accelerate the decarbonization of commercial
transportation. Heramba is led by Dr. Hans-Jörg Grundmann (Managing Director), who has dedicated his career to innovating and improving commercial transportation, including in his role as CEO of Siemens Mobility and his other leadership roles with industry leaders Siemens and AEG.

Media contacts:

Anika Wild | Spokesperson Corporate Communications | Knorr-Bremse AG

T +49 89 3547 2470; E anika.wild@knorr-bremse.com

Julian Ebert | Spokesperson Rail Mobility | Knorr-Bremse AG 

T +49 (0)89 3547 1497; E julian.ebert@knorr-bremse.com

Contact Investor Relations:

Andreas Spitzauer | Head of Investor Relations | T +49 (0)89 3547 182 310; E andreas.spitzauer@knorr-bremse.com

Knorr-Bremse Sees Higher Profit Margin and Strong Cash Flow

• Robust demand continues in both divisions in the first nine months of 2023: order intake rises to € 6.2 billion
• Order book reaches a new record high of roughly € 7.2 billion
• Knorr-Bremse’s revenue increases by a significant 12.7% to roughly € 5.9 billion
• BOOST 2026 strategy program: efficiency increase measures show initial success; operating EBIT margin in third quarter rises to 11.5% (Q2/23: 11.1%)
• Free cash flow in third quarter rises significantly to € 230 million (Q3/22: € 38 million) with a cash conversion rate of 168% (Q3/22: 25%)
• Group confirms Guidance for 2023
   

Munich, October 31, 2023 – 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 2023.

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “We are fully on course to achieve our goals this year. Both our divisions performed very well in the first nine months of this fiscal year, and we are very satisfied with the demand, too. For us as a global market and technology leader, it shows impressively how much trust our global customers have in our products and solutions. In July, we launched our BOOST 2026 strategy update and now we are proceeding with our portfolio review by precisely analyzing the performance of our existing investments. Simultaneously, we are reducing our costs through targeted measures. We have a clear focus on our top priorities: margin development and cash flow.”

Frank Markus Weber, Chief Financial Officer of Knorr-Bremse AG: “We were able to achieve further pleasing revenue growth in the last three months. At € 1.9 billion, this represents an increase of 8% on the same quarter last year. Our greater profitability stems from the successful implementation of our Profit and Cash Protection Program (PCPP), which is part of BOOST 2026. Operating EBIT improved continuously and rose to € 224 million in the quarter just ended, with an operating EBIT margin of 11.5%. This development was bolstered by cost control measures and successful price negotiations. Thanks to an improved working capital and larger customer payments, we were able to significantly improve free cash flow to € 230 million and raise the cash conversion rate to almost 170 % in the third quarter of 2023.”

Strong Performance in the First Nine Months of the Year

The order intake at Knorr-Bremse AG in the first nine months of 2023 amounted to € 6,216 million (9M/22: € 5,917 million), again up on the previous year by a rate of 5.1%. This is primarily the result of a very clear recovery in demand in the commercial vehicle business in all regions. The positive order levels are also reflected in the 4.6% growth of the order book, producing a new record of approximately € 7,191 million as at September 30, 2023 (September 30, 2022: € 6,878 million). This ensures that capacity will be utilized robustly in the coming quarters. Consolidated revenues also rose in the first nine months of 2023, up 12.7% to € 5,856 million (9M/22: € 5,198 million), which is attributable to growth in the OE and aftermarket business of both segments.

The positive revenue development was complemented by the successful implementation of cost control measures as well as successful price negotiations with customers and improved working capital management, contributing to the improvement in the operating EBIT margin and free cash flow. The operating EBIT margin in the first nine months of 2023 was 10.9% and remained at the previous year’s level (9M/22: 10.9%). Operating EBIT improved from € 568 million in the previous year’s quarter to € 639 million. The positive development of free cash flow, which was € 34 million in the second quarter of 2023, continued in the third quarter at € 230 million thanks to the crossdivisional “Collect” project for systematically improving net working capital. This is an exponential increase on the previous year’s quarter (Q3/22: € 38 million). Free cash flow thus improved significantly in the first nine months of the year, rising to € 65 million from € ‑229 million in the same period last year.

Rail Vehicle Systems: Strong Developments in Customer Demand and Order Intake

The Rail Vehicle Systems (RVS) division is performing very positively in all markets. Its revenue, at € 2,746 million in the first nine months of 2023, has risen by a significant 11.9% year over year (9M/22: € 2,453 million) thanks to increases in volumes and prices. Order intake was up 1.3% at € 3,044 million (9M/22: € 3,006 million) and the order book as at September 30, 2023, had reached a new record of € 5,168 million (September 30, 2022: € 4,844 million).

Despite the increase in sales volumes, the division only recorded a slight 3.8% increase in operating EBIT to € 387 million, compared with the previous year’s corresponding figure of € 373 million. The operating EBIT margin of 14.1% was 1.1 percentage points below the previous year’s figure (9M/22: 15.2%). The main factor influencing this is the longer-term original equipment contracts that were won before the Russian invasion of Ukraine and, accordingly, before the significant rise in inflation. These contracts do not allow inflation-related cost increases to be passed on. Price adjustments for new orders and cost control measures have only been able to partially offset the inflation-related cost increases. The positive effects from new contracts will already become noticeable over the next year through the gradual reduction of existing orders on old pricing terms.

As a key supplier of the rail industry, Knorr-Bremse places an emphasis on developing and enhancing innovative and leading solutions for maximum safety, increased availability, efficiency, and punctuality in rail transportation. With the latest generation of the CubeControl product, the world’s most frequently installed brake control, Knorr-Bremse is again putting into use a high-quality technology as an update of a successful product. Knorr-Bremse has signed a contract for it with Alstom to equip a fleet of Swedish high-speed trains starting in 2024, with an order value in the lower two-digit million range. The enhanced CubeControl integrates numerous components in an even better way, enabling a smarter interaction of electropneumatic, mechatronic, and software technologies. The Alstom order is planned to run until 2028.

Commercial Vehicle Systems: Robust Quarterly Performance and Further Concentration on Innovation Capabilities

The order intake in the Commercial Vehicle Systems (CVS) division in the first nine months of 2023 amounted to € 3,174 million (9M/22: € 2,913 million) and displayed a normalization at a high level in the third quarter of 2023 following record intake in the preceding quarters. The order book, at € 2,024 million as at September 30, 2023, remains stable in comparison with the same period the previous year (September 30, 2022: € 2,035 million), which is primarily attributable to the high demand in Europe and Asia. Revenue development has been particularly positively influenced by the stable truck production figures in Europe and North America, the significant increase in China, and successful price adjustments. The division’s revenue increased by a significant amount once again, up 13.3% to € 3,112 million (9M/22: € 2,747 million).

As expected, profitability developed positively as the quarter progressed, with operating EBIT in the CVS division improving in the third quarter of 2023 to € 107 million (Q3/22: € 87 million) to make for € 300 million in the first nine months of the year (9M/22: € 237 million). The operating EBIT margin was 10.6% after 9.2% in the previous year’s quarter and 9.3% in the second quarter of 2023. The price negotiations and cost control measures that were successfully wrapped up or implemented recently already had a positive influence in the quarter just ended and will continue to do so in the following quarters.

Knorr-Bremse announced in October that it will continue its eCUBATOR innovation unit, established in 2020, beyond 2023 to strengthen Knorr-Bremse’s long-term capabilities. The team at this unit drive innovation and development in the field of e-mobility. Many of the market-oriented products in the categories of air supply, brake control, and wheelend that were developed in the eCUBATOR so far can now be transitioned to regular business operations. In the future, the eCUBATOR team will have an even more intensive focus on new business fields that are related to zero-emission vehicles and offer excellent growth opportunities for Knorr-Bremse.

BOOST 2026 Program: Progress Being Made on Measures to Increase Efficiency and Resilience

In July, as part of its strategy update, Knorr-Bremse launched its BOOST 2026 program (Knorr-Bremse Operational Optimization Strategy and Transformation) with an array of strategic initiatives centering on the three action areas of “products, people, and processes.” One of the main targets is to permanently raise the EBIT margin to over 14% by 2026. A strengthening of the company’s resilience as well as its innovation and technology capabilities are also clearly defined objectives of the BOOST program.

A contribution to this is also being made by, among other things, research and development investment in the form of an expansion of the Knorr-Bremse Technology Center India (TCI), located in Pune, India. Knorr-Bremse is pursuing a growth strategy in both its rail and commercial vehicle divisions in India, which is an emerging transportation market, as well as other key markets. The new TCI will see a planned 1,300 experts driving the development of innovative and pioneering transportation technologies, primarily in the fields of engineering, hardware, software, IT, and simulation, for the rail and commercial vehicle markets for the benefit of the Knorr-Bremse Group’s sites globally.

Executive Board Membership: Continuity and Stability Ensured

The Supervisory Board of Knorr-Bremse AG has ensured the continuity and stability of the full Executive Board with its latest membership decisions. Dr. Nicolas Lange, the long-standing Chairman of the Management Board of Knorr-Bremse Systeme für Schienenfahrzeuge GmbH, was appointed to the full Executive Board with responsibility for Rail Vehicle Systems as of October 1, 2023, replacing Dr. Jürgen Wilder following the latter’s departure.

Moreover, the Supervisory Board has extended the contract of chief human resources officer Dr. Claudia Mayfeld for a further five years with effect from May 2024, doing so prior to her contract’s expiration and thus ensuring in particular that the ongoing transformation process in the corporate culture is maintained with consistency. Claudia Mayfeld continues to have global responsibility for HR, Integrity, Legal Affairs, IP, and Data Protection.

Group Confirms Guidance for 2023

The company is confirming its guidance for the 2023 fiscal year. Assuming that exchange rates remain as they are, that the geopolitical and macroeconomic environments remain mostly stable, that there are no new Covid-19 lockdowns, that inflation-related cost increases are compensated for and that there are no additional supply chain issues caused by potential energy shortages, the company expects revenue between € 7,500 million and € 7,800 million, an operating EBIT margin of 10.5% to 12.0% and free cash flow from € 350 million to € 550 million for the 2023 fiscal year.

The full quarterly report is available at www.knorr-bremse.com. Notes to and reconciliations with the financial indicators used can be found in the 2022 Annual Report of Knorr-Bremse AG (available under Investor Relations/Annual Report).

Media Contacts:

Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

 Claudia Züchner, Spokeswoman, Financial Communications

Phone: +49 89 3547 2582, e-mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com 

Stephanie Jaschiniok, Investor Relations Manager

Phone: +49 89 3547 18466, e-mail: stephanie.jaschiniok@knorr-bremse.com

Key Figures for the Knorr-Bremse Group:

Key Figures for the Knorr-Bremse Divisions:

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading provider of other systems for rail and commercial vehicles. Knorr-Bremse’s products make a decisive contribution to improving safety and energy efficiency on rail tracks and roads around the world. Some 32,600 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2022, Knorr-Bremse’s two divisions together generated global revenues of EUR 7.1 billion. For more than 115 years, the company has been the industry innovator, driving developments in mobility and transportation technologies with an 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.

Dr. Nicolas Lange to join Knorr-Bremse’s Executive Board and guide the market leader’s rail business

• The Supervisory Board has appointed Dr. Nicolas Lange, Chairman of the Management Board of Knorr-Bremse Rail Vehicle Systems, to the Group’s Executive Board effective October 1, 2023 
• Dr. Jürgen Wilder, the Executive Board member at Knorr-Bremse AG who previously oversaw the rail business, will leave the company on the best terms on September 30, 2023
• The Supervisory Board thanked Dr. Wilder for the exceptional work he performed as a member of the Executive Board 

Munich, September 22, 2023 – The Supervisory Board of Knorr-Bremse AG, global market leader for braking systems and a leading supplier of other rail and commercial vehicle systems, made an important personnel decision during its meeting today: Dr. Jürgen Wilder, the Executive Board member who oversees the company’s global Rail Vehicle Systems division, will leave the company on the best terms on September 30, 2023 and resign from his position on the Executive Board. An internal successor has already been selected: The Supervisory Board unanimously appointed Dr. Nicolas Lange as the new member of the Executive Board who will lead the Rail Vehicle Systems division effective October 1, 2023. Dr. Lange has most recently served as the Chairman of the Management Board of Knorr-Bremse Rail Vehicle Systems and has worked at the Knorr-Bremse Group for more than 20 years. In his current position, he oversees the global braking system business of the Rail division and the European business activities that generate about half of the division’s revenue. 

Dr. Reinhard Ploss, the Chairman of the Supervisory Board of Knorr-Bremse AG, said: “On behalf of the Supervisory Board, I would like to thank Jürgen Wilder for his exceptional commitment to the company and the hard work he did for it. He is someone who truly knows the rail industry inside out. While leading the division, he continued to successfully grow the global rail business of Knorr-Bremse and led it through some challenging times, including the corona crisis. As the company shifts its strategic focus, he has decided to move in a different direction himself. We wish him much success and all the best in his future endeavors.” Dr. Wilder has served on the Executive Board of Knorr-Bremse AG since September 2018.

