Report on Financial Year 2012
KSB increases Group sales revenue and earnings
Economic environment
After an encouraging start, the world economy cooled again in the course of 2012. Global growth was held back by the problems of the euro zone, which adversely affected the confidence of many investors in sound economic development. Due to the economic difficulties in Europe, the dynamism of important export-oriented emerging economies also weakened.
The mechanical engineering sector continued to grow in 2012, but much more slowly. For pumps and valves manufacturers the project business in the energy sector continued to be characterised by a low number of new orders and tight margins. Demand from the chemical and petrochemical industries as well as from the mining sector offered better growth opportunities.
Key Group figures as at 31 December 2012 (provisional figures)
| KSB Group | 01-12/2012 | 01-12/2011 | Change | |
|---|---|---|---|---|
| Order intake | € million | 2,257.1 | 2,132.3 | + 5.9 % |
Sales revenue | € million | 2,269.4 | 2,091.0 | + 8.5 % |
| Employees (31 Dec.) | 16,200 | 15,674 | + 3.4% |
Order growth in all four Regions
Order intake in the Group was € 2,257.1 million, € 124.8 million higher than in the previous year. The growth resulted from increased orders in all three Business Units – Pumps, Valves and Service.
In the domestic European market, order intake rose only moderately compared with the previous year; KSB AG, with its relatively high share of power plant business, reported a decline by 2.1 % to € 801.8 million. In contrast, KSB posted double-digit growth in orders received in the Regions Asia / Pacific, Americas and Middle East / Africa. Order intake was driven by demand from the mining sector in the Americas, the chemical and petrochemical industries in Asia, and the water and waste water industry in the Middle East and Africa.
Group sales revenue grows by 8.5 %
The Group’s sales revenue increased year on year by € 178.4 million to € 2,269.4 million. The highest increases resulted from the pump business including automation products and drives. Sales revenue for valves and service activities rose by an even higher percentage.
The largest absolute growth contribution came from the companies in the Region Europe, mainly from deliveries to the chemical and petrochemical industries as well as to the construction industry. Several European companies, including KSB S.A.S. in France, enjoyed double-digit percentage growth in sales revenue; KSB AG increased its sales revenue by 2.1 % to € 828.2 million.
The three non-European Regions recorded higher percentage growth in sales revenue than Europe. In the Region Asia / Pacific, this was mainly due to the invoicing of large orders in the power generation sector, in the Americas due to orders from mining, and in the Middle East due to growth in the building services business.
13 companies in Europe and China consolidated for the first time contributed to the positive development within the Group in 2012. Their total order intake was € 39.4 million with sales revenue of € 39.1 million.
Earnings forecast confirmed
From today’s perspective, earnings before income taxes for 2012 will reach the targeted level of € 135 million. This means that the prior-year profit will be clearly exceeded.
Growth in staff numbers through first-time consolidations
The number of employees in the Group as at 31 December 2012 increased by 3.4 % year on year to 16,200. The newly consolidated companies, accounting for 499 employees at year end, contributed significantly to this total growth by 526 people. In addition, individual companies have increased their staff, primarily to implement strategic projects.
Outlook
Despite only moderate growth in the global economy, we expect order intake and sales revenue to once again grow in 2013. The implementation of strategic projects should contribute significantly to this. Expansion of the standard business and the continued development of the service and aftermarket business will be important priorities.
