Knorr-Bremse ideally placed for further growth after record figures in 2017

In fiscal 2017, the Company posted an increase in sales to a record EUR 6.24 billion
(2016: EUR 5.49 bn) on the back of expansion of its systems offering and its global market
position. Despite substantial extraordinary expenses (in the amount of EUR 75 m) resulting
from foreign exchange effects, the bid for Haldex and the cost of conversion to IFRS,
EBITDA for 2017 totaled EUR 1.06 billion (2016: EUR 1.01 bn). In line with IFRS, adjusted
EBITDA (still to be audited) reached EUR 1.14 billion. Net income rose to EUR 580 million (2016:
EUR 550 m). Incoming orders were 16.3% up on the previous year, outpacing consolidated
sales growth to reach EUR 6.66 billion (2016: EUR 5.72 bn). Orders on the books at yearend
were up 19.8% at EUR 4.98 billion (2016: EUR 4.15 bn).
“Despite high extraordinary expenses we closed our books on 2017 with a set of record figures
and will continue to pursue our path to profitable and sustainable growth,” said Klaus
Deller, Chairman of the Executive Board of Knorr-Bremse AG. “Digitalization, autonomous
driving, and electrification are the trends of the future that will shape the business of our two
divisions over the coming decade. Thanks not least to targeted acquisitions such as KnorrBremse
SteeringSystems for automated driving or Kiepe Electric for electrification, we are
ideally positioned for these developments and together with our customers and partners we
are going to actively shape the transportation of the future,” Deller added.
“Since 2005, Knorr-Bremse has posted average sales growth of 7.1% and EBITDA growth
of 9.7%. On top of this, the Company can boast an outstanding financial profile with which
we are well equipped to face the current and future challenges of the market,” said Ralph
Heuwing, Chief Financial Officer of Knorr-Bremse AG.
Generating new impetus for growth
In fiscal 2017, Knorr-Bremse continued to drive forward its strategy for profitable and
sustainable growth. Through the integration of Kiepe Electric, the globally active supplier of
electrical equipment for rail vehicles and buses, Knorr-Bremse added state-of-the-art drive
technology for rail and commercial vehicles to its portfolio. In addition, Knorr-Bremse
expanded its collaboration with Dongfeng Motor Group of China to include development of
automated manual transmissions for the truck market in Asia. With this step, Knorr-Bremse
obtained even wider access to the world’s largest commercial vehicle market.
In March 2017, the Company also completed its acquisition of the Bosch Transmissions
Systems (TRS) division in Japan. The transmission components developed, manufactured
and marketed by TRS for on-highway commercial vehicles open up additional opportunities
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Knorr-Bremse Group
for growth in what is a key market. By accessing the steering business through KnorrBremse
SteeringSystems, the Company has also become the world’s first vendor to be able
to offer braking and steering systems with smart connectivity from a single source. This
puts Knorr-Bremse in a position to provide the basis for complex driver assistance systems,
all the way to fully autonomous vehicles. Knorr-Bremse sees great potential for growth in
this sector.
High investments in research & development
As a core element of its strategy for profitable and sustainable growth, Knorr-Bremse
further expanded its research & development (R&D) activities. Total expenditure on R&D
and customer-specific development modifications rose to EUR 359 million in fiscal 2017
(2016: EUR 328 m), which equates to approximately 6% of sales.
Workforce reaches almost 28,000 employees
At year-end 2017, the Knorr-Bremse Group employed a total of 27,705 persons (year-end
2016: 24,565) which represents a year-on-year increase of 12.8%.
Development of business by division
The Rail Vehicle Systems division posted sales of EUR 3.33 billion (2016: EUR 2.99 bn).
Adjusted for foreign exchange effects, this is the highest level of sales ever recorded by the
division. The sharp rise in sales revenues reflects in particular buoyant market demand in
Europe, as well as the contribution to sales of the newly acquired Kiepe Electric. At the
same time, developments in North America and the Asia/Australia region were also positive.
One key milestone was the order covering the braking systems for approximately
1,500 cars for the Chinese high-speed segment, some of which are also to be equipped
with IFE entrance systems and/or HVAC systems from Merak. Also in China, the volume of
overhaul work on vehicles with braking systems increased to more than 2,000 cars. The
division reported income before taxes of EUR 543 million (2016: EUR 512 m).
The Commercial Vehicle Systems division also returned record sales of EUR 2.93 billion
(2016: EUR 2.52 bn). Income before taxes totaled EUR 385 million (2016: EUR 328 m). All
regions contributed equally to this top-class performance. In particular, the expansion of
collaboration with Dongfeng Motor Group of China to include development of the transmission
control units for new generations of heavy-duty trucks will continue to have a positive
impact on the development of the division.
Knorr-Bremse cares
At both global and local levels, Knorr-Bremse assumes responsibility for responding to
societal challenges. The Company’s commitment is based on two pillars: Knorr-Bremse
Global Care e.V. and Knorr-Bremse Local Care. In 2017, both divisions of the KnorrBremse
Group supported the independent charitable organization Knorr-Bremse Global
Care. Global Care aims to support projects for people in need, both in countries where
there are Knorr-Bremse sites and in developing countries around the world. In 2017, funding
of two million euros reached a total of 36,310 people worldwide. Key project areas were
the fields of education and WASH (water, sanitation and hygiene).