Dr. Reinhard Ploss added: “I am really happy that the successor question could be settled optimally: Nicolas Lange is a remarkably strong internal successor. Nicolas Lange has been a part of Knorr-Bremse for many years. As Chairman of the Management Board of Knorr-Bremse Rail Vehicle Systems, he has the technical expertise and the international experience needed to lead this business in the best possible way. He is someone who can continue to expand our global rail business and generate the momentum that will lead to new innovations. He stands for both continuity and for the change that the Executive Board initiated several weeks ago as part of its strategic update. Nicolas Lange will be a valuable addition to the Executive Board team led by our Executive Board Chairman Marc Llistosella.”                

Dr. Nicolas Lange said: “I would like to thank the Supervisory Board for the trust that they have placed in me. I would also like to thank Jürgen Wilder for the very good working relationship we have enjoyed over the years. He is turning an exceptionally well-positioned, high-potential division over to me. I am really looking forward to a trusting relationship with the entire Executive Board. The rail division is brimming with great ideas and innovations that we will energetically use in future months and years to benefit both our customers and Knorr-Bremse.”

Dr. Nicolas Lange began his career at Knorr-Bremse in 2000 in the Rail Vehicle Systems division, where he climbed, rung by rung, up the career ladder. The mechanical engineer was named division head in 2009. He joined the Management Board of Knorr-Bremse Rail Vehicle Systems in July 2017. He became Chairman of the Management Board in November 2019. Nicolas Lange is 55, married and has three children.

Media contact:

Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com 

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems. The products made by Knorr-Bremse contribute tremendously to increased safety and energy efficiency on railways and highways. About 32,600 employees who work at over 100 locations in more than 30 countries apply their expertise and motivation each day to meet their customers’ needs for products and services. In 2022, both divisions of Knorr-Bremse generated a total of € 7.1 billion in revenue. For more than 115 years now, the company has been an innovative force in its industries. It fuels developments in mobility and transport technology and has moved to the forefront of connected system solutions. Knorr-Bremse is one of Germany’s most success industrial groups and profits from major 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.

Knorr-Bremse Sees Strong Growth in Revenues and Profit in H1 2023

• Revenues up by a significant 15.0% at € 3.9 billion in H1 2023
• Demand remains robust in both divisions, with order intake up 4.9% at € 4.2 billion
• Order book reaches new record at € 7.1 billion (+6.4%)
• Profitability starting to develop positively, with operating EBIT rising by 13.8% to € 415 million and operating EBIT margin stable at approx. 10.6% (Q1/2023: 10.0%, Q2/2023: 11.1%)
• Portfolio review: Sheppard foundry sold, sale of Kiepe signed off
• Sustainability: 2030 climate targets validated by Science Based Targets initiative
• Guidance for 2023 confirmed and revenue target increased to € 7.5 billion to € 7.8 billion (previously: € 7.3 billion to € 7.7 billion)
• “BOOST 2026” program launched – strategic initiatives to generate additional, profitable growth and add value 

Munich, August 10, 2023 – Knorr-Bremse AG, the global market leader for braking systems and a leading supplier of other rail and commercial vehicle systems, today published its results for the first half and second quarter of 2023.

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “Our company performed well in the first half of 2023 and we are continuing to see robust demand in both divisions. We now expect increased revenue between € 7.5 billion and € 7.8 billion for the 2023 fiscal year, up from our previous target of € 7.3 billion to € 7.7 billion, since truck production rates as well as the development of the aftermarket business in the Rail Vehicle Systems division have exceeded our expectations. We have launched our ‘BOOST 2026’ program so that we can increase our performance and safeguard our position as a global market and technology leader in market conditions that remain difficult or are deteriorating further. Our price increases and cost control measures are already making an impact and we are pleased to report that our profitability increased accordingly in the past quarter. Moreover, the BOOST measures will generate additional profitable growth and add value for Knorr-Bremse.”

Frank Markus Weber, Chief Financial Officer of Knorr-Bremse AG: “We closed the first half of 2023 with strong revenue growth of roughly 15%, coming to roughly € 3.9 billion. Operating EBIT also improved as expected in the second quarter, which resulted in a 14% gain to € 415 million in the first half of 2023. This result reflects the effectiveness of our profit optimization measures already initiated under the Profit and Cash Protection Program (PCPP). Boosted by our record order book, this positive trend should last.”

Order Intake and Order Book Still Robust, Sales up Strongly

Customer demand is strong across all regions. The 4.9% increase in incoming orders in the first half of 2023, to € 4,236 million (H1/22: € 4,038 million), represents another record. The order book also saw a strong gain of 6.4% and grew to € 7,122 million (June 30, 2022: € 6,695 million). Consolidated revenues successfully increased by a significant 15.0% to € 3,917 million (H1/22: € 3,406 million).

The positive revenue development, higher prices for our customers, the successful implementation of cost control measures and improved working capital management contributed to the improvement in the operating EBIT margin and free cash flow. While the first quarter of 2023 was still weak, the positive effects of the countermeasures under the PCPP became clearly recognizable in the second quarter, with the operating EBIT margin rising to 11.1% in the second quarter of 2023 from 10.5% in the same period of the previous year. Free cash flow in the first half of 2023 also improved significantly, from € ‑267 million in the previous year to € ‑165 million. Knorr-Bremse therefore achieved a significant 13.8% gain in its operating EBIT in the first half of the year, bringing it to € 415 million (H1/22: € 365 million), and maintained a stable operating EBIT margin of 10.6% compared to the previous year (H1/22: 10.7%). This result indicates that the loss of Russia-based business and costs of inflation have been fully offset.

Rail Vehicle Systems (RVS) Division Seeing Significant Increase in Revenues

Order intake in the Rail Vehicle Systems (RVS) division in the first half of 2023 was recorded at € 2,025 million, a slight decline of 4.8% (H1/22: € 2,128 million). The order book as of June 30, 2023, had increased to € 5,060 million (June 30, 2022: € 4,769 million). Revenue was up 13.5% year over year at € 1,813 million (H1/22: € 1,598 million).

The operating EBIT for RVS in the first half of the year was € 253 million and 5.4% up on the previous year’s value (H1/22: € 240 million). The operating EBIT margin in the first half of 2023 went down year over year to 14.0% (H1/22: 15.0%), however, it exhibited a significant recovery thanks to the successful cost control measures and pricing adjustments to offset inflation in the second quarter. The division is expecting its profitability to develop well in the following quarters of 2023 due to the good revenue developments and further success in the PCPP.

In the first half of 2023, the RVS division announced, among other things, the placement of a high-value, multiple-system order with Hitachi Rail for extensive equipment for a new generation of metro trains in the Milan region and expanded its presence in the South Korean transportation market through a further important supply contract with leading train manufacturer Dawonsys. The agreement involves equipping a large fleet of regional and commuter trains – 208 carriages in total – with complete Knorr-Bremse braking systems. KORAIL, the national railway operator in South Korea, is expected to put the first trains in service at the end of the first quarter of 2024.

Furthermore, Knorr-Bremse has received an order to fit braking systems in 36 new metro trains, with 288 carriages in total, from CRRC – the world’s largest train manufacturer – for the megacity of Chengdu. Knorr-Bremse has already successfully worked together with CRRC for decades. The order will see Knorr-Bremse take on a further project to supply braking systems for metro trains that reach a maximum speed of 140 km/h. Thanks to its strong presence in research, development, production and customer service, Knorr-Bremse meets the high requirements for localization and is cementing its position in China, an important core market, with the order.

Commercial Vehicle Systems (CVS) Division Profiting from Positive Market Developments

The commercial vehicle industry has continued to develop positively. The sustained high demand led to significantly increased truck production rates in Europe, North America and, in particular, China since the beginning of the year. Accordingly, the Commercial Vehicle Systems division’s incoming orders and order book developed positively. The order intake in the first half of 2023 was € 2,212 million, up 15.8% on the previous year’s corresponding value (H1/22: € 1,911 million). The order book as of June 30, 2023, came to € 2,063 million, having grown by 7.0% (June 30, 2022: € 1,927 million). CVS’ revenue increased by 16.4% year over year to € 2,105 million (H1/22: € 1,809 million).

Operating EBIT in the CVS segment amounted to € 193 million in the first half of 2023, up 28.1% on the previous year’s level (H1/22: € 151 million). The operating EBIT margin improved from 8.3% in the first half of 2022 to 9.2% in the first half of 2023 thanks to the strong aftermarket business and the successful implementation of the profit optimization program, including in particular the increase in prices that customers pay.

The CVS division continues to focus especially on the ongoing development of its product portfolio in the categories of e-mobility, connectivity, automated driving and aftermarket. Sustainability in particular has a major role in this. Knorr-Bremse’s efforts to further develop safe, efficient and sustainable transportation received acclaim again just recently. Automobilclub KS e.V., an automotive association, has given Knorr-Bremse its 41st KS Energy and Environment Award in the “Vehicle Technology” category for the company’s brake drag torque reduction system. Usage of this system reduces fuel consumption in urban and long-distance transportation by up to one percent.

Back in late April, Knorr-Bremse launched Knorr-Bremse TruckServices, its CVS aftermarket brand, in South America and presented the TruckServices portfolio for dealers, workshops and fleets at Automec 2023, the largest trade fair for the aftermarket, in South America. Moreover, Knorr-Bremse TruckServices and Fersa Bearings, a Spanish specialist in wheel bearings, expanded their strategic partnership to the South American market. 

Portfolio Review: Sale of Sheppard Foundry Completed, Sale of Kiepe Electric Signed Off

Knorr-Bremse is determinedly continuing with its ongoing portfolio review process, a core element of the BOOST program to improve its efficiency, speed and power. In the US, the CVS division has successfully completed the sale of a foundry belonging to Sheppard, an investment of Knorr-Bremse’s American subsidiary Bendix. Sheppard is one of North America’s leading manufacturers of steering systems for commercial vehicles. The Kiepe Group, the specialist for electrical traction equipment and whose companies are allocated to the Rail Vehicle Systems division, are planned to be sold as part of a portfolio adjustment. A buyer has now been found in the form of Heramba GmbH and Heramba Holdings, Inc. and an agreement signed with it. The closing of the agreement is subject to customary regulatory and other conditions. Knorr-Bremse is confident of the closing of the agreement in the near future. Further portfolio measures are being assessed to increase Knorr-Bremse’s profitability further and to reach the optimal strategic alignment.

Sustainability: Knorr-Bremse’s Climate Targets¹ Validated by SBTi

 For Knorr-Bremse, sustainability is an integral element of business strategy. The company is consistently pushing ahead with its sustainability activities for this reason. During the current fiscal year, the company significantly increased its target for reducing production-related carbon emissions (Scope 1+2) from initially -50% to -75% until 2030 compared to the 2018 baseline.

Additionally, Knorr-Bremse extended its climate targets also to the value chain. In the 2023 Sustainability Report the company published for the first time its targets for reducing greenhouse gas emissions from the upstream and downstream value chain (Scope 3): By 2030, absolute Scope 3 CO₂ emissions from purchased goods and services, upstream transportation and distribution, and from the use phase of sold products are to be reduced by 25 percent compared with the base year 2021.

Knorr-Bremse’s ambitious climate targets were validated by the internationally recognized Science Based Targets initiative (SBTi) in June 2023.

Guidance for 2023 Fiscal Year Confirmed and Revenue Target Raised

Knorr-Bremse confirms its guidance for the 2023 fiscal year and is raising its revenue target. Assuming that exchange rates remain as they are, that the geopolitical and macroeconomic environments remain mostly stable, that there are no new Covid-19 lockdowns, that inflation-related cost increases are compensated for and that there are no additional supply chain issues caused by potential energy shortages, the company expects revenue between € 7,500 million and € 7,800 million (previously: € 7,300 million to € 7,700 million), an operating EBIT margin of 10.5% to 12.0% and free cash flow from € 350 million to € 550 million for the 2023 fiscal year.

Events after the Reporting Period

On July 18, i.e., after the end of the second quarter, Knorr-Bremse released a comprehensive strategy update and presented its corporate “BOOST 2026” program. The overarching targets that were set were an increase in revenues to € 8 billion to € 9 billion, an EBIT margin of more than 14% and a cash conversion rate of 80% to 90% by 2026. For more information, please refer to the corresponding press release and the associated investor presentation at the following links:

Press release from July 18, 2023: “Knorr-Bremse Lays Groundwork for the Future: Global Strategy Update ‘Next Level’ with Strong Focus on Profitable Growth”

Presentation from July 18, 2023: Strategy Update 2023

¹ Knorr-Bremse AG commits to reduce absolute scope 1 and 2 GHG emissions 75% by 2030 from a 2018 base year. Knorr-Bremse AG also commits to reduce absolute scope 3 GHG emissions from purchased goods and services, upstream transport and distribution and use of sold products 25% by 2030 from a 2021 base year.

 
The full half-year report is available at www.knorr-bremse.com/en/. Notes to and reconciliations with the financial indicators used can be found in the 2022 Annual Report of Knorr-Bremse AG.

Key Figures for the Knorr-Bremse Group:

Key Figures for the Knorr-Bremse Group’s Divisions:

 
Media Contacts:

Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Claudia Züchner, Spokeswoman, Financial Communications

Phone: +49 89 3547 2582, e-mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com 

Stephanie Jaschiniok, Investor Relations Manager

Phone: +49 89 3547 18466, e-mail: stephanie.jaschiniok@knorr-bremse.com

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems. The products made by Knorr-Bremse contribute tremendously to increased safety and energy efficiency on railways and highways. About 32,600 employees who work at over 100 locations in more than 30 countries apply their expertise and motivation each day to meet their customers’ needs for products and services. In 2022, both divisions of Knorr-Bremse generated a total of € 7.1 billion in revenue. For more than 115 years now, the company has been an innovative force in its industries. It fuels developments in mobility and transport technology and has moved to the forefront of connected system solutions. Knorr-Bremse is one of Germany’s most success industrial groups and profits from major 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.

