IR Corporate Presentation · IR Corp. Presentation June 2020. 3. About us. Ownership structure &...

1IR Corp. Presentation November 2020

IR Corporate PresentationKSB SE & Co. KGaADr. Matthias Schmitz (CFO)Dieter Pott (Head of Finance and Accounting)


About us

KSB Group is one of the world’s leading manufacturers of pumps and valves for many applications, providing a comprehensive range of service offerings. General Industry Petrochemicals / Chemicals Water Energy Mining Building Services


About usOwnership structure & No. of shares outstanding

Key Figures (EUR million) 2018 2019

Order intake 2,303.5 2,453.8 Sales revenue 2,245.9 2,383.2

EBITDA 179.2 195.5 EBITDA margin 8.0 % 8.2 %

EBIT 74.7 113.6 EBIT margin 3.3 % 4.8 %

Equity ratio 38.2 % 37.1 %20%

80%

Preference shares: 864,712

Johannes &Jacob KleinGmbH

Freefloat

84%

16%

Ordinary shares: 886,615

Johannes &Jacob KleinGmbH

Freefloat

Future Perspectives

Global market volume ~ EUR 107 billion in 2019 Average annual growth rate 2 to 4 %


Strategy

Markets, regional presence and economic development

Outlook

Sustainability

Appendix


Our focal points

Focus on Customers in Sales and After Sales worldwide

Agility and Flexibility in Structures and Processes

Profit Orientation based on Key Performance Indicators

High Engineering Competence powered by Innovationand Excitement of Creativity


Our Mission

KSB – We shape the future of Fluid Handling

We strive to achieve greater benefits for our customers. We inspire with our expertise, innovation power and creative drive.This makes us a successful, independent and reliable partner. Since 1871.


Strategic measures

Competitive cost structures

Reducing complexity(companies, products)

Global Footprint includingoptimising Supply Chain

Shared Service Center

Reaching competitive cost structures and striving for profitable growth at the same time

Focussing on profitablegrowth Aftermarket

Expanding business in core markets

ETA-Flagship

Start Additive Manufacturing(Lasercusing) for spare parts

Uniform systems and leanprocesses PACE – Excellence in accounting

and controlling

Global SAP platform

KSBase

Cloud for Service


Strategy


Outlook

Sustainability

Appendix


Pumps, valves and serviceA fragmented addressable market of roughly €107 billion

2019 Market size (€M) by geography

Americas

Europe

MEA

APAC

World

> 4% 2–4% <2%CAGR 2019-2025

P V

18,700

8,000

P V

17,900

8,400

P V

3,3008,700

27,200

P

14,500

V 34,200

P

72,600

V

Source: KSB estimates


Building Services

Energy

General Industry

Mining

Petrochemicals/Chemicals

Water

Centrifugal pumps in m€ Valves in m€

2,6004,300

9,300

2,400

8,0005,700

25,600

6,900

1,600

19,500

Pumps, valves and serviceSize of targetmarketsMegatrends driving growth in KSB's markets Environmentalism

− Increasing regulation− Energy efficiency

Urbanization and population growth− Need for more infrastructure

Water scarcity− Growing demand for water

reuse, treatment and efficiency Digitization

Source: KSB estimates > 4% 2–4% <2%CAGR 2019-2025

8,000

12,800


Being present in all big markets globally

KSB production sites KSB sales and service sites

Share of regions(as per 31 December 2019)

Order intake Sales

Europe 53 % 54 %

Asia 24 % 23 %

America 16 % 16 %

MEA 7 % 7 %


1.887

1.620

Order intake decreased from January – September 2020 in comparison to the prior-year figure

Q1 - Q3 2019 Q1 - Q3 2020

- 14.2 % The € 267 million decline compared with the prior-year period was influenced, in particular, by the coronavirus pandemic as well as by negative currency translation effects of € 50 million.

All Regions reported a lower order intake compared with the prior-year period.

Decline in Order Intake per segment:

Valves: - 16.1 %Pumps: - 13.1 %Service*: - 10.7 %

(EUR million)*The Service Segment figures are adjusted by the sale of four French service companies (reported – 16.2 %).


Order intake grew in 2019 by EUR 150.2 million

KSB Group Pumps Valves Service

+ 6.5 % + 7.4 % + 1.8 % + 7.3 %

2,453.8

1,617.8361.9

474.1

(EUR million)

Order intake in 2019 grew across all segments particular driven by orders in the project business.

Main segment drivers: + Energy (+ EUR 43.4 million)+ Industry (+ EUR 25.4 million) and+ Water / Waste Water 12(+ EUR 23.3 million)

Regional growth drivers:+ Asia / Pacific (+ EUR 69.5 million)+ America (+ EUR 44.2 million)


Growth of order intake in all regions in 2019

+ 1.0 %

+ 13.6 % + 12.3 %

Europe Asia / Pacific Americas Middle East /Africa

53 %

16 %

24 %

7 %

Middle East / Africa

Asia / Pacific

AmericasEurope

(in EUR + 13.1 million)



(in EUR + 23.4 million) 2019

Total order intake: EUR 2,453.8 million

+ 16.3 %


1.7671.610

Sales revenue decreased from January – September 2020 in comparison to the prior-year figure

Q1 - Q3 2019 Q1 - Q3 2020

- 8.9 % All Regions saw a decrease in sales

revenue. In particular, government-ordered closures in Asia and South Africa had a negative impact.

