Knorr-Bremse (KBX) Q2 2024 earnings summary

Executive summary

• Achieved strong performance in Q2 and H1 2024, with rail (RVS) outperformance and resilient truck (CVS) business despite market headwinds.

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

• Executive Board contract extended; 2024 guidance raised and confirmed.

• Major portfolio actions included sale agreements for GT Emission Systems, Kiepe-Group, and Russian business; Alstom Signalling NA acquisition closing expected late August.

• Revenues rose 1.8% year-over-year to €3,987.1 million, with net income up €51.8 million to €312.8 million.

Financial highlights

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

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

• Free cash flow quadrupled year-over-year to €158m in Q2; H1/24 free cash flow at €64m (vs. -€165m H1/23).

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

• ROCE improved to 20.2% (up from 16.6% Q2/23); equity ratio at 36.1%.

Outlook and guidance

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

• RVS expected to drive margin improvement in H2; CVS margin to remain resilient but below 10%.

• Guidance assumes stable FX and macro/geopolitical conditions; excludes impact of pending Alstom Signalling NA acquisition.

• Rail market outlook remains positive; commercial vehicle production expected to decline, especially in Europe.