Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “Our hard work is paying off. We once again demonstrated our strength. With an operating EBIT margin of 14.2% in the second quarter, we have already exceeded our primary BOOST objective of achieving an operating EBIT margin of above 14% by the end of 2026. Our free cash flow also increased significantly, reaching € 262 million. This achievement reflects our strict cost management, structural improvements, and substantial efficiency gains. Our record order book of € 7.9 billion provides a solid foundation for continued business growth. Our updated mid-term guidance reinforces our commitment to delivering sustained profitable growth from a position of strength.”

Impressive second quarter drives half-year results

The outstanding second-quarter performance of both divisions was a key driver of the excellent first-half results overall. The Rail division further accelerated its organic growth while delivering strong profitability. The Truck division, meanwhile, benefited primarily from improved cost structures, supported by rising demand. Higher revenues driven by economies of scale had a particularly positive impact on earnings.

Overall, the Knorr-Bremse Group continued to experience strong demand in the first half of 2026, with order intake of € 4,431 million (H1/2025: € 4,484 million). The order book reached a new record high of € 7,887 million as of the end of the first half-year, an increase of 7.7% (June 30, 2025: € 7,326 million). At € 4,080 million, consolidated revenues were up 3.1% on the prior-year figure of € 3,957 million thanks to a slight increase in both divisions. Adjusted for currency effects, revenues would in fact have been 2.6% higher.

The positive business development is also clearly reflected in our profitability. Operating EBIT improved significantly, rising by 13.7% to € 566 million (H1/2025: € 498 million). Compared with the prior-year period, the operating EBIT margin rose by as much as 130 basis points to 13.9% (H1/2025: 12.6%). Key factors behind this positive trend were the significant improvement in Truck division earnings and a substantial increase in Rail division EBIT.

The strong operational performance combined with the significant improvement in working capital gave the free cash flow a significant boost to € 294 million (H1/2025: € 160 million).

Both divisions deliver a strong half-year performance

Rail:

• The order intake remained at a high level at € 2,399 million (H1/2025: € 2,600 million)

• The order book rose by 6.4% to € 5,910 million (June 30, 2025: € 5,555 million)

• Revenues rose slightly to € 2,245 million (H1/2025: € 2,169 million)

• Operating EBIT improved significantly by 10.3% to € 383 million (H1/2025: € 347 million)

• As a result, the operating EBIT margin rose significantly by 110 basis points to 17.1% (H1/2025: 16.0%)

Truck:

• The order intake increased by 7.5% to € 2,026 million in the first half of the year (H1/2025: € 1,884 million)

• The order book rose significantly by 11.7% to € 1,979 million (June 30, 2025: € 1,772 million)

• Revenues improved by 2.7% to € 1,837 million (H1/2025: € 1,789 million)

• Operating EBIT rose by a substantial 21.5% to € 214 million (H1/2025: € 176 million)

• The operating EBIT margin improved to 11.7% as a result (H1/2025: 9.9%).

From successful transformation to sustainable growth

Through its BOOST strategy program, Knorr-Bremse has delivered significant improvements and achieved important milestones over the past three years, laying the foundation for a new level of entrepreneurial freedom.

Also, an extensive portfolio restructuring was part of BOOST. In this context, Knorr-Bremse concluded an agreement to sell its global HVAC business unit (heating, ventilation, and air conditioning systems for trains), Merak, with OpenGate Capital, on July 28, 2026. The closing of the transaction is subject to customary closing conditions and regulatory approvals and is expected by the end of calendar year 2026.

With its new Growth Beyond initiative, Knorr-Bremse is now focusing squarely on profitable growth. To achieve this, the company will further strengthen its core business and selectively tap into new areas of growth where it can leverage its core industrial competencies in safety, quality, and reliability. By 2030, Knorr-Bremse aims to generate approximately € 10 billion in revenue with an operating EBIT margin of around 16%, maintain a cash conversion rate above 90%, and deliver a return on capital employed of over 25%.

Guidance for 2026 raised

Based on a strong first half of 2026 and a positive outlook for the remainder of the year, Knorr-Bremse is raising its operating guidance for fiscal 2026. The assumption remains that the crisis in the Middle East will not escalate or persist, particularly with regard to supply chain disruptions. In addition to the effects of the acquisition of duagon, the guidance is based on the company’s current portfolio. The company now expects revenues of between € 8,100 million and € 8,300 million (previously: € 8,000 million to € 8,300 million), an operating EBIT margin of 14.0% to 14.5% (previously: around 14%), and free cash flow of € 750 million to € 850 million.

The full half-year report for 2026 will be released as planned on July 30, 2026 and will be available at www.knorr-bremse.com. Notes to and reconciliations with the financial indicators used can be found in the 2025 Annual Report of Knorr-Bremse AG (available under Investor Relations/Annual Report).

Key Figures of Knorr-Bremse Group

Key Figures for the Knorr-Bremse Group's divisions

The transaction involves OpenGate Capital acquiring all of Merak’s business activities and its approximately 1,500 employees, who are primarily located in Europe, North America, China, and Australia. The closing of the transaction is subject to customary closing conditions and regulatory approvals and is expected by the end of calendar year 2026.

Perella Weinberg served as exclusive financial adviser to Knorr-Bremse.

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “The first quarter showed, once again, how resilient our business is. We achieved the best Q1 operating EBIT margin (13.5%) in five years in a persistently difficult truck market. Our excellent return on capital employed (ROCE) of 22% underscores that we are consistently investing in the right areas. Together with our very solid financial basis overall, we created excellent conditions to successfully drive Knorr-Bremse forward in demanding markets.”

Globally, the political and economic environment remains uncertain and unstable. Knorr-Bremse is successfully navigating current challenges with discipline and remarkable resilience. This is borne out in the strong set of results for the first quarter, which show a substantial improvement in profitability.

Demand remains robust: Order intake maintained a high level in the first quarter of 2026 at € 2,229 million in a currently uncertain market environment, particularly in the Truck segment (Q1/2025: € 2,376 million). The order book rose to € 7,813 million as of the end of the quarter (March 31, 2025: € 7,443 million), an increase of as much as 5.0%. Despite significant exchange rate effects as compared with the previous year, consolidated revenues remained largely stable at € 1,937 million (Q1/2025: € 1,958 million); organically, this corresponds to a 2.1% increase in revenues.

