Knorr-Bremse sets the stage for growth

In fiscal 2016, Knorr-Bremse set the stage for growth. To this end, the company initiated
seven acquisitions, the majority of which were also successfully concluded by year-end. In
addition, the leading manufacturer of braking systems and provider of additional subsystems
for rail and commercial vehicles again kept investments far higher than depreciation
and maintained expenditures for research and development (R&D) at their existing high
level. All of these measures targeted the expansion of the company’s systems portfolio and
the strengthening of its global market position and innovative capabilities.
Following on from record sales in the previous year, in fiscal 2016 sales showed a marketled
downturn of 5.8% to EUR 5.49 billion (2015: EUR 5.83 billion). Adjusted for foreign exchange effects at actual prior-year rates, the decline in sales was just 1.9%. The main reasons for the downturn were weaker performances by the rail vehicle market in China, the
rail freight sector, and the commercial vehicle market in North America. As a result of the
drop in revenues, income before taxes fell to EUR 829 million (2015: EUR 977 million). Net
income stood at EUR 550 million (2015: EUR 645 million), which equates to a return on
sales of 10.0% (2015: 11.1%). Incoming orders were 1.0% up at EUR 5.72 billion (2015:
EUR 5.67 billion). Orders on the books showed a clear 8.6% rise to EUR 4.15 billion (2015:
EUR 3.82 billion).
“In a phase marked by a market-led slowdown in growth, we were able to further strengthen
our position in the various regions and gear our Group increasingly to the generation of sustainable and profitable growth in the years ahead,” explains Klaus Deller, Chairman of the
Executive Board of Knorr-Bremse AG and responsible for the Rail Vehicle Systems division.
“The acquisitions alone open up additional sales potential of approximately EUR 1 billion.
With the opening of the new Development Center at our Munich plant, we are also in a
position to successfully shape the major topics of the future in our industry, such as system
connectivity, automated driving, digitalization, and energy efficiency,” Deller added.

Acquisitions strengthen rail and commercial vehicle business
In the rail vehicle sector, Knorr-Bremse expanded its product range through the acquisition
of the rail vehicle activities of friction material manufacturer TMD Friction and of the outstanding shares in the ICER Rail joint venture. With the acquisition of the Electrical Systems business unit (henceforth KiepeElectric) from Vossloh AG, Knorr-Bremse is adding
advanced drive technologies to its portfolio, particularly for metros, light rail vehicles, and
regional rail networks, but also for electrically powered commercial vehicles.

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