Slide 1: Financial Results Q2/23
FINANCIAL RESULTS Q2/23 MARC LLISTOSELLA I CEO FRANK WEBER I CFO AUGUST 10, 2023
Slide 2: Key take-aways for today
ML Key take-aways for today Robust demand in rail and truck continues EBIT margin improved in Q2/23 as expected High order book secures solid capacity utilization Settlement with Indian Railways agreed upon Divestment agreement signed regarding Kiepe, sale of foundry at Sheppard closed and
Slide 3: Good underlying demand in rail and truck markets continues
Good underlying demand in rail and truck markets continues Current situation Outlook FY23 EU/ NA: strong support by stimulus programs and Ridership: EU full recovery to pre-Covid-19 level expected sustainability efforts EU/ NA: good demand should continue CN: good momentum of ridership supporting AM
Slide 4: KPIs Q2/23: Strong orders and revenues as well as recovery of EBIT margin
KPIs Q2/23: Strong orders and revenues as well as recovery of EBIT margin REVENUES OF € 2.01bn 11.1% op. EBIT MARGIN (+16% yoy) (PY: 10.5%) € 958m € 1,052m 14.7% 9.3% € 34m FREE CASHFLOW (PY: € -35m) 26% Cash Conversion Rate ORDER INTAKE € 2.06bn ORDER BOOK € 7.12bn (+7% yoy) (+6% yoy) 4
Slide 5: Turnaround of NWC/scope of days achieved and ROCE improved
Turnaround of NWC/ scope of days achieved and ROCE improved CapEx NWC1 ROCE (annualized) €m % of sales Scope of days % 73.0 71.7 4.4% 3.7% 17.0% 16.4% 1,561 77 1,381 75 Q2/22 Q2/23 30.06.22 30.06.23 30.06.22 30.06.23 1) Short term notes payables and liabilities are included in Q2/23. Considering the
Slide 6: FCF turned positive already in Q2/23 and CCR moves in the right direction
FCF turned positive already in Q2/23 and CCR moves in the right direction Free Cashflow1 Cash Conversion Rate €m In % 34 26% -32% -35 Q2/22 Q2/23 Q2/22 Q2/23 1) FCF before M&A 6
Slide 7: RVS: Record order book and good Book to bill provide sound visibility
RVS: Record order book and good Book to bill provide sound visibility Order intake Order book €m Comparable OI yoy in EU and NA, APAC softer +6.1% 1.27 Book-to-bill 1.07 ▪ EU: OE comparable yoy, main drivers Regional/ 5,060 Commuter, Loco, HS & LRV; AM higher, also driven -2.2% 4,769 by KB Denmark ▪
Slide 8: RVS: Strong increase in revenues and enhanced profitability
RVS: Strong increase in revenues and enhanced profitability Revenue op. EBIT/ EBIT Margin (ROS) 1 €m Revenue higher yoy in Q2/23 ▪ Revenue includes both volume & price increases +16.4% 14.3% 14.7% ▪ EU: Higher in both OE and AM, including acquisition of KB Denmark (DSB) 146 19 958 ▪ APAC: Higher rev
Slide 9: CVS: Truck demand remained strong and order book on record level
CVS: Truck demand remained strong and order book on record level Order intake Order book €m Order intake up by 18% 0.96 Book-to-bill 0.98 +7.0% ▪ EU/ NA: Demand still on high level with no major 2,063 cancellations, only shift of orders into later months +17.6% 1,927 and next year 156 28 1,036 ▪ APA
Slide 10: CVS: Profitability continues to improve with strong revenues
CVS: Profitability continues to improve with strong revenues Revenue op. EBIT/ EBIT Margin (ROS) 1 €m Revenues benefitted from demand and pricing ▪ Revenue includes both volume & price increases +15.1% ▪ EU & NA: Stable TPR and higher customer pricing support strong revenue development 26 9.3% 138 1
Slide 11: Guidance FY23 confirmed and revenue target increased
Guidance FY23 confirmed and revenue target increased Revenue op. EBIT margin (RoS) Free Cashflow Assumptions €m % €m ▪ Current exchange rates 7,500-7,800 ▪ Essentially stable geopolitical and macroeconomic 7,150 350-550 Old guidance conditions 10.5-12.0% 7,300-7,700 11.1% ▪ No new lockdowns due to C
