Knorr-Bremse Reports Strong and Resilient Performance in First Half of 2025, Driven by Rail Growth and Strategic Measures
Knorr-Bremse AG, a global leader in braking systems and a prominent supplier of other safety-critical systems for rail and commercial vehicles, has released its financial results for the first half of 2025. The company’s performance demonstrates its ability to maintain stability and achieve growth amid global economic and geopolitical headwinds, underpinned by the strength of its aftermarket business, a robust Rail division, and ongoing strategic initiatives.
CEO Highlights Strategic Direction and Resilience
Commenting on the company’s performance, Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG, emphasized the organization’s successful navigation of turbulent economic times. “We are successfully navigating turbulent times. Our robust aftermarket business and the strategic steps we took were particularly helpful in counteracting the market downturn and safeguarding our profitability,” he stated.
Llistosella particularly praised the Rail division for delivering an exceptionally strong and profitable performance. This division benefited from increased demand, especially in Asia-Pacific, and was a key contributor to the company’s stability and growth in the first half of the year. He acknowledged that while the Commercial Vehicle Systems (CVS) division faced challenges due to a sluggish North American market, it still managed to achieve an impressive operating EBIT margin close to 10%.
Looking ahead, the CEO affirmed Knorr-Bremse’s commitment to its strategic transformation. “We are systematically pursuing our strategic path and are investing in the technologies of tomorrow to maintain our market-leading position,” Llistosella added.
CFO Applauds Margin Growth and Cash Flow Improvements
Frank Weber, Chief Financial Officer of Knorr-Bremse AG, echoed the CEO’s positive sentiment and highlighted key financial achievements. “We lifted our operating EBIT margin by 30 basis points in the first half of the year to 12.6% despite the challenging market conditions – a fantastic team achievement,” Weber stated.
One of the most encouraging financial indicators was the significant improvement in free cash flow, which rose to €160 million, compared to €64 million in the same period last year. This was driven by effective working capital management and strong operational performance.
Weber also pointed to potential tailwinds from the German government’s investment programs, which he expects to positively influence business development in the near term. Additionally, he expressed confidence in the company’s ability to offset the impact of newly announced U.S. tariffs through proactive measures.
Resilient Performance Amid Global Challenges
Despite continued geopolitical tensions and economic uncertainties across various regions, Knorr-Bremse maintained a high level of resilience, owing largely to its decentralized organizational structure. In the first half of 2025, the company recorded a 5.8% year-over-year increase in order intake, reaching €4,484 million, up from €4,239 million in the same period in 2024. This growth was fueled by strong demand in the rail sector, expansion in Asia and North America, and the outstanding performance of KB Signaling, a U.S.-based company acquired by Knorr-Bremse.
The company’s order book also reflected healthy momentum, rising to €7,326 million by the end of June 2025, marking a 7.0% increase from €6,848 million the previous year. Although consolidated revenues slightly declined to €3,957 million (down from €3,987 million), the decrease was primarily due to market slowdowns in the CVS segment and divestments of certain business units. The Rail division’s revenue surge nearly offset this dip.
Operating EBIT Climbs with Strong Rail Contributions
Knorr-Bremse’s operating EBIT for the first half of 2025 rose by 1.6% year-over-year to €498 million, compared to €490 million in 2024. This increase was largely attributed to the Rail Vehicle Systems (RVS) division’s robust performance. The operating EBIT margin also grew, reaching 12.6%, up from 12.3% in the previous year.
The company’s focus on efficiency and capital optimization further strengthened its financial position, with free cash flow more than doubling to €160 million in H1 2025 from €64 million in H1 2024.
Division-Wise Performance Snapshot
Rail Vehicle Systems Division (RVS):
The RVS division emerged as a key growth engine for Knorr-Bremse in the first half of 2025.
- Order Intake: Up 18.0% to €2,600 million, driven by high demand across all major regions and enhanced by the successful integration of KB Signaling.
- Order Book: Increased by 13.8%, totaling €5,555 million.
- Revenue: Rose by 9.5% year-over-year to €2,169 million.
- Operating EBIT: Climbed 14.4% to €347 million.
- EBIT Margin: Improved to 16.0%, up from 15.3%.
These strong metrics underscore the division’s resilience, consistent demand across global rail markets, and strategic execution.
Commercial Vehicle Systems Division (CVS):
While the CVS division faced headwinds, it remained operationally sound.
- Order Intake: Declined to €1,884 million from €2,038 million in H1 2024.
- Order Book: Down to €1,772 million from €1,969 million.
- Revenue: Dropped to €1,789 million, impacted by the deconsolidation of GT and Sheppard investments, unfavorable currency effects, and weakened demand.
- Operating EBIT: Declined to €176 million from €223 million.
- EBIT Margin: Nevertheless maintained a respectable 9.9%, reflecting effective countermeasures.
2025 Full-Year Outlook and Guidance
Knorr-Bremse has reaffirmed its guidance for operating EBIT and free cash flow for the full year 2025. However, the company has adjusted its revenue forecast slightly downward due to currency translation effects. The euro’s appreciation since February 2025 against other major currencies led to this revision.
- Revenues: Now expected to be in the range of €7,800 million to €8,100 million, compared to the previous estimate of €8,100 million to €8,400 million.
- Operating EBIT Margin: Maintained in the range of 12.5% to 13.5%.
- Free Cash Flow: Unchanged at between €700 million and €800 million.
The guidance assumes continued geopolitical stability, minimal impact from new tariffs, and no major disruptions in key markets. Knorr-Bremse also acknowledged that restructuring efforts in select regions will lead to additional costs of approximately €75 million in 2025.