Knorr-Bremse recorded a very high level of profitability in particular in the first quarter. Operating EBIT improved to € 261 million. The operating EBIT margin rose by 140 basis points to 13.5% (Q1/2025: 12.1%), reaching the highest Q1 level in five years. Free cash flow amounted to € 32 million (Q1/2025: € 15 million).

Highest Q1 profitability for both divisions in five years.

Rail Vehicle Systems Division (RVS):

• Order intake was robust at € 1,263 million (Q1/2025: € 1,312 million)

• Increasing by 7.3% to € 5,933 million, the order book reached a new all-time high (March 31, 2025: € 5,530 million), mainly on the back of strong development in the Asia-Pacific region and in the U.S. market

• Even including exchange effects, revenues came to € 1,060 million (Q1/2025: € 1,065 million); organically, this corresponds to an improvement of nearly 1%

• Operating EBIT improved to € 175 million compared with the figure for the year-earlier period (Q1/2025: € 166 million)

• At 16.5%, the operating EBIT margin was 90 basis points above the prior-year level (Q1/2025: 15.6%)

Commercial Vehicle Systems Division (CVS)

• Considering the market environment, the order intake was robust at € 964 million (Q1/2025: € 1,065 million)

• The order book as of March 31, 2026 amounted to € 1,882 million (March 31, 2025: € 1,914 million); organically, it rose by a slight 0.7% on the prior-year figure

• Due exclusively to currency factors, revenues of € 878 million remained slightly below the prior-year quarter (Q1/2025: € 894 million), recording strong organic growth of 3.6%

• Operating EBIT improved by a substantial 19.2% to € 101 million (Q1/2025: € 85 million) thanks to rigorous implementation of the BOOST and efficiency measures

• The operating EBIT margin increased equally robustly to 11.5%, a significant increase of 200 basis points (Q1/2025: 9.5%).

Guidance

Knorr-Bremse is confirming its guidance for the 2026 fiscal year. The company generally assumes that the geopolitical and economic backdrop will remain essentially stable. Assuming that the crisis in the Middle East does not escalate or persist, particularly with regard to supply chain disruptions, Knorr-Bremse expects revenues of between € 8,000 million and € 8,300 million for the current year, an operating EBIT margin of around 14% and free cash flow between € 750 million and € 850 million. These figures are based on the assumption that exchange rates will remain essentially stable at February 2026 levels. 

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 2025 Annual Report of Knorr-Bremse AG (available under Investor Relations/Annual Report).

Key Figures of Knorr-Bremse Group

Key Figures for the Knorr-Bremse Group's divisions

The index selection is based on the annual S&P Global Corporate Sustainability Assessment (CSA). Only companies that rank among the most sustainable in their respective industries are included in the Best‑in‑Class indices. Knorr‑Bremse significantly improved its performance in this internationally recognized ESG evaluation (Environment, Social and Governance), increasing its score by nine points year on year. As a result, Knorr‑Bremse now ranks among the top five percent of companies worldwide in the ‘Machinery and Electrical Equipment’ industry (as of December 2025).

Dr. Sigrid Nikutta, who had been a member of the Supervisory Board since 2022, decided not to stand for re-election. The shareholders elected Dr. Christian Schlögel as her successor. A recognized digitalization expert, he brings many years of leadership experience in international technology and industrial companies and will strengthen the Supervisory Board, particularly with his expertise in digital transformation, software, and artificial intelligence.

The Annual General Meeting was again held virtually. A total of 89.9% of the share capital of Knorr-Bremse was represented at the Annual General Meeting.

A recording of the speeches given by the Chairman of the Supervisory Board and the members of the Executive Board, and the detailed results of the votes on the individual agenda items at the meeting are available at www.ir.knorr-bremse.com.

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “By extending his contract early the Supervisory Board underscores complete confidence in Frank Weber’s work. I, for one, am delighted that he will remain a leading light at the company in the coming years, ensuring continuity within the Executive Board. As Chief Financial Officer, Frank Weber is one of the key driving forces behind our strong financial performance, thereby laying the groundwork for targeted investments in future-oriented areas and expanding our leading market position.”

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “I would like to thank the Supervisory Board for the trust placed in me. Together, we have made Knorr-Bremse more financially resilient in recent years, clearly aligned our capital allocation with our strategic goals, and driven up our profitability and cash flow generation. I intend to build on this progress and further advance Knorr-Bremse’s successful development together with the Executive Board and our colleagues worldwide.”

Dr. Reinhard Ploss, Chairman of the Supervisory Board of Knorr-Bremse AG:
“On behalf of the full Supervisory Board, I would like to warmly thank Ms. Nikutta for her extraordinary commitment and the constructive working relationship in recent years. During her tenure, she made a valuable contribution with her expertise and outlook, also successfully overseeing Knorr-Bremse’s entry into the new rail control, command, and signaling technology business segment. To take her place we are proposing Dr. Christian Schlögel, a proven expert in digitalization, for election to the Supervisory Board. His experience and innovative capacity are an excellent fit with Knorr-Bremse’s strategic objectives. We are confident that Dr. Schlögel can provide valuable impetus for our company’s continued development.”

The dividend payment and the new elections to the Supervisory Board require the shareholders’ approval at the virtual Annual General Meeting, for which invitations have been sent for April 30, 2026: Investor Relations/Annual General Meeting.

The 2025 Annual Report of Knorr-Bremse AG was published today and is available to download at www.knorr-bremse.com as of this moment.

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “The development of our KPIs in the 2025 fiscal year underscores the extent of our company’s sustainable earnings capacity and considerable financial stability. We demonstrated our financial strength with a significant increase in free cash flow to over € 790 million, a cash conversion rate well above 100% once more, and a further improvement in the operating EBIT margin to 13%. The strong year-end results were bolstered by significant contributions in the fourth quarter. This is all down to our systematic cost-cutting and portfolio optimization as part of our BOOST strategy. At the forefront of our priorities is lowering our fixed costs. In total, more than 10,000 measures are still being implemented with the aim of deploying capital and resources in a more focused manner and securing structural efficiency gains in the long term.”

