Knorr-bremse Ag · XETR:KBX

Knorr-bremse — Q2 2024 Earnings Presentation

39 slides from Knorr-bremse's earnings presentation, Aug 8, 2024

  1. Slide 1: Q2/24 Financial Results

    STRICTLY CONFIDENTIAL Q2/24 FINANCIAL Q2/24 FINANCIAL RESULTS RESULTS MARC LLISTOSELLA MARC LLISTOSELLA II CEO CEO FRANK WEBER FRANK WEBER II CFO CFO August 8, August 8, 2024 2024

  2. Slide 2: Key take-aways today

    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 N

  3. Slide 3: BOOST Overview – Implemented measures already show great benefits

    BOOST Overview – Implemented measures already show great benefits Recap Strategy Update in 07/23 Examples of specific measures ▪ 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 improve

  4. Slide 4: BOOST Brownfield/Fix it – First benefits already achieved

    BOOST BROWNFIELD/ FIX IT – First benefits already achieved and full impact towards FY26 Recap Strategy Update in 07/23 Examples of specific measures CVS ▪ One Japan ▪ Efficiency program of Global Steering Fix ▪ BOOST: Wheelend, Engine Air, Purchasing/ Material ▪ Installation of global responsibiliti

  5. Slide 5: BOOST Brownfield/Sell it – Well on track to sell ~€700m of revenues

    BOOST BROWNFIELD/ SELL IT – Well on track and decisions taken to sell ~€ 700m of revenues Revenue Margin Project status Recap Strategy Update in 07/23 volume improv.1 Carve out Investor Signing/ approach Closing Kiepe (RVS) ~€ 150m ~20bps Safety Direct (CVS) ~€ 20m ~10bps GT Emis. Syst.2 (CVS) ~€ 70

  6. Slide 6: Market development – Strong demand in Rail, Truck faces challenges

    Market development – Strong demand in Rail continues and Truck faces challenges especially in EU Current situation Outlook FY24  EU/ NA: solid growth continues in OE and AM  Ridership levels globally FY24 > FY23  CN: good AM and supportive HS  EU: Growth continues, shift to rail (green deal)  G

  7. Slide 7: H1/24 – Strong KPIs across the board

    H1/24 – Strong KPIs across the board OPERATING REVENUES OF EBIT MARGIN ORDER INTAKE € 3.99bn 12.3% FREE CASHFLOW (+4.4% yoy1) € 4.24bn (PY: 10.6%) € 64m (+2.1% yoy1) (PY: € -165m) € 1.98bn 15.3% ORDER BOOK (+13.8% yoy1) (PY: 14.0%) +20% € 6.85bn CCR (+4.0% yoy1) € 2.01bn 11.1% (PY: -63%) (-3.6% yoy1

  8. Slide 8: Q2/24 – Strong KPIs across the board

    Q2/24 – Strong KPIs across the board OPERATING REVENUES OF EBIT MARGIN ORDER INTAKE € 2.01bn 12.5% FREE CASHFLOW (+2.6% yoy1) € 2.13bn (PY: 11.1%) € 158m (+5.5% yoy1) (PY: € 34m) € 1.02bn 15.6% (+10.7% yoy1) (PY: 14.7%) ORDER BOOK 103% € 6.85bn CCR (+4.0% yoy1) € 1.00bn 11.2% (PY: 26%) (-4.8% yoy1)

  9. Slide 9: FCF quadrupled by improved EBIT & NWC and ROCE >20% again

    FCF quadrupled by improved EBIT & NWC and ROCE >20% again CapEx [€m] NWC1 [€m] Free Cashflow [€m] ROCE1 annualized [%] % of sales Scope of days 3.7% 70.9 69.8 up 4x 3.2% 158 20.2% 75 1,544 1,546 65 16.6% 34 Q2/23 Q2/24 30.06.23 30.06.24 Q2/23 Q2/24 Q2/23 Q2/24 1) Figures 30.06.23 and Q2/23 according

  10. Slide 10: RVS – Strong order book and Book-to-bill >1 for 11 quarters

    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 OI higher yoy in all -3.6% Order book remains on +11.3% regions high level 5,060 160 4,881 1,141  EU: Higher driven by  Organic order book, +7.6% 1,025 -36 -8 OE, AM remain

