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PRESS RELEASE: Knorr-Bremse Aktiengesellschaft: Financial performance in Q2 2020 significantly exceeds expectations

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DGAP-News: Knorr-Bremse Aktiengesellschaft / Key word(s): Quarter
Results/Forecast
Knorr-Bremse Aktiengesellschaft: Financial performance in Q2 2020
significantly exceeds expectations

2020-07-16 / 14:08
The issuer is solely responsible for the content of this announcement.

*Press release*
Munich, 16 July 2020

*Knorr-Bremse: Financial performance in Q2 2020 significantly exceeds
expectations*

*- First indications for the second quarter of 2020: preliminary revenues of
around EUR 1.4 billion and a very healthy operating EBITDA margin of approx.
17%*

*- Outlook for 2020: Revenues expected to reach EUR 5.8 to 6.2 billion, with
an operating EBITDA margin of 16.0 to 17.5%*

*Munich, 16 July 2020 -* Knorr-Bremse AG has considerably surpassed
expectations in compensating for the anticipated downturn in business caused
by the Covid-19 pandemic during the second quarter of 2020. Based on first
indications, the company is anticipating revenues of approximately EUR 1.4
billion (previous year: EUR 1.8 billion) and an operating EBITDA margin of
approximately 17% (previous year: 19.1%) for the reporting period April to
June 2020.

According to a Vara Research report of 15 June 2020, analysts estimate
revenues of just EUR 1.2 billion and an operating EBITDA margin of only 9%
for the second quarter of 2020.

Bernd Eulitz, CEO of Knorr-Bremse AG: "In the second quarter of 2020,
Knorr-Bremse's business model once again proved to be particularly
resilient. A rapid response to the global spread of the Covid-19 pandemic
that became apparent in March 2020 helped to limit the negative impact on
Knorr-Bremse's performance. Faced with temporary closures of customer and
supplier plants, we were able to react swiftly by implementing consistent
cost and efficiency measures. We therefore expect to finish the second
quarter of 2020 with higher revenues of around EUR 1.4 billion and an
improved EBITDA margin of around 17%, exceeding capital market estimates.
Nevertheless, we expect the Covid-19 pandemic to have a noticeable negative
impact on our key financial figures for the full year 2020. As a result, our
revenues and operating EBITDA margin are likely to be lower than in 2019."

By introducing a stringent cost-cutting program in both divisions at an
early stage, Knorr-Bremse was able to significantly mitigate the effects of
the market downturn on its own business. In both divisions, short-time
working measures had a positive impact on earnings in the second quarter of
2020. In the Rail division, short-time working was lifted again as early as
1 July 2020 in response to rising demand. It was noticeable that customers
brought forward their stocking of spare parts in the second quarter, which
had a positive impact on revenues and earnings. Similarly, a favorable
product mix in the second quarter, including strong figures in braking
systems, led to improved performance in terms of profitability.

While the Truck division's business in Europe and North and South America
suffered a sharp decline in the second quarter under the impact of the
Covid-19 pandemic, the Truck business in China saw a strong recovery in
April and May, with production rates at record levels. Overall, the
relatively good performance of the aftermarket business continued in the
second quarter of 2020. At the earnings level, temporary cost-saving
measures such as the introduction of short-time working at all European
locations had a positive effect on the EBITDA margin in the second quarter
of 2020.

"_Based on the improved figures at the end of June 2020, the recovery is
likely to continue overall in the second half of the year, though not as
clearly as in the second quarter. Knorr-Bremse has a very solid financial
basis. We have also proven that we can swiftly take the right measures_,"
says Frank Weber, CFO of Knorr-Bremse AG. In particular, Knorr-Bremse
expects some of the effects that positively influenced the Rail division in
the first half-year, such as advance purchases in the aftermarket business
and a favorable product mix, not to continue in the same way in the second
half of the year. In the Truck division, demand in China is expected to
normalize. The record level of production in China is therefore unlikely to
be sustained, which will contribute to a slower recovery. In addition,
predictions of commercial vehicle demand in the second half of 2020 are
currently still subject to a high degree of uncertainty, particularly in
Europe and North America.

