Knorr-bremse Ag · XETR:KBX
Knorr-bremse — FY2021 Earnings Presentation
43 slides from Knorr-bremse's earnings presentation, Feb 24, 2022
Slide 1: Preliminary Financial Results FY21
PRELIMINARY FINANCIAL RESULTS FY21 DR. JAN MROSIK I CEO FRANK WEBER I CFO FEBRUARY 24, 2022
Slide 2: FY21 highlights
FY21 highlights Financial KPIs significantly improved with strong finish in Q4/21 FY21 yoy: OI +13%, revenues +9% and op. EBIT margin at 13.6% (+40bps), EPS of € 3.87 (+26%) Record order book of € 5.6bn at YE21 underlines resilient business in rail and truck CVS: Strong underlying demand continues F
Slide 3: FY21: Guidance achieved in a challenging environment
FY21: Guidance achieved in a challenging environment Revenue op. EBIT margin €m Promised Delivered 6,600-6,800 13.0-13.5% 13.6% 6,706 Outperformance in major markets Stronger growth than markets Resilient profitability op. EBIT margin of 13.6% Strong cash preservation during Covid FCF of € 600m and
Slide 4: RVS: Operational highlights in all rail megatrends
RVS: Operational highlights in all rail megatrends Digitalization ▪ Future of freight: Expanding in freight market; about to launch Digital Automated Coupling (DAC) New Sustainability ▪ Railnova: increasing installed base of predictive growth maintenance and aftermarket connectivity for rolling mark
Slide 5: CVS: Operational highlights underline leading market position
CVS: Operational highlights underline leading market position Digitalization ▪ Electric power steering: First contract to develop new steering generation New Sustainability ▪ ADAS/HAD: start-up investment in Autobrains growth with video perception technology for realizing markets Urbanization system
Slide 6: Covid-impact still visible but positive market outlook for rail and truck in 2022
Covid-impact still visible but positive market outlook for rail and truck in 2022 Current situation Throughout 2022 No cancellations of contracts by rail operators, Recovery of demand should benefit from but postponements ongoing postponements in FY21 Europe as strongest rail market driver OE: pas
Slide 7: Strong order books of selected rail OEMs show strong recovery in Europe
Strong order books of selected rail OEMs show strong recovery in Europe Order book development European OEMs1 in €bn (selective & illustrative) 115 Strong ~1102 110 recovery Covid-related 105 postponements ~103 100 ~99 ~97 ~95 95 90 85 31.12.19 30.06.20 31.12.20 30.06.21 31.12.21 • Main selected top
Slide 8: Highlights FY21: Strong development of key financials
Highlights FY21: Strong development of key financials ORDER INTAKE € 7.29bn ORDER BOOK € 5.56bn (13.1% yoy) (11.7% yoy) REVENUES OF € 6.71bn 13.6% OP. EBIT MARGIN (8.9% yoy) (PY: 13.2%) € 3.32bn € 3.39bn op. 18.1% 10.7% (-0.6% yoy) (+20.2% yoy) (PY: 19.1%) (PY: 8.3%) € 600m FREE CASHFLOW (PY: € 687m
Slide 9: FY21: Rock-solid balance sheet underlines superior financial profile
FY21: Rock-solid balance sheet underlines superior financial profile of Knorr-Bremse Equity + Equity Ratio Gross Debt1 / Net Debt Liquidity2 Rating €m €m €m +26.4% A -36.2% 2,429 -38.1% A2 2,242 2,345 Moody‘s outlook improved to „stable“ 1,922 in 2021 -854 1,389 1,497 Leverage 26% 34% Gross Debt/ EB
Slide 10: Shareholder value focus through high return of invested capital and EPS growth
Shareholder value focus through high return of invested capital and EPS growth ROCE EPS1 % € +26.1% ▪ ROCE on high level at 25.0% almost stable driven by solid profitability and good control 3.87 over capital employed despite Covid-related -2.3% challenges 1.0% 25.6% 25.0% -0.7% 3.07 ▪ Increase of w
Slide 11: FY21: Improved EBIT profitability despite Covid-related challenges