Knorr-Bremse Lays Groundwork for the Future: Global Strategy Update “Next Level” with Strong Focus on Profitable Growth

• Strategic initiatives in three action areas, “products, people, and processes,” are generating additional, profitable growth and added value
• Target vision for 2026: Knorr-Bremse is seeking to secure its position as a global market leader for the long term with operational excellence
• Efficiency program: portfolio measures planned with revenue of up to
  € 1.4 billion
• Ambitious growth targets announced for 2026: revenue of € 8 to 9 billion,
  an operating EBIT margin of more than 14%, and a cash conversion rate of 80% to 90%

Munich, July 18, 2023 – Knorr-Bremse AG is seeking to become significantly faster, more efficient, and more effective. The company today published “Next Level KB”, an update of its previous corporate strategy to help achieve this objective. It aims to secure its global leadership of markets and technologies and to generate further, profitable growth. The core of the strategy update is the program “BOOST 2026“ (Knorr-Bremse Operational Optimization Strategy and Transformation) which provides an array of strategic initiatives in three action areas called “products, people, and processes.”

The Knorr-Bremse Executive Board, under the leadership of new Chief Executive Officer Marc Llistosella, has deeply analyzed the market situation and business development since the beginning of the year to adapt the existing strategy accordingly. With this newly published update, Knorr-Bremse is demonstrating how it wishes to safeguard sustainable growth and further increase its profitability. All measures and strategic directions have been formulated to be future oriented and flexible so that the constantly changing and challenging market conditions can be accounted for.

Returning to Success with Strategic Foresight

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “The most important objective for us on the Executive Board and in the management team is to secure our company’s position as world market and technology leader in the long term – by consistently increasing our profitability, while simultaneously unlocking new, future markets for ourselves. Our market position remains steady and thus provides the basis for our future success. We do not need to reinvent Knorr-Bremse, though we do need to get back on track. With our strategy update, we have put together a clear road map for tackling the current and future challenges in a reinforced and focused manner. Occasionally, there will even be decisions that seem tough; however, they cannot be avoided. Wherever the analysis indicates that we are not the best owner of a particular line of business, we will consistently initiate a separation process or implement a firm turnaround plan in the relevant parts of the company. This will affect revenue of up to € 1.4 billion in total.” 

The program has been designed to last multiple years and there will be continuous reviews of its effectiveness. Marc Llistosella: “With foresight and an opening for new ideas, we will together continuously ensure innovation and the development of a modern corporate culture. We all share the same vision. With it, we will restore confidence as a team and add lasting value for Knorr-Bremse. This is my most important message to our shareholders, our customers, and all employees.”

A Worthwhile BOOST: Sights Set on Improved Value Creation

With the “BOOST” Program, Knorr-Bremse is entering a transitional period in which the company wishes to significantly increase its efficiency, speed, and effectiveness. In the years following the IPO in 2018, there were a series of developments independently of the company that had far-reaching consequences. They were a significant burden on the historically above-average business growth of the preceding years and continue to be a burden, with the Covid-19 crisis, slower economic growth in China, and Russia’s invasion of Ukraine being just a few key examples of these global developments. The resulting weakened economic performance, coupled with risen energy costs, increased fragility in supply chains, and slower payments from customers in east Asia, along with increased tendencies toward economic isolation and new ESG (environment, social, and governance) requirements have increased the pressure further. Knorr-Bremse’s top-level management is countering the pressure with its new program of effective measures for the company. The strategic groundwork and initiated measures are intended to translate into new growth and improved profitability for Knorr-Bremse by 2026.

Frank Markus Weber, Chief Financial Officer of Knorr-Bremse AG: “Knorr-Bremse stands for quality, reliability, and safety. We intend for these attributes to be reflected more strongly in our profitability and resilience in the future. This is thanks to our compelling action plan, with which we are going to create value at an accelerated pace. Our successful Profit and Cash Protection Program (PCPP) will be integrated into ‘BOOST’, continued determinedly, and expanded as needed. The result will be a significant improvement of our profit: We are planning for revenue to rise to € 8 to 9 billion, for an operating EBIT margin of over 14%, and for a cash conversion rate between 80% and 90% by 2026.”

Clear Road Map for the Future

Marc Llistosella: “The ‘BOOST’ Program is our road map for the coming years until 2026. In the first part of the process, what we are calling the “brownfield phase,” we must complete a few fundamental tasks. They will provide a basis for us to enjoy the future commercial prospects in the second part, which we are calling the “greenfield phase.” We are excellently equipped for the impending journey. Our continued strong global market position, with our Commercial Vehicle Systems products having 30% market share and our braking systems in the Rail Vehicle Systems division having 50% market share, provides us with the best foundation for reacting to new market conditions and driving innovation successfully as a global industry leader.”

The first part of the “BOOST” Program, the brownfield phase, has a clear focus on efficiency gains. The optimization of the product and company portfolios will be a major aspect of it and make for a significant improvement in profitability. The company wishes to distance itself from unprofitable investments where the products and technologies do not help add value in the long term. It plans to further strengthen its attractive aftermarket business as that business represents the backbone of the overall Group’s resilience. On top of that, there is a clear ambition to further strengthen the company’s innovation and technology prowess so that Knorr-Bremse can continue to have a pioneering role as an innovation leader. The heavy R & D expenditure of the past, the progressing digitalization of Knorr-Bremse’s products and solutions, the increasing number of innovations developed in-house, and support for new, innovative technologies serve as the basis for this future success.

The second, or greenfield, part expands the spectrum that the company has had so far. In the future, Knorr-Bremse will rely on accelerated growth through digital business models from partnerships and M&A. Examples of this future model include the existing majority interest in Cojali in the Commercial Vehicle Systems division and the strategic partnership and minority interest in Nexxiot in the Rail Vehicle Systems division. A further focus during this phase will be on Knorr-Bremse’s key role as a driver of “green transportation,” which will result from the company helping to successfully realize its customers’ ESG targets with system solutions that are rigorously aligned with the customers’ needs. In addition, clear strategic and financial guidelines will be added to the present M&A strategy in order to complement the company’s organic growth with profitable acquisitions in the future.
 

Financial Guidance for 2023 Fiscal Year Confirmed

Knorr-Bremse confirms its financial guidance for the 2023 fiscal year. Assuming that exchange rates remain as they are, that the geopolitical and macroeconomic environments remain mostly stable, that there are no new Covid-19 lockdowns, that inflationary cost increases will be compensated and that there are no additional supply chain issues caused by potential energy shortages, the company expects revenue between € 7,300 million and € 7,700 million, an operating EBIT margin of 10.5% to 12.0% and free cash flow of € 350 million to € 550 million for the 2023 fiscal year.

Media contact:

Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems. The products made by Knorr-Bremse contribute tremendously to increased safety and energy efficiency on railways and highways. About 32,600 employees who work at over 100 locations in more than 30 countries apply their expertise and motivation each day to meet their customers’ needs for products and services. In 2022, both divisions of Knorr-Bremse generated a total of € 7.1 billion in revenue. For more than 115 years now, the company has been an innovative force in its industries. It fuels developments in mobility and transport technology and has moved to the forefront of connected system solutions. Knorr-Bremse is one of Germany’s most success industrial groups and profits from major 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.

Knorr-Bremse Starts with Increased Profits into 2023

• Order intake at € 2.2 billion, benefiting from very high demand in the first quarter; order book increases by 18.6% to a record level of € 7.1 billion
• Rail and Commercial divisions contribute to strong growth in sales; consolidated revenues up a significant 14.3% at € 1.9 billion globally
• Measures to safeguard profitability have been implemented successfully: operating EBIT rises by 5.6% to € 192 million, operating EBIT margin reaches 10.0% (Q1/22: 10.9%)
• Sale of Sheppard foundry in the USA signed
• Financial guidance for 2023: Knorr-Bremse confirms forecast

Munich, May 11, 2023 – 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 quarter of 2023.

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “While the global economic environment has improved significantly, it is still very tense. We as a global market and technology leader are overcoming the crisis much better than many other comparable businesses and we successfully generated good results in the first three months of this year. We are not going to rest on these results, though, and are doing everything we can to increase our results and profitability. To this end, we are rigorously orienting our business activities toward performance and developing a long-term vision for the entire Group for further profitable and sustainable growth. This process is already underway and we will be presenting the initial results in July. There will be no taboos, and it is important that we even consider divesting operations that no longer fit our business and profitability strategies if this is the right choice.”

Frank Markus Weber, Chief Financial Officer of Knorr-Bremse AG: “We closed the first quarter of 2023 with strong revenue growth of roughly 14%, coming to € 1.9 billion. Simultaneously, our order book of € 7.1 billion reached a new record. These are strong signs to start the year with. We are being confronted with a difficult economic environment in the current fiscal year, as with the previous year. Despite that, we successfully reached a very robust operating EBIT growth and a margin of 10% in the first quarter. This shows that we are on the right path with the comprehensive Profit and Cash Protection Program that we implemented early on to adapt our variable and overhead costs and adjust our pricing.”

Record Order Intake and Order Book, Sales up Strongly

Despite the inflation-related price rises, Knorr-Bremse is still seeing very good demand among customers in Asian and North American countries. Order intake in the first quarter of 2023 rose by 3.2% year over year to a new record of € 2,176 million (Q1/22: € 2,109 million). Knorr-Bremse also recorded a strong 18.6% increase in its order book, which grew to € 7,116 million (March 31, 2022: € 5,998 million). The Group’s sales were up 14.3% at € 1,908 million (Q1/22: € 1,669 million).

The operating EBIT margin reached 10.0%. Compared with the previous year, the inflationary pressure and decline in Russia had particularly negative effects. The initiated countermeasures were, however, successful and resulted in the year-over-year decline only being relatively small (Q1/22: 10.9%). Operating EBIT rose by 5.6% to € 192 million (Q1/22: € 182 million). Free cash flow improved and ran at € ‑199 million in the first quarter of 2023 (Q1/22: € ‑231 million). Inventories remain relatively high as Knorr-Bremse considers it important to safeguard its delivery capability. At the same time, the positive sales performance and customers’ payment behaviors meant that receivables rose by a significant amount as well. The company is working on improving both line items tangibly over the coming quarters.

Rail Vehicle Systems (RVS) Division Expects Improved Profit as Fiscal Year Progresses

Order intake in the Rail Vehicle Systems (RVS) division in the first quarter of 2023 was recorded at € 1,000 million, a decline of 7.4% (Q1/22: € 1,081 million). The order book as of March 31 was valued at € 5,026 million (Q1/22: € 4,181 million). Revenue was up 10.3% at € 855 million (Q1/22: € 775 million).

Due in particular to the loss of Russia-based business, the operating EBIT for RVS was € 112 million in the first quarter of this year, a drop of 8.2% on the previous year’s quarter (Q1/22: € 122 million). This result also reflected the effects of inflation. Accordingly, the operating EBIT margin fell to 13.1% from the previous year’s level (Q1/22: 15.7%). For the following quarters in 2023, the division expects further success out of the Profit and Cash Protection Program (PCPP) and an improved margin due to increasing sales and the planned sale of Kiepe Electric respectively.

In the first quarter of 2023, the RVS division announced, among other things, a new, high-value order in Italy, which for Knorr-Bremse is one of the most important and promising rail markets in Europe. This order, concluded with Hitachi Rail for multiple systems, involves extensive equipment for a new generation of metro trains in the Milan region. As part of it, Knorr-Bremse will supply its new passenger train coupling systems to a customer for the first time anywhere in the world from this year on already.

Work is proceeding at full speed to drive further innovation, too. Currently, Knorr-Bremse is testing its Digital Automatic Coupler (DAC) in real-world conditions in a freight train in Sweden. The DAC is considered a key innovation for automated rail freight transportation.

Commercial Vehicle Systems (CVS) Division Sees Persistently Strong Customer Demand, Successful Price Adjustments and Significant Increase in Sales

The commercial vehicle industry continued to see high demand in the European and North American markets, accompanied by a good recovery in the Chinese market. Truck production rates in Europe, North America and China developed very positively year over year and acted as a main driving force for the division. The order intake in the first three months of 2023 was € 1,176 million, up 14.2% on the previous year’s corresponding value (Q1/22: € 1,030 million). The order book as of March 31, 2023, came to € 2,091 million, having grown by 14.1% (Q1/22: € 1,832 million). Compared with the same quarter of the previous year, CVS’ revenue increased by 17.7% to € 1,053 million (Q1/22: € 895 million), which is attributable to measures such as successfully passing on the inflation to customers.

Operating EBIT in the CVS segment amounted to € 95 million in the first quarter of 2023, up 24.8% on the previous year’s level (Q1/22: € 76 million). The operating EBIT margin, at 9.0%, had improved slightly on the same quarter of the previous year (Q1/22: 8.5%). The reason for this positive development was the successful implementation of the Profit and Cash Protection Program, including in particular the raising of customer prices.

Overall, the CVS division continues to focus especially on the ongoing development of its product portfolio in the categories of e-mobility, connectivity, automated driving and aftermarket. Sustainability in particular has a major role in this.

