Knorr Bremse : Q2/20 Financial Results Präsentation (English only)

FINANCIAL RESULTS Q2/20

FRANK MARKUS WEBER I CFO

SEPTEMBER 10, 2020

FRANK MARKUS WEBER - NEW CFO OF KNORR-BREMSE

Business experience

• Head of Corporate Development and Corporate Strategy (Daimler)
• Head of Transformation (Mercedes Benz) and MOVE Efficiency Program (Daimler)
• Head of M&A and Real Estate (Daimler)
• CFO Trucks Asia (Daimler) and CFO (Mitsubishi Fuso Truck & Bus)
• Auditing and Consultant (Kullen Mueller Zinser Treuhand)
• Education: Business Administration (Diplom-Kaufmann)

Responsibilities

• Member of the Executive Board of Knorr-Bremse AG
• Finance, Controlling, IT, Legal Affairs, Investor Relations, Compliance

Knorr-Bremse AG 2

STRONG PERFORMANCE IN Q2/20 UNDERPINS RESILIENCE OF KB

Q2/20: Strong performance in challenging times

Countermeasures against COVID-19 payoff

Good development of aftermarket business

RVS: Strong profitability driven by very effective counter measures and positive sales mix

CVS: Very effective COVID-19 task force program kept supply chain running, achieved quick costs adaptions and safeguarded positive result

Guidance 2020 confirmed and narrowed

Knorr-Bremse AG 3

MARKETS IMPACTED BY COVID-19, BUT FIRST ENCOURAGING SIGNS OF RECOVERY

Rail market current view		Truck market current view

Rail markets show great resilience in turbulent times as expected

Rail car OEMs are back to pre COVID-19 levels globally (ex India) and rather bullish statements released

Stimulus packages initiated to support green mobility via low CO2 footprint and support for operators

Aftermarket partly driven by pull-ins from H2/20 into H1/20

No cancelations, but order delays and contract shifts

Ridership in trains still at rather low levels

After very weak demand at the beginning of Q2/20 truck markets in Europe and in NA continue to recover

Very quick recovery in China. Continuation of good demand after record levels in Q2/20

Continuous customer focus on e-mobility and driving assistant systems provide good opportunities for CVS

High volatility and huge bandwidths of TPR forecasts by research institutes, especially for Europe and NA in 2020

Truck OEMs initiated cost cutting programs

Knorr-Bremse AG 4

KB ACTIVITIES RECENTLY

Heinz Hermann Thiele, Thomas Enders and Theodor Weimer join the	Holistic countermeasures	KB becomes a strategic
Supervisory Board of Knorr-Bremse AG	implemented to master	partner for a new very
	COVID-19 pandemic	high-speed train
		generation in Russia

Retrofittable turning	KB becomes a global
assistant to improve	supplier of truck steering
traffic safety	systems after the
	acquisition of R.H.
	Sheppard

KB and TMH International	Major contract with	KB's HVACs contribute
sign contract for 1,300	Schmitz Cargobull for	to cleaner in-train air to
passenger cars for Egypt	trailer air disk brakes	fight COVID-19
	extended

Knorr-Bremse AG 5

Q2/20 - IN A NUTSHELL SHOWS MAJOR ASPECTS OF OUR STRONG

PERFORMANCE
REVENUES OF	€ 1.43bn
	(-22.6% yoy)
€ 849m	€ 579m

17.2% OP.1 EBITDA MARGIN

(PY: 19.1%)

24.0%

8.7%

€ 48m POSITIVE FREE CASH FLOW

	(-69.8% yoy)
ORDER INTAKE € 1.14bn	ORDER BOOK € 4.36bn
(-32.5% yoy)	(-3.9% yoy)

1) Operating level excludes restructuring costs, which have occurred in 2019.	Knorr-Bremse AG		6

Q2/20: FIRM ORDER BOOK, BUT COVID-19 IMPACT ON ORDER INTAKE

Order intake

Order book

€m					€m
0.91		Book-to-bill		0.80
						-3.9%
		-32.5%			4,542.3
1,688.0					4,363.3
		-8.7	-42.1	1,139.1	M&A impact
	-498.1
	-29.5%				R.H. Sheppard € +7m (Q2/20)
				Powertech € -16m (Q2/19)
	Org.
	decrease
Q2/19	Organic	M&A net	FX	Q2/20	30.06.19	30.06.20
		disposals

