KSB Group generates earnings of approx. € 173 million
Financial press conference of KSB AG in Frankenthal
The pumps and valves manufacturer KSB generated consolidated earnings before taxes of € 172.8 million in financial year 2009 (previous year: € 200.1 million), as Dr Wolfgang Schmitt, Chairman of the Board of Management, reported at the Group’s financial press conference today in Frankenthal. Although this is below the record earnings achieved in the previous year, it does point to a significantly better performance than many comparable mechanical engineering companies. The Group achieved a 9.1 percent return on sales (previous year: 10.0 percent).
Falling demand due to the global economic crisis affected KSB’s standard business in particular in 2009. Order intake was considerably lower for pumps and valves used in building services or industrial processes. The longer-term project business was only partially able to compensate for this decline. Overall, KSB therefore posted a fall of 11.2 percent in order intake to € 1,934.0 million for the first time following five years of strong growth.
In terms of sales revenue development, KSB was again able to benefit from a very high level of orders in hand in financial year 2009. Despite the weaker standard business with pumps and valves, consolidated sales revenue contracted less than order intake, by 5.0 percent to € 1,892.8 million. The decline in overall sales revenue of € 98.9 million is largely attributable to the European companies. KSB AG recorded sales revenue in the past financial year of € 768.5 million (in accordance with HGB – German Commercial Code). This was 6.2 percent lower than in the previous year.
Consolidated earnings before taxes fell to € 172.8 million in 2009 (previous year: € 200.1 million). Nonetheless, this is KSB’s second best result to date.
Pre-tax earnings for KSB AG amounted to € 46.3 million (previous year: € 52.8 million). As the parent company’s earnings were still good, it will be possible to pay out a dividend at almost the same level as in the previous year. The Board of Management and Supervisory Board of KSB AG will therefore propose to the Annual General Meeting to approve a dividend per ordinary share of € 12.00 (previous year: € 12.50) and per preference share of € 12.26 (previous year: € 12.76).
The Group’s balance sheet total rose by 15.8 percent in 2009 to € 1,645.4 million, mainly as a result of the measures taken to safeguard liquidity in case of a protracted crisis; these included a loan against borrower's note. Despite the € 224.0 million increase in the balance sheet total, KSB was again able to improve the equity ratio to 43.8 percent (previous year: 42.6 percent).
KSB largely maintained its headcount at the prior-year level (– 0.7 percent), with 14,249 employees worldwide as at the end of 2009 (previous year: 14,345). However, the company significantly reduced the number of leased personnel.
KSB expects the market environment to remain difficult in the current year, and that the standard and project businesses will stabilise at the level achieved in 2009. However, late cyclical effects and increasing pressure on prices could hamper the project business.
KSB anticipates that order intake and sales revenue will range at prior-year levels in 2010. The company is not, however, ruling out a slight decline in performance under unfavourable conditions. In the first two months of 2010, figures were still below those of the previous year. The Group continues to have a high level of orders in hand worth approximately one billion euros.
KSB expects a decline in earnings in 2010, largely due to increasing pressure on prices and higher depreciation and amortisation charges for major investments made in the previous years.
KSB intends to continue to pursue intensive cost and liquidity management in 2010, without however endangering the implementation of the corporate strategy approved in 2009. This aims to ensure sustained profitable growth, for which the company plans to initiate some 125 strategic projects with a focus on technical and sales aspects. KSB will launch over half of these projects until the end of 2010.
For more information on the 2009 business figures, please go to Investor Relations.