Just in late April, Knorr-Bremse announced the successful launch of Knorr-Bremse TruckServices, its CVS aftermarket brand, in South America and presented the TruckServices portfolio for dealers, workshops and fleets at Automec 2023, the largest trade fair for the aftermarket, in South America. Moreover, Knorr-Bremse TruckServices and Fersa Bearings, a Spanish specialist in wheel bearings, expanded their strategic partnership to the South American market. 

Portfolio Measures: Sale of Sheppard Foundry in the USA signed

To optimize its portfolio, the CVS division in the USA has signed the sale of a foundry belonging to Sheppard, an investment of Knorr-Bremse’s American subsidiary Bendix. Sheppard, one of the leading North American manufacturers of steering systems for commercial vehicles, will now be able to focus more on its core business again.

Sustainability: Significant Expansion of Carbon Emission Reduction Targets

For Knorr-Bremse, sustainability is an integral part of its business strategy. The company is consistently pushing ahead with its ESG activities for this reason. Owing to the success achieved so far in reducing production-related carbon emissions (Scopes 1 and 2), the Executive Board of Knorr-Bremse AG has decided to amend its previous target of halving emissions by 2030, compared with the base year 2018, and raise it to 75% reduction.

Additionally, Knorr-Bremse extended the Knorr-Bremse climate targets to its value chain at the start of 2023 and published targets for reducing greenhouse gas emissions in its upstream and downstream value chains (Scope 3) for the first time in the Sustainability Report that was released recently. They provide for a 25% reduction of the Scope 3 emissions associated with the business activities of Knorr-Bremse by 2030, compared with the base year 2021.

Financial Guidance for 2023 Fiscal Year Confirmed

Knorr-Bremse confirms its financial guidance for the 2023 fiscal year. Assuming that exchange rates remain as they are, that the geopolitical and macroeconomic environments remain mostly stable, that there are no new Covid-19 lockdowns, that inflationary cost increases will be compensated and that there are no additional supply chain issues caused by potential energy shortages, the company expects revenue between € 7,300 million and € 7,700 million, an operating EBIT margin of 10.5% to 12.0% and free cash flow of € 350 million to € 550 million for the 2023 fiscal year.

Key Figures for the Knorr‑Bremse Group:

Key Figures for the Knorr‑Bremse Group’s Divisions:

Media Contacts:

Alexander Stechert-Mayerhöfer, Leiter Unternehmenskommunikation

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Claudia Züchner, Spokeswoman, Financial Communications

Phone: +49 89 3547 2582, e-mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

Sophia Kursawe, Senior Investor Relations Manager

Phone: +49 89 3547 187311, e-mail: sophia.kursawe@knorr-bremse.com

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical 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. About 32,600 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2022, Knorr-Bremse’s two divisions together generated revenues of € 7.1 billion. For more than 115 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. One of Germany’s most successful industrial companies, Knorr-Bremse profits from the key global megatrends of urbanization, sustainability, digitalization, and mobility.

DISCLAIMER

This publication has been independently prepared by Knorr-Bremse AG (“Knorr-Bremse”). It may contain forward-looking statements which address key issues such as strategy, future financial results, events, competitive positions, and product developments. Like any entrepreneurial activity in a global environment, these forward-looking statements always come with a degree of uncertainty. They are subject to a number of risks, improbabilities, and other factors, including, but not limited to, those described in Knorr-Bremse’s disclosures. Should one or more of these risks, improbabilities, or other factors materialize, or should underlying expectations not occur or should assumptions prove incorrect, the actual results, performance, 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 that are not clearly defined in the applicable financial reporting framework and 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.

Dividend of  € 1.45 approved at Annual General Meeting

• Dividend: Amount distributed reaches approximately € 234 million
• Payout ratio is 46% of consolidated net income

Munich, May 5, 2023 – At today’s Annual General Meeting for Knorr-Bremse AG, the shareholders approved all agenda items. The shareholders also accepted the proposal made by the Executive Board and Supervisory Board to distribute a dividend of € 1.45 per share with dividend rights (161,200,000 shares) for the 2022 fiscal year. The amount distributed therefore comes to approximately € 234 million which corresponds to a payout ratio of around 46% of the consolidated net income in 2022 and is in line with the existing dividend policy, which envisions a 40-50% payout to shareholders.

The Annual General Meeting was again held virtually. A total of 90.09% of the capital stock of Knorr-Bremse was represented at the Annual General Meeting.

A recording of the speeches by the Supervisory Board Chairman and the Executive Board, and the tabulations of the votes cast for the individual agenda items at the Annual General Meeting are available at www.ir.knorr-bremse.com in a timely manner.

Media Contacts:

Claudia Züchner, Spokeswoman, Financial Communications

Phone: +49 89 3547 2582, e-mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical 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. About 31,600 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2022, Knorr-Bremse’s two divisions together generated revenues of € 7.1 billion. For more than 115 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. One of Germany’s most successful industrial companies, Knorr-Bremse profits from the key global megatrends of urbanization, sustainability, digitalization, and mobility.

Knorr-Bremse Releases Annual Report and Announces Dividend Proposal

• Knorr-Bremse releases Annual Report for fiscal year 2022
• Virtual Annual General Meeting convened for May 5, 2023
• The Executive Board and Supervisory Board to propose € 1.45 dividend per share for fiscal year 2022 to Annual General Meeting

Munich, March 23, 2023 – Today, the Knorr-Bremse AG published the Annual Report for fiscal year 2022. As the issue of sustainability is one of Knorr-Bremse's top priorities, the Annual Report will no longer be available in print, but only in digital form and can be accessed on the website at Investor Relations / Financial Publications & Presentations.

The Executive Board and Supervisory Board of Knorr-Bremse AG have resolved to propose a dividend of € 1.45 per share for fiscal year 2022 to the Annual General Meeting. The distribution ratio is equivalent to around 46% of Group’s net income for 2022 and is thus in line with the existing dividend policy, which envisions a 40-50% payout to shareholders.

The dividend distribution is subject to the approval of the shareholders at the Annual General Meeting, which has been convened for May 5, 2023: Investor Relations / Annual General Meeting. The Annual General Meeting of Knorr-Bremse AG will again be held virtually this year.

Media Contacts:

Claudia Züchner, Spokeswoman, Financial Communications

Phone: +49 89 3547 2582, e-mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical 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. About 31,600 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2022, Knorr-Bremse’s two divisions together generated revenues of € 7.1 billion. For more than 115 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. One of Germany’s most successful industrial companies, Knorr-Bremse profits from the key global megatrends of urbanization, sustainability, digitalization, and mobility.

Knorr-Bremse bleibt auch im globalen Krisenjahr auf der Erfolgsspur

• Guidance 2022 erfüllt für Umsatz und Profitabilität
• Auftragseingang steigt um 11,4 % auf Rekordniveau von 8,1 Mrd. EUR
• Auftragsbestand erreicht mit einem Plus von 24,3 % ebenfalls neues Rekordniveau von 6,9 Mrd. EUR
• Umsatzanstieg im Geschäftsjahr 2022 um 6,6 % auf rund 7,1 Mrd. EUR dank hoher Nachfrage in Europa und Nordamerika
• Sehr solide Profitabilität in global unsicheren Zeiten erreicht: operative EBIT-Marge von 11,1 % (Vorjahr: 13,5 %) und operative EBITDA-Marge von 15,4 % (Vorjahr: 17,9 %)
• Nachhaltigkeit: Neue Initiativen zum Green-Financing gestartet und Commitment zu Scope 3 Zielen vereinbart  
• Guidance für 2023: Umsatz 7,3 Mrd. EUR bis 7,7 Mrd. EUR, operative EBIT-Marge zwischen 10,5 % und 12,0 % und Free Cashflow zwischen 350 Mio. EUR und 550 Mio. EUR

München, 23. Februar 2023 – Trotz globaler Krise bleibt die Knorr-Bremse AG auf Wachstumskurs. Der Weltmarktführer für Bremssysteme und führende Anbieter weiterer Systeme für Schienen- und Nutzfahrzeuge hat heute in München seine vorläufigen Ergebnisse für das Geschäftsjahr 2022 präsentiert.

Marc Llistosella, seit 1. Januar neuer Vorstandsvorsitzender der Knorr-Bremse AG: „Was Knorr-Bremse und alle Kolleginnen und Kollegen im vergangenen Jahr geleistet haben, beeindruckt mich sehr. Wir haben erneut ein sehr gutes Ergebnis erzielt. Wir haben geliefert, was wir versprochen haben. Und das in einem äußerst herausfordernden Jahr: mit den schlimmen menschlichen und wirtschaftlichen Auswirkungen des russischen Angriffs auf die Ukraine, mit hoher Inflation, den Folgen der Corona-Pandemie und den weltweiten Lieferengpässen.  Heute verfügen wir über einen sehr hohen Auftragsbestand. Das zeigt mir, welch großes Maß an Vertrauen unsere Kunden in unsere Zuverlässigkeit und Qualität haben. All das sind beste Voraussetzungen für die Zukunft – auch wenn die Herausforderungen gigantisch bleiben und wir weiterhin strikt auf unsere Kosten achten werden. Mit einem klar aufeinander abgestimmten Portfolio sowie konsequent an den Marktbedürfnissen ausgerichteten Produkten und Prozessen werden wir unsere Position als Weltmarkt- und Technologieführer verteidigen.“

Frank Markus Weber, Finanzvorstand der Knorr-Bremse AG: „Unser Geschäftsmodell mit den beiden Divisionen Schienen- und Nutzfahrzeuge hat sich erneut als resilient bewiesen. Der Auftragseingang und Umsatz sind deutlich gestiegen. Die Profitabilität ist trotz der Widrigkeiten im globalen Marktumfeld mit einer operativen EBIT-Marge von 11,1 % sehr solide. Preissteigerungen bei Kunden, Verhandlungen mit Lieferanten sowie Kostenmaßnahmen haben dazu beigetragen, dieses Ergebnis zu erzielen. Auch das Thema Nachhaltigkeit (ESG) haben wir im vergangenen Jahr weiter vorangetrieben: Allein mit drei verschiedenen Sustainability-linked Finanzierungsinstrumenten haben wir deutlich gemacht, welchen Stellenwert nachhaltiges Wirtschaften für uns als Knorr-Bremse hat. Dies wird auch dadurch eindrücklich bestätigt, dass wir unsere Klimaziele dieses Jahr auf Scope 3 ausweiten und von SBTi prüfen lassen werden.“

Konsequente Umsetzung von Maßnahmen zur Ergebnisoptimierung

Das Geschäftsjahr 2022 war geprägt von massiven Einflüssen durch den russischen Angriffskrieg auf die Ukraine, die bis Jahresende geltende strenge Null-Covid-Politik in China und die inflationsgetriebenen Kostenanstiege. In dieser schwierigen globalen Lage konnte der Konzernumsatz durch die gute Kundennachfrage vor allem im europäischen und nordamerikanischen Raum um 6,6 % auf 7.149,7 Mio. EUR (Vorjahr: 6.705,6 Mio. EUR) gesteigert werden. Haupttreiber war hierbei der Nutzfahrzeugmarkt und zu einem kleineren Teil der Schienenfahrzeugmarkt. Das frühzeitig im Jahr 2022 eingeführte interne Profit & Cash Protection Programm konnte die inflationsbedingten Kosten auffangen, jedoch nicht die negativen Einflüsse aus Russland und China. Die operative EBIT-Marge erreichte einen Wert von 11,1 % (Vorjahr: 13,5 %), das operative EBIT lag bei 794,6 Mio. EUR (Vorjahr: 908,1 Mio. EUR). Der Free Cashflow belief sich 2022 auf 220 Mio. EUR (Vorjahr: 600 Mio. EUR). Gründe für diese Entwicklung waren vor allem der Aufbau von Vorräten zur Sicherung der Lieferfähigkeit sowie Verzögerungen bei Zahlungen von Kunden.

Rekordwerte bei Auftragseingang und Auftragsbestand

Insgesamt blieb die Nachfrage der Endkunden sowohl im Schienen- als auch im Nutzfahrzeugbereich in allen Märkten stark – mit Ausnahme Chinas, das aufgrund der Zero-Covid-Politik 2022 erhebliche Marktschwächen aufzeigte. Knorr-Bremse konnte den Auftragseingang deutlich um 11,4 % auf ein neues Rekordniveau in Höhe von 8.114,1 Mio. EUR (Vorjahr: 7.286,7 Mio. EUR) steigern. Vor allem die Erholung der Nachfrage im Schienenfahrzeuggeschäft sorgte für einen Wachstumsschub. Der Auftragsbestand betrug zum 31.12.2022 rund 6.907,5 Mio. EUR (Vorjahr: 5.558,1 Mio. EUR) und stieg somit signifikant um 24,3 %.

