Knorr-bremse Ag · XETR:KBX
Knorr-bremse — FY2022 Earnings Presentation
38 slides from Knorr-bremse's earnings presentation, Feb 23, 2023
Slide 1: Preliminary Financial Results 2022
PRELIMINARY FINANCIAL RESULTS 2022 MARC LLISTOSELLA I CEO FRANK WEBER I CFO FEBRUARY 23, 2023
Slide 2: Track Record: Marc Llistosella
Track Record Marc Llistosella 28 years of experience in commercial vehicles India: successful launch of BharatBenz Japan: first series electro truck / record results Start-up investor and business angel 2
Slide 3: Key take-aways for today
Key take-aways for today Solid execution in a difficult year 2022 Order intake and order books on record levels Continuous investments in R&D, digitization and aftermarket ESG strengthened and integral part of KB’s strategy Guidance FY22 for revenues and op. EBIT margin achieved Rail and
Slide 4: Plenty of operational highlights FY22 supporting KB's strategy
Plenty of operational highlights FY22 supporting KB’s strategy Digitization and Innovation Corporate environment Contract wins aftermarket Digital Automated Coupler Top employer in Germany Rail contract wins, e.g. Acquisition of Cojali (rail freight) • Germany • Egypt • Milan (passenger coupler) Rot
Slide 5: Guidance FY22 for revenues and op. EBIT margin achieved
Guidance FY22 for revenues and op. EBIT margin achieved Revenues op. EBIT margin Free Cashflow €m €m 6,900-7,200 7,150 300-500 10.5-12.0% Price increases and other 11.1% measures fully offset 220 € ~325m inflationary cost burden in FY22 Guidance FY22 Guidance FY22 Guidance FY22 FY22 FY22 FY22 Delive
Slide 6: KB will benefit from good underlying demand in rail and truck markets
KB will benefit from good underlying demand in rail and truck markets YE22 Outlook FY23 Support by stimulus programs and sustainability efforts Ridership: EU full recovery to pre-Covid-19 level expected; CN increase expected after end of zero-Covid policy Partly ridership exceeds pre-Covid-19 in EU;
Slide 7: Financial highlights FY22: Sound performance in a difficult environment
Financial highlights FY22: Sound performance in a difficult environment ORDER INTAKE € 8.11bn ORDER BOOK1 € 6.91bn (11% yoy) (24% yoy) REVENUES OF € 7.15bn 11.1% OP. EBIT MARGIN (7% yoy) (PY: 13.5%) € 3.40bn € 3.75bn op. 14.9% op. 9.0% (3% yoy) (11% yoy) (PY: 17.9%) (PY: 10.7%) € 220m FREE CASHFLOW
Slide 8: Rock-solid balance sheet is excellent basis for business development
Rock-solid balance sheet is excellent basis for business development Equity + Equity Ratio Gross Debt1 / Net Debt Liquidity2 Rating €m €m €m A +11% +56% -4% A2 2,691 2,171 1,497 2,426 1,444 Confirmed in i.a. bond of € 700m 2022 at very attractive rates 1,389 34% 34% Leverage Gross Debt/ EBITDA 109 7
Slide 9: Investments into future growth basically in line with financial target corridors
Investments into future growth basically in line with financial target corridors CapEx R&D NWC €m 57 7% 6.6% 6.4% - 47 50 6% 5.6% 6% - - 45 5% 4.9% 1,127 470 431 876 376 352 Q4/21 Q4/22 € 163m € 126m FY21 FY22 FY21 FY22 31.12.21 31.12.22 In % of revenues Scope of days Strategic corridor 9
Slide 10: FCF impacted by high accounts receivables and inventory
FCF impacted by high accounts receivables and inventory Free Cashflow1 Accounts receivables/ inventories €m Development in FY22 +11.3% 600 ▪ Lower EBIT yoy driven by lower contribution from China and Russia ▪ Higher inventory to secure customer delivery in uncertain business environment 1,343 reduce
Slide 11: ESG as integral part of KB's strategy further accelerated
ESG as integral part of KB’s strategy further accelerated Further roll-out of energy efficiency activities and own green power production - 2030 goal of -50% CO2 (Scope 1+2) intact (>-65% in FY22)1 Environment Scope 3 strategy accelerated with internal commitment to join SBTi, target announcemen