  11. Slide 11: RVS – All regions grew profitable in OE & AM

    RVS – All regions grew profitable in OE & AM and converting well Revenue [€m] Op. EBIT [€m]/ op. EBIT margin [%] Org. revenues up 11% 14.7% 15.6% Op. margin increase + 90bps by ~90bps +6.1%  Growth supported by 103 volume & prices ▪ Good operating 1,017 +12.0% leverage  EU: Higher in OE and 25 -37

  12. Slide 12: CVS – Good order book of almost €2bn provides visibility

    CVS – Good order book of almost € 2bn provides sound visibility in a tougher market environment Order intake [€m] Order book [€m] 0.98 Book-to-bill 0.99 OI on high level -4.5% Order book remains on -4.8%  EU: significantly 2,063 high level at ~€ 2bn 1,036 1,969 0 987 weaker yoy  Weaker market in E

  13. Slide 13: CVS – Cost & flexibility measures lead to margin increase

    CVS – Cost & flexibility measures as well as better pricing lead to a significant margin increase Revenue [€m] Op. EBIT [€m]/ op. EBIT margin [%] 11.2% 9.3% + 190bps -5.3% Revenue slightly lower Profitability up as  EU: significantly lower promised 1,052 due to weak OE &  Pricing in EU and Trailer

  14. Slide 14: KB Group – approximately 50% of FY26 margin goal achieved

    KB Group – approximately 50% of margin goal for FY26 is already achieved Recap Strategy Update in 07/23 Op. EBIT [€m]/ op. EBIT margin [%] 14.0% 12.5% 10.5% 11.1% +200 bps 252 223 183 Q2/22 Q2/23 Q2/24 FY26e Recovery of KB to old strength and BEYOND… 14

  15. Slide 15: Raised Guidance FY24 confirmed

    Raised Guidance FY24 confirmed Revenue [€m] Op. EBIT Margin Free Cashflow [€m] General Assumptions: ▪ Stable FX yoy ▪ Essentially stable geopolitical and 7,926 7,700-8,000 11.5-13.0% 550-650 macroeconomic conditions 11.3% 552 Divisional Assumptions: RVS: ex. Kiepe1 ex. Kiepe1 ex. Kiepe1 ▪ Solid orga

  16. Slide 16: Q&A / Backup

    Q&A / Backup

  17. Slide 17: Financial calendar 2024

    Financial calendar 2024 – Upcoming events and FY24 release dates DATE EVENT LOCATION Sep 4 Commerzbank & ODDO Corporate Conference Frankfurt Sep 5 Morgan Stanley Unplugged Conference London Sep 9 UBS Quo Vadis Industrial Event Virtual Sep 10-11 Kepler Cheuvreux Roadshow U.S. West Coast Sep 12 Morgan

  18. Slide 18: Group Q2/24 – Order intake and order book

    Group Q2/24 – Order intake and order book Order intake [€m] Order book [€m] 1,02 Book-to-bill 1,06 ex. Kiepe1 -3.8% 6,522 7,122 6,848 +3.2% 114 2,127 +4.0% 2,060 Org. -36 -11 growth +5.5% RVS 5,060 4,881 RVS 1,025 1,141 ex. Kiepe1 4,461 CVS 1,036 987 CVS 2,063 1,969 Q2/23 Organic M&A1 FX Q2/24 30.06

  19. Slide 19: Group Q2/24 – Revenue development

    Group Q2/24 – Revenue development Revenue [€m] Revenue [€m] By division By region ex. Kiepe1 +0.2% 1,973 2,010 2,013 2,010 52 2,013 Asia/ +8.8% -37 -12 Pacific 481 523 +2.6% SA 37 +29.4% 48 RVS 958 1,017 506 496 -2.0% -1.8%2 NA CVS 1,052 997 986 -4.1% 946 -0.4%2 EU Q2/23 Organic M&A1 FX Q2/24 Q2/23

  20. Slide 20: Group Q2/24 – Profitability and EPS

    Group Q2/24 – Profitability and EPS Op. EBIT [€m]/ op. EBIT margin [%] EPS2 [€] 12.5% 11.1% + 140bps Fin. Result burdened by non-cash effects  GT Emission Systems >1.00 +12.6% fair value effect ~€ 10m +18.6% 38 252 0.90  Cojali performance better 223 -4 -6 0.75 than Acquisition Business +17.0% Cas

  21. Slide 21: Group Q2/24 – Bridge reported EBIT to operating EBIT

    Group Q2/24 – Bridge reported EBIT to operating EBIT Op. EBIT [€m]/ op. EBIT margin [%] +140bps +140bps 252 238 12 (12.5%) 2 223 (11.8%) 209 (11.1%) (10.4%) 158 158 (15.6%) 141 RVS 139 (15.6%) (14.7%) (14.5%) CVS: ~€ 2m CVS: ~€ 12m 112 CVS 86 98 98 (8.1%) (9.8%) (11.2%) (9.3%) Q2/23 rep. Q2/24 rep.