Knorr-Bremse AG 7

STRONG IMPACT BY COVID-19, BUT FAST RECOVERY IN CHINA

Revenue
€m						By region
		-22.6%
1,846.3					1,846
				1,428.3	27	-60.0%
CVS	-393.3	-9.9	-14.8	M&A impact	536		1,428
48%					+4.2%	11
			CVS		SA
-21.3%
			41%			558	Asia/
	Org.			R.H. Sheppard € +7m (Q2/20)	435
			Powertech € -17m (Q2/19)	-40.2%		Pacific
	decrease
							260	NA
RVS				RVS	849	-29.4%
52%				59%
				599	EU
Q2/19	Organic	M&A net	FX	Q2/20	Q2/19		Q2/20
		disposals

y-o-y growth	Knorr-Bremse AG		8

STRONG PROFITABILITY DESPITE COVID-19 IMPACT UNDERPINS RESILIENCE OF KB

OP.1 EBITDA/ E. Margin

P.1 EBIT/ E. Margin

€m
19.1%
	17.2%
	-30.3%
351.7
	245.3
Q2/19	Q2/20

Development in Q2/20

15.5%		▪	Operating leverage burdened by lower revenue and
			mitigation costs
	12.1%	▪	Early and fast measures taken to mitigate COVID-19
			impact on employees, customers and KB performance
-39.2%		▪	Revenue share from AM increased from 32% in Q2/19 to
285.5			38% in Q2/20
	▪ RVS strong: 1) Powertech divestment supportive, 2)
			favorable development AM vs. OE business, 3) APAC
	173.5		recovery supportive and 4) COVID-19 saving measures
			mostly compensate volume driven EBITDA reduction
		▪ CVS resilient: Significant volume impact partially
			compensated by quick recovery in China and strong cost
			measures using subsidized government programs,
Q2/19	Q2/20		continued investment in future technology projects

1) Operating level excludes restructuring costs, which have occurred in 2019.	Knorr-Bremse AG		9

KB CONTINUOUSLY INVESTS IN GOOD SUPPLY CHAIN MANAGEMENT FOR ITS CUSTOMERS AND IN FUTURE GROWTH

CapEx1

€m		% of sales

4.7%

3.3%

61.2	66.9
Q2/19	Q2/20

• Mgt. program installed to adapt investments to Covid-19 situation
• Continue expansion of production capacity & automation to secure future growth opportunities

NWC

€m		Scope of days

	70.5
57.1	1,196.8
1,142.5
30.06.19	30.06.20

• CUSTOMER FIRST - Safety stock measures taken to ensure ongoing customer deliveries in uncertain times
• Stringent supply chain & stock management implemented

Op. ROCE (annualized)

%

31.3%
	22.2%
30.06.19	30.06.20

• ROCE impacted by lower profitability, investments and supply chain measures

1) Capex are adjusted for sale & lease back transactions.	Knorr-Bremse AG	10

IMPROVEMENT OF CASH CONVERSION RATE IS A HIGH PRIORITY

Operating Cashflow

Free Cashflow1

Cash Conversion Rate

€m
-48.0%
221.4
	115.1
Q2/19	Q2/20

€m

-69.8%
157.6
	47.5
Q2/19	Q2/20

Development in Q2/20

	▪ Cashflow strongly impacted by COVID-19
	pandemic and lower profit
	▪ Stringent measures ensured positive Free
92.1%	Cashflow in Q/20, significantly better than in
Q1/20
	▪ Measures initiated to increase FCF in H2/20
	vs. H1/20
	41.3%
	▪ Cash conversion rate and FCF in Q2/20
	significantly lower than in Q2/19, but on a good
	level when considering the influence of
	COVID-19
Q2/19	Q2/20

1) FCF adjusted for sale & lease back in Q2/19.	Knorr-Bremse AG	11

COVID-19: FAST IMPLEMENTATION OF COUNTERMEASURES

	MARKET
▪	Temporary Covid-19 impact, most operators and rail car OEMs	▪	Demand stabilizing further and truck OEMs on average at
	back to operation level, stimulus programs put in place		90%+ capacity after summer break
▪	China recovered in Q2/20, stimulus of 100bn RMB released, India	▪	Recovering demand for trucks and trailers
	heavily impacted	▪	China very strong → normalization from record levels
▪	Strong impacts on already cyclic declining freight market,
	expected until YE20; India significantly hit; Japan shows first
	passenger market with very low ridership
		indications of recovery

BUSINESS DEVELOPMENT

Suppliers

• No more suppliers closed
• A few suppliers remain in close monitoring to manage impacts on our production / customer deliveries

Own plants

• Operations normalized almost back to pre COVID-19 levels globally. Very limited closures of suppliers in India
• No supply shortages experienced to date

• Safety measures across all sites and processes in place to safeguard operations and customer supply
• All sites resumed operations
• Productivity could be kept at good level, despite Some push-outs by customers

