Knorr-Bremse (KBX) Q4 2025 earnings summary

Executive summary

• Achieved strong FY2025 results, meeting all guidance targets and demonstrating resilience amid challenging macroeconomic and geopolitical conditions.

• BOOST strategy execution improved cost efficiency, margin-accretive growth, and portfolio optimization, with Phase I nearly complete and Phase II focused on expansion.

• Rail division (RVS) reached its midterm margin target a year early, now representing 55% of group revenues; truck division (CVS) maintained solid performance despite market headwinds.

• Portfolio optimization included divestments of low-margin businesses and reinvestment into higher-margin, growth-oriented platforms.

• Strategic focus on digitalization, AI transformation, and expansion in energy and signaling markets to drive future growth.

Financial highlights

• FY25 revenues reached €7.82 billion, with organic growth in Europe and APAC, and a slight overall decline due to divestments and FX headwinds.

• Operating EBIT margin improved by 70 bps to 13.0%, with EBIT exceeding €1 billion; EPS increased 20.7% to €3.33.

• Record free cash flow of €790 million, with a cash conversion rate of 131%.

• Order intake grew to €8.42 billion (+5.8% YoY), and order book reached €7.36 billion (+8% YoY), supporting future growth.

• Equity ratio increased to 36%, net debt reduced by 31% to €627 million, and net debt/EBITDA at 0.49x.

• CapEx was €319 million (4.1% of revenues), down year-over-year; ROCE improved by 200 bps to 23.4%.

Outlook and guidance

• 2026 guidance: revenues €8.0–8.3 billion, operating EBIT margin around 14%, and free cash flow €750–850 million.

• RVS operating margin expected just below 17.5% for 2026; CVS margin targeted to improve toward 12%.

• Organic revenue growth in CVS projected at low- to mid-single digits, with margin expansion as cost base is further optimized.

• Up to €30 million in restructuring costs may be incurred to optimize global production footprint.

• New midterm targets to be communicated with Q2 2026 results.