  22. Slide 22: Group Q2/24 – op. EBIT development

    Group Q2/24 – op. EBIT development Op. EBIT [€m]/ op. EBIT margin [%] 12.5% 11.1% + 140bps +12.6% 38 Reported: 252 Reported: 209 238 (10.4%) -4 -6 (11.8%) 223 +17.0% 158 RVS 141 (15.6%) (14.7%) CVS 98 112 (9.3%) (11.2%) Q2/23 Organic M&A1 FX Q2/24 1) M&A: before PPA 22

  23. Slide 23: Group H1/24 – Order intake and Order book

    Group H1/24 – Order intake and Order book Order intake [€m] Order book [€m] 1,08 Book-to-bill 1,06 -3.8% 7,122 ex. Kiepe1 6,848 +0.1% 6,522 87 +4.0% 4,236 4,239 Org. -46 -39 growth +2.1% RVS 5,060 4,881 RVS 2,025 2,202 ex. Kiepe1 4,461 CVS 2,212 2,038 CVS 2,063 1,969 H1/23 Organic M&A1 FX H1/24 30.0

  24. Slide 24: Group H1/24 – Revenue development

    Group H1/24 – Revenue development Revenue [€m] Revenue [€m] By divison By region ex. Kiepe1 +1.8% 3,856 3,987 3,917 174 3,987 3,917 Asia/ -61 +7.0% 965 -43 Pacific 903 +4.4% SA 72 +23.9% 89 RVS 1,813 1,981 NA 1,001 -2.5% 976 -2.3%2 CVS 2,105 2,007 EU 1,942 +0.7% 1,957 +3.2%2 H1/23 Organic M&A1 FX H1

  25. Slide 25: Group H1/24 – Profitability and EPS

    Group H1/24 – Profitability and EPS Op. EBIT [€m]/ op. EBIT margin [%] EPS2 [€] 12.3% 10.6% + 170bps Fin. Result burdened by non-cash effects >2.00  GT Emission Systems +18.0% fair value effect ~€ 10m +18.9% 88 490  Cojali performance better -1 -12 1.85 415 1.55 than Acquisition Business Case +21.

  26. Slide 26: Group H1/24 – Bridge reported EBIT to operating EBIT

    Group H1/24 – Bridge reported EBIT to operating EBIT Op. EBIT [€m]/ op. EBIT margin [%] +170bps +170bps 475 490 2 13 (11.9%) (12.3%) 415 399 (10.6%) (10.2%) 303 304 (15.3%) 251 (15.3%) 253 RVS (14.0%) (13.8%) 209 CVS: ~€ 2m CVS: ~€ 13m 223 179 193 CVS (8.5%) (10.4%) (11.1%) (9.2%) H1/23 rep. H1/24 r

  27. Slide 27: Group H1/24 – op. EBIT development

    Group H1/24 – op. EBIT development Op. EBIT [€m]/ op. EBIT margin [%] 12.3% 10.6% + 170bps +18.0% 88 490 Reported: Reported: 399 -1 475 (10.2%) -12 (11.9%) 415 304 253 +21.2% RVS (15.3%) (14.0%) CVS 193 223 (9.2%) (11.1%) H1/23 Organic M&A1 FX H1/24 1) M&A: before PPA 27

  28. Slide 28: Group H1/24 – CapEx, NWC, Free Cashflow, ROCE

    Group H1/24 CapEx [€m] NWC1 [€m] Free Cashflow [€m] ROCE1 annualized [%] % of sales Scope of days 3.6% 70.9 69.8 3.4% 64 20.2% 139 136 1,544 1,546 16.6% -165 H1/23 H1/24 30.06.23 30.06.24 H1/23 H1/24 Q2/23 Q2/24 1) Figures 30.06.23 and Q2/23 according to IAS 8.41 for Cojali acquisition (NWC -€ 17m/

  29. Slide 29: RVS H1/24 – Order intake and Order book

    RVS H1/24 – Order intake and Order book Order intake [€m] Order book [€m] 1,12 Book-to-bill 1,11 -3.6% +8.8% 5,060 241 4,881 2,202 2,025 -46 -18 +11.9% H1/23 Organic M&A1 FX H1/24 30.06.23 30.06.24 1) Kiepe was deconsolidated end of January 2024 29

