Knorr Bremse : Q2/22 Financial Results Presentation

FINANCIAL RESULTS Q2/22

FRANK WEBER I CFO AND EXECUTIVE BOARD SPOKESMAN DR. JÜRGEN WILDER I HEAD OF RVS

AUGUST 12, 2022

Key take-aways for today

Strong underlying demand in Truck (EU/ NA) and Rail (EU) continues, but Russia and weak development in China are weighing on both divisions

Pricing and cost measures to mitigate inflation on track

Challenging global economic environment should continue, but KB is prepared

Bolt-onM&A activities done to strengthen portfolio and drive digitization

FY22: confirmation of revised guidance

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Good demand ex China in a challenging global environment

Current situation

No cancellations of vehicle contracts by rail operators, but postponements of deliveries ongoing

Despite increasing supply challenges good tender development in EU and NA

Continuously good OI: last three quarters were each above € 1bn

Strong financial impact from Russia sanctions

China: low investments in rolling and zero-Covid

policy BUT good investments in rail infrastructure

TPRs1 Q2/22: EU WE +6%, NA +10%, CN -65%

Strong outperformance in all major markets driven by content per vehicle and pricing

Strong demand in EU and NA continues

Supply shortages limiting OEM output

Financial impact from Russia sanctions, deconsolidation of JV with KAMAZ

Throughout 2022

Good OI development expected

AM: Increase in train traffic after Covid

Book-to-Bill FY22e: >1

Withdrawal from Russian market

Ongoing inflation of input costs

China: almost no recovery expected in H2/22 (e.g. Metro market will decrease, we consider a double-digit percentage yoy)

TPRs1 FY22e: EU WE +8% and NA +13% CN -58%

Solid development of AM continues

Agreements on cost compensation with several major OEMs achieved, negotiations continue on track

Supply shortages and strong price inflation will endure

throughout 2022 Decrease of some material indices (e.g. aluminum) supportive

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

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KPIs Q2/22: Strong demand and revenues, but pressure on profitability

REVENUES OF € 1.74bn

(+0.5% yoy)

€ 823m

€ 914m

10.5% op. EBIT MARGIN
(PY: 14.1%)
14.3%	8.1%

€ -35m FREE CASHFLOW

		(PY: € 131m) -32% Cash Conversion Rate
ORDER INTAKE € 1.93bn		ORDER BOOK € 6.69bn1
(+6.9% yoy)		(+29.7% yoy)

1) Specific revenue-generating existing orders (e.g. prototypes, other revenues and FX impacts etc.) are now included in the order	4
book. Accordingly, the order book has increased by around € 375 million. Order intake is not affected by this adjustment.

Higher NWC to secure ability to deliver ("Customer First"), while stringent

measures implemented to lower NWC towards YE22

Capex

€m		% of sales

4.4%

3.9%

68	77
Q2/21	Q2/22

• Slightly higher investments in Q2/22 as expected and communicated after slow start in Q1/22
• Capex fully in line with targets

NWC

€m		Scope of days	73.0
			67.4

59.3

1.381

1.126 47.0 1.250

876

30.06.21 31.12.21 31.03.22 30.06.22

• Higher stock levels to secure customers
• Strong increase in Q1/22 and much lesser in Q2/22
• Increased NWC to support higher revenues in upcoming quarters
• Lower NWC towards YE22 expected

ROCE (annualized)

%

26.7%
	16.4%
30.06.21	30.06.22

• ROCE impacted by lower EBIT and higher NWC

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