Knorr-Bremse Reports Strong Q2 Performance and Raises Revenue Target
Shares in Knorr-Bremse have experienced a surge following the company's impressive performance in the second quarter. The Germany-based braking systems manufacturer reported a revenue increase of approximately 16% to EUR2.01 billion, while the order intake amounted to EUR2.06 billion, surpassing Vara consensus by 8%, as per analysts.
Positive Outlook for Investors
Analysts at Citi stated in a research note that the beat in order expectations should be well received by investors. Moreover, the results provide potential for low-single-digit upgrades to consensus.
Robust Earnings Growth and Margin Expansion
Earnings before interest, taxes, depreciation and amortization (EBITDA) saw a significant rise, increasing from EUR235 million to EUR299 million. This growth can be attributed to higher customer prices and effective cost control measures. The EBITDA margin also improved to 14.9%.
Revised Revenue Target and Confirmed Operating EBIT Margin
Knorr-Bremse now anticipates revenue between EUR7.5 billion and EUR7.8 billion, surpassing its previous expectations of EUR7.3 billion to EUR7.7 billion. This revision is supported by strong performance in the rail vehicle systems division and truck production rates.
The company has also confirmed its operating EBIT margin within a range of 10.5% to 12%. Additionally, Knorr-Bremse expects free cash flow to be between EUR350 million and EUR550 million.
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