FY21: Improved EBIT profitability despite Covid-related challenges op. EBITDA/ EBITDA Margin op. EBIT/ EBIT Margin (ROS) €m 18.0% 17.9% op. EBIT margin at 13.6% in FY21 13.2% 13.6% ▪ Operating leverage, cost measures +8.7% and fix cost discipline supported 102 2 1,203 Reported: +12.1% margin 1,2112
Slide 12: FY21: Very strong FCF again and good CCR performance
FY21: Very strong FCF again and good CCR performance over the last four years Free Cashflow1 Development in FY21 668 687 ▪ Good earnings quality supported strong FCF 600 ▪ Stringent and focused capex prioritization but 402 investments in future Q4/21 € 303m ▪ Tax rate improved ▪ Stringent WC managem
Slide 13: Investments into future growth in line with financial targets
Investments into future growth in line with financial targets CapEx R&D NWC €m 47.0 43.6 5.6% 5.6% 6.4% 6.4% 876 746 431 376 396 342 Q4/21 Q4/21 € 112m € 163m FY20 FY21 FY20 FY21 31.12.20 31.12.21 ▪ Guided capex range of 5-6% ▪ Guided R&D range of 6-7% ▪ Guided NWC days of 45-50 achieved achieved ac
Slide 14: Knorr-Bremse strengthened ESG status and reached carbon neutrality
FY21: Knorr-Bremse strengthened ESG status and reached important goal of carbon neutrality in 2021 Carbon-neutrality YE21 at KB sites achieved1 Goal of -50% CO2 until 2030 fully intact (>-65% in FY21)1 E nvironment First time TCFD and Scope 3 reporting in sustainability report FY21 (May) Sys
Slide 15: Q4/21: Overall strong finish in FY21 achieved
Q4/21: Overall strong finish in FY21 achieved ORDER INTAKE € 2.25bn ORDER BOOK € 5.56bn (7.8% yoy) (11.7% yoy) REVENUES OF € 1.70bn 11.8% OP. EBIT MARGIN (8.3% yoy) (PY: 14.2%) € 857m € 841m op. 18.2% 7.4% (10.7% yoy) (6.0% yoy) (PY: 21.3%) (PY: 9.7%) € 303m FREE CASHFLOW (PY: € 519m) 196% Cash Conv
Slide 16: Record order book provides strong foundation for future growth
Record order book provides strong foundation for future growth Order intake Order book €m €m 1.33x Book-to-bill 1.32x +11.7% +7.8% 5,558 4,977 119 10 33 2,249 2,087 5.7% RVS RVS RVS 1,281 3,875 1,095 RVS 3,721 CVS EVAC CVS 992 € 10m (Q4/21) 968 CVS CVS 1,697 1,269 Q4/20 Organic M&A FX Q4/21 31.12.20
Slide 17: Revenue increase driven by Europe and North America
Revenue increase driven by Europe and North America Revenue €m By business By region +8.3% 1,698 14 41 1,698 1,567 24.2% 27 SA 75 1,567 22 Asia/ 520 2.0% Pacific 4.8% 510 RVS RVS 857 774 9.6% 357 NA 326 EVAC CVS CVS € 14m (Q4/21) 710 11.7% 793 EU 793 841 Q4/20 Organic M&A FX Q4/21 Q4/20 Q4/21 17
Slide 18: Operating profitability impacted by Covid-related topics and supply issues
Operating profitability impacted by Covid-related topics and supply issues op. EBITDA/ margin op. EBIT/ ROS €m Op. EBIT margin at 11.8% in Q4/21 19.3% 14.2% ▪ Net extra costs (e.g. freight, semiconductors) of 16.7%2 >€ 15m in CVS in Q4/21 11.8%2 ▪ Increased R&D expenses -6.4% ▪ Strong Q4/20 as refer
Slide 19: RVS: Strong recovery of OI in Q4/21 and Book-to-Bill of 1.49
RVS: Strong recovery of OI in Q4/21 as expected and Book-to-Bill of 1.49 Order intake Order book €m Strong Book-to-bill of 1.05 in FY21 +4.1% ▪ Order book up by 4.1% to all-time record 1.41x Book-to-bill 1.49x 3,875 level, well supported by resilient rail industry +17.0% 3,721 despite Covid challeng
Slide 20: RVS: Operating leverage could not fully offset negative effects on profitability
RVS: Operating leverage could not fully offset negative effects on profitability Revenue op. EBIT / EBITDA €m 21.3% Revenue higher in Q4/21 yoy 18.2% ▪ EU: higher in both OE (mainly Passenger, Loco -5.2% and Metro) and AM +10.7% ▪ APAC: higher in OE and AM; India: stronger 165 4 156 mainly OE pass.