Slide 12: BOOST Value creation 2026 targets
BOOST Value creation 2026 targets Margin improvement is key priority € 8-9bn Highly resilient business with growth potential in AM revenues Long-term above market growth fueled by mega trends Key Takeaways > 14% op. EBIT margin Improvement of cash conversion rate Solid balance sheet 80-90% cash conv
Slide 13: Q&A / Backup
Q&A / Backup
Slide 14: Financial calendar: Upcoming events
Financial calendar: Upcoming events Date Event August 10, 2023 Q2/23 financial results September 7, 2023 MS CEO Conference, London September 15, 2023 UBS Quo Vadis Virtual September 18, 2023 Berenberg & Goldman Sachs Twelfth German Corporate Conference, Munich September 20, 2023 Baader Investment Co
Slide 15: Q2/23 – Group: Order Intake and Order Book
Q2/23 – Group: Order Intake and Order Book Order intake Order book1 €m €m 1.11 Book-to-bill 1.02 +6.4% +6.8% 7,122 6,695 149 47 2,060 1,928 -64 RVS RVS RVS 7.7% RVS 5,060 1,025 4,769 1,047 DSB € 19m (Q3/22) CVS Cojali CVS € 28m (Q4/22) 1,036 CVS 881 CVS 1,927 2,063 Q2 22 Organic M&A FX Q2 23 30.06.2
Slide 16: Q2/23 – Group: Revenue development
Q2/23 – Group: Revenue development Revenue €m By business By region +15.7% 45 2,010 284 2,010 37 SA -1.5% -56 1,737 1,737 481 Asia/ RVS 38 12.8% Pacific RVS +16.4% 958 426 823 506 DSB 12.3% NA 451 € 19m (Q3/22) Cojali € 26m (Q4/22) CVS CVS 914 1,052 986 EU 822 19.9% Q2 22 Organic M&A FX Q2 23 Q2/22
Slide 17: Q2/23 – Group: Profitability and EPS
Q2/23 – Group: Profitability and EPS op. EBIT/ ROS2 EPS1 €m 10.5% 11.1% € +12.6% 0.74 0.66 +22.0% 42 4 223 -6 183 23.0% DSB € -3m (Q3/22) Cojali € 7m (Q4/22) Q2/22 Org. M&A FX Q2/23 Q2/22 Q2/23 1) After minorities 2) M&A: Before PPA 17
Slide 18: Q2/23 Group: Bridge – reported EBIT to operating EBIT
Q2/23 Group: Bridge – reported EBIT to operating EBIT op. EBIT/ EBIT Margin (ROS)1 €m 11.1% 10.4% 14 223 209 4 -4 14.7% 14.5% 141 14.9% 139 12m RVS: -€13.3% RVS: +€ 14m 8.1% 9.3% 86 CVS: +€ 8m CVS: +€ 4m 98 Q2/23 rep. Exit Russia Sale Technical settlement Q2/23 op. Foundry Sheppard Rail India signed
Slide 19: Q2/23 – Group: op. EBIT growth vs. prior year
Q2/23 – Group: op. EBIT growth vs. prior year op. EBIT/ EBIT Margin1 €m 11.1% 10.5% +22.0% Reported: 162 (9.3%) 42 4 223 Reported: 209 -6 (10.4%) 183 RVS 22.9% 141 RVS (14.7%) 118 DSB (14.3%) € -3m (Q3/22) Cojali CVS € 7m (Q4/22) CVS 74 98 (8.1%) (9.3%) Q2 22 Organic M&A FX Q2 23 1) M&A: before PPA
Slide 20: H1/23 – Group: Order Intake and Order Book
H1/23 – Group: Order Intake and Order Book Order intake Order book1 €m €m 1.19 Book-to-bill 1.08 +6.4% +4.9% 7,122 101 4,236 6,695 4,038 151 -54 RVS RVS RVS 3.7% 2,025 RVS 2,128 5,060 4,769 DSB € 42m (Q3/22) CVS CVS Cojali 1,911 € 59m (Q4/22) 2,212 CVS CVS 1,927 2,063 H1 2022 Organic M&A FX H1 2023
Slide 21: H1/23 – Group: Revenue development
H1/23 – Group: Revenue development Revenue €m By business €m By region y-o-y growth +15.0% 466 98 3,917 3,917 -0.7% 72 SA -53 3,406 3,406 RVS 72 903 Asia/ 9.2% Pacific RVS 13.7% 1,813 826 1,598 1,001 DSB 839 19.3% NA € 42m (Q3/22) Cojali CVS CVS € 56m (Q4/22) 2,105 1,942 1,809 1,669 16.4% EU H1 2022
Slide 22: H1/23 – Group: Profitability
H1/23 – Group: Profitability op. EBITDA/ EBITDA Margin op. EBIT/ EBIT Margin (ROS)1 €m 15.0% 14.9% 10.7% 10.6% +14.2% +13.8% 50 25 583 15 415 RVS 35 510 RVS -2 365 RVS 0 361 RVS RVS RVS RVS 9.8% 325 RVS 9.6% RVS 390 253 305 240 RVS 301 326 DSB DSB € -2m (Q3/22) CVS € -4m (Q3/22) CVS CVS CVS Cojali 2
Slide 23: H1/23 Group: Bridge – reported EBIT to operating EBIT
H1/23 Group: Bridge – reported EBIT to operating EBIT op. EBIT/ EBIT Margin (ROS)1 €m 10.6% 10.2% 399 4 2 14 415 -4 14.0% 13.8% 251 253 12m RVS: -€13.3% RVS: +€ 14m 9.2% 8.5% 179 CVS: +€ 8m CVS: +€ 4m CVS: +€ 2m 193 H1 2023 rep. Exit Russia Sale Restructuring Technical settlement H1 2023 op. Foundry
