KSB Group Remains on Course for Growth

23.06.2006

Good order intake, increasing sales revenue and improved prospects for the return on sales were the key features of the report by Heinz-Jürgen Otto, the new Chairman of the KSB AG Board of Management, at the company's Annual General Meeting in Frankenthal, Germany.

On 22 June he introduced himself to the shareholders as a new member of the Board, as did Dr. Wolfgang Schmitt, who is responsible for Finance. A new Chairman of the Supervisory Board was also appointed on 6 April 2006 in the shape of Dr. Hans-Joachim Jacob.

After healthy growth in orders in 2005, the Group again increased its order intake from January to May 2006 by 24.9 percent compared with the same months in the previous year (KSB AG: + 35.1 percent). This strong growth rate was attributable above all to major orders from the energy sector, Heinz-Jürgen Otto explained. But KSB also reported marked gains in all other market segments, he added.

On account of the particularly strong project business, in which new major orders only translate into sales revenue after a certain time lag, Group figures show the growth in sales revenue, at plus 11.7 percent (KSB AG: + 5.1 percent), to be still somewhat lower than that of order intake. Nevertheless, on the basis of the growth in sales revenue, KSB expects an improvement in consolidated earnings for 2006 (2005: € 32.4 million). The Group's return on sales will also increase further, Otto announced.

However, the Board of Management sees some cause for concern in the earnings situation of the parent company KSB AG, which closed 2005 with a loss. To move the "German flagship" back into the profit zone, he said, a package of measures has been put together that is aimed at improving earnings in the short term.

For the further development of the company, Otto pointed to sales revenue opportunities in important future markets, such as water supplies, environmental protection and power generation, as well as industry, the mining sector and building services. KSB also aims to step up its activities in the area of renewable energy.

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