Knorr Bremse : Q2/24 Finanzergebnisse Präsentation (nur Englisch)

Q2/24 FINANCIAL RESULTS

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

Key take-aways today

RVS: strong performance and outperforming rail markets

CVS: good resilience in tougher truck environment

BOOST measures reached next level

BROWNFIELD: Sale of GT Emission Systems signed and selling process of 4th entity started

GREENFIELD: Expected closing of Alstom Signalling NA end of August

Contract of Executive Board member Bernd Spies extended

Raised Guidance FY24 confirmed

2

BOOST Overview - Implemented measures already show great benefits

Recap Strategy Update in 07/23

Examples of specific measures

Brownfield

(Housekeeping)

• Increase capacity in best cost countries
• Expansion of AM business
  (Rail AM 2.0/ extended AM strategy with Cojali)
• Reducing number of legal entities
• Cash Flow improvement (project Collect)
• Expansion of global business services
• Good progress of culture program @ KB

Greenfield

(Expansion)

3

BOOST BROWNFIELD/ FIX IT - First benefits already achieved and full impact towards FY26

Recap Strategy Update in 07/23

Fix

Examples of specific measures

CVS

• One Japan
• Efficiency program of Global Steering
• BOOST: Wheelend, Engine Air, Purchasing/ Material
• Installation of global responsibilities at CVS
• R&D: prioritization of projects and increase efficiency

RVS

• BOOST RVS: increase profitability
• Footprint: rightsizing of locations worldwide
• Portfolio: restructuring programs for underperforming business units

Increase of op. EBIT margin by ~70bps (of total ~200bps) until FY26 vs. FY22

4

BOOST BROWNFIELD/ SELL IT - Well on track and decisions taken to sell ~€ 700m of revenues

Recap Strategy Update in 07/23

Sell

	Revenue	Margin	Project status
	volume	improv.1
			Carve out	Investor	Signing/
				approach	Closing
Kiepe (RVS)	~€ 150m	~20bps
Safety Direct (CVS)	~€ 20m	~10bps
GT Emis. Syst.2 (CVS) ~€ 70m	~10bps
One entity (CVS)	~€ 140m	~40bps
2+ entities (RVS)	>€ 300m	~50bps	Started	2025/2026
∑ ~€ 700m ~130bps	All projects on track

Increase of op. EBIT margin by ~130bps (of total ~200bps) until FY26 vs. FY22

1)	Impact on KB group level vs. FY22	5
2)	GT Emission Systems produces e.g. EGR valves, Exhaust Brakes or Thermal Management valves, focusing on combustion engines of trucks

Market development - Strong demand in Rail continues and Truck faces challenges especially in EU

Current situation

• EU/ NA: solid growth continues in OE and AM
• CN: good AM and supportive HS

 Global: High order books at OEMs continue

• Pricing of new contracts supportive
• Inflationary burden ongoing but further decreasing

 Supply chain problems with specialist suppliers for the rail industry not yet over

Outlook FY24

• Ridership levels globally FY24 > FY23
• EU: Growth continues, shift to rail (green deal) and replacement of obsolete fleets
• NA: Demand increase should continue especially in AM
• CN: Increase of AM business will continue

• Price development supportive
• TPRs in Q2/24 yoy1:
• • EU: significantly lower
  • NA: slightly lower
  • CN: slightly weaker/ flat

• AM business: better development vs. OE expected and Cojali supportive
• TPRs1:

EU/ NA inline with expectations of truck OEMs

• EU: significantly lower
• NA: moderately lower
• CN: flat

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

6

H1/24 - Strong KPIs across the board

OPERATING

ORDER INTAKE

• 4.24bn

(+2.1% yoy1)

ORDER BOOK

€6.85bn

(+4.0% yoy1)

REVENUES OF

• 3.99bn

(+4.4% yoy1)

€ 1.98bn

(+13.8% yoy1)

• 2.01bn

(-3.6% yoy1)

EBIT MARGIN

12.3%

(PY: 10.6%)

15.3%

(PY: 14.0%)

11.1%

(PY: 9.2%)

FREE

CASHFLOW

• 64m

(PY: € -165m)

+20%

CCR

(PY: -63%)

1) Organic development shown. Reporting of Q2/23 last year, incorporated € 600m from Kiepe in order book and € 47m order intake

7

Q2/24 - Strong KPIs across the board

OPERATING

ORDER INTAKE

• 2.13bn

(+5.5% yoy1)

ORDER BOOK

€6.85bn

(+4.0% yoy1)

REVENUES OF

• 2.01bn

(+2.6% yoy1)

€ 1.02bn

(+10.7% yoy1)

• 1.00bn

(-4.8% yoy1)

EBIT MARGIN

12.5%

(PY: 11.1%)

15.6%

(PY: 14.7%)

11.2%

(PY: 9.3%)

FREE

CASHFLOW

• 158m

(PY: € 34m)

103%

CCR

(PY: 26%)

1) Organic development shown. Reporting of Q2/23 last year, incorporated € 600m from Kiepe in order book and € 36m order intake

8

FCF quadrupled by improved EBIT & NWC and ROCE >20% again

CapEx [€m]

% of sales

3.7%
75	3.2%
	65
Q2/23	Q2/24

NWC1 [€m]

Scope of days

70.9	69.8
1,544	1,546
30.06.23	30.06.24

Free Cashflow [€m]

up 4x

	158
34
Q2/23	Q2/24

ROCE1 annualized [%]

	20.2%
16.6%
Q2/23	Q2/24

1) Figures 30.06.23 and Q2/23 according to IAS 8.41 for Cojali acquisition (NWC -€ 17m/ Goodwill +€ 125m)

9

RVS - Strong order book and Book-to-bill >1 for 11 quarters in a row

Order intake [€m]

Order book [€m]

1.07

Book-to-bill

1.12

	+11.3%
160			1,141
1,025	-36	-8
+15.6%
Q2/23 Organic	M&A	FX	Q2/24

OI higher yoy in all regions

• EU: Higher driven by OE, AM remaining on high level
• AP: Significantly higher especially in India OE and CN AM
• NA: Overall higher driven by OE and AM

	-3.6%			Order book remains on
							high level
5,060		4,881
				 Organic order book,
			+7.6%
					ex Kiepe, increased
			Org.
		growth			by 8%
						 Strong order book
ex. Kiepe 1
4,461						provides good
							visibility for FY24
							and beyond
							 Order book well
							supported by resilient
							and stable rail
							demand
30.06.23	30.06.24

1) Kiepe Electric was deconsolidated end of January 2024

10