Division Systeme für Schienenfahrzeuge (RVS) mit hoher Nachfrage

Durch die Entspannung der Covid-19-Situation erholte sich der Markt für Schienenfahrzeuge langsam, aber stetig. Infolgedessen war die Entwicklung der Abrufe aus den Rahmenverträgen und Auftragsvergaben in der Branche erfreulich. Die Division RVS zeigte sich mit einem Umsatz in Höhe von 3.401,9 Mio. EUR auch im Krisenjahr 2022 leicht wachsend (Vorjahr: 3.317,0 Mio. EUR). Die operative EBIT-Marge erreichte aufgrund der Russland-Sanktionen und der Lage in China 14,9 % (Vorjahr: 17,9 %). Beim Auftragseingang verzeichnete die Division mit 4.161,9 Mio. EUR ein Plus von 19,9 % gegenüber 2021 (Vorjahr: 3.470,7 Mio. EUR). Der Auftragsbestand lag zum 31.12.2022 mit 4.918,9 Mio. EUR (Vorjahr: 3.875,1 Mio. EUR) auf einem neuen Rekordniveau.

Division Systeme für Nutzfahrzeuge (CVS) mit starker Performance

Auch der Nutzfahrzeugmarkt verzeichnet eine anhaltend gute Nachfrage. Die Lkw-Produktionsraten in Europa und Nordamerika entwickelten sich im Jahresvergleich positiv, während China nach der Einführung des China6-Emissionsstandards im Juli 2021 aufgrund von Vorzieheffekten erwartungsgemäß schwach war. Mit einer Steigerung des Umsatzes um 10,6 % auf 3.750,0 Mio. EUR (Vorjahr: 3.390,2 Mio. EUR) hat die Division CVS ein starkes Ergebnis erzielt. Die Profitabilität der Division verzeichnete mit einer operativen EBIT-Marge von 9,0 % einen Rückgang gegenüber 2021 (Vorjahr: 10,7 %). Gründe dafür sind zum einen die Entwicklungen in Russland und vor allem der konjunkturelle Einbruch in China, zum anderen jedoch auch die gestiegenen Aufwendungen für Forschung und Entwicklung als Investition in die Zukunft. Der Auftragseingang stieg auf 3.954,3 Mio. EUR (Vorjahr: 3.818,0 Mio. EUR). Der Auftragsbestand zum Jahresende in Höhe von 1.989,8 Mio. EUR (Vorjahr: 1.696,8 Mio. EUR) bedeutete auch für die CVS-Division ein neues Rekordniveau.

Stärkung der Digitalisierungs- und Automatisierungskompetenz der Divisionen

Für Knorr-Bremse als ein weltweit führender Technologiekonzern bedeuten Investitionen in Forschung und Entwicklung konkrete Wachstumsperspektiven: 2022 steigerte Knorr-Bremse seine F&E-Investitionen um 9 % auf 470,0 Mio. EUR (Vorjahr: 431,4 Mio. EUR). Damit liegt die Quote des F&E-Aufwandes zum Konzernumsatz bei 6,6 %. Insgesamt verfügt das Unternehmen mittlerweile über ca. 12.000 Patente, mehr als 4.000 Beschäftigte arbeiten für Knorr-Bremse in der Forschung und Entwicklung, darunter über 750 Softwareentwicklerinnen und -entwickler.

• Die im Geschäftsjahr 2022 getätigten Investitionen zur Stärkung der Digitalisierungs- und Automatisierungskompetenz folgen konsequent der M&A-Strategie des Unternehmens: Mit der im Mai 2022 abgeschlossenen strategischen Kooperations- und Investitionsvereinbarung mit dem Schweizer TradeTech-Unternehmen Nexxiot stärkt Knorr-Bremse die eigene Kompetenz für digitale Geschäftsmodelle im Rail-Bereich. Durch die Vereinbarung wird Knorr-Bremse die Sensortechnologie und das digitale Ökosystem von Nexxiot nutzen und seinen Kunden weitere interessante digitale Geschäftsmodelle bieten.
• Im Bereich Systeme für Nutzfahrzeuge hat Knorr-Bremse seit November 2022 zum Ausbau seiner Position auf dem Gebiet digitaler und datengetriebener Aftermarket-Lösungen die Mehrheit an der spanischen Cojali S.L. übernommen. Cojali ist ein weltweit erfolgreicher Entwickler und Hersteller von Mehrmarkendiagnoselösungen für Nutzfahrzeuge. Knorr-Bremse erweitert dadurch unter anderem das bestehende Aftermarket-Geschäft mit einer nutzfahrzeugspezifischen Softwarelösung, um künftig auch im Bereich Big Data und der vorausschauenden Wartung (Predictive Maintenance) neue Geschäftsfelder zu erschließen.

Weiterer Ausbau der ESG-Maßnahmen entlang der Wertschöpfungskette

Für Knorr-Bremse ist unternehmerische Verantwortung und nachhaltiges Wirtschaften eine Selbstverständlichkeit. Die Bedeutung von Nachhaltigkeit zeigt sich auch im neuen globalen Vergütungssystem für den Vorstand und das Management: Die kurzfristige variable Vergütung orientiert sich seit 2022 mit 20 % an der Erreichung von Nachhaltigkeitszielen zu Klimaschutz und Arbeitssicherheit sowie an Nachhaltigkeitsratings. Für 2022 wurden sämtliche Nachhaltigkeitsziele erreicht.

Ein weiterer Beleg für die ESG-Strategie sind die drei Sustainability-linked Finanzierungsinstrumente, die Knorr-Bremse 2022 an den Start gebracht hat: der im Januar abgeschlossene Konsortialkredit, die im September platzierte erste nachhaltigkeits-gekoppelte Anleihe (Sustainability-Linked Bond) sowie das im Dezember eingeführte Supply Chain Finance Program.

Die Knorr-Bremse AG liegt bei ihrem Ziel, die produktionsbedingten CO₂-Emissionen (Scope 1+2) bis 2030 zu halbieren, voll auf Kurs – im Geschäftsjahr 2022 hat Knorr-Bremse eine Reduktion von mehr als 65 % gegenüber dem Basisjahr 2018 erreicht. Im laufenden Jahr wird Knorr‑Bremse zudem die Klimaziele ausweiten und auch die vor- und nachgelagerte Wertschöpfungskette (Scope 3) berücksichtigen. Im Fokus stehen dabei Emissionen aus der Lieferkette (bezogene Materialien), der Logistik sowie der Nutzungsphase der Produkte. Knorr-Bremse plant, bis zum 31. August 2023 ein von der Science Based Targets initiative (SBTi) validiertes Ziel zur Reduktion ihrer Scope 1, Scope 2 sowie relevanter Scope 3 Treibhausgasemissionen zu veröffentlichen.

Der Knorr-Bremse Konzern beschäftigte zum 31.12.2022 insgesamt 31.464 Mitarbeiterinnen und Mitarbeiter (FTE), 3 % mehr als im Vorjahr (30.544). Um den Anteil von Mitarbeiterinnen zu steigern, hat Knorr-Bremse 2022 global geltende Zielquoten festgesetzt: 25 % Frauenanteil in der Belegschaft und 20 % im Management bis Herbst 2027. Zum Jahresende 2022 betrug der Anteil der Mitarbeiterinnen weltweit 21,1 % (Vorjahr: 20,3 %). Der Frauenanteil in Führungspositionen erhöhte sich auf 16,4 % (Vorjahr: 14,1 %).

Ausblick für 2023

Unter der Annahme aktueller Wechselkurse, im Wesentlichen stabiler geopolitischer und makro-ökonomischer Rahmenbedingungen, keiner neuen Lockdowns aufgrund der Corona-Lage, keiner deutlichen Verschärfung der Inflation und keiner zusätzlichen Probleme bei den Lieferketten bedingt durch potenzielle Energie-Engpässe, erwartet das Unternehmen für das Geschäftsjahr 2023 einen Umsatz zwischen 7.300 Mio. EUR und 7.700 Mio. EUR, eine operative EBIT-Marge von 10,5 % bis 12,0 % sowie einen Free Cashflow zwischen 350 Mio. EUR bis 550 Mio. EUR.

Die aufgeführten Zahlen sind vorläufig und ungeprüft. Der vollständige Jahresabschluss und der Geschäftsbericht werden am 23. März 2023 auf der Website www.knorr-bremse.com veröffentlicht.

Eine Videoaufzeichnung der Jahrespressekonferenz mit dem Vorstandsvorsitzenden Marc Llistosella und Finanzvorstand Frank Markus Weber zu den vorläufigen Zahlen für das Geschäftsjahr 2022 wird auf unserer Website unter www.knorr-bremse.com zur Verfügung gestellt.

Ein Webcast für Investoren mit dem Vorstandsvorsitzenden Marc Llistosella und Finanzvorstand Frank Markus Weber zu den vorläufigen Zahlen für das Geschäftsjahr 2022 findet heute um 13 Uhr (MEZ) statt. Die Präsentationen sind auf unserer Website unter www.knorr-bremse.com verfügbar.

Medienkontakte:

Alexander Stechert-Mayerhöfer, Leiter Unternehmenskommunikation

Tel.: +49 89 3547 1942, E-Mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Claudia Züchner, Pressesprecherin Finanzkommunikation

Tel.: +49 89 3547 2582, E-Mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Leiter Investor Relations

Tel.: +49 89 3547 182310, E-Mail: andreas.spitzauer@knorr-bremse.com

Sophia Kursawe, Senior Investor Relations Manager

Tel.: +49 89 3547 187311, E-Mail: sophia.kursawe@knorr-bremse.com

Konzern-Kennzahlen der Knorr-Bremse Gruppe:

Über Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, Tickersymbol: KBX) ist Weltmarktführer für Bremssysteme und weitere Systeme für Schienen- und Nutzfahrzeuge. Die Produkte von Knorr-Bremse leisten weltweit einen maßgeblichen Beitrag zu mehr Sicherheit und Energieeffizienz auf Schienen und Straßen. Rund 31.500 Mitarbeiter an über 100 Standorten in mehr als 30 Ländern setzen sich mit Kompetenz und Motivation ein, um Kunden weltweit mit Produkten und Dienstleistungen zufriedenzustellen. Im Jahr 2022 erwirtschaftete Knorr-Bremse in seinen beiden Geschäftsdivisionen weltweit einen Umsatz von 7,1 Mrd. EUR. Seit mehr als 115 Jahren treibt das Unternehmen als Innovator in seinen Branchen Entwicklungen in den Mobilitäts- und Transporttechnologien voran und hat einen Vorsprung im Bereich der vernetzten Systemlösungen. Knorr-Bremse ist einer der erfolgreichsten deutschen Industriekonzerne und profitiert von den wichtigen globalen Megatrends: Urbanisierung, Nachhaltigkeit, Digitalisierung und Mobilität.

HAFTUNGSAUSSCHLUSS

Diese Veröffentlichung wurde von der Knorr-Bremse AG selbstständig erstellt und kann zukunftsgerichtete Aussagen zu wichtigen Themen wie Strategie, zukünftigen finanziellen Ergebnissen, Ereignissen, Marktpositionen und Produktentwicklungen enthalten. Diese zukunftsgerichteten Aussagen sind - wie jedes unternehmerische Handeln in einem globalen Umfeld - stets mit Unsicherheit verbunden. Sie unterliegen einer Vielzahl von Risiken, Ungewissheiten und anderen Faktoren, die in Veröffentlichungen von Knorr-Bremse AG beschrieben werden, sich aber nicht auf diese beschränken. Sollten sich eine(s) oder mehrere dieser Risiken, Ungewissheiten oder andere Faktoren realisieren oder sollte sich erweisen, dass die zugrunde liegenden Erwartungen nicht eintreten beziehungsweise Annahmen nicht korrekt waren, können die tatsächlichen Ergebnisse und Entwicklungen von Knorr-Bremse AG wesentlich von denjenigen Ergebnissen abweichen, die als zukunftsgerichtete Aussagen formuliert wurden. Zukunftsgerichtete Aussagen sind erkennbar an Formulierungen wie „erwarten“, „wollen“, „ausgehen“, „rechnen mit“, „beabsichtigen“, „planen“, „glauben“, „anstreben“, „einschätzen“, „werden“ und „vorhersagen“ oder an ähnlichen Begriffen. Knorr-Bremse AG übernimmt keine Verpflichtung und beabsichtigt nicht, zukunftsgerichtete Aussagen ständig zu aktualisieren oder bei einer anderen als der erwarteten Entwicklung zu korrigieren.

Diese Veröffentlichung kann – in einschlägigen Rechnungslegungsrahmen nicht genau bestimmte – ergänzende Finanzkennzahlen, die sogenannte alternative Leistungskennzahlen sind oder sein können, enthalten. Für die Beurteilung der Vermögens-, Finanz- und Ertragslage von Knorr-Bremse sollten diese ergänzenden Finanzkennzahlen nicht isoliert oder als Alternative zu den im Konzernabschluss dargestellten und im Einklang mit einschlägigen Rechnungslegungsrahmen ermittelten Finanzkennzahlen herangezogen werden. Die Ermittlung der alternativen Leistungskennzahlen kann auch bei gleicher oder ähnlicher Bezeichnung von Unternehmen zu Unternehmen abweichen.

Knorr-Bremse Remains on the Path to Success Even in a Year of Global Crisis

• Revenue and profitability guidance for 2022 achieved
• Order intake rises by 11.4% to a record € 8.1 billion
• Order book achieves 24.3% boost for another new record of € 6.9 billion
• Revenue in 2022 fiscal year increases by 6.6% to approximately € 7.1 billion thanks to high demand in Europe and North America
• Highly robust profitability attained in globally uncertain times: operating EBIT margin of 11.1% (previous year: 13.5%) and operating EBITDA margin of 15.4% (previous year: 17.9%)
• Sustainability: new green-financing initiatives launched and commitment made to scope 3 targets  
• Guidance for 2023: revenue of € 7.3 billion to € 7.7 billion, operating EBIT margin between 10.5% and 12.0%, and free cash flow between € 350 million and € 550 million

Munich, February 23, 2023 – Knorr‑Bremse AG remains on its growth course despite global crisis. The global market leader for braking systems and leading provider of other systems for rail and commercial vehicles presented its preliminary results for the 2022 fiscal year in Munich today.