Sizable margin increase and record free cash flow

2025 was another year full of uncertainties. Despite these challenges, Knorr-Bremse developed very successfully in terms of revenues, earnings and cash flow, driven by the consistent implementation of the BOOST strategy with a clear focus on portfolio optimization, cost discipline and lowering the break-even point. The full effect of the BOOST measures on performance was especially evident in the fourth quarter. Stringent execution of the initiatives to increase earnings and enhance efficiency resulted in significant margin expansion and a record free cash flow.

Order intake at € 8,417 million was nearly 3 % higher than the prior-year figure (previous year: € 8,186 million), with the higher order intake in the Rail Division compensating for falling demand in the commercial vehicle business. The ratio of incoming orders to revenues (book-to-bill ratio) increased slightly year over year to 1.08 in the 2025 fiscal year, providing a solid basis for capacity utilization in 2026 and beyond. The order book stood at € 7,362 million as of December 31, 2025 (previous year: € 7,182 million), continuing to climb on the back of the very healthy level of orders in the rail vehicle business.

Consolidated revenues in organic terms increased by 1.9% despite an extremely challenging downturn in the North American commercial vehicles market. Even after the disposals of R.H. Sheppard and GT Emissions Systems in the Truck Division and negative impacts caused by currency effects, revenues remained essentially stable in the 2025 fiscal year at € 7,817 million (previous year: € 7,883 million). The revenues of KB Signaling, acquired in 2024, which were now taken into account for a full year, making a sizable contribution to this figure. Organic revenue growth in the fourth quarter came in at a robust 6.4%.

In the 2025 fiscal year, operating EBIT was up by € 50 million year over year to a total of € 1,016 million (previous year: € 966 million), with the operating EBIT margin registering a significant improvement to 13.0% compared with the previous year (12.3%). This increase clearly reflects the improvement in the cost structures, staff adjustments, and the portfolio optimization. The fourth quarter in particular saw a substantial widening of the operating EBIT margin in the two divisions. On a quarterly basis, profitability increased by 140 base points year over year to 17.0% (Q4/2024: 15.6%) for Rail and by 180 base points to 11.3% for Truck (Q4/2024: 9.5%).

Free cash flow continuously improved in the year just ended, reaching € 471 million in the last quarter of 2025 alone. Full-year operating free cash flow hit a new all-time high of € 790 million. This is mainly attributable to the significant improvement in the cash flow from operating activities together with lower capital expenditures. The cash conversion rate (free cash flow relative to net income) reached 131% on an operating basis due to the strong earnings – a significantly higher level than in the previous year (113%).

Rail Division achieves new records; Truck Division maintains stable double-digit return despite challenging market situation

The Rail Division (RVS) turned in a very strong performance again in 2025, accounting for a large share of Knorr-Bremse’s results. This was primarily attributable to the positive order trend recorded in all regions, due to demand in the Asian and North American markets in particular, and the very favorable development of KB Signaling.

• Order intake rose by over 7% to € 4,774 million (previous year: € 4,440 million).

• The order book reached a new record of € 5,576 million as of December 31, 2025 (December 31, 2024: € 5,352 million).

• Revenues were also up on the previous year, hitting a new all-time high of € 4,316 million (previous year: € 4,044 million).

• Operating EBIT recorded a substantial increase of over 10% to € 713 million (previous year: € 630 million).

• The operating EBIT margin rose to 16.5% (previous year: 15.6%).

The Truck Division (CVS) performed well in a very challenging market environment and recorded only moderate declines year over year, mainly supported by higher demand in Europe, a robust aftermarket business, and the cost control measures introduced.

• Order intake amounted to € 3,644 million (previous year: € 3,748 million).

• Despite divestments, the order book as of December 31, 2025 stood at € 1,788 million (December 31, 2024: € 1,832 million).

• At € 3,503 million, revenues remained moderately below the prior-year figure as a result of market and portfolio factors (previous year: € 3,842 million).

• Operating EBIT came in at € 363 million (previous year: € 401 million).

• At 10.4%, the operating EBIT margin remained stable at the previous year’s level (10.4%).

BOOST program advancing, with portfolio optimization and focused investments strengthening growth strategy

In the first phase of the BOOST program, Knorr-Bremse concentrated on making structural and organizational improvements. Since 2023, the company has been systematically cutting costs and optimizing its portfolio in order to safeguard its position as the global market leader in the long term and enhance its performance. The business units Knorr-Bremse has sold to date have generated revenue in excess of €400 million. The company will continue optimizing its portfolio in the current year. The achievements were already visible in the fiscal year now ended and will continue to have a positive impact on Knorr-Bremse’s earnings in 2026 and beyond.

In the second phase of the BOOST program, Knorr-Bremse is focusing on increasing attractive growth. Knorr-Bremse has already expanded its business in profitable cutting-edge fields with high-margin acquisitions, such as the acquisition of KB Signaling in 2024 and the recent purchases of duagon Group and TRAVIS Road Services. duagon will broaden the offering of electronics and software for the rail industry, while TRAVIS will expand aftermarket solutions for commercial vehicles as a digital platform solution.

Overall, Knorr-Bremse is also placing strong emphasis on its digitalization strategy: In addition to its own center for artificial intelligence, currently being set up in India, Knorr-Bremse is driving forward its AI transformation with Amazon Web Services (AWS). The aim of this project is to use powerful AI systems to make the company even faster and more agile in the long term (see press release dated February 16, 2026).

Guidance for 2026

Assuming that the geopolitical and macroeconomic environments remain stable, the company expects revenues between € 8,000 million and € 8,300 million, an operating EBIT margin of around 14%, and free cash flow between € 750 million and € 850 million for the 2026 fiscal year.

In order to remain strategically well positioned beyond 2026 and continue to grow profitably in the long term, Knorr-Bremse may incur restructuring costs of up to € 30 million, among other things to optimize its global production footprint.

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 19, 2026.

