Knorr-Bremse (KBX) Q3 2024 earnings summary

Executive summary

• Q3 2024 delivered strong performance with order intake and revenue above €1.9 billion, driven by robust rail growth and resilient commercial vehicle margins despite a weak truck market and global challenges.

• The BOOST 2026 efficiency program and structural measures contributed to margin improvements, with aftermarket growth supporting results.

• Guidance for 2024 was slightly increased after the KB Signaling acquisition, reflecting confidence in continued growth and margin improvement.

• Major events included the KB Signaling acquisition, two bond issuances totaling €1.1 billion (including a green bond), and active portfolio management.

• Aftermarket revenue share increased, providing resilience against cyclical downturns.

Financial highlights

• Q3 order intake reached €1.94 billion (+0.2% yoy), with a book-to-bill ratio at 1.02; order book at €7.06 billion (+4.4% yoy).

• Group revenues for Q3 surpassed €1.9 billion (+0.3% yoy); RVS revenue up 9.5% yoy to €995 million, CVS down 8.2% yoy to €915 million.

• Operating EBIT margin improved to 12.3% (up from 11.5% prior year), driven by RVS and efficiency measures.

• Free cash flow for Q3 was €184 million; nine-month free cash flow surged to €248 million from €65 million.

• EPS for Q3 was €0.81 (+5.2% yoy); net income for nine months was €452.5 million, up from €398.2 million.

Outlook and guidance

• 2024 revenue guidance raised to €7.8–8.1 billion, EBIT margin expected at 11.5–13%, and free cash flow at €550–650 million.

• For 2025, RVS is expected to see mid-single-digit revenue growth and margin improvement; CVS revenues to be flat to slightly up, with margins flat to slightly higher.

• Guidance assumes stable exchange rates and no major geopolitical or economic disruptions.