Sales for Knorr-Bremse Group Up 4.1% at €3.25 Billion in 2007
During fiscal 2007 the Knorr-Bremse Group continued to grow, with the company posting record results. Sales rose by 4.1% to €3.25 billion (2006: €3.12). Adjusted for currency effects, the group’s operational growth amounted to 6.6%.
Significant growth in Europe, South America and Asia during 2007 more than compensated for a decline in North America, where stricter emissions regulations resulted in a reduction in sales amounting to some €175 million.
During the course of the year the group workforce expanded from 13,035 (end 2006) to almost 14,000. This included 350 more employees in Asia but also an increase of almost 300 in the German workforce. This additional staff, especially in the field of R&D, puts the group in a strong position for further growth.
The three major regions that Knorr-Bremse’s activities are divided into – Europe, the Americas and Asia/Australia – contributed to the Group’s growth as follows:
Sales in Europe rose to €2.36 billion (2006: €2.11 billion), with both the group’s divisions – commercial vehicle systems and rail vehicle systems – achieving growth of more than 11% and further expanding their strong market position. By flexibly adapting its production capacity, the commercial vehicle systems division was able to benefit from a sharp rise in European truck production.
Following a period of stagnation in 2006, the rail vehicle systems division experienced a distinct recovery in the market in 2007. A number of major long-term agreements for mass-transit and mainline rail projects were signed with leading European vehicle manufacturers.
In North America, the two divisions experienced differing patterns of development in 2007. As expected, the introduction of stricter exhaust emission laws with effect from January 1, 2007 caused a decline of some 40% in the OEM truck market in the USA, and Knorr-Bremse’s North American truck division was inevitably affected, suffering a decline in sales of just under 30% compared with 2006.
In South America, however, sales were up 36%, boosted by a buoyant OEM and trailer market and rising levels of exports. In the rail vehicle systems division, North American sales rose 1.5% compared with 2006, but in South America a weaker market resulted in a drop of 10% compared with the previous year’s figure. For the region as a whole, the group posted sales of €790 million in 2007 (2006: €60 million).
Sales by group subsidiaries in the Asia-Pacific region rose by almost 60% to €330 million (2006: €208 million). Sales in the truck division were up 25%. 2007 saw growth of over 80% for the rail vehicle division in this region. Contributing to this positive result was the fact that the four Chinese joint ventures set up in 2006 came on stream and Knorr-Bremse’s own new plant in Suzhou was also opened. In the Australian market, Knorr-Bremse succeeded in winning the biggest ever order in the field of rail vehicle systems in Australia.
OUTLOOK FOR 2008
The Knorr-Bremse Group expects to see an overall positive development of its business in 2008. In Europe, the markets for both divisions are expected to remain strong, and in North America a modest recovery in the OEM truck market is forecast. Growth opportunities in Asia continue to be good.
The main focus of the business will be on expanding its global position and developing new markets such as Russia. Trends in raw material and energy prices remain a source of risk, as do possible economic downturns resulting from the ongoing financial crisis in North America, the overall impact of which cannot yet be foreseen. The Press conference on the annual results will take place on April 1, 2008 at 10.00 in Munich.
The Knorr-Bremse group is the world’s leading manufacturer of braking systems for rail and commercial vehicles. For more than 100 years now the company has pioneered the development, production and marketing of state-of-the-art braking systems. Other lines of business include automatic door systems, rail vehicle air conditioning systems and torsional vibration dampers for internal combustion engines.