Knorr-Bremse (KBX) Q4 2023 earnings summary

Executive summary

• FY23 turnaround achieved: revenue €7.93bn, operating EBIT margin 11.3% and free cash flow €553m; FY23 guidance met.

• Order book reached a record €7.08bn, including €570m from Kiepe, providing a strong foundation for 2024.

• BOOST brownfield measures were on track; Kiepe was sold and deconsolidated at end-January 2024.

Financial highlights

• FY23 revenue was €7.926bn, up 10.9% organically; reported revenue rose from €7.150bn.

• Operating EBIT reached €893m versus €795m in FY22; margin increased to 11.3% from 11.1%.

• Order intake was €8.252bn, up 2.7%; order book grew 2.5% to €7.082bn.

• Q4 revenue was €2.07bn, up 6% YoY; operating EBIT margin was 12.3% versus 11.6%, and FCF was €488m versus €48m.

Outlook and guidance

• FY24 revenue guidance is €7.7–8.0bn, operating EBIT margin 11.5–12.5%, and FCF €550–650m.

• FY24 assumptions include stable FX and essentially stable geopolitical and macroeconomic conditions.

• RVS expects solid organic revenue and EBIT margin increases; CVS expects slightly lower revenue and flat-to-slightly higher EBIT margin.

• FY26 targets are revenue of €8–9bn, operating EBIT margin above 14%, and cash conversion of 80–90%.