Slide 24: H1/23 – Group: op. EBIT growth vs. prior year
H1/23 – Group: op. EBIT growth vs. prior year op. EBIT/ EBIT Margin (ROS)1 €m 10.7% 10.6% +13.8% Reported: 343 (10.1%) 35 15 415 Reported: 365 399 0 (10.2%) 9.6% RVS RVS 253 (14.0%) 240 (15.0%) DSB € -4m (Q3/22) Cojali CVS CVS € 20m (Q4/22) 151 193 (9.2%) (8.3%) H1 2022 Organic M&A FX H1 2023 1) M&A
Slide 25: H1/23 – Group
H1/23 – Group FCF CapEx NWC1 ROCE (annualized) €m Group €m % of sales €m Scope of days % 73.0 71.7 4.1% 3.6% 17.0% 1,561 16.4% 38% 1,381 141 139 -165 -267 H1/22 H1/23 30.06.22 30.06.23 H1/22 H1/23 H1/22 H1/23 1) Considering short term notes payables and liabilities previous year NWC would amount to
Slide 26: H1/23 – RVS: Order Intake and Order Book
H1/23 – RVS: Order Intake and Order Book Order intake Order book1 €m +6.1% 1.33 Book-to-bill 1.12 5,060 -4.8% 4,769 2,128 42 2,025 -107 -39 -5.0% DSB € 42m (Q3/22) H1 2022 Organic M&A FX H1 2023 30.06.2022 30.06.2023 1) Specific revenue-generating existing orders (e.g. prototypes, other revenues and
Slide 27: H1/23 – RVS: Revenue and Profitability
H1/23 – RVS: Revenue and Profitability Revenue op. EBITDA / EBITDA margin op. EBIT / EBIT margin (ROS) 1 €m 19.1% +13.5% 17.9% 15.0% 14.0% 209 42 1,813 -36 1,598 +6.5% 13.1% 23 325 +5.4% 305 -2 -2 18 253 7.6% 240 DSB -4 -1 € 42m (Q3/22) 7.5% DSB DSB € -2m (Q3/22) € -4m (Q3/22) H1 2022 Organic M&A FX
Slide 28: H1/23 – CVS: Order Intake and Order Book
H1/23 – CVS: Order Intake and Order Book Order intake Order book1 €m 1.06 Book-to-bill 1.05 +15.8% +7.0% 258 59 2,212 2,063 1,911 -16 1,927 13.5% Cojali € 59m (Q4/22) H1 2022 Organic M&A FX H1 2023 30.06.2022 30.06.2023 1) Specific revenue-generating existing orders (e.g. prototypes, other revenues
Slide 29: H1/23 – CVS: Revenue and Profitability
H1/23 – CVS: Revenue and Profitability Revenue op. EBITDA / EBITDA margin op. EBIT / EBIT margin (ROS)1 €m +16.4% 12.2% 13.0% 8.3% 9.2% 56 2,105 257 +24.1% -17 +28.1% 27 274 27 20 1 193 1,809 0 221 22 151 12.2% 14.2% 14.6% Cojali € 56m (Q4/22) Cojali € 27m (Q4/22) Cojali € 20m (Q4/22) H1 Organic M&A
Slide 30: H1/23: income statement development
H1/23: income statement development INCOME STATEMENT 2022 2023 2022 2023 €m Q1/22 Q2/22 Q3/22 Q4/22 FY22 Q1/23 Q2/23 H1/22 H1/23 Revenues 1,669.4 1,736.7 1,792.0 1,951.7 7,149.7 1,907.6 2,009.9 3,406.0 3,917.5 Change in inventory of unfinished/finished products 54.0 8.3 43.6 -76.0 30.0 5.4 12.0 62.3
Slide 31: H1/23: cashflow development
H1/23: cashflow development CASHFLOW STATEMENT (shortened) 2022 2023 2022 2023 €m Q1/22 Q2/22 Q3/22 Q4/22 2022 Q1/23 Q2/23 H1/22 H1/23 Net cash flows from/used in operating activities -189.6 36.7 121.6 572.9 541.6 -678.6 105.3 -152.9 -31.7 Net cash flows from/used in investing activities -35.3 -125.
Slide 32: H1/23: balance sheet / assets development
H1/23: balance sheet / assets development BALANCE SHEET 2022 2023 €m 31.03.2022 30.06.2022 30.09.2022 31.12.2022 31.03.2023 30.06.2023 Assets Intangible assets and goodwill 1,016.5 1,017.4 1,068.5 1,340.2 1,337.7 1,331.9 Property, plant and equipment 1,798.8 1,786.0 1,850.5 1,814.5 1,820.0 1,798.0 I
Slide 33: H1/23: balance sheet / liabilities development
H1/23: balance sheet / liabilities development 2022 2023 €m 31.03.2022 30.06.2022 30.09.2022 31.12.2022 31.03.2023 30.06.2023 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 10.3 10.0 10.3 10.3 10.3 10.3 Other components
Slide 34: 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
Slide 35: 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 35