A video recording of the annual press conference with Chief Executive Officer (CEO) Marc Llistosella and Chief Financial Officer (CFO) Frank Weber on the preliminary figures for the 2025 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 Weber on the preliminary figures for the 2025 fiscal year will be held today at 1 p.m. (CET). The presentations are available on our website at www.knorr-bremse.com.

Key Figures of Knorr-Bremse Group

Key Figures for the Knorr-Bremse Group's divisions

Knorr-Bremse has set ambitious climate targets and aims to achieve net-zero emissions (Scope 1–3) by 2050. The interim targets validated by the Science Based Target initiative (SBTi) for 2030 cover production, the supply chain, and product use. As an internationally successful player in the mobility sector, Knorr-Bremse actively supports its customers’ efforts toward sustainable transportation with solutions for safe, efficient, and environmentally friendly mobility on rail and road.

In the 2025 CDP rating, the company improved from “A-” to the highest score “A,” placing it among the leaders in transparency and climate action. Only four percent of the more than 22,000 companies assessed achieved this distinction in the current rating. CDP operates the most comprehensive environmental database, collecting annual data on CO₂ emissions, climate risks, and reduction targets from companies, thereby creating a data-driven foundation for environmentally responsible decisions.

Already in early December last year, Knorr-Bremse also achieved a significantly improved score in the S&P Global Corporate Sustainability Assessment (CSA) compared to the previous year. The overall score of 64 points represents an increase of nine points year-on-year. This positions Knorr-Bremse among the top five percent globally in the “Machinery and Electrical Equipment” sector (as of December 2025). The improvement is due partly to Knorr-Bremse’s successful reduction of CO₂ emissions and partly to the company’s expanded and more transparent sustainability reporting. Through its annual analysis of sustainability practices, S&P Global CSA helps companies worldwide assess and further develop their sustainability performance based on industry-specific economic, environmental, and social criteria.

Further information on Knorr-Bremse’s sustainability strategy can be found at: Knorr-Bremse | Sustainability.

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “Knorr-Bremse has done its homework and has a very solid financial footing. In times of geopolitical and macroeconomic uncertainty, this gives us freedom and represents a clear competitive advantage. Our best profitability in 16 quarters – 13.3% in the past quarter – confirms this impressively. The focus last year was on preparing and implementing adjustment of the portfolio. This year, we’re adapting our structures so that we can address the issue of sustainable growth and expansion more strongly in the coming year.”

The persistently high demand in the Rail division and the continued solid performance of the Truck division despite market weakness clearly underline Knorr-Bremse’s resilience. In particular, the Rail Vehicle Systems (RVS) division made a substantial contribution to our overall success.

The order intake improved significantly year-on-year to € 6,440 million (9M 2024: € 6,182 million). The order book increased by 4.4% to € 7,368 million as at September 30, 2025 (September 30, 2024: € 7,058 million). Organically, this even equates to a rise of 8.2%. Consolidated revenues were € 5,839 million and thus largely stable compared with the first nine months of 2024 despite considerable exchange rate effects (9M 2024: € 5,897 million). Organically, revenues rose slightly by 0.4%.

Consolidated earnings improved on the back of the higher revenues in the Rail division, resultant economies of scale, targeted efficiency measures and successes in restructuring of the portfolio. Operating EBIT rose by 3.3% to € 749 million (9M 2024: € 725 million). The operating EBIT margin improved accordingly from 12.3% in the prior-year period to 12.8%, an increase of 0.5 percentage points. In the third quarter alone, the operating EBIT margin improved by one percentage point to 13.3%. Free cash flow rose positively in the first nine months thanks to the good operating performance and working capital optimization, reaching € 319 million, an increase of almost 30% despite the negative impact of exchange rate effects (9M 2024: EUR 248 million).

Overview of Development in Both Divisions

Rail Vehicle Systems Division (RVS):

• Order intake increased due to the persistently high demand in the global rail market, up a significant 13.5% to € 3,773 million (9M 2024: € 3,323 million)

• The order book increased to € 5,659 million (September 30, 2024: € 5,222 million)

• Revenues improved 8.2% to € 3,219 million (9M 2024: € 2,976 million)

• Operating EBIT rose by a significant 13.8% to € 526 million (9M 2024: € 463 million)

• The operating EBIT margin increased to 16.4% (9M 2024: 15.5%)

Commercial Vehicle Systems Division (CVS):

• Order intake amounted to € 2,667 million (9M 2024: € 2,861 million) and organically was at the previous year’s level

• Given the challenges in the truck market, the order book remained at a high level of € 1,710 million as at September 30, 2025 (September 30, 2024: € 1,838 million)

• Revenues in the first nine months were € 2,622 million, 10.3% behind the comparable period of the previous year (9M 2024: € 2,922 million) due to market-related factors and exchange rate effects as well as portfolio adjustments; organically, revenues only fell by 3.3%

• Operating EBIT declined to € 264 million, mainly due to volumes (9M 2024: € 314 million)

• Profitability was almost maintained despite the market-driven reduction in volume and stood at 10.1% (9M/2024: 10.7%)

Operating Guidance for 2025 confirmed

Knorr-Bremse confirms its operating guidance for the 2025 fiscal year. This is based on the assumption of stable geopolitical and macroeconomic environments, exchange rates at the level of October 2025 and no major impacts from possible tariffs. Knorr-Bremse expects revenues of between € 7,800 million and € 8,100 million, an operating EBIT margin of 12.5% to 13.5% and a free cash flow of between € 700 million and € 800 million.

The interim report for the January to September 2025 period is available on the Knorr-Bremse AG website. Notes to and reconciliations with the financial indicators used can be found in the 2024 Annual Report of Knorr-Bremse AG.

Key Figures of Knorr-Bremse Group

Key Figures for the Knorr-Bremse Group's divisions

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “We lifted our operating EBIT margin by 30 basis points in the first half of the year to 12.6% despite the challenging market conditions – a fantastic team achievement. In addition, the encouraging increase in the free cash flow to € 160 million, which we achieved through working capital measures and thanks to our strong performance, is testament to our financial strength. We expect the German government’s investment program, among other things, to have a positive effect on the development of business going forward. We are also confident that we will be able to compensate for the announced US tariffs.”

