Annual General Meeting of KSB Aktiengesellschaft
After the second-best earnings performance in the company's history in 2009, KSB lowers profit expectations for the current year.
KSB emerged from the financial and economic crisis in the past financial year largely unscathed. Despite a fall in order intake and sales revenue, the pumps and valves manufacturer achieved the "second-best earnings in the history of the KSB Group”, reported Dr Wolfgang Schmitt, Chairman of the Board of Management, at the KSB Annual General Meeting in Frankenthal on 19 May. At the same time he made clear that business performance in the current year will be impacted by continuing weak demand and increased price pressure.
The KSB Group closed 2009 with new orders, at € 1,934.0 million, down by 11.2 percent compared with the previous year and sales revenue 5.0 percent lower at € 1,892.8 million. In the pumps and valves sector as a whole the drop was significantly larger. In this respect KSB outperformed most of its competitors, said Schmitt. At € 172.8 million, consolidated earnings before taxes remained at a high level, likewise the return on sales at 9.1 percent.
KSB AG posted net retained earnings for 2009 of € 33.7 million. In line with the proposal of the Board of Management and the Supervisory Board, KSB intends to pay out € 21.2 million of these in dividends to shareholders, with ordinary shareholders receiving € 12.00 (previous year: € 12.50) per share and preference shareholders € 12.26 (previous year: € 12.76).
In a presentation of the new Group strategy, shareholders learned how KSB intends to pursue positive medium-term to long-term development. The strategy is focused on achieving "sustainable, profitable growth", with KSB seeking a “leading competitive position in attractive markets". KSB plans to launch 125 strategic projects in the business lines of particular importance to the company's development. These include sales measures, new applications and product innovations. "Alongside weathering the crisis, the pursuit of our new strategy has top priority," says the Chairman of the Board of Management.
The weakness in demand as a result of the economic situation will nevertheless continue to adversely affect business performance in the current and possibly also the coming year. KSB expects to close 2010 with order intake and sales revenue on a par with last year's figures but cannot rule out the possibility of a slight drop in performance.
The Group’s order intake in the first four months of 2010 fell by 6.6 percent to € 640.3 million compared with the same period last year. This was entirely due to business performance in Europe, said the company. By contrast, KSB's three Regions outside Europe posted strong growth. Consolidated sales revenue fell by 5.1 percent in the first four months of this year to € 591.3 million. In terms of sales revenue development, the Group is able to benefit from a high level of orders on hand, which are currently in excess of € 1 billion.
As things stand today, KSB anticipates consolidated earnings to fall in 2010. These will be impacted by a combination of growing pressure on prices due to excess capacities in the sector and higher depreciation and amortisation charges for major investments made in the previous years.
Please note: At the time of publication of this press release, the Annual General Meeting, which had started at 3 pm, was still under way. Therefore, information on attendance and voting behaviour was not yet available.