Slide 21: CVS: B-t-B again well above 1 and strong order book
CVS: B-t-B again well above 1 and strong order book, despite supply shortages Order intake Order book €m Strong recovery of OI in Q4/21 vs. Q3/21 (€ 697m) +33.7% and almost flat year over year 1.25x Book-to-bill 1.15x 1,697 ▪ EU/ NA: Order intake reflects ongoing high market demand but truck product
Slide 22: CVS: Solid profitability, despite low China demand and extra costs
CVS: Solid profitability, despite low China demand and Covid-related extra costs Revenue op. EBIT / EBITDA €m Recovery of revenues, despite constrained truck 9.7% 7.4% production ▪ EU/ NA: increase yoy in spite of supply shortages -19.0% reflect high market demand +6.0% 77 0 3 63 ▪ APAC: Despite rec
Slide 23: Group Guidance 2022 fully in line to support our mid-term targets
Group Guidance 2022 fully in line to support our mid-term targets Revenue op. EBIT margin Free Cashflow Assumptions €m €m ▪ Stable geopolitical and economic environment 6,800-7,200 ▪ FX rates stable yoy 6,706 600 500-600 ▪ No further setbacks occur as 12.5-14.0% a result of Covid 13.6% ▪ Shortages o
Slide 24: Growth opportunity RVS in Europe: digitalization of rail freight
Growth opportunity RVS in Europe: digitalization of rail freight European rail freight market Innovation driving growth path of RVS Mid-to-long-term revenue Digitalization potential for RVS : € 200-300m p.a. ▪ European rail freight market – OEM new vehicles and Additional aftersales1: € 3.7bn servic
Slide 25: Growth opportunity CVS: EPS is next generation of truck steering
Growth opportunity CVS: EPS is next generation of truck steering Knorr-Bremse driving steering innovation and Technological benefit through Electric Power Steering (EPS) vehicle content growth ▪ Truck industry faces tough goals of CO2 reduction ▪ EU: CO2 reduction of -15% until 2025 (vs. 2019) and -
Slide 26: Management focus in 2022
Management focus in 2022 Secure Drive market Management of Efficient capital Foster Drive innovation and outperformance Covid-related allocation with ESG shareholder quality challenges clear value leadership M&A strategy 26
Slide 27: Q&A / Backup
Q&A / Backup 27
Slide 28: Financial calendar: upcoming events
Financial calendar: upcoming events Date Event March 8, 2022 Morgan Stanley, Paris Industrials Day March 9, 2022 UBS, Best of Business Services, Industrials & Green Mobility, Leisure & Transport March 15, 2022 Bank of America, Global Industrials Conference March 31, 2022 Annual Report FY21 May 12, 2
Slide 29: Backup
a) KNORR-BREMSE Backup
Slide 30: FY21 – Group
FY21 – Group Order intake Order book €m €m 1.05 Book-to-bill 1.09 +11.7% +13.1% 5,558 861 53 7,287 4,977 6,442 -69 RVS RVS RVS 13.4% 3,471 RVS RVS 3,875 3,485 RVS 3,721 3,517 3,496 EVAC € 25m (FY21) CVS CVS R.H. Sheppard 3,818 CVS 2,954 € 28m (Q1/21) CVS 1,697 1,269 FY20 Organic M&A FX FY21 31.12.20
Slide 31: FY21 – Group
FY21 – Group Revenue €m By business €m By region y-o-y growth +8.9% 60 6,706 6,706 542 SA 6,157 6,157 115 -54 76 51.9% 2,024 Asia/ 8.8% RVS Pacific 3,317 2,027 -0.2% RVS 3,337 1,398 NA 1,261 10.8% EVAC € 31m (FY21) R.H. Sheppard CVS CVS € 29m (Q1/21) 3,390 3,168 2,819 2,792 13.5% EU FY20 Organic M&A
Slide 32: FY21 – Group
