KNORR-BREMSE AG

Recommendation history

• Q3 2025HoldHold: Knorr-Bremse delivered a strong Q3, with revenue of €1.9bn, organic growth near 3%, operating EBIT margin up 100bp to 13.3%, and €159m free cash flow. Rail remains exceptionally healthy—RVS reached 17.0% margin with a €5.7bn backlog—while CVS showed resilience at 10.5% despite North American truck production falling 28%. However, management withheld 2026 guidance, truck-market visibility remains poor, and the 14%+ 2026 margin target is still largely dependent on execution and cost cuts.
• Q2 2025HoldHold: Knorr-Bremse delivered resilient Q2 revenue of about €2.0bn, 12.6% H1 operating EBIT margin, €146m free cash flow and strong rail execution, but the investment case is balanced by weak North American trucks, tariff exposure and limited underlying organic margin expansion. 2025 guidance remains €12.5–13.5% operating EBIT margin, €700–800m free cash flow and €3.50–3.60 EPS; management’s midpoint confidence is not enough to justify a clean buy while analysts continue to challenge organic drop-through.
• Q2 2024BuyBuy: Knorr-Bremse delivered strong execution despite a weakening truck market—Q2 operating EBIT margin rose 140 bps to 12.5%, H1 margin reached 12.3%, free cash flow was €158 million in Q2, and order intake was €2.1 billion with a €6.85 billion backlog. Rail strength, pricing, aftermarket mix and BOOST support the raised FY24 outlook, but the key tension is CVS: management expects truck production to fall sharply in H2, full-year CVS book-to-bill below 1 and margins moderately below 10%.
• Q1 2024HoldHold: Knorr-Bremse delivered a strong Q1, with revenue near €2.0bn (+3%), operating EBIT margin up 210bp to 12.1%, €6.7bn backlog and both divisions above 1.0 book-to-bill. However, the investment case still depends on executing the €630m Alstom North American signalling acquisition and sustaining truck-margin gains through a weakening cycle; FY2024 guidance remains €7.7–8.0bn revenue, 11.5–12.5% operating EBIT margin and €550–650m free cash flow.
• Q2 2023HoldKnorr-Bremse delivered a credible Q2 recovery: group operating EBIT margin rose 60 bps year over year to 11.1%, order backlog reached a record €7.1 billion, and 2023 revenue guidance increased to €7.5–7.8 billion. However, the raised revenue outlook implies roughly flat year-over-year growth in H2, RVS margin is expected to remain below last year, and China aftermarket benefited from potentially non-recurring pull-forward demand; the risk/reward is balanced rather than a clean buy.
• 2023-07-18HoldHold: Knorr-Bremse set ambitious 2026 targets of €8–9bn revenue, operating EBIT margin above 14% and 80–90% cash conversion, supported by 5–6% annual organic sales growth and portfolio-led margin recovery. The installed base, aftermarket exposure and content-per-vehicle growth are attractive, but the investment case still depends on executing against €1.4bn of underperforming revenue, restoring working capital and proving that disposals and efficiency actions can offset normalized China and Russia headwinds.
• Q4 2022HoldHold: FY22 revenue was €7.1bn, operating EBIT margin 11.1% and free cash flow only €220m, while FY23 guidance calls for €7.3–7.7bn revenue, 10.5–12.0% EBIT margin and €350–550m FCF. Strong order books, pricing actions and truck-market recovery support the case, but RVS margins are still pressured by legacy inflation-exposed contracts, lost Russian business and weak China, while the new CEO’s strategy and M&A reset remain unproven.