Geopolitical and economic challenges remained dominant forces in the first half of 2025, leading to market uncertainty in all regions worldwide. Knorr-Bremse continued to demonstrate a high degree of resilience and flexibility in this environment with its decentralized structure. Compared with the first half of 2024, order intake was up by 5.8% to € 4,484 million (H1/2024: € 4,239 million). This increase is due to three factors in particular: rising demand in the rail vehicle market, considerable growth in Asia and North America as well as strong performance at the acquired U.S.-based company KB Signaling, which more than compensated for the disposals of business units and currency effects.

At € 7,326 million at the end of the first half year (June 30, 2024: € 6,848 million), the order book nearly matched the record level achieved in the prior quarter (€ 7,443 million). This is equivalent to an increase of 7.0% compared with the previous year. Despite challenging market conditions, consolidated revenues were just shy of the prior-year level at € 3,957 million (H1/2024: € 3,987 million), with the substantial increase in revenues in the rail vehicle business almost fully offsetting the sharper decline in sales in the commercial vehicle business and effects from disposals of business units.

Operating EBIT recorded growth of 1.6% to € 498 million (H1/2024: € 490 million), mainly underpinned by the Rail Vehicle Systems division, which continues to benefit from the positive development in the Asia-Pacific market in particular. The operating EBIT margin increased to 12.6% (H1/2024: 12.3%). The strong operational performance and ongoing working capital optimization gave the free cash flow a significant boost to € 160 million (H1/2024: € 64 million).

Overview of H1 2025 Developments in Both Divisions

Rail Vehicle Systems Division (RVS):

• The order intake increased significantly by 18.0% year-on-year to € 2,600 million (H1/2024: € 2,202 million), buoyed by brisk demand in all regions and underpinned by KB Signaling.
• The order book also saw considerable growth of 13.8%, rising to € 5,555 million (June 30, 2024: € 4,881 million).
• Revenues rose by 9.5% to € 2,169 million (H1/2024: € 1,981 million).
• Operating EBIT improved by 14.4% to € 347 million (H1/2024: € 304 million).
• As a result, the operating EBIT margin rose by 70 basis points to 16.0% (H1/2024: 15.3%).

Commercial Vehicle Systems Division (CVS):

• The order intake stood at € 1,884 million (H1/2024: € 2,038 million).
• The order book amounted to € 1,772 million (June 30, 2024: € 1,969 million).
• As expected, revenues declined to € 1,789 million (H1/2024: € 2,007 million) due to market and currency factors as well as to the deconsolidation of the investments in GT and Sheppard.
• Operating EBIT fell to € 176 million only (H1/2024: € 223 million) on the back of pinpointed countermeasures.
• The operating EBIT margin increased robustly to 9.9% (H1/2024: 11.1%).
   

Guidance

Knorr-Bremse confirms its operating EBIT and cash flow guidance for the 2025 fiscal year. The expected revenue range has been adjusted due to currency translation effects solely. Compared to the previously assumed FX level of February 2025, the euro has strengthened considerably against many other currencies. The guidance continues to be based on the assumption of stable geopolitical and macroeconomic environments and no major impacts from possible tariffs. There is unchanged potential for restructuring in a number of regions which will lead to costs of approximately € 75 million in 2025. As a result, the company now expects revenues between € 7,800 million and € 8,100 million (previously € 8,100 million and € 8,400 million) as well as an unchanged operating EBIT margin between 12.5% and 13.5% and unchanged free cash flow between € 700 million and € 800 million.

The interim report for the January to June 2025 period is available at www.knorr-bremse.com. Notes to and reconciliations with the financial indicators used can be found in the 2024 Annual Report of Knorr-Bremse AG (available under Investor Relations/Annual Report).

Key Figures of Knorr-Bremse Group

Key Figures for the Knorr-Bremse Group's divisions

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “We have a rock-solid financial footing. Our finances are secured over the long term, and we are posting an excellent equity ratio. In the medium term, we expect the new German government’s economic stimulus program to provide momentum for business in both divisions. The capital expenditure on infrastructure will drive new orders for commercial and rail vehicles. Our globally distinctive localization strategy greatly supports our ability to act flexibly and our containment of any tariff-related impacts. The free cash flow of € 15 million, which is extraordinarily high for the first quarter, is due to strong operational performance and, to a large extent, the ongoing optimization of working capital.”

The geopolitical and economic challenges are persisting. Thanks to its decentralized basis, Knorr-Bremse is still demonstrating itself to be highly resilient. As explained in the notification on April 29, 2025, the order intake has risen by an impressive 12.5% year over year to € 2,376 million. There are positive effects on this from the newly acquired KB Signaling business as well as pre-emptive effects due to the current tariff issue.

The order book increased to € 7,443 million (March 31, 2024: € 6,728 million), representing 10.6% growth. The consolidated revenues of € 1,958 million exhibited largely steady development from the previous year (Q1/2024: € 1,974 million) and recorded a slight, organic increase. The Rail Vehicle Systems (RVS) division was therefore more than able to compensate for the market-driven revenue developments in the Commercial Vehicle Systems (CVS) division in the previous year.

With operating EBIT of € 236 million (Q1/2024: € 238 million), too, the Rail Vehicle Systems division was able to offset the challenging truck markets for reasons including in particular the positive development in the Asia–Pacific market and the good mix between OE and aftermarket business. The operating EBIT margin remained at the previous year’s level at 12.1% (Q1/2024: 12.1%). Free cash flow rose to € 15 million due to good business performance, ongoing working capital optimization, and a tax refund (Q1/2024: € -95 million), which is extraordinarily strong for the first quarter.