FY21 - Group op. EBITDA/ EBITDA Margin op. EBIT/ EBIT Margin (ROS) €m 18.0% 17.9% 13.6% 13.2% +8.7% Reported: +12.1% 102 2 1,203 1,2112 Reported: 1,107 -8 (18.1%) 105 912 9202 (13.7%) 814 -2 -5 9.2% RVS RVS 730 12.9% RVS 764 (22.0%) 599 RVS (22.9%) (18.1%) RVS 637 (19.1%) EVAC 390 EVAC € 0.1m1 (FY21
Slide 33: FY21 – Group
FY21 – Group OCF & FCF CapEx NWC ROCE €m OCF FCF €m % of sales €m Scope of days % 47.0 5.6% 5.6% 43.6 -12.8% -5.7% 25.6% 25.0% 876 1,036 977 746 376 342 687 600 FY20 FY21 FY20 FY21 31.12.20 31.12.21 31.12.20 31.12.21 33
Slide 34: FY21 – RVS
FY21 – RVS Order intake Order book €m +4.1% 1.04 Book-to-bill 1.05 3,875 -0.4% 3,721 3,485 25 3,471 -32 -7 -0.9% EVAC € 25m (FY21) FY20 Organic M&A FX FY21 31.12.20 31.12.21 34
Slide 35: FY21 – RVS
FY21 – RVS Revenue op. EBITDA / EBITDA margin op. EBIT / EBIT margin (ROS) €m -0.6% 22.9% 22.0% 3,337 19.1% 31 1 3,317 18.1% -52 -4.6% 764 1 729 -5.9% -1.5% -35 -1 637 0,1 599 -4.5% -37 -1 EVAC -5.8% € 31m (FY21) EVAC EVAC € 1.0m1 (FY21) € 0.1m1 (FY21) FY20 Organic M&A FX FY21 FY20 Organic M&A FX FY
Slide 36: FY21 – CVS
FY21 – CVS Order intake Order book €m +33.7% 1.05 Book-to-bill 1.13 1,697 +29.2% 898 28 3,818 1,269 -62 2,954 30.4% R.H. Sheppard € 28m (Q1/21) FY20 Organic M&A FX FY21 31.12.20 31.12.21 36
Slide 37: FY21 – CVS
FY21 – CVS Revenue EBITDA / EBITDA margin EBIT / EBIT margin (ROS) €m 14.8% 13.5% +20.2% 10.7% 8.3% 596 29 3,390 +31.3% -54 +53.6% 126 1 501 133 361 2,819 -8 381 -2 -5 21.1% 235 33.0% 56.5% R.H. Sheppard € 29m (Q1/21) R.H. Sheppard R.H. Sheppard € 1m (Q1/21) € -2m (Q1/21) FY20 Organic M&A FX FY21 FY
Slide 38: Income statement
Income statement INCOME STATEMENT 2020 2021 €m Q1/20 Q2/20 Q3/20 Q4/20 FY20 Q1/21 Q2/21 Q3/21 Q4/21 FY21 Revenues 1,627.5 1,428.3 1,533.5 1,567.4 6,156.7 1,691.5 1,727.4 1,589.2 1,697.5 6,705.6 Change in inventory of unfinished/finished products -0.8 15.1 -6.7 -18.9 -11.3 30.0 22.2 17.9 -43.5 26.6 O
Slide 39: Cashflow statement
Cashflow statement CASHFLOW STATEMENT (shortened) 2020 2021 €m Q1/20 Q2/20 Q3/20 Q4/20 FY20 Q1/21 Q2/21 Q3/21 Q4/21 FY21 Net cash flows from/used in operating activities 3.5 115.1 250.8 666.6 1,036.0 27.6 196.1 265.1 488.7 977.4 Net cash flows from/used in investing activities -57.8 -195.5 -69.2 -25
Slide 40: Balance sheet / assets
Balance sheet / assets BALANCE SHEET 2020 2021 €m 31.03.2020 30.06.2020 30.09.2020 31.12.2020 31.03.2021 30.06.2021 30.09.2021 31.12.2021 Assets Intangible assets and goodwill 858.8 896.2 888.5 887.8 899.2 967.5 986.9 1,005.8 Property, plant and equipment 1,437.2 1,490.0 1,479.5 1,544.7 1,589.1 1,61
Slide 41: Balance sheet / liabilities
Balance sheet / liabilities 2020 2021 €m 31.03.2020 30.06.2020 30.09.2020 31.12.2020 31.03.2021 30.06.2021 30.09.2021 31.12.2021 Equity Subscribed capital 161.2 161.2 161.2 161.2 161.2 161.2 161.2 161.2 Capital reserves 13.9 13.9 13.9 13.9 13.9 13.9 13.9 13.9 Retained earnings 34.2 34.2 34.2 13.3 13
Slide 42: Investor relations contact
Investor relations contact Andreas Sophia Spitzauer Kursawe +49 89 3547 182310 +49 89 3547 187311 +49 175 5281320 +49 151 62330709 Andreas.Spitzauer@knorr-bremse.com Sophia.Kursawe@knorr-bremse.com 42
Slide 43: 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