Knorr-Bremse AG, the global market leader for braking systems and a leading supplier of other safety-critical rail and commercial vehicle systems, recently published its results for the first half and second quarter of 2024.
Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “We are proud of the outstanding business performance in the first half of 2024, with many of our key financials seeing significant gains. This positive development is also the result of our extensive BOOST 2026 suite of measures which we launched a year ago. Our portfolio optimization in particular is progressing well and making a key contribution to our increased profitability. Following Kiepe Electric and Safety Direct, we just sold GT Emissions Systems in the UK and reached the next milestone. Simultaneously, we have already started the process to sell a fourth business unit.”
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.
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