• Safety measures across all sites and processes in place to safeguard operations and customers supply
• All facilities running continuously, production ramp-up managed soundly with extra safety measures in place
• Stepwise increasing utilization based on current order book

Knorr-Bremse AG 12

RVS: STRONG ORDER BOOK SECURES SOLID OUTLOOK

Order intake

Order book

€m
0.92		Book-to-bill		0.93
		-11.2%
889.7
	-63.8	-16.2		790.0
	-19.7
	-7.2%
	Org.
	decrease
	Powertech
	€ -16m (Q2/19)
Q2/19	Organic	M&A net	FX	Q2/20
		disposals

+7.2%
3,261.1	3,496.5
30.06.19	30.06.20

Order book increased by 7.2 %yoy

• Tough comparable financial figures: strong OI in Q4/19 due to timing of tender awards leads to balanced OI in Q1/20
• Order book increase yoy by end of June, over- compensating the Powertech divestment
• EU: Postponed project decisions due to COVID-19 leading to lower OI in both OE and AM
• APAC: Impact by COVID-19 particularly in ex-China countries (esp. India), compensated by catch-up effects in China in both OE and AM
• NA: Freight and AM decreased due to lower transport volumes, leading to lower utilization of existing vehicles and lower demand

Knorr-Bremse AG 13

RVS: STRONG MARGIN INCREASE

Revenue				Op.1 EBITDA / Op.1 EBIT
€m					op. EBITDA	op. EBIT	Revenue decreased 12.0% yoy in Q/20
					op. EBITDA margin
					▪	AM: Good development despite COVID-19 impact
					op. EBIT margin
						in Q2/20 partly driven by pull-in effects from H2/20
						24.0%
		-12.0%			22.5%	▪	EU: decrease driven by COVID-19 in OE,
964.7								locomotives positive, AM mitigating
				848.6			▪ APAC: overall higher mainly by strong Metro
							business and Regional & Commuter business
	-88.0	-17.4	-10.7		19.5%	19.9%
	-9.1%		▪	NA: generally lower mainly driven by weak Freight
				217.5			market, AM almost flat
	Org.				204.0
				188.4	Op. EBITDA margin of 24.0% in Q2/20
	decrease			169.1
					Powertech divestment supportive
							▪
	Powertech					▪ Favorable development AM vs. OE business
	€ -17m (Q2/19)					▪	APAC recovery supportive
							▪ COVID-19 saving measures mostly compensate
								volume driven EBITDA reduction
Q2/19	Organic M&A net	FX	Q2/20	Q2/19	Q2/20
		disposals

1) Operating level excludes restructuring costs, which have occurred in 2019.	Knorr-Bremse AG		14

RVS: LONG-TERM GROWTH DESPITE SHORT-TERM HEADWINDS

• Stimulus programs just a push to get back to normal (compensation for losses)
  → No additional invest
• Future stimulus expected by climate programs/ green deals

• The EU Commission intends to declare 2021 'the Year of Rail'
• Green Deal: > € 750bn funding which have to comply with green focus
• Shift2Rail: +€ 1bn for COVID-19 response in 2020
• Direct support of € 5bn & increased credit limit for Deutsch Bahn
• € 50bn investment in future technology (e.g. hydrogen)
• INVEST Act targets ~ USD 60bn of rail investments (USD 29bn for Amtrak for improvements and expansion of the National passenger rail network; USD 19bn passenger rail improvements; USD 7bn Rail infrastructure and safety improvements)
• Significant expansion of railway mileage planned (July 2020 vs. 2035): highspeed almost +100% and non-highspeed network almost +25%
• Phase 1 of HS2 confirmed in April 2020 (> GBP 100bn)
• Bailout (GBP 3.5bn) by government for losses of private rail companies
• Austria and France announced shifts from short-haul flights to rail
• France announced a € 4.7bn stimulus program for rail only

Knorr-Bremse AG 15

CVS: OI DECREASE DRIVEN BY COVID-19, UPSIDES FROM CHINA

Order intake

Order book

€m
0.91		Book-to-bill		0.60
		-56.7%
799.1
		R.H. Sheppard
		€ +7m (Q2/20)
		7.5		345.9
	-438.4		-22.3
	-54.9%
	Org. decrease
Q2/19	Organic	M&A net	FX	Q2/20
		disposals

-32.1%
1,295.6
	880.1
30.06.19	30.06.20

Book to Bill rate clearly reflects COVID-19 impact

• EU/ NA: After first impact in March, full impact on order intake due to customer shut-downs triggered by COVID- 19 in Q2, recovery in EU already started in May and in NA in June
• APAC: Strong bounce-back in China in Q2, overcompensates reduction in Japan, India & SEA due to COVID-19 lock downs

