Knorr-Bremse Expects €8.3 Billion in Revenue and €850 Million in Free Cash Flow in 2026
Key Facts
Knorr-Bremse said on October 28 that it expects revenue and free cash flow in 2026 to reach the upper end of its annual ranges, reaffirming its existing guidance rather than raising it again. The company is targeting revenue of between 8,100 and 8,300 million euros, an operating margin of between 14.0% and 14.5%, and free cash flow of between 750 and 850 million euros. The outlook came alongside third-quarter results showing increases in revenue, operating profit and free cash flow. The company had raised the lower end of its revenue target in July to 8,100 million euros from 8,000 million, and at the time set an operating margin range of 14.0% to 14.5%, compared with previous guidance of about 14%.
Group revenue rose 9.0% to 2,051 million euros in the third quarter, compared with 1,883 million in the same period of 2025. Operating profit increased 19.1% to 299 million euros, from 251 million a year earlier, while the margin improved to 14.6% from 13.3%. The chief financial officer said the figure was the second-highest quarterly operating profit in the company's history, and that the margin reached its highest level in more than five years. Free cash flow also jumped about 50% to 238 million euros, compared with 159 million in the third quarter of the previous year. In the first nine months, revenue grew 5.0% to 6,132 million euros, operating profit rose 15.5% to 865 million, and free cash flow increased 66.5% to 531 million from 319 million.
Demand indicators presented a more mixed picture: Group orders rose 4.9% to 2,053 million euros in the third quarter, from 1,956 million a year earlier. The order backlog stood at 7,883 million euros on September 30, up 7.0% from 7,368 million on the same date in 2025. But quarterly revenue fell short of Vara Research's consensus of 2.09 billion euros, according to the company's comparison with consensus forecasts published on October 13. Rail orders received also came in at about 1.05 billion euros, against consensus of 1.18 billion. The company attributed the shortfall in rail orders mainly to customers postponing the call-off of orders worth about 80 million euros, which it expects to be called off over the following six months.
In the truck segment, revenue rose 12.5% to 938 million euros in the third quarter, compared with 833 million in the same period of 2025. Segment operating profit increased 31.9% to 116 million euros from 88 million. The company said the market recovery, particularly in North America, contributed to the improvement alongside the impact of cost-cutting measures. At Group level, Chief Executive Mark Listosella described the result as "the second-highest quarterly result in the company's history" and linked it to the success of the BOOST programme and its transition to the "Growth Beyond" initiative. The chief financial officer said the implementation of efficiency measures, disciplined working capital management and solid operating performance strengthened financial resilience.
Knorr-Bremse expects a partial recovery in rail orders received in the fourth quarter, with a return to about 1.2 billion euros. The company's 2026 guidance is based on the assumption that the Middle East crisis does not escalate or persist, particularly if it leads to supply-chain disruptions. Against a backdrop of economic data from Germany, the ifo business climate index rose to 90.2 points in October from 89.9 points in September, as companies' expectations improved while their assessment of the current situation edged slightly lower. The company did not link its guidance to this reading, while delivery on its annual outlook remains tied to the assumptions it announced concerning the crisis and supply chains.