  30. Slide 30: RVS H1/24 – Revenue and Profitability

    RVS H1/24 – Revenue and Profitability Revenue [€m] Op. EBIT [€m]/ op. EBIT margin [%] +9.2% 15.3% 250 1,981 14.0% + 130bps -61 -21 1,813 +13.8% +20.0% 60 304 253 -1 -8 H1/23 Organic M&A1 FX H1/24 H1/23 Organic M&A1 FX H1/24 1) M&A: before PPA 30

  31. Slide 31: CVS H1/24 – Order intake and order book

    CVS H1/24 – Order intake and order book Order intake [€m] Order book [€m] 1,05 Book-to-bill 1,02 -4.5% -7.9% 2,063 1,969 2,212 -7.0% 0 2,038 -154 -20 H1/23 Organic M&A FX H1/24 30.06.23 30.06.24 31

  32. Slide 32: CVS H1/24 – Revenue and Profitability

    CVS H1/24 – Revenue and Profitability Revenue [€m] Op. EBIT [€m]/ op. EBIT margin [%] -4.6% 11.1% 2,105 -3.6% 9.2% + 190bps 0 2,007 -76 -22 +15.5% 0 34 223 193 -4 H1/23 Organic M&A FX H1/24 H1/23 Organic M&A FX H1/24 32

  33. Slide 33: Group: Income statement

    Group: Income statement 2023 2024 2023 2024 €m Q1/23 Q2/23 Q1/24 Q2/24 H1/23 H1/24 Revenues 1.907,6 2.009,9 1.974,2 2.012,9 3.917,5 3.987,1 Change in inventory of unfinished/finished products 5,4 12,0 52,1 4,3 17,3 56,4 Own work capitalized 27,1 26,1 32,4 25,9 53,2 58,4 Total operating performance 1

  34. Slide 34: Group: Cashflow statement

    Group: Cashflow statement 2023 2024 2023 2024 €m Q1/23 Q2/23 Q1/24 Q2/24 H1/23 H1/24 Net cash flows from/used in operating activities -137,0 105,3 -48,3 219,0 -31,7 170,7 Net cash flows from/used in investing activities -110,7 -69,1 0,0 0,0 -179,7 0,0 Net cash flows from/used in financing activities

  35. Slide 35: Group: Balance sheet/ assets

    Group: Balance sheet/ assets 2023 2024 €m 31.03.2023 30.06.2023 31.03.2024 30.06.2024 Assets Intangible assets and goodwill 1.337,7 1.331,9 1.467,1 1.459,4 Property, plant and equipment 1.820,0 1.798,0 1.864,1 1.851,2 Investments accounted for using the equity method 75,3 67,6 62,5 56,9 Other financ

  36. Slide 36: Group: Balance sheet/ liabilities

    Group: Balance sheet/ liabilities 2023 2024 €m 31.03.2023 30.06.2023 31.03.2024 30.06.2024 Equity Subscribed capital 161,2 161,2 161,2 161,2 Capital reserves 13,9 13,9 13,9 13,9 Retained earnings 10,3 10,3 9,4 309,4 Other components of equity -138,1 -167,8 -181,4 -165,8 Profit caried forward 2.500,3

  37. Slide 37: Net Financial Debt / (Cash) Balance

    Net Financial Debt / (Cash) Balance € million 30.06.2024 31.12.2023 31.12.2022 Cash and cash equivalents (1,075.7) (1,291.4) (1,342.6) Short-term liabilities to banks 59.1 66.2 172.4 Short-term bonds and obligations 768.1 11.0 11.0 Short-term leasing liabilities 65.8 63.4 63.1 Securities (incl. othe

  38. Slide 38: Investor relations contact

    Investor relations contact Andreas Sophia Stephanie Spitzauer Kursawe Jaschiniok +49 89 3547 182310 +49 89 3547 187311 +49 89 3547 183466 +49 175 5281320 +49 151 62330709 +49 171 8451732 Andreas.Spitzauer@knorr-bremse.com Sophia.Kursawe@knorr-bremse.com Stephanie.Jaschiniok@knorr-bremse.com 38

  39. Slide 39: Disclaimer

    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, an

Knorr-Bremse — Q2 2024 Earnings Presentation on 6ix