COVID-19 impact on order book follows intake

• Strong Q2/19 performance in EU & NA compares to crisis levels in Q2/20

Knorr-Bremse AG 16

CVS: SOLID RESULTS DESPITE SEVERE COVID-19 IMPACT

Revenue

Op.1 EBITDA / Op.1 EBIT

€m

-34.3%

880.6

	7.5		578.9
	-305.1	-4.1
	-34.6%
	Org.
	decrease
	R.H. Sheppard
	€ +7m (Q2/20)
Q2/19	Organic M&A net	FX	Q2/20
	disposals

op. EBITDA op. EBIT

op. EBITDA margin op. EBIT margin

15.9%

12.2%8.7%

139.9

107.5

3.0%

50.7

17.4

Q2/19Q2/20

Revenues hit by production shut-downs due to COVID-19, however partly mitigated by global market presence

• EU & NA: Q2 yoy comparison not only affected by COVID-19 impact, but generally stronger markets and pre-buy effects in 2019, solid bounce back in May/June
• APAC: Record truck production rate in China overcompensate for COVID-19 induced decline in Japan and India, normalization expected in China for H2/20
• Improvement of AM share continued in Q2/20

Improved channel mix & profit recovery actions mitigate losses and led to remarkable positive result in Q2

• Effectiveness of global cost adaption program reflected in operational result, restrictive expense policy in place despite signs of recovery
• First consolidation of R.H. Sheppard Steering Business in June will lead to short-term margin dilution

1) Operating level excludes restructuring costs, which have occurred in 2019	Knorr-Bremse AG		17

SOME POSITIVE FACTS, DESPITE TPR DECREASE DUE TO COVID-19

Truck production rate1

In 1.000 trucks

Outlook

150

EU2

100

50

0

Q1/19

Q2/19

Q3/19

Q4/19

Q1/20

Q2/20

NA

100

50

0

Q1/19

Q2/19

Q3/19

Q4/19

Q1/20

Q2/20

400

China 200

0

Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20

Expected market development

• Very positive development in China will soften in H2/20
• EU and NA on the way to further recovery in H2/20
• Freight volumes expected to further stabilize and increase
• Positive trend of content per vehicle unchanged
• Partially postponed refurbishment of truck fleets and reduced stock at distributors might lead to improved AM business in H2/20
• CVS was able to gain market share in Q2/20yoy

Q2/20 vs. Q2/19	NA	EU	APAC	China
TPR (Heavy3)	-82%	-65%	-7%	+2%
CVS (Rev.)	-49%	-45%	+26%	+81%

Source: LMC 1) TPR defines all tuck units produced in a specified time; 2) EU+2; 3) ~>16t and Class 8	Knorr-Bremse AG		18

KB CLOSED ACQUISITION OF R.H. SHEPPARD

	Brake	Torque
	overlay
	control
	steering
2016
CV steering business of	JV with
2018	2019
	CV system competence

Strategic rationale

• Following the acquisition of Hitachi Steering business, KB reaches another important milestone with Sheppard R.H. as a global Steering supplier for commercial vehicles
• R.H. Sheppard is one of the two leading steering suppliers in the NA market
• KB is now among the Top 3 global Steering suppliers for commercial vehicles
• KB is one of the two leading suppliers of a combined braking and steering systems globally
• Enabling supply of advanced driver assistance systems and automated driving technology

Financial impact expected for KB (06/20-12/20)

• Revenue: >USD 50m
• EBITDA margin target: break even

Knorr-Bremse AG 19

AS A RESULT, CONVINCING OPERATIVE PERFORMANCE OF KB GROUP

		- Clear market leadership in braking systems in different
	Market		markets globally
	-	Only supplier worldwide to fulfill all global and local
	position
		standards
		- Clear megatrends ahead: urbanization, sustainability
	Technological		digitalization and green mobility
	-	R&D focus: connectivity, digitalization, life cycle costs,
	excellence
		standardization, automated train operation, etc.
		- Strong aftermarket growth backed by high installed
	Future		OE base
	- Green Mobility: numerous stimulus programs around the
	growth
		world are planned

• Clear market leadership in ADB and strong market position in many subsystems in commercial vehicles
• Global footprint and high local content: present in 30+ countries
• Focus on industry trends: traffic safety, emissions reduction & e-mobility, automated driving, connectivity
• R&D focus: realizing new product generations in time, cost, quality despite COVID-19, develop our product portfolio to fit to new regulations and requirements
• Growth via content per vehicle continues driven by new regulations on safety and emissions standards
• Driver Assistance: increasing demand and new functions
• New opportunities via combined Braking & Steering systems