Marc Llistosella, the new Chief Executive Officer of Knorr‑Bremse AG since January 1: “The achievements made by Knorr‑Bremse and all its people last year impress me greatly. We again achieved an excellent result. We delivered on our promises. We did that in an extremely challenging year, with the awful human and economic impacts from the Russian invasion of Ukraine, with high inflation, with the fallout of the Covid-19 pandemic, and with the global supply chain shortages.  Today, we have a very large order book to our name. That shows me the high level of trust that our customers have in our reliability and quality. All this represents the best conditions for moving into the future, even if the challenges remain tremendous and we are still maintaining a strict focus on our costs. With a clearly coordinated portfolio as well as products and processes that are consistently aligned with market needs, we will defend our position as a global market and technology leader.”

Frank Markus Weber, Chief Financial Officer of Knorr‑Bremse AG: “Our business model involving two divisions, Rail Vehicle Systems and Commercial Vehicle Systems, has proved to be resilient once again. Order intake and revenue have risen significantly. Profitability, with an operating EBIT margin of 11.1%, is very solid despite the adversities in the global market environment. Raising prices for customers, negotiating with suppliers, and implementing cost reduction measures have helped to achieve this result. We also continued to drive the topic of sustainability (ESG) over the last year. Even just with our three different sustainability-linked financing instruments, we have shown how much Knorr‑Bremse values sustainable business. The fact that we will broaden our climate targets to scope 3 this year and have them assessed by the SBTi is impressive confirmation of this.”

Determined Implementation of Profit Optimization Measures

The 2022 fiscal year was shaped by the enormous influences of Russia’s invasion of Ukraine, the strict zero-Covid policy in China that applied until year end, and the price rises driven by inflation. In this difficult global environment, the Group’s revenue successfully increased by 6.6% to € 7,149.7 million (previous year: € 6,705.6 million) due to the pleasing customer demand, primarily in Europe and North America. The main driver of this was the commercial-vehicle market and, to a smaller extent, the rail vehicle market. The internal Profit & Cash Protection Program introduced early in 2022 was able to soften the blow from the inflation-related costs, however it could not make up for the negative influences from Russia and China. The operating EBIT margin reached a value of 11.1% (previous year: 13.5%) with operating EBIT of € 794.6 million (previous year: € 908.1 million). Free cash flow in 2022 amounted to € 220 million (previous year: € 600 million). The reasons for this development were mainly the buildup of inventories to ensure our delivery capabilities as well as delays in payments from our customers.

Record Order Intake and Order Book

Overall, the demand among end customers for rail vehicle systems as well as commercial-vehicle systems remains strong in all markets except for China, which exhibited considerable market weakness in 2022 due to its zero-Covid policy. Knorr‑Bremse successfully grew its order intake by a significant 11.4% to a record level of € 8,114.1 million (previous year: € 7,286.7 million). The recovery of demand in the rail vehicle business in particular ensured a boost for growth. The order book as at December 31, 2022, was worth roughly € 6,907.5 million (previous year: € 5,558.1 million), a significant rise of 24.3%.

Rail Vehicle Systems (RVS) Division Seeing High Demand

Thanks to the relaxation of the Covid-19 situation, the rail vehicle market recovered slowly but surely. Consequently, there was pleasing development in the orders placed under blanket purchase agreements as well as in tendering in the industry. The RVS division had revenue of € 3,401.9 million, indicating slight growth even in the crisis that marked 2022 (previous year: € 3,317.0 million). The operating EBIT margin reached 14.9% (previous year: 17.9%) due to sanctions on Russia and the situation in China. For order intake, the division recorded € 4,161.9 million, up 19.9% on 2021 (previous year: € 3,470.7 million). The order book of € 4,918.9 million as at December 31, 2022 (previous year: € 3,875.1 million), had reached a new record.

Commercial Vehicle Systems (CVS) Division Performing Strongly

The commercial-vehicle market is seeing persistently good demand. Truck production rates in Europe and North America developed positively year over year, while China was weak as expected due to anticipatory effects after the introduction of the China 6 emission standard in July 2021. With revenue increasing by 10.6% to € 3,750.0 million (previous year: € 3,390.2 million), the CVS division achieved a strong result. The division’s profitability was down on 2021 with an operating EBIT margin of 9.0% (previous year: 10.7%). The reasons for this were, firstly, the developments in Russia and especially the economic downturn in China and, secondly, also the increased expenditure on research and development, which is an investment in the future. Order intake rose to € 3,954.3 million (previous year: € 3,818.0 million). The order book at year end, worth € 1,989.8 million (previous year: € 1,696.8 million), also signaled a new record high for the CVS division.

Reinforcing the Divisions’ Digitization and Automation Capabilities

As a world-leading technology corporation, investment in research and development provides tangible growth prospects for Knorr‑Bremse. In 2022, Knorr‑Bremse increased its R&D investment by 9% to € 470.0 million (previous year: € 431.4 million). The R&D intensity, that is, the ratio of R&D expenditure to Group revenue, is therefore 6.6%. In total, the company now has over 12,000 patents, with more than 4,000 employees working in research and development for Knorr‑Bremse, including over 750 software developers.

• The investments made during the 2022 fiscal year to strengthen digitization and automation capabilities are a consistent continuation of the company’s M&A strategy. Through the strategic cooperation and investment agreement signed with Swiss TradeTech company Nexxiot in May 2022, Knorr‑Bremse is reinforcing its in-house capabilities for digital business models in the rail sector. Under the agreement, Knorr‑Bremse will use Nexxiot’s sensor technology and digital ecosystem and offer its customers further, appealing digital business models.
• In Commercial Vehicle Systems, Knorr‑Bremse acquired a majority interest in Cojali S.L., based in Spain, in November 2022 to build up its position in the field of digital and data-driven aftermarket solutions. Cojali is a globally successful developer and manufacturer of cross-brand diagnostic solutions for commercial vehicles. Knorr‑Bremse is consequently adding, among other things, a commercial-vehicle-specific software solution to its existing aftermarket business so that it can exploit new fields of business in big data and predictive maintenance in the future.

Further Expansion of ESG Measures across the Value Chain

For Knorr-Bremse, corporate responsibility and sustainable business practices are essential. The importance of sustainability for the company can also be seen in the new, global remuneration system for the Executive Board and management: Since 2022, 20% of the short-term variable remuneration has been based on the achievement of sustainability targets for climate protection and employee safety as well as on the companies sustainability ratings. All sustainability targets for 2022 were achieved.

The syndicated loan obtained in January, the first-ever sustainability-linked bond issued in September, and the Supply Chain Finance Program launched in December are the three sustainability-linked financing instruments that Knorr‑Bremse launched in 2022 and are all further evidence of the ESG strategy.

Knorr‑Bremse AG is fully on track to meet its target of halving production-related carbon emissions (scope 1+2) by 2030. In the fiscal year 2022, Knorr‑Bremse has achieved a reduction of more than 65% compared to the base year 2018. During the current year, Knorr‑Bremse decided to expand its climate targets also to up- and downstream value chain processes (Scope 3). The focus is on emissions from the supply chain (purchased materials), logistics, and the use phase of the products. Knorr-Bremse plans to publish a target validated by the Science Based Targets initiative (SBTi) for reducing its Scope 1, Scope 2 and relevant Scope 3 greenhouse gas emissions by August 31, 2023.

The Knorr‑Bremse Group had a total of 31,464 employees (FTE) as of December 31, 2022, an increase of 3% year over year (previous year: 30,544). To increase the share of female employees, Knorr‑Bremse set target percentages in 2022 that apply globally: 25% women in the workforce and 20% in management by fall 2027. At year end 2022, the share of female employees globally was 21.1% (previous year: 20.3%). The share of women in leadership positions increased to 16.4% (previous year: 14.1%).

Guidance for 2023

Assuming that exchange rates remain as they are, that the geopolitical and macroeconomic environments remain mostly stable, that there are no new Covid-19 lockdowns, that there is no significant intensification of inflation, and that there are no additional supply chain issues caused by potential energy shortages, the company expects revenue between € 7,300 million and € 7,700 million, an operating EBIT margin of 10.5% to 12.0%, and free cash flow between € 350 million and € 550 million for the 2023 fiscal year.

The figures presented here are preliminary and unaudited. The full annual financial statements and annual report will be published on the website www.knorr-bremse.com on March 23, 2023.

A video recording of our annual press conference with Chief Executive Officer Marc Llistosella and Chief Financial Officer Frank Markus Weber on the preliminary figures for the 2022 fiscal year will be available on our website at www.knorr-bremse.com.

A webcast for investors with Chief Executive Officer Marc Llistosella and Chief Financial Officer Frank Markus Weber on the preliminary figures for the 2022 fiscal year will take place today at 1 p.m. (CET). The presentations are available on our website at www.knorr-bremse.com.

Media Contacts:

Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Claudia Züchner, Spokeswoman, Financial Communications

Phone: +49 89 3547 2582, e-mail: claudia.zuechner@knorr-bremse.com

Investor Relations:

Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

Sophia Kursawe, Senior Investor Relations Manager

Phone: +49 89 3547 187311, e-mail: sophia.kursawe@knorr-bremse.com

Key Figures for the Knorr-Bremse Group:

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical 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. About 31,500 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2022, Knorr-Bremse’s two divisions together generated revenues of € 7.1 billion. For more than 115 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. One of Germany’s most successful industrial companies, Knorr-Bremse profits from the key global megatrends of urbanization, sustainability, digitalization, and automated driving.

DISCLAIMER

This publication has been independently prepared by Knorr-Bremse AG (“Knorr-Bremse”). It may contain forward-looking statements which address key issues such as strategy, future financial results, events, competitive positions, and product developments. Like any entrepreneurial activity in a global environment, these forward-looking statements always come with a degree of uncertainty. They are subject to a number of risks, improbabilities, and other factors, including, but not limited to, those described in Knorr-Bremse’s disclosures. Should one or more of these risks, improbabilities, or other factors materialize, or should underlying expectations not occur or should assumptions prove incorrect, the actual results, performance, 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 that are not clearly defined in the applicable financial reporting framework and 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.

Knorr-Bremse AG Profits from High Customer Demand with Increased Revenues and Profitability

- Knorr-Bremse’s revenues rise by 3.8% to approximately € 5.2 billion in the first nine months of the year thanks to high demand in Europe and North America

- Very solid profitability in a globally uncertain era: Knorr-Bremse increases operating EBIT margin to 11.3% in third quarter (Q2 2022: 10.5%)

- Order intake rises to € 5.9 billion, order book grows to roughly € 6.9 billion in the first nine months of 2022

- Operating guidance for 2022 confirmed

- New CEO Marc Llistosella to start on January 1, 2023, bringing many years of industry expertise and international experience

Munich, November 10, 2022 – 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 2022.

Frank Markus Weber, Chief Financial Officer and Executive Board Spokesman of Knorr-Bremse AG: "We remain on course. Knorr-Bremse achieved a pleasing result in the first nine months of 2022 and significantly increased its revenues in very uncertain times. Today decades of reliable partnerships with our customers pay off, which can be seen in the ongoing high demand among customers and in our large market shares, especially in Europe and North America. Simultaneously, we are increasingly profiting from the measures we are taking to optimize our results, which lets us compensate accordingly for the increased costs caused by inflation this year. We are a technology leader, so we do not allow any compromises on our ambitious research and development projects. They represent our promise to our customers and are the basis for our leadership in technologies and markets. This is a path that we will be consistent in maintaining next year, too, under the leadership of our designated Chief Executive Officer, Marc Llistosella."

Knorr-Bremse AG announced the Supervisory Board’s appointment of Marc Llistosella, a former high-level manager at Daimler Truck and current start-up investor, as Chief Executive Officer of Knorr-Bremse AG on October 13, 2022 (see press release). He is planned to commence this position on January 1, 2023.
 

Increased Revenues Thanks to Growing Aftermarket Business and Ongoing High Demand from Customers in Europe and North America

The order intake at Knorr-Bremse AG in the first nine months of 2022 increased significantly by 17.4% versus the prior-year period, amounting to € 5,917 million (9M 2021: € 5,038 million). The recovery for rail vehicle systems in particular ensured a boost in growth. The order book as at September 30, 2022, stood at approximately € 6,878 million (9M 2021: € 5,007 million), a significant 37% increase.

The ongoing high demand is also reflected in the Group’s revenues for the first nine months of the year, which have risen by 3.8% to € 5,198 million (9M 2021: € 5,008 million). This increase is especially attributable to the continued consistent demand among customers in the European and North American markets. The commercial vehicles market and the aftermarket in particular contributed the lion’s share of the revenue growth. Rail system orders in these regions developed positively, too. However, the performance of both divisions generally remains influenced by the continued supply chain issues and, in China, by a range of factors including the strict zero-Covid policies that remain in place.
 

