KNORR-BREMSE: “THE GLOBAL SITUATION SUBJECT TO HIGH LEVELS OF UNCERTAINTY”
Knorr-Bremse achieved significantly less sales in the first half of this year due to the corona crisis, but reiterated the sales and margin targets for the full year. Turnover fell by 15.2 percent, from 3.60 billion to 3.06 billion euros. The corona crisis hit the company in all markets and the company had to act quickly to adjust to lower demand.
Knorr-Bremse expects sales of 5.9 billion to 6.2 billion euros for the whole of 2020, against 6.94 billion euros in 2019, and an operating margin of 16.5 to 17.5 percent, against 18.8 percent a years earlier. That expectation is based on the current economic conditions.
The global commercial vehicle market was impacted in the first six months of 2020 by the effects of the Covid-19 pandemic in most parts of the world, shrinking by 16% compared with the prior-year period. Only the Chinese market saw a rapid recovery, even outperforming the first half of 2019 by 21%. The Commercial Vehicle Systems division recorded a sharp fall in its order intake of 36.1% to EUR 1,060.6 million in the first half of 2020 (previous year: EUR 1,658.5 million). This was attributable to temporary closures at our customers’ manufacturing facilities because of the Covid-19 crisis, mainly in the second quarter of 2020. The significant decrease in the order intake was also reflected in the order book, which dwindled by 32.1% to EUR 880.1 million as of June 30, 2020 (previous year: EUR 1,295.6 million). In the train division, revenue declined 7 percent year-on-year, with recovery at the end of the first half in China and Europe. The group booked 24 percent fewer orders than a year earlier, with 2.73 billion euros. The order book nevertheless remained strong at 4.36 billion euros, 4 percent lower than in the previous year.
Frank Markus Weber, CFO of Knorr-Bremse AG: “The Covid-19 pandemic hit Knorr-Bremse in all markets during the first half of 2020. Our top priority was keeping our employees healthy. We lost no time in swiftly implementing an action program to stabilize income and cash flows in response to the drop in demand; this enabled us to significantly mitigate the effects on our net income in the first half of 2020. Our strong aftermarket business in both divisions helped to keep our profit margins stable. We observed a perceptible recovery in the second quarter, particularly in China, though this will not continue in the same measure. The global situation continues to be subject to high levels of uncertainty.”