Diversification through product excellence balances business cycles

Knorr-Bremse AG 20

GUIDANCE 2020

Assumptions

Group Revenue1

Op.1,2 EBITDA margin

€m

• Stable economicenvironment
• No large wave of infections due to COVID-19with significant financialimpact

▪ FX rates as of mid-July 2020

6,937
	5,900 - 6,200
FY19	FY20e

18.8%	16.5 - 17.5%
FY19	FY20e

1) Including Sheppard since June 1, 2020	2) Operating level excludes restructuring costs, which have occurred in 2019	Knorr-Bremse AG		21

Q&A / BACKUP

Knorr-Bremse AG 22

FINANCIAL CALENDAR

Upcoming events
Event	Date
Morgan Stanley conference	11.09.2020
Virtual roadshow (JP Morgan)	16.09.2020
UBS Quo Vadis Investor Trip 2020	18.09.2020
Berenberg/Goldman Sachs conference	21./22.09.2020
Baader Bank conference	23./24.09.2020
Release Nine Months/Third Quarter 2020 Report	19.11.2020

…	Knorr-Bremse AG		23

INVESTOR RELATIONS CONTACT

Andreas Spitzauer

Phone:	+49	89 3547 182310
Mobile:	+49	175 5281320
Email:	[e-mail]

Sophia Kursawe

Phone:	+49	89 3547 187311
Mobile:	+49	151 62330709
Email:	[e-mail]

…	Knorr-Bremse AG		24

DISCLAIMER

IMPORTANT NOTICE

This presentation has been prepared for information and background purposes only. It does not constitute or form part of, and should not be construed as, an offer of, a solicitation of an offer to buy, or an invitation to subscribe for, underwrite or otherwise acquire, any securities of Knorr-Bremse AG (the "Company") or any existing or future member of the Knorr-Bremse Group (the "Group"), nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company, any member of the Group or with any other contract or commitment whatsoever. This presentation does not constitute and shall not be construed as a prospectus in whole or in part.

Any assumptions, views or opinions (including statements, projections, forecasts or other forward-looking statements) contained in this presentation represent assumptions, views or opinions of the Company as of the date indicated and are subject to change without notice. The Company disclaims any obligation to update or revise any statements, in particular forward-looking statements, to reflect future events or developments. All information not separately sourced is derived from Company's data and estimates. Information contained in this presentation related to past performance is not an indication of future performance. The information in this presentation is not intended to predict actual results, and no assurances are given with respect thereto.

The information contained in this presentation has not been independently verified, and no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained herein, and no reliance should be placed on it. Neither the Company nor its advisers and any of their respective affiliates, officers, directors, employees, representatives and advisers, connected persons or any other person accepts any liability for any loss howsoever arising (in negligence or otherwise), directly or indirectly, from this presentation or its contents or otherwise arising in connection with this presentation. This shall not, however, restrict or exclude or limit any duty or liability to a person under any applicable law or regulation of any jurisdiction which may not lawfully be disclaimed (including in relation to fraudulent misrepresentation).

Historical financial or operative information contained in this presentation, if not taken or derived from our accounting records or our management reporting or unless otherwise stated, is taken or derived from financial statements prepared in accordance with either IFRS (for the financial years 2014-2019) or German GAAP (HGB) (for the financial years 1989-2019), each as indicated in this presentation, for the respective period. The financial statements prepared in accordance with IFRS may deviate substantially from (segmental or other) information in the financial statements prepared in accordance with German GAAP (HGB) and, thus, may not be fully comparable to such financial statements. Accordingly, such information prepared in accordance with German GAAP (HGB) is not necessarily indicative for the future results of operations, financial position or cash flows for financial statements prepared in accordance with IFRS. All amounts are stated in million euros (€ million) unless otherwise indicated. Rounding differences may occur. This presentation contains certain supplemental financial or operative measures that are not calculated in accordance with IFRS or German GAAP (HGB) and are therefore considered as non-IFRS measures. The Group believes that such non-IFRS measures used, when considered in conjunction with (but not in lieu of) other measures that are computed in accordance with IFRS, enhance the understanding of our business, results of operations, financial position or cash flows. There are, however, material limitations associated with the use of non-IFRS measures including (without limitation) the limitations inherent in the determination of relevant adjustments. The non-IFRS measures used by us may differ from, and not be comparable to, similarly-titled measures used by other companies.