Price Negotiations and Internal Profit Optimization Measures Show Positive Effect on Profitability

Even with the global environment remaining very difficult, Knorr-Bremse generated operating EBIT of € 568 million in the first nine months of 2022 (9M 2021: € 712 million). Compared to the previous quarter, the company achieved further success with the Profit & Cash Protection Program that it had rolled out to mitigate inflation-related costs. By raising prices for customers, negotiating with suppliers, and implementing cost-optimization measures, there was a significant rise in the operating EBIT margin from 10.5% (Q2 2022) to 11.3% (Q3 2022).

Free cashflow in the first nine months of 2022 amounted to € -229 million compared to € 297 million in the prior-year period. The reasons behind this development include higher warehouse and inventory levels, which have a purpose of safeguarding delivery capabilities even in difficult market conditions, as well as the stricter liquidity management that Knorr-Bremse is observing among its customers.

Frank Markus Weber: "Our top priority is to maintain high delivery capabilities and therefore reliability for our customers. Consequently, building up inventory levels to safeguard these delivery capabilities is also a strategic investment in positive and long-lasting customer relationships. This provides the basis for successful price negotiations, among other things. After numerous conversations with customers at this year’s InnoTrans, IAA Transportation, and Automechanika – the foremost trade shows in the industry – we believe that we have clearly taken the right approach. We have also already implemented simultaneous measures that are certain to strengthen cashflow."
 

RVS Has Large Order Book and New Investments in Digitalization

The Rail Vehicle Systems (RVS) division is continuing to develop well, however the conditions it is facing vary strongly in the markets around the world. Its revenues of € 2,453 million in the first nine months of 2022 are just about stable in comparison to the previous year (9M 2021: € 2,460 million). Its order intake is up 37.3% and trending positively in all markets. The order book also remains high at € 4,844 million.

Overall, rail business internationally remains strongly impacted by the effects of the Covid-19 pandemic generally, while in China it has additionally been influenced by lower investment in the market. The war-related sanctions on Russia have simultaneously impacted business performance in a significant way. Accordingly, the operating EBIT of € 373 million is 14.6% down on the corresponding figure of € 443 million in the previous year. The operating EBIT margin of 15.2% is also 2.8 percentage points down on the previous year’s figure (9M 2021: 18.0%).

Knorr-Bremse is further strengthening its RVS division for the challenges of the future, with automation being a significant tool for efficiency, flexibility, and competitiveness gains in the rail sector. To develop automated solutions for the "digital freight train" concept, Knorr-Bremse signed a cooperation agreement with Thales, a globally leading provider of high technology, in October. Together, the companies are pursuing a goal of adding considerable value for automated rail transportation through their innovation. For operators of locomotive-hauled freight and passenger trains, this will pay off in the form of improved energy efficiency and punctuality, among other things.
 

Positive Revenue Developments in CVS and Further Strengthening of EV Capabilities

Order intake in the Commercial Vehicle Systems (CVS) division in the first nine months of 2022 amounted to € 2,913 million (9M 2021: € 2,850 million). The order book as at September 30, 2022, had increased significantly to € 2,035 million since the prior-year period (September 30, 2021: € 1,569 million). The division successfully increased its revenue again by 7.7%, bringing it to € 2,747 million (9M 2021: € 2,549 million). The increase has been influenced in particular by robust demand and successful price negotiations in Europe and North America as well as the generally strong aftermarket business.

Operating EBIT in the Commercial Vehicle Systems division fell in the first nine months of the year to € 237 million (9M 2021: € 299 million). The operating EBIT margin was 8.6% after 11.7% during the prior-year period. The fall was caused among other things by the situation in the Chinese market, where the economy has experienced a slump. However, the outlook for the Chinese truck market indicates a recovery. Compared to the rest of the market, Knorr-Bremse currently is also significantly less burdened than its competitors and is expecting the market to turn around once the Covid-19 situation has calmed and supply chains have normalized, with positive effects for the company’s performance. The most recent pricing and cost measures will also have a positive impact on profits in subsequent quarters.

Knorr-Bremse is preparing for the increasingly rapid global growth in automated driving and electrification with its investment in Shanghai Bobang Automotive Technology, a Chinese electric motor supplier, which was announced in October. By obtaining an approximately 13% interest in the company, Knorr-Bremse has become the second-largest shareholder in Bobang. As a result, Knorr-Bremse is strengthening its electric motor capabilities and therefore further expanding its international competitiveness.


Further Boost to Sustainability Commitment: Pursuing SBTi Targets

Knorr-Bremse AG underscores its commitment to increased sustainability by pledging to expand its own climate targets and defining them in line with the requirements of the Science Based Targets initiative (SBTi). In particular, this means that in future, in addition to the company's own production emissions (scope 1 and 2), the focus will also be on emissions from the supply chain and product use-phase (scope 3). Knorr-Bremse is therefore further intensifying its efforts to reduce emissions across the value chain. Furthermore, this commitment is a component of the sustainability-linked bond that was issued for € 700 million (see press release). The detailed target-setting and validation process with the SBTi is planned to be completed by August 31, 2023. The integration of the sustainability targets into financing instruments is a clear sign of the importance of effective climate protection measures to the company’s success. Knorr-Bremse is driving this integration globally and accelerating the execution of its climate strategy in parallel. One of the most recent examples of this is Knorr-Bremse Rail Systems Italia: Since the installation of a new photovoltaic system, almost 80% of electricity demand is being covered by own generated renewable power. Thus, carbon dioxide emissions are lowered by far more than 100 metric tons per year.
 

Group Confirms Guidance for 2022

The company expects revenue between € 6,900 million and € 7,200 million, an operating EBIT margin between 10.5% and 12.0%, and free cashflow between € 300 million and € 500 million for the 2022 fiscal year, assuming that foreign-exchange rates remain as they are currently, a predominantly stable macroeconomic environment, no new Covid-19 lockdowns, no significant increase in inflation, and no additional supply chain issues caused by potential energy shortages.

The full quarterly report is available at www.knorr-bremse.com. Explanations and reconciliations of the financial KPIs used can be found in the 2021 annual report of Knorr-Bremse AG (available at https://ir.knorr-bremse.com/download/companies/knorrbremse/Annual%20Reports/DE000KBX1006-JA-2021-EQ-E-00.pdf).

Media contact: Alexander Stechert-Mayerhöfer, Head of Corporate Communications
Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Investor Relations: Andreas Spitzauer, Head of Investor Relations
Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

About Knorr-Bremse
Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical 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. About 30,500 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2021, Knorr-Bremse’s two divisions together generated revenues of € 6.7 billion. For more than 115 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. One of Germany’s most successful industrial companies, Knorr-Bremse profits from the key global megatrends of urbanization, sustainability, digitalization, and automated driving.

Key Figures for the Knorr-Bremse Group:

Key Figures for the Knorr-Bremse Group’s Divisions:

DISCLAIMER
This publication has been independently prepared by Knorr-Bremse AG ("Knorr-Bremse"). It may contain forward-looking statements that address key issues such as strategy, future financial results, events, competitive positions, and product developments. These forward-looking statements – just as any business activity in a global environment – are always associated with uncertainty. Such forward-looking statements 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, performance, 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 that 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). For the assessment of the net assets, financial position, and results of operations of Knorr-Bremse, these supplementary financial figures should not be used in isolation or as alternatives to the financial figures presented in the consolidated financial statements and determined in accordance with the relevant 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.

Marc Llistosella to Become the New Chief Executive Officer of Knorr-Bremse AG

• Marc Llistosella, former top manager at Daimler Truck and current start-up investor, will take up the CEO position at Knorr‑Bremse AG as of January 1, 2023
• Ploss: “Marc Llistosella is an impressive and determined corporate leader with copious international experience, especially in Asia”

Munich, October 13, 2022 – The Supervisory Board of Knorr-Bremse AG voted unanimously at its meeting today to appoint Marc Llistosella as the Chief Executive Officer of Knorr-Bremse AG for a period of three years with effect from January 1, 2023.

Dr. Reinhard Ploss, Chairman of the Knorr-Bremse AG Supervisory Board, said, “I am extremely delighted that we have been able to gain Marc Llistosella as the new Chief Executive Officer of Knorr-Bremse. He is an impressive corporate leader with an excellent reputation and many years of management experience, especially in technology, operations, sales, and strategy. In recent years, he has also been active in the mobility sector as an investor and start-up founder. As a result, he is just as familiar with the world of a global technology corporation as he is with the agile spirit of a young company. I am firmly convinced that he will return Knorr‑Bremse to its former strength with his international background in the capital goods sector, his extensive experience in top-level management, especially in Asia, his ability to see things through, and his soft skills.”

Marc Llistosella was most recently active in investor and start-up founder roles, for example at Vaionic, a start-up specializing in the development of electric drive systems, and Einride, a Swedish company that develops electric and self-driving commercial vehicles. He is a member of the advisory or supervisory boards at both companies, and the 55-year-old business graduate and economist will retain both of these positions going forward. Up until 2018, he was CEO of Mitsubishi Fuso Truck & Bus Corporation and Head of Daimler Trucks Asia. Before then, he led the Daimler India Commercial Vehicles subsidiary for multiple years as Chief Executive Officer. This position saw him oversee the launch of Daimler’s commercial vehicles in the Indian market, among other things.

Marc Llistosella, designated CEO of Knorr‑Bremse AG: “Knorr‑Bremse is a fascinating company and a true icon of German industry. It has stood for safe transportation for over 115 years and, as a global market leader, it drives innovation for sustainable, safety-critical system solutions. Together with its employees and the Executive Board team, and in close communication with the Supervisory Board, we will build further on the enormous potential of this company.”

Dr. Ploss thanks Frank Weber on behalf of the Supervisory Board for his outstanding dedication and commitment as interim Spokesman for the Executive Board. Frank Weber has taken on the role of Executive Board Spokesman alongside his duties as Chief Financial Officer since mid-March.

Media contact: Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Investor Relations: Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical 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. About 30,500 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2021, Knorr-Bremse’s two divisions together generated revenues of € 6.7 billion. For more than 115 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. One of Germany’s most successful industrial companies, Knorr-Bremse profits from the key global megatrends of urbanization, sustainability, digitalization, and automated driving.

New CEO appointed

Munich, October 13, 2022 – The Supervisory Board of Knorr-Bremse AG unanimously decided today to appoint Marc Llistosella as member and chairman of the Executive Board of Knorr-Bremse AG with effect from January 1, 2023.

Media contact:       

Alexander Stechert-Mayerhöfer
Head of Corporate Communications
Phone: +49 89 3547 1942    
Mobile: +49 160 99079182   
Email: alexander.stechert-mayerhoefer@knorr-bremse.com 

Investor Relations contact:

Andreas Spitzauer
Head of Investor Relations
Phone: +49 89 3547 182310
Mobile:  +49 175 528 1320
Email: investor.relations@knorr-bremse.com

Knorr-Bremse issues inaugural 700 Million Euro Sustainability-Linked Bond (SLB)

• The inaugural SLB is issued under the new Sustainability-Linked Bond Framework by Knorr-Bremse AG
• With this transaction Knorr-Bremse commits itself to continue to drive its decarbonization approach within its value chain
• The transaction was met with strong interest from investors and was significantly oversubscribed

Munich, September 15, 2022 – Knorr Bremse AG implements its focus on sustainability now also within its capital market financing. The global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems, issued its inaugural sustainability-linked bond at the European debt capital markets yesterday. The bond has a volume of EUR 700 million and a tenor of 5 years. The annual coupon amounts to 3,25 percent. 

Frank Markus Weber, Executive Board Spokesman and Chief Financial Officer of Knorr-Bremse AG: “With the Sustainability-Linked Bond we are strengthening our liquidity and refinancing, among other things, our current M&A transactions. Through the link to sustainability objectives, we underline the importance of our Climate Strategy 2030 and commit ourselves to continue to develop our sustainability approach. As the second sustainability-linked instrument in our capital structure we further send a strong message, to continue to facilitate the integration of aspects of sustainability in all areas of the company“.

The interest rate of the bond is linked to the achievement of a predetermined sustainability target. Knorr-Bremse has defined the target within a framework for sustainability-linked financing, called the Sustainability-Linked Bond Framework. Knorr-Bremse is committed to publish a Scope 3 emissions reduction target focusing on its value chain, approved by the Science-Based Target initiative. The framework was evaluated by ESG agency ISS Corporate Solutions (ISS) in form of a Second Party Opinion (SPO). ISS confirms the ambitions and materiality of Knorr-Bremse’s targets and the alignment with common market standards. In case Knorr-Bremse will not achieve the target, the interest rate will be increased by 20 bps. p.a., until the maturity of the bond. The proceeds of the issue are intended for general corporate purposes.

At the beginning of 2022 Knorr-Bremse already integrated sustainability elements into the syndicated credit and and is now expanding its financing instruments in this area by issuing a sustainability-linked bond.

 
Media: Alexander Stechert-Mayerhöfer, Head of Corporate Communications
Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Investor Relations: Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

Corporate Treasury: Kai Gloystein, Head of Corporate Finance & Treasury
Tel: +49 89 3547 2248, kai.gloystein@knorr-bremse.com

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical 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. About 30,500 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2021, Knorr-Bremse’s two divisions together generated revenues of € 6.7 billion. For more than 115 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. One of Germany’s most successful industrial companies, Knorr-Bremse profits from the key global megatrends of urbanization, sustainability, digitalization, and automated driving.