Slide 12: Financial highlights Q4/22: Strong finish in FY22 achieved
Financial highlights Q4/22: Strong finish in FY22 achieved ORDER INTAKE € 2.20bn ORDER BOOK1 € 6.91bn (-2% yoy) (24% yoy) REVENUES OF € 1.95bn 11.6% OP. EBIT MARGIN (15% yoy) (PY: 11.6%) € 949m € 1,003m op. 14.1% op. 10.1% (11% yoy) (19% yoy) (PY: 17.7%) (PY: 7.4%) € 449m FREE CASHFLOW (PY: € 303m)
Slide 13: RVS: Record order book provides good visibility for FY23
RVS: Record order book provides good visibility for FY23 Order intake Order book1 €m High order intake driven by EU and NA +26.9% ▪ EU: driven by Regional & Commuter and 1.49x Book-to-bill 1.22x 4,919 freight, however not on equally high level as order intake Q4/21 with high Russia volume -9.7% ▪ AP
Slide 14: RVS: Operating leverage could not offset Russian and Chinese impact
RVS: Operating leverage could not offset Russian and Chinese impact Revenue op. EBIT €m Revenue up yoy and AM improved to 50% 17.7% ▪ EU: higher yoy, AM overcompensating slightly 14.1% softer OE +10.7% ▪ APAC: overall similar level yoy; India: stronger loco & regional and AM; China: similar yoy, 19
Slide 15: CVS: Good demand and high order backlog provide good visibility for 2023
CVS: Good demand and high order backlog provide good visibility for 2023 Order intake Order book1 €m Order intake increased again qoq as customer +17.3% fill up their order books for 2023 1.15x Book-to-bill 1.04x 1,990 ▪ Demand and outlook remain solid +7.5% 1,697 ▪ EU/ NA: Solid demand remains also
Slide 16: CVS: Strong revenues and improved price/cost ratio led to higher margins
CVS: Strong revenues and improved price/ cost ratio led to higher margins Revenue op. EBIT €m Revenue growth also driven by higher prices, AM share slightly decreased to 29% +19.3% 10.1% ▪ EU/ NA: Q4/22 strongly driven by updated 47 1,003 7.4% customer agreements targeting inflation and 99 16 demand
Slide 17: Important actions taken to countersteer challenging business environment
Important actions taken to countersteer challenging business environment External headwinds require…. ….optimization measures1 Geopolitics Business climate Portfolio Fix costs restructuring RVS: plant closure Phase-out Russia in China CVS: layoffs Sale of Kiepe Supply chain Inflation in China Sale o
Slide 18: Guidance FY23
Guidance FY23 Revenues op. EBIT margin Free Cashflow Assumptions €m €m ▪ Current exchange rates 7,300-7,700 ▪ Essentially stable geopolitical 7,150 and macroeconomic 350-550 conditions 10.5-12.0% 11.1% ▪ No new lockdown due to Covid ▪ Inflationary cost increases will be compensated ▪ No additional p
Slide 19: We want to lead Knorr-Bremse to profitable growth by innovation
- strictly confidential - PRODUCTS / SOLUTIONS We want to lead Knorr-Bremse to profitable growth by PEOPLE innovation. And beyond. PROCESSES / ORGANIZATION 19
Slide 20: Products / Solutions: Obligation and add-on
- strictly confidential - PRODUCTS / SOLUTIONS Define target picture, secure market leadership & bolster technology foundation OBLIGATION Facilitate ESG – sustainability as base layer to all our doings Focus on global diversification Grow by digitalization & data monetization ADD-ON Drive active inn
Slide 21: People: Build one team with one direction
- strictly confidential - PEOPLE Build one team with one direction OBLIGATION Ensure employee satisfaction Adapt to new working reality Drive towards #1 employer ADD-ON Leverage of knowledge culture – foundation for the next level 21
Slide 22: Processes / Organization: Further foster resilience and agility
