Knorr-Bremse Reports Strong First Half Results

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

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG said, “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, added, “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).

To view the entire financial-results report for H1 and Q2, click HERE.

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