KSB is charting a course for growth - Currency translation effects dampen improvement
Pump and valve manufacturer KSB continued on its growth path in the past financial year. KSB’s order intake increased by € 38.2 million to € 2,303.5 million and sales revenue by € 41.0 million to € 2,245.9 million. Without currency translation effects, growth would have been considerably higher at 6 % and 6.1 % respectively and in line with expectations. Earnings (EBIT) were well down on the previous year at € 74.7 million. Provisions for a major project in the United Kingdom, as announced in the half-year report, and write-downs had a negative impact on earnings. Through these measures the company has taken impairment risks into account and has responded to the current political conditions in its business with Iran.
In addition, Management and employee representatives have agreed on new company pension arrangements. Employees can now opt for receiving their pension either in monthly instalments for life or as a single lump-sum payment. This will reduce the financial impact on the balance sheet and also have a one-off effect on operative earnings.
“In view of the political and economic environment we are satisfied with the financial year, since without the currency translation effects order intake and sales revenue would have been in line with our forecast. We are, of course, disappointed with the earnings figure. Backed by the corrective measures referred to, and through the CLIMB 21 structural and growth programme that we have initiated, we are charting the course for long-term, profitable growth,” Dr Stephan Timmermann, CEO, explained at the financial press conference.
All regions contributed to growth. The largest contribution came from Asia and Europe, accounting for two-thirds of growth. The companies in North America also performed positively, while performance in South America was weaker because of the currency translation effects. Pumps remain the largest segment, with order intake of € 1,506.2 million. In the Valves segment order intake amounted to € 355.6 million, while in the Service segment – which, following the launch of the KSB SupremeServ brand in the financial year, will be significantly gaining in importance in the future – order intake totalled € 441.7 million.
The increase was mainly attributable to business in the manufacturing sector, transport, building services, chemicals and petrochemicals.
As some of the orders are part of long-term projects, sales revenue lags behind order intake. All three segments likewise contributed to the growth in sales revenue.
In the current 2019 financial year, KSB aims to generate further growth in order intake and sales revenue, and also aims to achieve a significant improvement in earnings.
A dividend of € 3.00 per ordinary share and € 3.38 per preference share will be proposed to the Annual General Meeting, so taking due account of the earnings performance.