Financial Press Conference of KSB SE & Co. KGaA€¦ · This report contains forward-looking statements. These statements are based on the current estimates and forecasts of the Managing

Financial Press Conference of KSB SE & Co. KGaA

26 March 2020

I Financial Press Conference I KSB SE & Co. KGaA I 26 March 2020 2

This report contains forward-looking statements. These statements are

based on the current estimates and forecasts of the Managing Directors

and the information currently available to them. The forward-looking

statements do not represent guarantees for the future developments and

results they refer to. Rather, they depend on a variety of factors and include

different risks and uncertainties, and are based on assumptions that might

prove to be inaccurate.

The KSB Annual Report is now (10.00 CET) available for download from the

our web site.


1. The 2019 financial year

2. Business development and finances

3. Strategy / investments / products

4. Outlook

2019 – A Successful Year for KSB


Financial Press Conference 2020

Key indicators in line with the forecast Work on strategic priorities continued:

− Climb 21 – Profitable growth− Corporate culture – Entrepreneurship and communication− Sustainability

Groundwork laid – Business is on track

The sleeping giant has awoken.

2019Order intake + 6.5 %Sales revenue + 6.1 %

Financial Year 2019 – A Good YearFinancial Press Conference 2020


Very satisfied with business development

EBIT: € 113.6 millionROS: 4.8 %

2018:

Order intake + 1.7 %Sales revenue + 1.9 %

EBIT: € 74.7 millionROS: 3.3 %

En Route to Profitable Growth



Trend reversalimplemented

Profitable growth: Changes initiated

Reducing costs: Measures were taken

Strategy: Realignment under way

Topics at a Glance



Climb 21 strategy project

Future investments

KSB SupremeServ

Sustainability





4. Outlook

Significant increase in order intake


Asia / Pacific+ 13.6 %

(+ € 69.5 million)

Europe+ 1.0 %

(+ € 13.1 million)

+ 12.3 %(+ € 44.2 million)

Americas

Order intake development by Region

Middle East /Africa

+ 16.3 %(+ € 23.4 million)

€ millions Order intake Year on year

KSB Group 2,453.8 + 150.2

+ 6.5 %

Pumps 1,617.8 + 7.4 %

Valves 361.9 + 1.8 %

Service 474.1 + 7.3 %

Sales revenue rises significantly by 6.1 %Proportion of sales revenue by Region

Europe 54.4 %

Middle East / Africa 6.5 %

Asia / Pacific 22.7 %

Americas16.3 %


€ millions Sales revenue Year on year

KSB Group 2,383.2 + 137.2

+ 6.1 %

Pumps 1,562.5 + 6.3 %

Valves 364.4 + 6.9 %

Service 456.4 + 4.7 %

Income statement benchmark figures

€ millions 2019 2018

Sales revenue 2,383.2 2,245.9

Cost of materials 984.8 934.5in % of sales revenue 41.3 41.6

Staff costs* 848.3 765.5in % of sales revenue 35.6 34.1

EBITDA 195.5 179.2

EBIT 113.6 74.7


* Average number of employees: 15,591 (2019), 15,358 (2018)

€ millions 2019 2018Earnings before finance income / expense and tax (EBIT) 113.6 74.7

Earnings after income tax 58.5 23.9

Earnings per ordinary share 24.47 6.26

Earnings per preference share 24.73 6.64

EBIT margin in %

3.3

2018

4.8

2019

EBIT margin: 4.8 %

Earnings before finance income / expense and income tax (EBIT)



Equity ratio remains solid


Equity 862.6 856.8

Equity ratio 37.1 % 38.2 %

2019

863

2,327

€ millions

2018

857

2,242

Equity and balance sheet total

Investments



Intangible assets 15.2 13.0

Right-of-use assets 12.9 -

Property, plant and equipment 78.9 66.6

107.0 79.6

Depreciation and amortisation 81.9 104.5

€ millionsFinancialliabilities

Availablefinancial resources

2019

2019

293.4*

Net financial position in € millions

- 53.9* + 347.3

Increase in adjusted net financial position


Δ + 25.0 + 13.4

2018- 78.9 + 333.9

2018

255.0

* Adjusted for the effects from the first-time adoption of IFRS 16 amounting to € 47.1 million. Taking account of the lease liabilities recognised on the balance sheet, the net financial position decreased to € 246.3 million.


