Knorr-Bremse (KBX) Q4 2025 earnings summary

Executive summary

• Achieved strong financial results in 2025, meeting or exceeding all guidance targets for revenue, EBIT margin, and free cash flow despite challenging macroeconomic and geopolitical conditions.

• BOOST strategy execution drove margin improvement, cost efficiency, and profitable growth, with Phase I nearly complete and Phase II focused on margin-accretive growth.

• Rail division (RVS) reached its midterm target margin a year early, now representing 55% of group revenues and delivering strong profitable growth; truck division (CVS) maintained solid performance amid a tough market.

• Portfolio optimization through divestments and acquisitions shifted focus to higher-margin, growth-oriented businesses, including integration of duagon, KB Signaling, and TRAVIS.

• FY25 guidance achieved; FY26 guidance aligns with mid-term targets, with new targets to be provided in Q2/26.

Financial highlights

• FY25 revenue reached €7.82 billion, with organic growth driven by Europe and APAC, despite FX headwinds and tough US markets.

• Group operating EBIT margin increased by 70 basis points to 13%, led by rail's 16.5% and CVS's resilient 10.4%; operating EBIT exceeded €1 billion.

• Free cash flow hit a record €790 million (+8% YoY), with a cash conversion rate of 131%.

• Order intake grew 5.8% YoY to €8.42 billion; order book at €7.36 billion (+8% YoY), near record levels.

• Net debt/EBITDA at 0.49x; equity ratio improved to 36%; liquidity of €1.7 billion after bond repayment.

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% with low- to mid-single-digit organic revenue growth.

• 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.