Marc Llistosella, Chief Executive Officer of Knorr-Bremse AG: “Our very positive business development and strong financial figures for 2025 show that Knorr-Bremse remains on course for success. We have set the stage for sustainable growth and profitability with our BOOST strategy. The fourth quarter in particular was exceptionally good, as we had continuously built up our resilience quarter by quarter. The steady strong performance of our Rail Division is driving our commercial success; the Truck Division also delivered good results in very challenging markets. This year, we will press ahead with our BOOST measures to accelerate our growth, move forward with the digitalization of our solutions, and become an even stronger partner to our customers worldwide. We are expanding our product portfolio by making focused investments like the acquisition of the successful electronics provider duagon in Rail and the leading online booking platform TRAVIS in Truck. At the same time, we are continuing to invest in our existing business, for example by opening our new AI center in Chennai. This will reinforce our digitalization strategy which enables us to tap into opportunities for growth in pioneering fields of technology.”
Frank Weber, Chief Financial Officer of Knorr-Bremse AG: “The development of our KPIs in the 2025 fiscal year underscores the extent of our company’s sustainable earnings capacity and considerable financial stability. We demonstrated our financial strength with a significant increase in free cash flow to over € 790 million, a cash conversion rate well above 100% once more, and a further improvement in the operating EBIT margin to 13%. The strong year-end results were bolstered by significant contributions in the fourth quarter. This is all down to our systematic cost-cutting and portfolio optimization as part of our BOOST strategy. At the forefront of our priorities is lowering our fixed costs. In total, more than 10,000 measures are still being implemented with the aim of deploying capital and resources in a more focused manner and securing structural efficiency gains in the long term.”
Sizable margin increase and record free cash flow
2025 was another year full of uncertainties. Despite these challenges, Knorr-Bremse developed very successfully in terms of revenues, earnings and cash flow, driven by the consistent implementation of the BOOST strategy with a clear focus on portfolio optimization, cost discipline and lowering the break-even point. The full effect of the BOOST measures on performance was especially evident in the fourth quarter. Stringent execution of the initiatives to increase earnings and enhance efficiency resulted in significant margin expansion and a record free cash flow.
Order intake at € 8,417 million was nearly 3 % higher than the prior-year figure (previous year: € 8,186 million), with the higher order intake in the Rail Division compensating for falling demand in the commercial vehicle business. The ratio of incoming orders to revenues (book-to-bill ratio) increased slightly year over year to 1.08 in the 2025 fiscal year, providing a solid basis for capacity utilization in 2026 and beyond. The order book stood at € 7,362 million as of December 31, 2025 (previous year: € 7,182 million), continuing to climb on the back of the very healthy level of orders in the rail vehicle business.
Consolidated revenues in organic terms increased by 1.9% despite an extremely challenging downturn in the North American commercial vehicles market. Even after the disposals of R.H. Sheppard and GT Emissions Systems in the Truck Division and negative impacts caused by currency effects, revenues remained essentially stable in the 2025 fiscal year at € 7,817 million (previous year: € 7,883 million). The revenues of KB Signaling, acquired in 2024, which were now taken into account for a full year, making a sizable contribution to this figure. Organic revenue growth in the fourth quarter came in at a robust 6.4%.
In the 2025 fiscal year, operating EBIT was up by € 50 million year over year to a total of € 1,016 million (previous year: € 966 million), with the operating EBIT margin registering a significant improvement to 13.0% compared with the previous year (12.3%). This increase clearly reflects the improvement in the cost structures, staff adjustments, and the portfolio optimization. The fourth quarter in particular saw a substantial widening of the operating EBIT margin in the two divisions. On a quarterly basis, profitability increased by 140 base points year over year to 17.0% (Q4/2024: 15.6%) for Rail and by 180 base points to 11.3% for Truck (Q4/2024: 9.5%).
Free cash flow continuously improved in the year just ended, reaching € 471 million in the last quarter of 2025 alone. Full-year operating free cash flow hit a new all-time high of € 790 million. This is mainly attributable to the significant improvement in the cash flow from operating activities together with lower capital expenditures. The cash conversion rate (free cash flow relative to net income) reached 131% on an operating basis due to the strong earnings – a significantly higher level than in the previous year (113%).