Comparison of KSB dividends(ordinary share) in €

2017 2016

7.50

20182019

5.50

Dividend per

2019

(proposal)

2018

Ordinary share € 8.50 € 3.00

Preference share € 8.76 € 3.38

3.00

Dividend proposal: € 8.50 per ordinary share

* Preference share in 2019: € 8.76

8.50

2015

5.50





4. Outlook

KSB – Key Indicators of the Last Ten YearsClimb 21

Sales revenue (in € millions)

EBIT (in € millions)

1.939 2.091 2.268 2.247 2.182 2.335 2.166 2.205 2.246 2.383

2010 2019

+2%

149 133 150 136

89 105 88117

75114

2010 2019

– 8 %

+ 6 %

+ 52 %


Cornerstones of Company Development

Efficiency / Cost savings / Liquidity

Profitable growthStructural measures

Potential through external growth

Long-term measures

Medium-term measures

Short-term measures

OCT2018 202120202019

Q1 Q2 Q3 Q4NOV DEC

Focusing on markets Imple-mentation

Improvement of the income statement

Improvement of the balance sheet

Focused acquisitions

Development of a new organisational structure and functions

Climb 21

Climb 21


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2020

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Efficiency and effectiveness by

adapting the organi-sational structure

Profitable growththrough focusing on

markets

Climb 21Strategy Project

Core Phases of the ProgrammeClimb 21

Today

Market analysis(Three lenses)

Targeted organisational

structure

Development of strategies for

market segments

2019 2020

Prioritising the initiatives and

measuresImplementation for go-live

Second half of year

Consolidation of overall business plan


New Organisational Structure of KSBClimb 21


Regions

Executive centre

Mining Energy Chemicals / Petrochemicals Water General Industry Building Services

Pumps Valves ServiceCentral

servicesKSB Valves KSB SupremeServ

EBIT margin in %

Target for 2025: EBIT Margin: > 8 %


Climb 21

20181

4.8

2019 2025+

4.4

> 8.0

KSB SupremeServ


Cornerstones of GrowthKSB SupremeServ

Integration of service and spare parts into an independent organisational unitOrganisation

Investment in employees Investment in further service centres Investment in training: KSB SupremeServ Academies

Technical service

Competitive pricing Availability (logistics) E-sales / Web Shop

Spare parts

Digitalised service ReengineeringProducts

KSB SupremeServ spiritCorporate culture


Key Investments


Investments in 2019

USA (Grovetown, Port Arthur)

Australia (Perth)

India (Shirwal)

Germany (Frankenthal, Halle)

Digitalisation

Overview of Investments in 2019: € 107 million


Investments in 2019

USA € 17.5m

Germany€ 43.3m

Remainder€ 36.6m

Australia€ 1.1m

India € 8.4m

Frankenthal: Overall Impression / Infrastructure / Production


Investments in 2019

Halle: Logistics / Production


Investments in 2019

Shirwal (India) – 3rd Extension Stage


Investments in 2019

GIW, Grovetown (USA) – 2nd Extension Stage


Investments in 2019

Standard Alloys, Port Arthur (USA): New Building


Investments in 2019

Perth (Australia) – New Test Field


Investments in 2019

Expansion of Digitalisation: Digital Factory, KSBase, Web Shop


Investments in 2019

Examples: RUV, Amarex NG, Etanorm FXM, Gamma


Product Innovations

Photo of Amarex NG Photo of Gamma

Examples: Amtrobox F, SISTO-16 TWA, STAAL 40, SICCA


Product Innovations

For a Better World

KSB joined the UN Global Compact in 2010.


Sustainability

2019 Facts & Figures


Sustainability

Greenhouse gases

- 2,292 t

Reduction in CO2 emissions year on year in 2019

Renewable energy

34.4 %

Share of renewable energy in the Group’s power consumption

Social activities

116Charitable initiatives and projects supported

Employee motivation

58 %

2017: 46 %Target for 2025: 80 %

New Binding Goals until 2025

1. CO2 emissions: - 30 %

2. KSB water pumps: Annual savings of 850,000 tonnes of CO2

3. Ecological product rating: Recyclability

4. Employee satisfaction index: 80 %

5. At least 20 % of management positions: Women

6. Reduction of days lost due to occupational accidents: < 0.3 days per employee / year

7. Professional development: At least 30 hours per employee / year

8. Sustainability performance assessment of key suppliers

9. Global commitment: 25 social projects / year


Sustainability





4. Outlook

Focus: Qualitative Growth


Outlook for 2020

Short-termDrive forward operative improvements

Long-termInclude external growth

Medium-termImplement market-oriented structures

Goals for 2020


Outlook

Increase in efficiency and effectiveness

Positioning of the KSB brand

Climb 21: Implementation

Financial press conference of KSB SE & Co. KGaA

26 March 2020

Documents

Financial Press Conference of KSB SE & Co. KGaA€¦ · This report contains forward-looking statements. These statements are based on the current estimates and forecasts of the Managing