Knorr-Bremse (KBX) Q2 2024 earnings summary

Executive summary

• Strong performance in rail (RVS) with robust demand and margin gains, while truck (CVS) remained resilient despite a challenging market.

• BOOST 2026 program and efficiency measures drove margin improvements and cash flow gains.

• Executive board contract extension and raised 2024 guidance following strong Q2/H1 results and positive rail outlook.

• Major portfolio actions included the sale of non-core businesses and the pending Alstom Signalling NA acquisition, expected to close by late August 2024.

• Revenues rose to €3,987.1 million in H1/24, with operating EBIT up 18% to €489.7 million and free cash flow rebounding to €63.8 million.

Financial highlights

• Q2/24 revenues €2.01bn (+2.6% yoy); H1/24 revenues €3.99bn (+4.4% yoy); Q2/24 order intake €2.13bn (+5.5% yoy); order book €6.85bn.

• Q2/24 operating EBIT €252m (12.5% margin, +140bps yoy); H1/24 operating EBIT €490m (12.3% margin, +170bps yoy).

• Q2/24 free cash flow €158m (up 4x yoy); H1/24 free cash flow €64m (vs. -€165m H1/23).

• Aftermarket revenues up 7.9% year-over-year, now 41.7% of group revenues.

• Net working capital stable at €1.55bn; CapEx at 3.2% of sales in Q2.

Outlook and guidance

• 2024 revenue expected at €7.7–8.0bn, operating EBIT margin 11.5–13.0%, and free cash flow €550–650m.

• Guidance raised due to strong divisional performance and positive rail outlook; integration of Alstom Signalling NA expected to add €100m in revenue.

• Rail expected to deliver solid organic growth; truck segment to see slight revenue decrease but stable or higher margin.

• Guidance assumes stable FX and macro/geopolitical conditions.

• EBIT margin target of >14% by 2026 remains on track.