Knorr Bremse : Presentation final figures FY23

PRELIMINARY FINANCIAL RESULTS 2023

MARC LLISTOSELLA I CEO

FRANK WEBER I CFO

February 22, 2024

Key take-aways for today

Turnaround achieved - margin increased

Resilience - extremely high and secured order book

Rock-solid balance sheet

BOOST on track - Kiepe sold

Stable management team

Guidance FY23 achieved

2

Operational highlights fully supporting KB's strategy

Innovation		Contract wins		Cultural Change

Cube Control

Digital Train

Important Rail contracts won

New Leadership Principles

• CRRC, China (Metro)
• Alstom, India (Metro)
• Hitachi Rail (EU/ITA)

iTEBS X System	ATLAS-L4	Achievements in Truck
		▪	Cojali well integrated with strong growth
		▪	Margin improvement under difficult
			market conditions

New Diversity strategy

Remuneration system adjusted

(STI/ LTI)

3

Recap Strategy Update BOOST1 program

Strategic initiatives

Brownfield

(Housekeeping)

Greenfield

(Expansion)

BOOST 2026

Products		People		Processes
Revitalizing the core		Culture development		Efficiency programs (PCPP)
Portfolio right-sizing		Organizational transformation
Fix-it program		Talent mgmt. (HR Connect)		NWC optim. (Project Collect)
Renewal of innovation power				SG&A, legal entity reduction
Expansion of aftermarket				IT excellence (S4Hana)
Driving digitalization (growth)		Strong EVP2		Driving digitalization (efficien.)

Enabling ESG for our customers (incl. CO2 emission reduction)

Selective M&A

Focus today

1) Knorr-BremseOperational Optimization Strategy and Transformation 2. Employer value proposition	4

FY23: Strong top and bottom line - turnaround achieved

ORDER INTAKE

€8.25bn

(+2% yoy)

ORDER BOOK1

€7.08bn

(+3% yoy)

	OPERATING
REVENUES OF	EBIT MARGIN
€7.93bn 11.3%
(+11% yoy)	(PY: 11.1%)

€ 3.75bn

14.3%

€ 4.18bn

10.0%

FREE

CASHFLOW

• 552m*

(PY: € 219m)

96%*

(PY: 43%)

CASH

CONVERSION

RATE

1) Incl.~€ 570m from Kiepe.	5
* Updated with Annual Report (March 21, 2024) vs. preliminary figures (February 22, 2024).

Guidance FY23 achieved

Revenue [€m]
7,500-7,800	7,926
Guidance	FY23
FY23

Op. EBIT Margin

10.5-12%	11.3%
Guidance	FY23
FY23

Free Cashflow [€m]
350-550	552
Guidance	FY23*
FY23

Additional achievements

• Record order book of € >7bn provides solid foundation for 2024
• Inflationary burden of nearly
• • 300m fully compensated
• WC SOD reduced by 3 days*
• Net Debt/ EBITDA of 0.5 and
• • 1.4bn of liquidity underlines strong financial resilience

* Updated with Annual Report (March 21, 2024) vs. preliminary figures (February 22, 2024).

6

Solid demand in rail and truck on good level

CURRENT SITUATION

OUTLOOK FY24

• EU/ NA: solid growth
• CN: good momentum of ridership supporting AM
• High order books at OEMs continue
• Pricing of new OE contracts supportive

 Inflationary burden continuous but easing

• EU: solid growth continues, shift to rail
  (green deal) and replacement of obsolete fleets
• NA: good demand should continue
• CN: Increase of AM business should continue

• TPRs1: EU/ NA good development, CN strong recovery in 2023 and on high level
• Pricing negotiations (wave 2) finalized and supportive for 2024

• TPRs1: CN flat to slightly higher expected
• Content per vehicle growth supportive
• AM should develop better than OE
• Further growth of Cojali expected
• TPRs1: EU/ NA inline with expectations of truck OEMs

1) yoy figure, TPR defines all truck units produced in a specified time; >16t / Class 8; Source: internal and external estimates.

7

Rock-solid balance sheet is excellent basis for 2024 and beyond

Equity/ Equity Ratio

[€m]	+11%
		2,904
2,628
32%		35%
31.12.22*	31.12.23*

Liquidity2

-1%

1.445 1.432

Debt Repayment

of ~ € 120m

included

31.12.22* 31.12.23

Net Debt/ Gross Debt1 [€m]

	-14%
727	627
2,172	2,060
Gross Debt	Gross Debt
31.12.22	31.12.23

Rating

A-

A3

Leverage

Net Debt/ EBITDA

0.51x

Gross Debt/ EBITDA

1.69x

1. Including: bank loans, lease liabilities and bonds as well as debt instruments 2) Cash and cash equivalents, incl. securities * Updated with Annual Report (March 21, 2024) vs. preliminary figures (February 22, 2024).

8

Improved EBIT and NWC efficiency boosted ROCE to 20%

CapEx

[€m]	% of sales

4.9%

4.6%

352	368
FY22	FY23*

NWC1
[€m]	55.9		Scope of days

	51.4
1,109	1,131
31.12.22*	31.12.23

ROCE

[%]

	19.5%
16.5%
31.12.22*	31.12.23*

1. Short term notes payables and liabilities are included in Q4/23. Considering them in Q4/22: NWC would amount to € 1,083m and scope of days would be 54.6. 9 * Updated with Annual Report (March 21, 2024) vs. preliminary figures (February 22, 2024).

FCF strongly improved and CCR above target range

Free Cashflow1

[€m]

	552
219
FY22	FY23*

Cash Conversion Rate (CCR)

[%]

	96
43
FY22	FY23*

"Collect" program

boosted NWC and FCF

&

PCPP boosted

EBIT margin

1 FCF before M&A.	10
* Updated with Annual Report (March 21, 2024) vs. preliminary figures (February 22, 2024).