Overview of Strong Development in Both Divisions

Rail Vehicle Systems Division (RVS):

• Order intake climbed organically though it was also energized by KB Signaling, rising by 23.5% to € 1,312 million (Q1/2024: € 1,062 million)
• The order book was also supported by KB Signaling and increased by 16.7% to € 5,530 million (March 31, 2024: € 4,739 million)
• Revenue was up a significant 10.5% at € 1,065 million (Q1/2024: € 964 million)
• Operating EBIT improved by 13.9% from the corresponding prior-year figure to € 166 million (Q1/2024: € 145 million)
• The operating EBIT margin saw a significant 50 base point increase to 15.6% (Q1/2024: 15.1%)

Commercial Vehicle Systems Division (CVS)

• Order intake increased slightly to € 1,065 million (Q1/2024: € 1,051 million)
• The order book, at € 1,914 million as at March 31, 2025, remained nearly stable (March 31, 2024: € 1,991 million)
• Revenues in the first quarter saw an expected decline for market-related reasons and due to the deconsolidation of GT and Sheppard, going down to € 894 million (Q1/2024: € 1,011 million)
• Operating EBIT went down to € 85 million (Q1/2024: € 111 million)
• The operating EBIT margin decreased accordingly to 9.5% (Q1/2024: 11.0%)

Guidance

Based on the exchange rate levels of February 2025 and based on the assumption that the geopolitical and macroeconomic environments remain mostly stable and that there are no larger impacts from possible tariffs, Knorr-Bremse is confirming its guidance for the 2025 fiscal year. The weakness in the American truck market should be mitigated by stronger European business. Moreover, there is higher potential for restructuring in a number of regions which now results in costs of approximately € 75 million. Accordingly, the company expects revenues between € 8,100 million and € 8,400 million, an operating EBIT margin between 12.5% and 13.5%, and free cash flow between € 700 million and € 800 million.

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 2024 Annual Report of Knorr-Bremse AG (available under Investor Relations/Annual Report).

Knorr-Bremse Group Key Performance Indicators:

Key Figures for the Knorr-Bremse Divisions:

Dr. Reinhard Ploss, the Chairman of the Supervisory Board of Knorr-Bremse AG, said: “Stephan Sturm will be an outstanding addition to and enrichment of the Supervisory Board thanks to his extensive and many years of management experience. Furthermore, his candidacy is evidence of the Foundation’s clear and strong commitment to our company. It creates stability and dependability for Knorr-Bremse’s ongoing development. We are greatly looking forward to the close and trusting collaboration with Mr. Sturm on the Supervisory Board. On behalf of the full Supervisory Board and our company’s workforce, I would like to thank Dr. Weimer for the extraordinary commitment and willingness with which he contributed his extensive, international experience for the benefit of our company in challenging times. All of us highly appreciated our collaboration and exchange with him.”

Stephan Sturm was Chairman of the Management Board of the Fresenius Group until 2022 before becoming the CEO of the Heinz Hermann Thiele Family Foundation in 2023. Between 2015 and 2021, he sat on the Supervisory Board of Deutsche Lufthansa, most recently as Chairman of its Audit Committee.

The dividend payment and the new election to the Supervisory Board require the shareholders’ approval at the virtual Annual General Meeting, for which invitations have been sent for April 30, 2025: Investor Relations/Annual General Meeting.

Information about the previous fiscal year can be found in the 2024 Annual Report, which is available to download at www.knorr-bremse.com as of this moment.

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “All in all, we are in top financial shape. Our financial structure is excellent, our equity is high, and we have long-term financing – a solid basis for mastering the current challenging market environment and leveraging growth opportunities in a targeted way. Our BOOST 2026 measures are reaping the desired effects and we are making the progress we wanted. Cash is King: Profitability is increasing and we achieved the highest operating free cash flow in our 120-year company history. Given our strong operating performance, we are aiming to distribute an increasing dividend for the 2024 fiscal year.”

Measures having an impact, profitability rises strongly, and free cash flow at an all-time high

Knorr-Bremse achieved strong results thanks to its substantial resilience and the progress made under the BOOST 2026 program: Consolidated revenues remained virtually stable at € 7,883 million (previous year: € 7,926 million) despite the significant weakening of the truck market and various company sales. In particular, growth outside Europe made a positive contribution to that. In organic terms – i.e., excluding the impact of the company acquisitions and sales in the 2024 fiscal year and excluding currency effects – revenues even increased by 0.7%. Continued strong demand, particularly in the Rail Division, made a significant contribution to that. The BOOST 2026 measures with a specific focus on revenues, cost discipline, and cash flow continued to prove valid and effective: The operating EBIT margin increased sharply to 12.3% (previous year: 11.3%) and operating EBIT rose to € 966 million (previous year: € 893 million). Knorr-Bremse achieved an operating free cash flow (i.e., excluding the one-time effects of the sale-and-leaseback transaction in 2019) of € 730 million, a new record high in the company’s history (previous year: € 552 million). The cash conversion rate (free cash flow relative to profit) soared to 113% (previous year: 96%) due to the good result and excluding the non-cash effects from portfolio adjustment and is thus even above the target range.

In view of the company’s very good performance, the Supervisory Board of Knorr-Bremse AG renewed the contract of CEO Marc Llistosella by five years at the end of January 2025, thus strengthening continuity on the Group’s Executive Board.

Order intake and order book remain high

Customer demand, especially in the Rail Division, remained strong in the past fiscal year. Order intake was almost at the prior-year level, falling by just –0.8% to € 8,186 million (previous year: € 8,252 million). The order book reached a new all-time high of € 7,182 million as of December 31, 2024, rising year on year by 1.4% (organically by 3.8%) (previous year: € 7,082 million), thus providing a very good springboard for the current fiscal year 2025 and beyond.

Historic highs in the Rail Division; Truck Division posts an improved double-digit return despite the economic crisis

The Rail Vehicle Systems Division (RVS) again demonstrated its economic strength – also thanks to a resurgence in passenger numbers – both in the OE and the aftermarket segments. The performance of the Rail division thus contributed substantially to Knorr-Bremse’s good overall result.