- strictly confidential - PROCESSES / ORGANIZATION Further foster resilience and agility OBLIGATION Optimize the portfolio Further optimize the process landscape Develop portfolio target picture & future growth initiatives ADD-ON Focus on further efficient organic & inorganic growth Exploit new adja
Slide 23: Q&A
Q&A
Slide 24: Financial calendar: upcoming events
Financial calendar: upcoming events Date Event Feb 24, 2023 Roadshow Frankfurt Feb 27-28, 2023 Roadshow London Mar 1, 2023 Roadshow Paris Mar 8-9, 2023 Roadshow North America Mar 16, 2023 Best of Southern Germany Conference Stifel, Stuttgart Mar 21, 2023 Global Industrials Conference Bank of America
Slide 25: Backup
a) KNORR-BREMSE Backup
Slide 26: Q4/22 – Group
Q4/22 – Group op. EBIT/ EBIT Margin (ROS) €m 11.6% 11.6% Reported: 208 (12.2%) +15.6% Reported: 178 22 1 8 227 (9.1%) 196 RVS 134 RVS 152 CVS 101 CVS 62 Q4/21 Organic M&A FX Q4/22 26
Slide 27: FY22 – Group: Order intake and order book
FY22 – Group Order intake Order book €m 1.09 Book-to-bill 1.13 +11.4% +24.3% 367 8,114 410 50 7,287 6,907 RVS RVS 5,558 4,162 3,471 RVS RVS RVS 3,517 4,919 RVS 3,496 3,875 CVS CVS 3,818 3,954 CVS CVS 1,697 1,990 31.12.21 31.12.22 FY21 Organic M&A FX FY22 27
Slide 28: FY22 – Group: Revenue
FY22 – Group Revenue €m By business By region y-o-y growth +6.6% 338 7,150 7,150 6,706 62 44 6,706 32.1% 152 SA 115 1,795 Asia/ RVS -11.3% RVS 2,024 Pacific 3,402 3,317 28.6% 1,798 1,398 NA CVS CVS 7.5% 3,390 3,750 3,404 3,168 EU FY21 Organic M&A FX FY22 FY21 FY22 28
Slide 29: FY22 – Group: op. EBIT / EBIT margin
FY22 – Group op. EBIT/ EBIT Margin (ROS) €m 13.5% 11.1% Reported: -12.5% 916 (13.7%) 908 Reported: 27 795 721 1 (10.1%) RVS -141 595 RVS (17.9%) 507 (14.9%) CVS CVS 361 339 (10.7%) (9.0%) FY21 Organic M&A FX FY22 29
Slide 30: FY22 – Group: OCF, FCF, CapEx, NWC, ROCE
FY22 – Group OCF & FCF CapEx NWC ROCE €m OCF FCF €m % of sales €m Scope of days % 57 5.6% -63.3% 4.9% 47 -44.4% 24.9% 1,127 975 376 876 16.8% 352 600 542 220 FY21 FY22 FY21 FY22 31.12.21 31.12.22 31.12.21 31.12.22 30
Slide 31: FY22 – RVS: Order intake and order book
FY22 – RVS Order intake Order book €m +26.9% 1.05 Book-to-bill 1.22 4,919 +19.9% 147 4,162 3,875 516 28 3,471 FY21 Organic M&A FX FY22 31.12.21 31.12.22 31
Slide 32: FY22 – RVS: Revenue and op. EBIT
FY22 – RVS Revenue op. EBIT / EBIT margin (ROS) €m 17.9% +2.6% 127 3,402 14.9% 3,317 28 -70 -14.8% 595 15 507 -98 -5 FY21 Organic M&A FX FY22 FY21 Organic M&A FX FY22
Slide 33: FY22 – CVS: Order intake and order book
FY22 – CVS Order intake Order book €m 1.13 Book-to-bill 1.05 +17.3% +3.6% 1,990 3,818 220 3,954 22 1,697 -106 FY21 Organic M&A FX FY22 31.12.21 31.12.22 33
Slide 34: FY22 – CVS: Revenue and op. EBIT
FY22 – CVS Revenue op. EBIT / EBIT margin (ROS) €m 10.7% 9.0% +10.6% 211 3,750 132 16 -6.2% 3,390 361 5 13 339 -41 FY21 Organic M&A FX FY22 FY21 Organic M&A FX FY22 34
Slide 35: FY22 Bridge – reported to operating results
FY22 Bridge – reported to operating results op. EBIT/ EBIT Margin (ROS) €m 90813.5% 916 13.7% 19 8 79511.1% 47 72110.1% 595 584 17.9% 17.6% 507 454 13.3% 14.9% 361 10.7% 318 8.5% 339 361 10.7% 9.0% FY21 rep. FY22 rep. Exit Russia Restructuring USA Restructuring China FY22 op. FY21 op. RVS CVS 35
Slide 36: Net Financial Debt / (Cash) Balance
Net Financial Debt / (Cash) Balance € thousand 2022 2021 2020 Cash and cash equivalents (1,342,587) (1,380,210) (2,277,048) Short-term liabilities to banks 172,402 90,106 566,459 Short-term bonds and obligations 11,017 4,636 504,808 Short-term leasing liabilities 63,061 59,942 51,574 Securities (inc
Slide 37: 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 37
Slide 38: 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