This presentation includes "'forward-looking statements." These statements contain the words "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including cost savings and productivity improvement plans) are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the market environment in which the Company will operate in the future. These forward-looking statements speak only as of the date of this presentation. Each of the Company, the relevant Group entities and their respective agents, employees and advisers, expressly disclaims any obligation or undertaking to update any forward-looking statements contained herein. You are urged to consider these factors carefully in evaluating the forward-looking statements in this presentation and not to place undue reliance on such statements.

To the extent available, the industry and market data contained in this presentation has come from official or third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee, representation or warranty (either expressly or implied) of the accuracy or completeness of such data or changes to such data following publication thereof. Third party sources explicitly disclaim any liability for any loss or damage, howsoever caused, arising from any errors, omissions or reliance on any information or views contained in their reports. Accordingly, undue reliance should not be placed on any of the industry or market data contained in this presentation.

Knorr-Bremse AG 25

BACKUP

…	Knorr-Bremse AG		26

H1/20 - GROUP

Order intake		Order book
€m		€m

0.99		Book-to-bill		0.89	7.9	7.8
						-3.9%
		-23.8%			4,542.3	4,363.3
3,581.2
				2,727.1
	-814.9	-28.1	-11.1
					M&A net disposals
	-22.8%
	Org.				• R.H. Sheppard € +7m (H1/20
				• Powertech € -36m (H1/19)
	decrease
H1/19	Organic	M&A net	FX	H1/20	30.06.19	30.06.20
		disposals

Knorr-Bremse AG 27

H1/20 - GROUP

Revenue

€mBy region

	-15.2%
3,601.5	3,601.5

					55	-36.5%
			3,055.8			3,055.8
				1,013	35	SA
				M&A net disposals
-508.3	-31.6	-5.8			+2.2%
	• R.H. Sheppard			Asia/
					1,035
					Pacific
				€ +7m (H1/20)

-14.1%

• Powertech

841

-27.2%

Org.

€ -39m (H1/19)

613

NA

decrease

1,692

-18.9%

1,373

EU

H1/19

Organic M&A net

FX

H1/20

H1/19

H1/20

disposals

y-o-y growth

28

Knorr-Bremse AG

H1/20 - GROUP

Op.1 EBITDA/ EBITDA Margin

Op.1 EBIT/ EBIT Margin

€m

19.0%
	17.5%
685.4
	535.5
H1/19	H1/20

15.6%
	13.0%
560.1
	397.5
H1/19	H1/20

1) Operating level excludes restructuring costs	Knorr-Bremse AG		29

H1/20 - GROUP

OCF & FCF		CapEx1
€m		OCF		FCF		€m		% of sales

-107%		4.8%
-61.8%
310.5		3.4%
			147.9
189.7		123.4
	118.6
	-13.3	H1/19	H1/20
H1/19	H1/20
1) H1/19 adjusted for Sale & Lease back	2) H1/19 adjusted for Wülfrath

NWC

€m		Scope of days

	70.5
57.1
1,143	1,197
30.06.19	30.06.20

op. ROCE2 (annualized)

%

31.3%
	22.2%
H1/19	H1/20

Knorr-Bremse AG 30

H1/20 - RVS

Order intake

Order book

€m
1.03		Book-to-bill		0.96		7.2%
		-13.5%			3,261.1	3,496.5
1,924.7
				1,664.3
	-212.5	-35.6	-12.3
	-11.0%
	Org.
	decrease
	Powertech € -36m (H1/19)
H1/19	Organic	M&A net	FX	H1/20	30.06.19	30.06.20
		disposals

Knorr-Bremse AG 31

H1/20 - RVS
Revenue			Op.1 EBITDA / EBITDA margin	Op.1 EBIT / EBIT margin
€m
	-7.2%			22.2%	22.4%
1,876.0	-87.5
			1,740.8			19.2%	18.7%
	-39.1	-8.6			-6.4%
	-4.7%			417.0			-9.4%
				390.2
	Org.				359.4
					325.6
decrease
	Powertech
	€ -39m (H1/19)
H1/19	Organic M&A net	FX	H1/20	H1/19	H1/20	H1/19	H1/20
	disposals

1) Operating level excludes restructuring costs	Knorr-Bremse AG		32

H1/20 - CVS

Order intake

Order book

€m

0.96

Book-to-bill

0.81

		-36.1%
1,658.5					-32.1%
					1,295.6
		+7.5	+1.3	1,060.6
	-606.7					880.1
	-36.6%
	Org.
	decrease
	R.H. Sheppard
		€ +7m (H1/20)
H1/19	Organic	M&A net	FX	H1/20	30.06.19	30.06.20
		disposals