• Order intake rose significantly to € 4,440 million (previous year: € 4,043 million)
• The order book increased to € 5,352 million (December 31, 2023: € 5,132 million)
• Revenues surpassed the € 4 billion mark for the first time, reaching a record level of € 4,044 million (previous year: € 3,748 million)
• Operating EBIT improved sharply by 18% to € 630 million (previous year: € 536 million)
• The operating EBIT margin increased to 15.6% (previous year: 14.3%)

The Commercial Vehicle Systems Division (CVS) had to contend with massive market headwinds. Despite the expected difficult market environment in the commercial vehicle industry in the major regions (Europe, North America and in China), the Truck Division proved robust in the past fiscal year and achieved remarkable results under these circumstances:

• Order intake amounted to € 3,748 million (previous year: € 4,212 million)
• The order book was € 1,832 million as of December 31, 2024 (December 31, 2023: € 1,952 million)
• Revenues remained below the figure for fiscal year 2023 at € 3,842 million for market-related reasons (previous year: € 4,180 million)
• Operating EBIT only declined slightly by just under 4% to € 401 million (previous year: € 417 million)
• The operating EBIT margin even bucked the market trend, improving to 10.4% (previous year: 10.0%)

Portfolio adjustment fully on track: more than 60% of the revenue volume from the planned sales already achieved at an early stage

In the past fiscal year, Knorr-Bremse made important progress in actively optimizing its portfolio by focusing on core competencies and performance. Four sales were successfully closed since the beginning of 2024: Kiepe Electric from the RVS Division and Safety Direct, GT Emission Systems, and R.H. Sheppard from the CVS Division. As a result, more than 60% of the revenue volume targeted for sale by 2026 has already been achieved.

The acquisition of KB Signaling in September opens up new opportunities for Knorr-Bremse in the North American market. The successful entry into the attractive and high-margin signaling technology business in the Rail Division (control, command, and signaling (CCS)) means Knorr-Bremse can push ahead with creating its own value added and generate sustainable growth with new and digital solutions.

The company is also making progress in implementing structural improvements. The clear structure of global responsibilities, the prioritization of projects, or efficient global controlling are just some of the measures that significantly support the goal of improving margins under the BOOST 2026 program. Furthermore, additional efficiency measures, such as expanding global shared services or strengthening sites with better cost structures, will also increase Knorr-Bremse’s profitability sustainably in the medium term.

Guidance for 2025

Assuming that exchange rates remain stable and that the geopolitical and macroeconomic environments remain mostly stable, the company expects revenues between € 8,100 million and € 8,400 million, an operating EBIT margin of 12.5% to 13.5%, and free cash flow between € 700 million and € 800 million for the 2025 fiscal year.

In order to remain strategically well positioned after 2026 and to keep on growing profitably in the long term, potential restructuring costs of up to € 50 million in 2025, among other things to optimize its global production footprint, could occur.

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 20, 2025.

A video recording of the annual press conference with CEO Marc Llistosella and CFO Frank Weber on the preliminary figures for the 2024 fiscal year will be provided in the Knorr-Bremse Newsroom section of our website.

A webcast for investors with CEO Marc Llistosella and CFO Frank Weber on the preliminary figures for the 2024 fiscal year will be held today at 1 p.m. (CET). The presentations are available on our website at www.knorr-bremse.com.

Key Figures of Knorr-Bremse Group

Key Figures for the Knorr-Bremse Group's divisions

Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “I am pleased to have the opportunity to continue shaping the future of Knorr-Bremse together with my Executive Board team and colleagues around the world. We are in the middle of the company’s strategic transformation and have set out to do a great deal to make Knorr-Bremse fit for the future in all areas. Our clear priorities are profitability, sustainable growth and added value.  We are implementing our strategy with determination. I give my thanks to Reinhard Ploss and the entire Supervisory Board for their confidence in me and look forward to continuing working together closely and trustingly.”

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

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

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

Overview of Developments in Both Divisions

Rail Vehicle Systems Division (RVS):

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

Commercial Vehicle Systems Division (CVS):

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

Guidance for 2024 Raised Slightly

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

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

Key Figures of Knorr-Bremse Group

Key Figures for the Knorr-Bremse Group's divisions

¹ Each adjusted for Kiepe Electric
² Adjusted in 2023

Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “Our revenue-boosting and efficiency measures are proving to be extremely effective. The significant and, most importantly, continuous improvement of our margins is the best evidence of this. Accordingly, free cash flow has improved significantly as well. We are working hard to maintain this positive trend.” 

With its results for the first half of 2024, Knorr-Bremse is clearly demonstrating its above-average performance as well as the resilience that is characteristic of the company. The order intake was € 4,239 million and remained stable in comparison with the previous year (H1 23: € 4,236 million) thanks to the continued high demand in the Rail Vehicle Systems division and despite the slowdown in the truck market. The order book as at June 30, 2024, adjusted for Kiepe Electric, had risen to € 6,848 million (June 30, 2023: € 6,522 million excluding Kiepe Electric). Consolidated revenues improved 2% to € 3,987 million (H1 23: € 3,917 million).

Alongside positive economies of scale from higher revenues, the targeted efficiency measures and attractive new contracts made a positive impact on the operating EBIT of € 490 million, a significant 18.0% boost year over year. This resulted in the operating EBIT margin improving from 10.6% in the previous year’s period to 12.3%, a significant increase of 170 basis points. In terms of free cash flow, Knorr-Bremse also saw a significant year-over-year increase, reaching € 64 million in the first half of the year (H1 23: € ‑165 million).

Overview of H1 2024 Developments in Both Divisions

Rail Vehicle Systems Division (RVS):

• Order intake rose to € 2,202 million (H1 23: € 2,025 million) thanks to unabated strong demand in the global rail market
• The order book, adjusted for Kiepe Electric, increased to € 4,881 million (June 30, 2023: € 4,461 million excluding Kiepe Electric).
• Revenue was up a significant 9.2% at € 1,981 million (H1 23: € 1,813 million).
• Operating EBIT improved significantly and rose 20.0% to € 304 million (H1 23: € 253 million)
• The operating EBIT margin increased robustly to 15.3% (H1 23: 14.0%)

Commercial Vehicle Systems Division (CVS):

• Order intake amounted to € 2,038 million (H1 23: € 2,212 million).
• The order book reached € 1,969 million as of June 30, 2024, remaining at a high level (June 30, 2023: € 2,063 million).
• Revenues were at € 2,007 million in the first half of the year, slightly down compared with the previous year (H1 23: € 2,105 million)
• Operating EBIT rose by a significant 15.5% to € 223 million (H1 23: € 193 million).
• The operating EBIT margin improved to 11.1% (H1 23: 9.2%)
   

Continuity on the Executive Board: Bernd Spies’s Contract Renewed

The Supervisory Board of Knorr-Bremse AG ensured continuity in the Executive Board team in June 2024 by announcing it would renew the contract of Bernd Spies (aged 58) as an Executive Board member. Effective March 2025, Bernd Spies will be responsible for the Commercial Vehicle Systems division globally for a further five years and will be able to keep driving the development of the truck division consistently (see press release from June 26, 2024).

