Market trends show that it is vital for companies nowadays to continually evolve and pursue new strategies. Marc Llistosella, who has been at the helm of the Munich-based supplier Knorr-Bremse for a year, seems to have embraced this. With clear objectives and a new philosophy, he is breaking away from the old perceptions of his predecessor and corporate patriarch Heinz Hermann Thiele.

"Although Knorr-Bremse is successful, Llistosella aims to bring about changes. At the annual press conference in Munich, he proudly reported full order books, rising profits, and a profit margin of 11.3 percent in 2023 – more than twice as much as competitor ZF Friedrichshafen. Nevertheless, he plans to divest business units with a sales volume of 1.4 billion euros, which corresponds to one-sixth of the total sales. His focus is on sustainable value creation and streamlining the portfolio, rather than quick acquisitions, as practiced by his predecessors."

With the support of McKinsey consultants, Llistosella has the company thoroughly analyzed and cleansed. "The house must be put in order," says the Knorr-Bremse chief. The sale of the rail supply division Kiepe last year was just the beginning, with further steps to follow in the first half of 2024. With this, Llistosella also breaks with the philosophy of his predecessor Thiele, who always focused on rapid growth and expansion.

In Remembrance of the Deceased Patriarch: Every morning, Llistosella passes by his portrait hanging in the foyer of the heritage-protected company headquarters, always adorned with fresh flowers. Nevertheless, the control Thiele's descendants have over the MDax company is both a curse and a blessing. Predecessors of Llistosella failed due to the corporate culture shaped by Thiele. Yet for Llistosella and CFO Frank Weber, the creeping erosion of key financial ratios like profit margin and return on capital employed for years is a "wake-up call".

Nevertheless, the operational business activity of Knorr-Bremse is a success. The revenue in the fourth quarter exceeded analysts' expectations and the stock recorded an increase of up to eight percent. Unlike other companies that are making layoffs, Knorr-Bremse presents strong figures during times of crisis. Llistosella wants to utilize this resilience and has set a goal to increase revenue to eight to nine billion euros by 2026 and to raise the operating margin to more than 14 percent.

"A crucial step to achieving this goal is the collaboration of the two independent divisions of the group - Truck and Rail. Whereas his predecessor attempted to take over the automotive supplier Hella, thereby upsetting the capital market, Llistosella is focusing on internal structure and transparency. With the help of data and consultants from McKinsey, the intricacies of the two divisions are to be unraveled. Many refer to this as the 'dismantling of the old guard' at Knorr-Bremse."

Llistosella himself calls his program "Boost 2026" and has clear ideas of how to make the company future-proof. Despite the impending sales of business units worth billions, revenues are expected to increase and margins to improve in the coming years. Achieving this goal requires clarity and an iron will to break up the old structures and steer them in the right direction.

Evidence of this can also be seen in the departure of top executives, such as Jürgen Wilder, who left the rail division of Knorr-Bremse to merge a similar business with Siemens Mobility. Llistosella, on the other hand, wants to keep the division and leverage synergies with the truck sector. Because, despite some challenges, Knorr-Brese is still a strong player in the industry. Llistosella will continue to work on strengthening the company for the future and achieving the goals of "Boost 2026."