Knorr-Bremse AG 33

H1/20 - CVS

Revenue

Op.1 EBITDA / EBITDA margin

Op.1 EBIT / EBIT margin

€m

	-23.9%			16.3%
1,726.7
			12.0%
	+7.5	+2.8	1,314.7		-43.6%
	-422.3			280.6
	-24.5%
	Org.				158.2
	decrease
	R.H. Sheppard
	€ +7m (H1/20)
H1/19	Organic M&A net	FX	H1/20	H1/19	H1/20
	disposals

12.8%
	7.2%
	-57.5%
221.5
	94.2
H1/19	H1/20

1) Operating level excludes restructuring costs.	Knorr-Bremse AG		34

Q2/20 - INCOME STATEMENT

			2019			2020		2019	2020
EUR million	Q2/19	Q3/19		Q4/19	2019	Q1/20		Q2/20		H1/19	H1/20
Revenues	1,846.2	1,711.1		1,623.9	6,936.5	1,627.5		1,428.3		3,601.5	3,055.8
Change in inventory of unfinished/finished products	-22.6	18.1		-11.5	5.7	-0.8		15.1		-0.8	14.3
Own work capitalized	15.7	22.3		19.9	73.3	18.8		18.5		31.0	37.3
Total operating performance	1,839.3	1,751.6		1,632.3	7,015.6	1,645.4		1,462.0		3,631.7	3,107.4
Other operating income	6.3	15.3		76.5	117.0	29.6		19.1		25.2	48.7
Cost of materials	-891.6	-863.9		-765.1	-3,428.6	-780.1		-688.3		-1,799.6	-1,468.4
Personnel expenses	-414.3	-403.7		-384.8	-8.0	-400.9		-368.3		-805.3	-769.2
Other operating expenses	-204.5	-186.1		-212.4	-781.5	-204.0		-179.1		-383.1	-383.1
Earnings before interest, tax, depreciation and amortization (EBITDA)	335.3	313.3		346.5	1,328.7	290.2		245.3		669.0	535.5
Depreciation and amortization	-76.6	-63.5		-66.6	-265.8	-66.2		-71.7		-135.7	-137.9
Earnings before interests and taxes (EBIT)	258.7	249.8		279.9	1,062.9	224.0		173.5		533.3	397.5
Interest income	3.6	6.7		9.4	27.6	10.0		-0.8		11.5	9.2
Interest expenses	-11.5	-12.8		-12.4	-51.1	-15.3		-8.2		-25.9	-23.5
Other financial result	-8.4	-91.8		-33.8	-132.3	-20.3		-5.3		-6.7	-25.6
Income before taxes	242.4	151.9		243.1	907.1	198.5		159.1		512.1	357.6
Taxes on income	-71.3	-50.7		-75.9	-275.1	-56.7		-44.0		-148.5	-100.7
Net income	171.1	101.2		167.1	632.0	141.9		115.0		363.7	256.9
Profit (loss) attributable to non-controling interests	10.2	10.7		12.6	43.6	7.5		12.4		20.3	19.9
Profit (loss) attributable to the shareholders of Knorr-Bremse AG	160.9	90.6		154.5	588.4	134.4		102.7		343.4	237.1
Earnings per share in Euro	1.00	0.56		0.96	3.65	0.83		0.64		2.13	1.47

…	Knorr-Bremse AG		35

Q2/20 - CASHFLOW

			2019			2020		2019	2020
EUR million	Q2/19	Q3/19		Q4/19	2019	Q1/20		Q2/20		H1/19	H1/20
Net cash flows from/used in operating activities	221.4	243.9		431.4	985.8	3.5		115.1		310.5	118.6
Net cash flows from/used in investing activities	-88.4	-108.5		76.9	-353.8	-57.8		-195.5		-322.2	-253.3
Net cash flows from/used in financing activities	-276.8	-74.2		-127.0	-505.2	171.7		400.3		-304.0	572.0
Cash flow changes	-143.7	61.1		381.3	126.8	117.4		319.9		-315.6	437.3
Change in cash funds resulting from exchange rate and valuation-related	-12.6	22.5		-20.7	8.6	-11.9		-12.3		6.8	-24.2
movements
Change in cash funds resulting from changes to the group structure	0	0		0	-0.6	0		0		-0.2	0
Change of cash fund	-156.3	83.6		360.2	134.8	105.5		307.5		-309.0	413.0
Cash funds at the beginning of the period	1,566.0	1,409.7		1,493.3	1,718.7	1,853.5		1,959.0		1,718.7	1,853.5
Cash funds at the end of the period	1,409.7	1,493.3		1,853.5	1,853.5	1,959.0		2,266.5		1,409.7	2,266.5

