Record Year for Knorr-Bremse

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. 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 ouremployee 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 euros. 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 euros 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.

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.