Based on the preliminary figures of the first half-year 2020 and the
expected development in the second half-year, the Executive Board of
Knorr-Bremse AG publishes a new outlook for the 2020 fiscal year. Barring
further lockdowns due to the Covid-19 pandemic and the resulting negative
impacts on business up to the end of the year, revenues in the region of EUR
5.8 to 6.2 billion (2019: EUR 6.937 billion) and an operating EBITDA margin
of 16.0 to 17.5% (2019: 18.8%) are expected for the 2020 fiscal year. This
outlook for the whole of 2020 is based on current exchange rates.

The full half-year report and Q2 2020 report will be published, as
scheduled, on 10 September 2020.

Explanations and reconciliations of the key financial figures used can be
found in the Knorr-Bremse AG Annual Report 2019 (available at
https://ir.knorr-bremse.com/download/companies/knorrbremse/Annual%20Reports/
DE000KBX1006-JA-2019-EQ-E-00.pdf), specifically on pages 75 onwards and page
102.

*About Knorr-Bremse
Knorr-Bremse (ISIN: DE000KBX1006, Ticker symbol: KBX)* is the global market
leader for braking and other rail and commercial vehicle systems.
Knorr-Bremse's products make a decisive contribution to greater safety and
energy efficiency on rail tracks and roads around the world. About 29,000
employees at over 100 sites in more than 30 countries use their competence
and motivation to satisfy customers worldwide with products and services. In
2019, Knorr-Bremse's two divisions together generated revenues of EUR 6.9
billion (IFRS). For more than 115 years the company has been the industry
innovator, driving innovation in mobility and transportation technologies
with an edge in connected system solutions. Knorr-Bremse is one of Germany's
most successful industrial companies and profits from the key global
megatrends: Urbanization, sustainability, digitalization and mobility.

*Press contact:*
Alexandra Bufe, Tel. +49 89 3547-1402, alexandra.bufe@knorr-bremse.com

*Investor Relations contact:*
Andreas Spitzauer, Tel. +49 8 3547-182310,
andreas.spitzauer@knorr-bremse.com

*DISCLAIMER*
This publication has been independently prepared by Knorr-Bremse AG
("Knorr-Bremse"). It may contain forward-looking statements which address
key issues such as strategy, future financial results, events, competitive
positions and product developments. Such forward-looking statements are
subject to a number of risks, uncertainties and other factors, including,
but not limited to, those described in Knorr-Bremse's disclosures. Should
one or more of these risks, uncertainties or other factors materialize, or
should underlying expectations not occur or shall assumptions prove
incorrect, the actual results, performances or achievements of Knorr-Bremse
may vary materially from those described in the relevant forward-looking
statements. Such forward-looking statements may be identified by words such
as "expect," "want," "anticipate," "intend," "plan," "believe," "seek,"
"estimate," "will," "project" or words of similar meaning. Knorr-Bremse does
not intend, nor does it assume any obligation, to update or revise its
forward-looking statements regularly in light of developments which differ
from those anticipated.

This publication may include - in the applicable financial reporting
framework not clearly defined - supplemental financial measures that are or
may be alternative performance measures (non-GAAP-measures). For the
assessment of the net assets, financial position and results of operations
of Knorr-Bremse, these supplementary financial figures should not be used in
isolation or as alternatives to the financial figures presented in the
consolidated financial statements and determined in accordance with the
relevant financial reporting framework. The calculation by other companies
that report or describe similarly titled alternative performance measures
may vary despite the use of the same or similar terminology.

2020-07-16 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
Language: English
Company: Knorr-Bremse Aktiengesellschaft
Moosacher Str. 80
80809 Munich
Germany
Phone: +49 89 3547 0
E-mail: info@knorr-bremse.com
Internet: www.knorr-bremse.com
ISIN: DE000KBX1006
WKN: KBX100
Indices: MDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange; Vienna Stock Exchange
(Third Market (MTF))
EQS News ID: 1095565

End of News DGAP News Service

1095565 2020-07-16



(END) Dow Jones Newswires

July 16, 2020 08:09 ET ( 12:09 GMT)
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