Knorr-Bremse AG Business Report FY ended Dec. 2017

Financial Overview

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 Rate of change (%) Factors
Net Sales 6,235.7 5,494.3 13.5 1)
Net Income 579.8 549.7 -
Commercial Vehicle Systems
Sales 2,927.9 2,523.2 16.0 2)

1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2017 increased by 13.5% over the previous year to EUR 6,235.7 million. On the back of positive developments in the markets and despite negative foreign exchange effects. In the Rail Vehicle Systems division, growth was supported by buoyant market demand in Europe, as well as by the Kiepe Electric companies acquired in February 2017. In the Commercial Vehicle Systems division, along with Europe, North America and China were the main growth drivers.

2) Commercial Vehicle Systems sales
-In the fiscal year ended December 31, 2017, the Company’s Commercial Vehicle Systems sales increased by 16.0% over the previous year to EUR 2,927.9 million. The truck and trailer business in North and South America picked up speed, while business in Europe and Asia remained buoyant.


-The Company is taking over tedrive Steering Systems GmbH based in Wulfrath, Germany. With this acquisition, the world's leading manufacturer of braking systems is adding state-of-the-art steering systems to its portfolio and thereby preparing to supply its customers with highly integrated systems, as well as new functionalities in the field of autonomous driving. With some 320 employees and locations in Germany, Turkey, Russia and the USA, tedrive is a specialized development partner and manufacturer of steering systems for the global vehicle market. The company manufactures and markets an extensive portfolio that includes rack-and-pinion as well as recirculating ball steering gear systems across all vehicle segments. (From a press release on June 1, 2016)

-The Company is to take over the on-highway commercial vehicle transmission components business from Bosch Corporation in Japan. Roughly 120 employees are to be transferred. The acquisition will enable Knorr-Bremse to develop and manufacture gear shift units and clutch actuators as well as transmission control units for trucks and buses locally for the Asian market, thereby reinforcing its competitive position in the automated manual transmission (AMT) and dual clutch transmission (DCT) sector in particular. (From a press release on June 27, 2016)

-The Company announced the completion of its acquisition of tedrive Steering Systems GmbH based in Wulfrath, Germany. The takeover of tedrive Steering, a manufacturer of vehicle steering systems, enables Knorr-Bremse to add steering systems to its portfolio and further expand its systems competence in the commercial vehicle sector. With the takeover of tedrive Steering, Knorr-Bremse is forming a new business unit, the Center of Competence (CoC) Steering, as part of Knorr-Bremse Systems for Commercial Vehicles GmbH. The acquisition of tedrive Steering means that Knorr-Bremse is taking over some 320 employees who work at two production plants in Wulfrath (Germany) and at further production, sales and technical facilities in Istanbul (Turkey), Nabereznyje Chelny (Tatarstan, Russia), and Wixom (Michigan, USA). (From a press release on September 12, 2016)

-Haldex announced on November 8, 2016, that the Board of Directors has decided to recommend the Haldex shareholders to accept the public cash offer by Knorr-Bremse, following the withdrawal by ZF Friedrichshafen of its offer to the Haldex shareholders on 5 October 2016. Prior to the announcement of this statement, the Board had recommended the Haldex shareholders to accept the offer by ZF and not the offer by Knorr-Bremse, despite being SEK 5.00 lower than the Knorr-Bremse offer. Because there was a significant risk that Knorr-Bremse’s offer would require a lengthy review - potentially lasting 6 months or more - by the relevant competition authorities which would be disruptive to the business of Haldex, and there was considerable uncertainty whether the transaction would close at all, including because the competition authorities could seek divestitures or other remedies that would not be acceptable to Knorr-Bremse. As of October 3, 2016, ZF's offer has been accepted by shareholders representing 4,238,980 shares or 9.59% of the total share capital in Haldex. The offer was conditional upon being accepted by Haldex's shareholders to such an extent that ZF would become the owner of shares representing more than 50% of Haldex's total share capital. As this condition has not been satisfied, ZF has decided to no longer pursue the offer. With total shareholdings in Haldex of 21.67%, ZF is now the biggest shareholder in Haldex. Haldex will accept the offer by Knorr-Bremse, if and when Knorr-Bremse announces the satisfaction or waiver of its condition concerning the receipt of all necessary regulatory approvals and clearances on terms that are acceptable to Knorr-Bremse. (From a press release on November 8, 2016)

-ZF Friedrichshafen AG, through its wholly-owned subsidiary ZF International B.V., announced that it has reduced its shareholding in Haldex Aktiebolag to 20.11 percent of the total share capital as of November 30 and intends to accept Knorr-Bremse AG’s tender offer at SEK 125 in cash per share for its entire remaining stake. ZF previously held 21.67 percent in Haldex and as such is Haldex's largest shareholder. (From a press release on November 30, 2016)

-The Company's Group announced that it is acquiring Vossloh Kiepe – the electrical systems unit of Vossloh AG. Based in Dusseldorf, Germany, Vossloh Kiepe is a globally active supplier of electrical traction equipment. A wholly-owned subsidiary of Vossloh AG, in financial 2015 Vossloh Kiepe GmbH reported sales of almost EUR 250 million and employed some 800 people. Vossloh AG is a major global provider in the rail infrastructure industry. In fiscal 2015, Vossloh AG (not including its electrical systems activities) posted sales of approximately EUR 950 million with a workforce of some 4,100 employees. (From a press release on December 21, 2016)


-Bendix Commercial Vehicle Systems, a subsidiary of the Company, announced that it has been named a Diamond Supplier by Navistar. In 2015, Navistar became the first North American truck manufacturer to offer the Bendix Wingman Fusion collision mitigation system. The company also added the Bendix ADB22X air disc brake as a data book option on its ProStar and DuraStar trucks. (From a press release on March 21, 2016)

R&D Expenditure

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Total 358.8 328.4 347.3
% of Sales 5.7 6.0 6.0

Product developments

Driver assist systems
-Due to regulations making Autonomous Emergency Brake Systems (AEBS) and Lane Departure Warning Systems (LDWS) mandatory in new European commercial vehicles by the fall of 2015, the Company focused on the development of these two systems for the start of series production.

Single-cylinder compressor
-The Company continued development of a single-cylinder compressor with an aluminum casing. The casing provides weight savings of approximately 40% compared to a compressor without an aluminum casing.

Energy Saving System (ESS)
-The Company continued development of its Energy Saving System and focused on reducing energy uptake and oil contamination in order to start series production of the system in 2016.

Screw-type compressor
-The Company continued development to enhance its screw-type compressor for hybrid and electric buses. The compressor’s low-noise profile makes it ideal for use in electric drive vehicles. In addition, the compressor can be driven by recuperated brake energy to reduce fuel consumption.

Rapid and precise mechatronic valve
-The Company continued development of its rapid and precise mechatronic valve. In the intake and exhaust manifolds to boost the efficiency of diesel engines.

Compressors with optimized thermal management
-The Company continued development of its compressors with optimized thermal management. Compressors with water-jacket cooling permit longer periods of operation and, through a further reduction in oil carry-over, achieve maximum purity in the compressed air.

Additional applications for the integrated parking brake
-The Company continued development of its additional applications for the integrated parking brake within the Electronic Air Control system (EAC). As the trend toward replacing pneumatic parking brakes in heavy vehicles continues.

Capital Expenditures

(in million EUR)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Commercial Vehicle Systems 98.3 82.4 81.1
Rail Vehicle Systems 71.8 103.6 117.6
Other 15.5 8.6 11.5
Overall 185.6 194.6 210.2