DISCLAIMER

This publication has been independently prepared by Knorr-Bremse AG (“Knorr-Bremse”). It may contain forward-looking statements that address key issues such as strategy, future financial results, events, competitive positions, and product developments. These forward-looking statements – just as any business activity in a global environment – are always associated with uncertainty. Such forward-looking statements 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, performance, 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 that 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). For the assessment of the net assets, financial position, and results of operations of Knorr-Bremse, these supplementary financial figures should not be used in isolation or as alternatives to the financial figures presented in the consolidated financial statements and determined in accordance with the relevant 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.

Knorr-Bremse Achieves Strong Results in First Half of 2022 Despite Global Economic Crisis and Russia Sanctions

• Order intake benefits from high demand in rail vehicle business, rising by 12% to more than € 4.0 billion
• Order book up 30% for a new record of roughly € 6.7 billion, ensuring utilization of capacity
• Revenue at € 3.4 billion, remaining at previous year’s level in a difficult market environment
• Operating EBIT margin at 10.7% (H1 2021: 14.5%) despite withdrawal from Russian business and high-impact Covid-19 restrictions in China, operating EBIT reaches € 365 million (H1 2021: € 495 million)
• An inventory buildup to mitigate supply shortages reduces free cash flow to € ‑267 million (H1 2021: € 108 million) with better developments in the second quarter
• Group-wide profit optimization program fully on course to compensate for increased prices for raw materials and energy during the year as a whole
• Operating guidance for 2022: adjusted forecast from July 27 confirmed
   

Munich, August 12, 2022 – 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 half and second quarter of 2022.

Frank Markus Weber, Executive Board Spokesman and Chief Financial Officer of Knorr-Bremse AG: “Knorr‑Bremse can handle crises. We have demonstrated this on multiple occasions over the years. Knorr‑Bremse continued to generate solid financial results in the second quarter of 2022 despite the difficult economic situation globally and a persistently volatile market environment. In difficult conditions in particular, our business model shows its high resilience and strength in both divisions. Nonetheless, 2022 is an especially hard and challenging year for our suppliers, customers, and ourselves. We will fully offset the enormous impacts of the strong increase in inflation with our own measures, including for example price increases and savings. We established a profit optimization program back at the start of the year for this purpose. However, our withdrawal from Russia-based business in connection with international sanctions and the difficult market conditions in China have made a noticeable impact on our business.”

Order book reaches record level again, revenue remains stable

At € 4,038 million in the first half of 2022 (H1 2021: € 3,603 million), order intake increased by 12.1% and was thus clearly above the previous year’s result. The high demand in rail vehicles in particular ensured a boost in growth. The order book as at June 30, 2022, was worth approximately € 6.7 billion (June 30, 2021: € 5.2 billion), another new record.

Knorr‑Bremse’s revenue in the first six months of the year was € 3,406 million and was therefore just under the previous year’s level of € 3,419 million. Whereas OE revenues dropped slightly, aftermarket revenue rose by 6.3%. Overall, this led to aftermarket having a significantly larger share in total revenue, growing from 34.2% to 36.4%. The highest revenue growth was achieved in South America (32.5%), North America (18.7%), and Europe/Africa (3.7%). In Asia, on the other hand, revenue dropped by 21.2% primarily as a result of the developments in China.

High profitability despite crisis, profit optimization program exhibiting considerable impact

Operating EBIT in the first half of 2022 was € 365 million (H1 2021: € 495 million) despite the globally tense economy. The operating EBIT margin was 10.7% (H1 2021: 14.5%). The year-over-year changes mainly stem from the following factors that have intensified further in recent months: the fallout of the Russia–Ukraine war and Knorr‑Bremse’s previously announced withdrawal from business in Russia. There are also the Covid-19 restrictions in China, where rail operators are responding to the significant, pandemic-induced decreases in trainloads by reducing services and investing less in new rolling stock. The situation is heightened by the very significant cooldown of China’s truck market. Knorr‑Bremse does not expect either market in China to recover significantly in the short term.

In the first six months of the year, free cash flow amounted to € ‑267 million (H1 2021: € 108 million). The reasons behind this development include a proactive buildup of inventories to mitigate potential supply shortages and to ensure the planned growth of revenue in the second half of the year. However, Knorr‑Bremse does expect that free cash flow will improve significantly in the second half of the year.

In order to respond to the overall difficult market conditions, the Knorr‑Bremse Executive Board launched an extensive Profit & Cash Protection Program back at the start of the year, with comprehensive measures for pricing and costs across the entire Knorr‑Bremse Group. It fully compensates for the significant increase in inflation that is currently burdening the cost structure in both divisions.

RVS has large order book and new investments in digitalization

The Rail Vehicle Systems division continues to be confronted by the challenges of the Covid-19 pandemic in a volatile market environment. Its revenue during the first half of the year declined by -3.4% from the comparable prior-year period. This development was particularly attributable to the declining market in China. The division’s operating EBIT in the first half of the year was € 240 million and below the corresponding prior-year figure of € 301 million; the operating EBIT margin reached 15.0% (H1 2021: 18.2%).

Order intake rose very significantly to € 2,128 million (H1 2021: € 1,451 million). All regions, and Europe most of all, profited from this development. The order book also developed very nicely and was worth € 4.8 billion at the end of June after being valued at € 3.5 billion the previous year. This figure already reflects orders canceled as a result of the sanctions on Russia.

RVS is consistently continuing its digitalization strategy this year, too. For example, Knorr‑Bremse signed a strategic cooperation and investment agreement with Nexxiot, a leading tradetech provider, in May and became the company’s largest shareholder at the same time. Nexxiot is specialized in equipping train carriages and shipping containers with IoT technology. The goal behind the agreement is to connect the brakes, doors, air-conditioning systems, hygiene systems, and other systems of Knorr‑Bremse with Nexxiot’s digital ecosystem to generate data that can be the basis for new business models. The added value for customers is that train availability and life cycle costs can be optimized.

CVS grows order book and also invests in high-growth markets of digitalization and connectivity

Order intake in the Commercial Vehicle Systems division fell in the first half of 2022 to € 1,911 million (H1 2021: € 2,153 million). The order book as at June 30, 2022, on the other hand, had increased significantly to more than € 1.9 billion since the prior-year period (€ 1.7 billion). The division was also able to increase its revenue by 2.5% to € 1,809 million (H1 2021: € 1,765 million) despite the global supply constraints within the commercial vehicle industry. This resulted from significant growth in aftermarket business from which all regions were able to benefit, except for Asia-Pacific.

EBIT in the Commercial Vehicle Systems division fell in the first six months of the year to € 151 million (H1 2021: € 214 million). The operating EBIT margin was 8.3% after 12.1% during the prior-year period. The lower profitability is due to the very significant reduction of the truck market in China as well as the supply shortages and increased inflation, which largely can only be passed on to customers in the form of price increases after a time delay.

Commercial Vehicle Systems is also determinedly expanding its business model, with Knorr‑Bremse having signed a contract to acquire a majority interest in Spain’s Cojali S.L. in June. This company is a global developer of diagnostics systems for commercial vehicles and other vehicle types. Using Cojali’s diagnostics capabilities, workshops and fleet operators analyze the status of vehicle components precisely and quickly for any brand and receive comprehensive help with troubleshooting. Knorr‑Bremse is therefore investing in the growing market for connectivity applications and continuing to build up its in-house digitalization capabilities.

Guidance for 2022

Knorr‑Bremse can fully compensate for inflation-related increases in costs through its own measures. However, the withdrawal from business in Russia as well as the significantly dampened market conditions in China are putting pressure on results. Viewing the year as a whole, Knorr‑Bremse is expecting a lower operating EBIT margin due to these effects, with China bringing it down by roughly 1.2 percentage points and the withdrawal from business in Russia by roughly 0.7 percentage points.

Knorr‑Bremse now expects revenue between € 6,900 million and € 7,200 million (previously € 6,800 million and € 7,200 million), an operating EBIT margin between 10.5% and 12.0% (previously 12.5% and 14.0%), and free cash flow between € 300 million and € 500 million (previously € 500 million and € 600 million), assuming that foreign-exchange rates remain as they are currently, a predominantly stable macroeconomic environment, no new Covid-19 lockdowns, no significant increase in inflation, and no additional supply chain issues caused by potential energy shortages.

The full half-year report is available at www.knorr-bremse.com. Explanations and reconciliations of the financial KPIs used can be found in the 2021 annual report of Knorr‑Bremse AG (available at https://ir.knorr-bremse.com/download/companies/knorrbremse/Annual%20Reports/DE000KBX1006-JA-2021-EQ-E-00.pdf).

Media: Alexander Stechert-Mayerhöfer, Head of Corporate Communications

Phone: +49 89 3547 1942, e-mail: alexander.stechert-mayerhoefer@knorr-bremse.com

Investor Relations: Andreas Spitzauer, Head of Investor Relations

Phone: +49 89 3547 182310, e-mail: andreas.spitzauer@knorr-bremse.com

Key figures for the Knorr-Bremse Group:

Key figures for the Knorr-Bremse Group’s divisions:

About Knorr-Bremse

Knorr-Bremse (ISIN: DE000KBX1006, ticker symbol: KBX) is the global market leader for braking systems and a leading supplier of other safety-critical 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. About 30,500 employees at over 100 sites in more than 30 countries use their competence and motivation to satisfy customers worldwide with products and services. In 2021, Knorr-Bremse’s two divisions together generated revenues of € 6.7 billion. For more than 115 years the company has been the industry innovator, driving innovation in mobility and transportation technologies with an edge in connected system solutions. One of Germany’s most successful industrial companies, Knorr-Bremse profits from the key global megatrends of urbanization, sustainability, digitalization, and automated driving.

DISCLAIMER

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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). For the assessment of the net assets, financial position, and results of operations of Knorr-Bremse, these supplementary financial figures should not be used in isolation or as alternatives to the financial figures presented in the consolidated financial statements and determined in accordance with the relevant 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.

Publication of Insider Information Pursuant to Article 17 of Regulation (EU) No. 596/2014

Keyword(s): guidance update, preliminary figures for Q2/22,

Knorr-Bremse AG

Moosacher Str. 80

80809 Munich, Germany

ISIN: DE000KBX1006

[Exchanges and market segments listed on/in]

Knorr-Bremse Publishes Preliminary Financial Figures for the Second Quarter of 2022 and Adjusts Guidance for 2022

Munich, July 27, 2022

Based on the initial indications for the April through June 2022 reporting period (Q2/22), Knorr-Bremse AG is expecting the following financial figures:

• Preliminary revenues of approximately € 1.73 billion (consensus: € 1.73 billion)
• Preliminary operating EBIT margin of approximately 10.5% (consensus: 11.0%)
• Preliminary free cash flow of approximately € -70 million (in Q2/21 € 131 million)

The preliminary results of Q2/2022 are broadly in line with analyst expectations as summarized in the current Vara Research Consensus.

Based on the preliminary financial figures for the first half of 2022, which are still being reviewed by the auditors, and based on the developments expected for the second half of the year, the Executive Board of Knorr-Bremse AG adjusts the guidance for the 2022 fiscal year in line with the current situation in Russia.

Assuming (i) current foreign-exchange rates, (ii) a predominantly stable macroeconomic environment, (iii) no new Covid-19 lockdowns, (iv) no significant increase in inflation, and (v) no additional supply chain issues caused by potential energy shortages, Knorr-Bremse now expects revenues between € 6,900 million and € 7,200 million (previously € 6,800 million and € 7,200 million), an operating EBIT margin between 10.5% and 12.0% (previously 12.5% to 14.0%), and free cash flow between € 300 million and € 500 million (previously € 500 million to € 600 million).

At the beginning of the year the Executive Board launched a comprehensive Profit & Cash Protection Program including accompanying cost and pricing measures for the entire Knorr-Bremse Group to fully compensate for the significant rise in inflation, which is currently depressing the cost base in both divisions.

The adjustment of the guidance, that is nevertheless necessary, is owed mainly to the development of the following factors that have intensified in recent months:

The impacts of the Russia–Ukraine war and Knorr-Bremse’s previously announced withdrawal from business in Russia result in significant adjustments to the guidance, as expected.

The withdrawal from Russia results, also as expected, in non-operating and non-cash expenses of no more than € 50 million, of which approximately € 20 million were recognized in Q2/22.

Furthermore, the Covid-19 pandemic continues to have negative effects on business. This is especially the case in China, where rail operators are responding to the significant, pandemic-induced decreases in train traffic by thinning out their fleets and through lower investments in new rail vehicles. The situation is heightened by the general cooldown of China’s truck market. Knorr-Bremse is not expecting a significant recovery in either segment in the short term, contrary to prior expectations.

The complete half-year financial report for 2022 will be published as planned on August 12, 2022.

Explanations and reconciliations to the financial KPIs used can be found in Knorr-Bremse AG’s 2021 Annual Report: (https://ir.knorr-bremse.com/download/companies/knorrbremse/Annual%20Reports/DE000KBX1006-JA-2021-EQ-E-00.pdf)

This publication contains forward-looking statements about the business, financial development, and earnings of the Knorr-Bremse Group.

These statements are underpinned by assumptions and forecasts that are based on currently available information and current assessments. They are subject to a large number of uncertainties and risks. Consequently, actual business development may vary significantly from the expected development.

Knorr-Bremse does not assume any obligation to update forward-looking statements beyond the requirements imposed by law.