Knorr Bremse : Q1/24 Financial Results Presentation

Q1/24 FINANCIAL RESULTS

MARC LLISTOSELLA I CEO FRANK WEBER I CFO May 8, 2024

Key take-aways today

Good start in 2024

BOOST program on track

BROWNFIELD: Kiepe and Safety Direct sold and process of other assets on track

GREENFIELD: Acquisition of Alstom Signalling NA

Continuation of reliable dividend strategy: € 264m paid

Guidance FY24 confirmed

2

Accretive Alstom Signalling NA business - strategic rationale

Accretive deal underpins BOOST

Underline KB's transformation path

Increase of rail revenue share Increase of NA revenue share

Expansion of addressable rail market

CCS2 market: high barriers to entry

Diversification of regional footprint

~€ 300m

revenues FY241

~16%

op. EBIT margin

FY241

>60%

AM revenue share

25-30%

market share

1) FY23/24 ended March 31, 2024 2) Control, Command and Signaling

3

Market development: Rail solid globally and Truck challenging in EU

CURRENT SITUATION

OUTLOOK FY24

• EU/ NA: solid growth continues
• CN: good AM and supportive HS business due to

improving ridership levels

• Global: High order books at OEMs continue
• Pricing of new OE contracts supportive
• Inflationary burden ongoing but further decreasing

• EU: solid growth continues, shift to rail
  (green deal) and replacement of obsolete fleets
• NA: good demand should continue
• CN: Increase of AM business should continue

• TPRs in Q1/24yoy1:
• • EU/ NA: slightly lower
  • CN: up and good demand on high level
• Price development supportive

• TPRs1: EU/ NA inline with expectations of truck OEMs
• • EU: significantly lower
  • NA: moderately lower
  • CN: flat to slightly increasing
• AM business: better development vs. OE expected and Cojali supportive

1) yoy figure, TPR defines all truck units produced in a specified time; >16t / Class 8; Source: internal and external estimates

4

Q1/24: Strong margin increase and FCF improved

	REVENUES OF
ORDER INTAKE	€1.97bn
€ 2.11bn	(+3% yoy)
(-3% yoy)
ORDER BOOK	€ 0.96bn
€6.73bn

(org. +3% yoy1)

€ 1.01bn

OPERATING EBIT MARGIN

12.1%

(PY: 10.0%)

15.1%

11.0%

FREE

CASHFLOW

• -95m

(PY: € -199m)

-59%

CASH

CONVERSION

RATE

1) Organic development shown. Reporting of Q1/23 last year, incorporated € 603m from Kiepe in order book and € 8m order intake

5

FCF & ROCE strongly improved Net Working Capital Efficiency by increased

EBIT

CapEx

[€m]

% of sales

3.4%	3.6%
	72
64
Q1/23	Q1/24

NWC1

[€m]

Scope of days

70.9	69.0
1,504	1,513
31.03.23	31.03.24

Free Cashflow		ROCE1 (annualized)
[€m]		[%]
			19.7%
		15.9%
	-95
-199
Q1/23	Q1/24	Q1/23	Q1/24

1) Figures 31.03.23 and Q1/23 according to IAS 8.41 for Cojali acquisition (NWC -€ 17m/ Goodwill +€ 125m)

6

RVS: Strong order book and Book-to-bill >1 for 10 quarters in a row

Order intake [€m]
1.17	Book-to-bill		1.10
				OI higher yoy due to EU
		+6.2%			EU: significantly higher
	80			1,062	driven by OE and AM
1,000				AP: Increase in India
	-8	-10	
			compensating softer
	+8.2%
				development in China
ex. Kiepe 1	+8.0%				NA: Overall lower driven
992				by tough comps, higher OI
					in freight partially
					compensating lower OI in
					passenger; AM
					comparable
Q1/23 Organic	M&A	FX	Q1/24

Order book [€m]
-5.7%	Order book remains on
		high level
5,026	4,739	▪ Order book adjusted by
		deconsolidation of Kiepe
			increasing
		▪ Strong Order book
ex. Kiepe 1			provides good visibility
+7.2%		into FY24
4,421
		▪	Order book well
			supported by resilient
			and stable rail demand
31.03.23	31.03.24

1) Kiepe Electric was deconsolidated end of January 2024

7

RVS: All regions grew in OE and AM business as well as significant margin improvement overall

Revenue [€m]
				Organic revenues up 12.7%
	+12.7%				Revenue growth supported
				by volume & prices
141
		964
				EU: Higher in OE
	-18
	-14			(passenger, loco, HS,
855					metro & freight) and AM
+16.5%				 APAC: CN higher in AM
				and OE (HS &
					regio/commuter), rest of AP
					slightly higher (mainly
					Australia/Japan OE and
					India AM)
				 NA: OE higher (freight,
					passenger cars & loco),
					AM also stronger
Q1/23 Organic	M&A	FX	Q1/24		AM share stays high at
					52%

Op. EBIT [€m]/ Margin1
13.1%			15.1%
		Op. EBIT margin increase
			driven by volume
	+30.1%		 Improved pricing of new
			contracts and and lower
36	1		145	legacy business
	supported profitability
		-4		Growth of brakes
112
			business in EU
+32.6%				overcompensated weaker
				FX (CN and India​) and
				loss of Russian business
				Positive channel mix
				AM/OE
			 Benefits trough BOOST
				efficiency program
Q1/23 Organic	M&A	FX	Q1/24

1) M&A: before PPA

8

CVS: Order book of € 2bn provides sound visibility and B-t-B >1

Order intake [€m]				Order book [€m]
1.12	Book-to-bill		1.04
					OI solid on high level,	-4.7%
		-10.6%			after record demand	2,091
1,176					 EU: weaker in Q1/24 after	1,991
		0		1,051	very high Q1/23
			 APAC: on same level as
	-108		-17
			Q1/23 due to solid high
	-9.2%
				demand in China, but
					Japan weaker driven by
					SEA impact
					 NA: softer (mainly due to
					weakening trailer
					demand)
Q1/23 Organic	M&A	FX	Q1/24		31.03.23	31.03.24

Order book remains on high level and close to € 2bn

• EU and NA slightly lower than Q1/23 (due to trailer market) APAC significantly above last year with strong China and continued economic recovery in Brazil

9

CVS: Better pricing and cost discipline lead to solid margin increase

Revenue [€m]
				Revenue drivers
	-4.0%			 EU: slight revenue
1,053				decrease due to OE in
				Q1/24, but good demand
	0			in AM business
-25			1,011	 APAC: OE stable on high
-2.4%		-17		level mainly due to China,
		AM stable
				 NA: OE truck sales stable
				but trailer lower, AM on
				solid level
				 AM share increased to
				30%
Q1/23 Organic	M&A	FX	Q1/24

Op. EBIT [€m]/ Margin1
9.0%			11.0%
			Profitability improved as
				promised ​
				 Positive impact by price
				spill over effects yoy in
	+16.8%			EU and NA
18	0		111	 Cojali supportive
	 Benefits trough BOOST
		-2
95			efficiency program
+19.4%
Q1/23 Organic	M&A	FX	Q1/24

1) M&A: before PPA

10