Increased guidance confirmed

Knorr-Bremse raised its guidance forecasts for the current 2024 fiscal year on July 29, 2024 (see press release from July 29, 2024). The company expects revenues between €7,700 million and €8,000 million, an operating EBIT margin between 11.5% and 13.0%, and a free cash flow between €550 million and €650 million.

This guidance does not take into account the acquisition of the rail signalling technology business of Alstom in North America, which has yet to be completed.

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

Key Figures of Knorr-Bremse Group

¹ Each adjusted for order book of Kiepe companies
² Adjusted in 2023

Key Figures for the Knorr-Bremse Group's divisions

Marc Llistosella, Chief Executive Officer (CEO) of Knorr-Bremse AG: “We are very happy with the strong start in 2024. Not only did we bring in solid financial results, but we also achieved the first important milestones of our BOOST 2026 strategy program. The sales of Kiepe Electric and SafetyDirect are evidence of our successful portfolio optimization. At the same time, we are determinedly carrying out a transformation of the Group, and the recently announced acquisition of Alstom’s rail signaling technology business in North America is a good example of this. The purchase is a boost for our rail business and is particularly valuable for us thanks to the promising market development, high margins, and its very profitable service business.”

Frank Weber, Chief Financial Officer (CFO) of Knorr-Bremse AG: “The revenue increase and strong margin development in the first quarter are a good basis for the current fiscal year.  They reflect our variety of efficiency-raising measures as well as successful pricing adjustments. Knorr-Bremse has a strong balance sheet, which provides a high degree of flexibility for us operationally. The acquisition that we are working toward should not impact our strong credit rating.”

Despite the still-challenging economic market conditions, Knorr-Bremse successfully recorded very good order intake in the first three months of 2024. Its two divisions each received orders valued at over one billion euros. Consequently, the total order intake reached € 2,112 million (Q1 2023: € 2,176 million), thanks in particular to the robust rail market and its extraordinarily high demand. The order book, adjusted for Kiepe Electric, grew to € 6,728 million as at March 31, 2024 (March 31, 2023: € 6,513 million excluding Kiepe Electric). Consolidated revenues improved 3.5% to € 1,974 million (Q1 2023: € 1,908 million), which is in particular due to a significant 12.7% revenue increase in the Rail division. In the Truck division, the revenue decline of 4.0% was less strong than expected.

Alongside the overall positive revenue development, there were efficiency measures and successful pricing initiatives ensuring strong operating EBIT growth of 24.2%. This results in growth of operating EBIT margin from 10.0% in last year’s quarter to 12.1%. Knorr-Bremse also achieved a significant improvement of its free cash flow, which, at € -95 million in the first quarter, was up more than € 100 million year over year (Q1 2023: € -199 million).

Overview of Strong Development in Both Divisions
 

Rail Vehicle Systems Division (RVS):

• Order intake rose to € 1,062 million thanks to very strong demand (Q1 2023: € 1,000 million).
• The order book, adjusted for Kiepe Electric, increased to € 4,739 million (March 31, 2023: € 4,424 million excluding Kiepe Electric).
• Revenue was up a significant 12.7% at € 964 million (Q1 2023: € 855 million).
• Operating EBIT improved by 30.1% from the corresponding prior-year figure to € 146 million (Q1 2023: € 112 million).
• The operating EBIT margin improved by a significant 200 base points to 15.1% (Q1 2023: 13.1 %)

Commercial Vehicle Systems Division (CVS)

• Order intake amounted to € 1,051 million (Q1 2023: € 1,176 million).
• The order book was worth € 1,991 million as at March 31, 2024, remaining at a high level (March 31, 2023: € 2,091 million).
• Revenues reached € 1,011 million in the first quarter (Q1 2023: € 1,053 million).
• Operating EBIT rose by a significant 16.8% to € 111 million (Q1 2023: € 95 million).
• The operating EBIT margin increased from 9.0% in Q1 2023 to a very robust 11.0%.

Guidance

Knorr-Bremse is confirming its guidance for the 2024 fiscal year. Accordingly, the company expects revenues between € 7,700 million and € 8,000 million, an operating EBIT margin between 11.5% and 12.5%, and free cash flow between € 550 million and € 650 million.

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 2023 Annual Report of Knorr-Bremse AG (available under Investor Relations/Annual Report).

Knorr-Bremse Group Key Performance Indicators:

¹ Each adjusted for order book of Kiepe companies
² Adjusted in 2023
 

Key Figures for the Knorr-Bremse Divisions:

Moreover, the shareholders agreed with around 95% to the modified remuneration system for the Executive Board, which puts an even stronger focus on the company’s profitability and earnings as well as its sustainability (ESG). Simultaneously, the modification increases the transparency of the system and reflects general developments in remuneration systems. 

The Annual General Meeting was held virtually. A total of roughly 90% of the share capital of Knorr-Bremse was represented at the Annual General Meeting.

A recording of the speeches given by the Chairman of the Supervisory Board and the members of the Executive Board, and the detailed results of the votes on the individual agenda items at the meeting will be available at www.ir.knorr-bremse.com in the near future.

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.

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.

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.

[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 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

Rail Vehicle Systems Division (RVS) Key Performance Indicators

Commercial Vehicle Systems Division (CVS) Key Performance Indicators

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 on the website under Investor Relations . Explanations and reconciliations of the financial KPIs used can be found in the 2022 annual report of Knorr-Bremse AG .

Key figures for the Knorr-Bremse Group

Key figures Rail Vehicle Systems division (RVS)

Key figures Commercial Vehicle Systems division (CVS)