The order situation and sales revenue of pump and valve manufacturer KSB developed positively in 2010. The Group’s order intake exceeded the two billion euro mark for the second time. As anticipated, consolidated earnings fell short of the prior-year figure.
With the financial and economic crisis coming to an end, KSB’s general business with standard pumps and valves saw a revival in 2010. By contrast, the project business continued to be affected by postponements in customers’ investment decisions during the crisis. The Group’s order intake improved by 7.3 percent to € 2,075.0 million overall. This growth came in particular from KSB’s companies outside Europe, with the companies in the Region Asia / Pacific reporting the strongest expansion with a 33.3 percent increase in orders received. Order intake at KSB AG was 5.8 percent below the previous year due to fewer new large projects.
The Group’s sales revenue reached € 1,939.3 million, an increase of 2.5 percent, largely due to the performance of companies in the Regions Asia / Pacific, Americas and Middle East / Africa. These three Regions achieved growth of 12.4 percent each, while sales revenue in European companies fell by 2.1 percent overall. KSB AG achieved sales revenue of € 778.8 million (in accordance with German Commercial Code accounting principles), a growth of 1.3 percent.
Consolidated order intake and sales revenue reflect the first-time consolidation of five operating companies in Germany, Italy, Canada, Norway and Russia. Without this expansion of the consolidated Group, order intake and sales revenue would have been € 40.2 million and € 35.4 million lower respectively.
The Group generated earnings before taxes (EBT) of € 135.8 million (previous year: € 172.8 million). The roughly 21 percent drop in earnings resulted from the reduced revenue in the project business due to intensified price pressure. Other contributing factors were higher impairment losses on major investments made in the previous years as well as additional staff costs. KSB AG achieved earnings before taxes (in accordance with German Commercial Code accounting principles) of € 39.8 million (previous year: € 46.3 million).
Despite the fall in earnings at the German parent company, the Board of Management and the Supervisory Board will propose to the Annual General Meeting the distribution of a dividend at the prior-year level of € 12.00 per ordinary share and € 12.26 per preference share.
The Group’s total assets grew to € 1,861.3 million in 2010 primarily in connection with an increase in non-current assets and higher receivables.
The net financial position improved again; the loan against borrower’s note placed in the previous year was not needed to finance operational business. KSB was also able to finance its strategic projects using its own funds and make early repayments of loans.
The number of KSB employees rose by 3.1 percent to 14,697 by the end of 2010 (previous year: 14,249). This increase in headcount is largely due to the first-time consolidation of the five companies. KSB AG, which launched numerous strategic projects, as well as companies in Brazil and India also posted an increase in staff.
KSB expects the economic upturn to continue in 2011, despite economic and political risks. The Group therefore anticipates growth both in order intake and in sales revenue. In the first two months of the current year, order intake and sales revenue grew by 11.3 percent and 9.2 percent respectively, compared with the same two months of 2010.
Based on KSB’s forecasts, consolidated earnings in the current financial year will reach at least the level of 2010. Whether an increase will be possible is still uncertain due to continuing price pressure in our sales markets and looming increases in material and staff costs.