…	Knorr-Bremse AG		36

H1/20 - BALANCE SHEET / ASSETS

			2019			2020
EUR million	31.03.2019	30.06.2019		30.09.2019	31.12.2019	31.03.2020		30.06.2020
Assets
Intangible assets and goodwill	840.0	813.9		838.4	842.2	858.8		896.2
Property, plant and equipment	1,430.5	1,454.0		1,470.2	1,469.2	1,437.2		1,490.0
Investments accounted for using the equity method	2.0	13.6		18.3	16.6	16.6		17.8
Other financial assets	85.6	63.4		64.5	63.5	52.5		57.8
Other assets	16.1	44.0		48.7	73.9	70.5		52.3
Income tax receivables	0	0		4.9	0	1.9		0.0
Assets from employee benefits	30.6	30.3		31.7	31.6	30.5		29.8
Deferred tax assets	138.5	164.9		172.0	126.6	118.8		123.9
Non-current assets	2,543.4	2,584.1		2,648.7	2,623.6	2,586.7		2,667.8
Inventories	910.5	877.2		865.7	815.0	865.4		933.2
Trade accounts receivable	1,511.7	1,512.5		1,452.8	1,149.0	1,353.6		1,411.6
Other financial assets	24.6	34.9		46.6	62.6	58.2		41.5
Other assets	117.2	147.1		137.2	152.1	128.7		167.0
Contract assets	125.8	99.3		81.3	89.9	91.7		91.4
Income tax receivables	103.4	112.2		127.5	73.9	68.9		61.3
Cash and cash equivalents	1,582.8	1,426.5		1,505.2	1,880.7	1,983.7		2,293.2
Current assets	4,376.1	4,209.6		4,216.3	4,223.2	4,550.2		4,999.2
Total assets	6,919.5	6,793.7		6,865.0	6,846.8	7,136.9		7,667.1

…	Knorr-Bremse AG		37

H1/20 - BALANCE SHEET / LIABILITIES

			2019			2020
EUR million	31.03.2019	30.06.2019		30.09.2019	31.12.2019	31.03.2020		30.06.2020
Equity
Subscribed capital	161.2	161.2		161.2	161.2	161.2		161.2
Capital reserves	13.9	13.9		13.9	13.9	13.9		13.9
Retained earnings	35.1	34.3		31.9	34.2	34.2		34.2
Other components of equity	-134.8	-188.3		-208.6	-179.3	-233.5		-272.2
Profit caried forward	1,448.3	1,164.1		1,149.5	1,166.0	1,754.5		1,464.3
Profit attributable to the shareholders of Knorr-Bremse AG	182.5	343.4		433.9	588.4	134.4		237.1
Equity attributable to the shareholders of Knorr-Bremse AG	1,706.2	1,528.6		1,581.8	1,784.4	1,864.6		1,638.5
Equity attributable to non-controlling interests	118.3	122.6		115.4	117.1	121.7		103.0
thereof share of non-controlling interests in net income	10.1	20.3		31.0	43.6	7.5		19.9
Equity	1,824.5	1,651.2		1,697.1	1,901.5	1,986.3		1,741.5
Liabilities
Provisions for pensions	314.1	360.2		397.0	343.3	301.3		347.8
Provisions for ther employee benefits	24.5	25.1		23.8	19.6	22.2		19.8
Other provisions	247.5	255.5		262.4	273.2	262.0		270.7
Financial liabilities	1,746.2	1,618.6		1,635.8	1,658.2	1,663.1		1,657.8
Other liabilities	8.7	6.3		5.4	5.6	5.1		3.4
Income tax liabilities	99.5	97.9		101.3	51.9	51.6		52.6
Deferred tax liabilities	91.1	104.6		76.9	80.8	85.9		94.7
Non-current liabilities	2,531.6	2,468.2		2,502.7	2,432.5	2,391.3		2,446.8
Provisions for other employee benefits	17.1	26.1		31.2	29.1	22.4		21.7
Other provisions	253.1	255.4		240.9	197.6	193.6		202.4
Trade accounts payable	1,081.0	1,054.9		1,034.6	967.5	978.0		946.2
Financial liabilities	779.7	860.1		888.4	875.6	1,170.9		1,859.8
Other liabilities	82.5	139.1		127.1	131.0	91.2		109.3
Contract liabilities	295.7	291.4		280.7	277.4	274.1		293.2
Income tax liabilities	54.3	47.4		62.2	34.6	29.1		46.2
Current liabilities	2,563.3	2,674.4		2,665.2	2,512.8	2,759.3		3,478.8
Liabilities	5,095.0	5,142.6		5,167.8	4,945.2	5,150.6		5,925.6
Total assets	6,919.5	6,793.7		6,865.0	6,846.8	7,136.9		7,667.1

…	Knorr-Bremse AG		38