Improvement in KSB Group Results in 2002

11.02.2003

The economic situation in 2002 remained tight throughout the world. Some stimulus in the pumps and valves market came from Asia, but the growth in the euro zone weakened further.

Key Group figures as of 31 December 2002

KSB Group

01-12/2002*

01-12/2001

Change

Order intake

€ million

1 201.1

1 181.6

+ 1.7 %

Sales

€ million

1 182.5

1 161.9

+ 1.8 %

Employees (31 Dec.)

11 940

12 071

- 1.1 %

*preliminary figures

Order intake and sales above previous year

Whereas many companies in the pumps and valves sector reported stagnating to declining order intake in 2002, the KSB Group succeeded in increasing its order volume over 2001 by 1.7 percent.

The growth in order intake came in particular from European and Asian companies. In Europe, a more intensive market coverage and greater focus on markets with comparatively good growth in demand were important success factors. The companies in the Region Asia/Pacific profited amongst other things from a special economic environment. The markets of China and India in particular contributed to a pick-up in demand for KSB products.

Sales

Group sales increased by 1.8 percent, with stimulus for growth coming above all from European companies. KSB AG and KSB Fluid Systems GmbH invoiced amongst other things for several major orders in the water engineering sector which were processed from Europe. The KSB companies in the Region Americas reported an overall sales decline that was, however, exclusively attributable to fluctuations in the currency exchange rate in favour of the euro.

Employees

The number of KSB employees on 31 Dec. 2002 was 1.1 percent lower than at the same time a year earlier, which is equivalent to 131 fewer employees. This decrease was essentially due to changes in American staff levels. In Europe, the number of employees in France fell as a result of the withdrawal of Building Services from the do-it-yourself market.

Stronger market position in Europe

As a result of its growth in order intake and sales, KSB was able to increase market share especially in Europe and Asia. The strengthening of market position was also helped by the purchase of a valves factory in Lünen, Germany. In addition, new sales cooperation agreements were concluded with a Japanese valves manufacturer and a US American manufacturer of ANSI pumps.

The Finnish joint venture Mercantile KSB Oy Ab, Helsinki, in which KSB AG hitherto held only a minority share of 25 percent, became a wholly owned subsidiary on 1 January 2003 and is now trading under the style of KSB Finland Oy.

Results

For the year 2002, KSB expects Group pre-tax profits to be up on the previous year's result of € 29.8 million. Positive contributions to the results came from all Regions.

Outlook

Conditions are not looking very favourable for an economic upturn in 2003. In the domestic KSB market of Europe economic policy and structural problems continue to hinder a rapid recovery of the market. This is especially true of Germany and France. A stimulation of markets will also only result in a growth in orders for pumps and valves after something of a time lag.

Against this economic background, the KSB Group is aiming to achieve moderate growth in order intake and sales in 2003. There will be a particular focus on development of the industrial and water (including waste water) business.

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