The revenue decrease in the Service segment was negatively influenced by the sale of four French service companies in the first half year 2020.

Change in Sales revenue per segment:

Valves: - 9.1 %Pumps: - 8.5 %Service*: - 4.9 %(EUR million)

*The Service Segment figures are adjusted by the sale of four French service companies(reported - 9.9 %).


Sales increased by EUR 137.2 million in 2019

KSB Group Pumps Valves Service

2,383.2

1,562.5364.4

456.4

+ 6.1 % + 6.3 % + 6.9 % + 4.7 %

(EUR million)

As some of the orders are part of long-term projects, sales revenue lags behind order intake

Regional growth driver:+ Asia/Pacific (+ EUR 59.5 million)+ Americas (+ EUR 41.9 million)


Focus on Asia / Pacific and Americas entities in sales in 2019

54%

16%

23 %

7 %

Europe


Asia / Pacific

Americas

+ 3.1 %

+ 12.4 % + 12.1 %

- 1.9 %

Europe Asia / Pacific Americas Middle East /Africa

(in EUR + 38.9 million) 2019

Sales in total: EUR 2,383.2 million



(in EUR - 3.0 million)


(EUR million) 2018 2019 H1/2019 H1/2020

Sales revenue 2,245.9 2,383.2 1,141.9 1,049.2Cost of materials

% of total Sales revenue

-934.5

41.6

-984.8

41.3

-505.7

44.3

-432.4

41.2Staff costs

% of total Sales revenue

-765.5

34.1

-848.3

35.6

-420.3

36.8

-418.1

39.8

Other expenses / income (net) -383.8 -338.8 -171.7* -156.5

EBIT 74.7 113.6 45.2 15.1

Income Statement

* Change in reporting from the 2019 Half-year Financial Report, other taxes item that was previously reported separately in the income statement was included in otherexpenses.


Capital Expenditure increased by 34.4 % resp. EUR 27.4 million

66.678.9

13.0

12.9 *

2018 2019

79.6

107.0

Property, plantand equipment

Intangible assets

60 %20 %

16 %

4 %

Europe


Asia / Pacific

Americas

2019

(EUR million)

Capex in total:EUR 107.0 million

15.2

Right of use asset *

* First-time adoption of the new IFRS 16 accounting standard.


Reasonable Equity ratio

2,253 2,242 2,327

885.4 856.8 862.6

2017 2018 2019

Equity

Balancesheet total

39,3 % 38,2 %

(EUR million)

37,1 % Equity ratio including non-controlling

interests


Lower Net financial position reflects introduction of IFRS 16 (lease accounting)

364.3333.9 347.3

-76.3 -78.9-101.1

2017 2018 2019

Financialliabilities

Availablefinancial

resources

288.0255.0

(EUR million)

246.3* Lease liabilities of € 47.1 million

were recognized as a result of the first-time adoption of IFRS 16 in 2019 as compared to the fiscal year 2018.

* Adjusted by the lease liabilities the net financial position amounts to € 293.4 million.


Lower Net financial position reflects introduction of IFRS 16 (lease accounting)

(EUR million)

- 54.3- 30.1

- 56.8

- 22.0- 48.8

2017 2018 2019

Long-termdebt

Short-termdebt

- 76.3 - 78.9

Financial liabilities

- 101.1 The increase in the financial liabilities of € 22.2 million are mainly attributable to the first-time adoption of IFRS 16 in 2019, mitigated by the repayment of a borrowers note.

The short-term debt of € 44.3 million is affected by € 15.0 million and the long-term debt of € 56.8 million is affected by € 32.0 million due to the capitalization of rights of use to leased assets under IFRS 16.

-44.3


5.501 5.501

7.501

3.002

8.501

2015 2016 2017 2018 2019

Dividend of EUR 8.50 per share for 2019

1 EUR / Preference shares: + 0.26 EUR2 EUR / Preference shares: + 0.38 EUR

24.7 % 35.5 % 47.9 % Pay out ratio Group:

Dividend per share / EPS

29.4 % 34.7 %


Strategy


Outlook

+ Outlook for financial year 2020

+ Climb 21 Strategy Project

Sustainability

Appendix


The global business environment is being shaped by rising coronavirus infection figures. These continue to create uncertainties regarding the impact on supply chains, production and customer demand in the near future.

With that in mind, it will remain difficult in the months ahead to estimate the scope and impact of the coronavirus pandemic on the customers’ willingness to reach out and invest, and thus on the key indicators of order intake, sales and EBIT.

Given these uncertainties, KSB continues to refrain from making a forecast for the 2020 financial year.

Outlook for financial year 2020


Industry

Further slowdown ofindustrialproduction in particular ofmechanicalengineering

Weakerdemand andcontinuingconsolidation, contraction in investments

Share in KSB COI (2019)

Outlook 2020e – economic downturn and decline in manufacturingwith high degree of uncertainty

Energy supplyPetro-/Chemical MiningWater/Wastewater

Contraction in countries witheconomicrecession

Worldwide extension andrenewal of waterand wastewaterinfrastructures in particular in APAC and Africa

Slow down in investments in power plants andrenewals

Construction

Reduction in production, capital spending and global fuel demand


Efficiency and effectiveness by

adapting the organi-sational structure

Profitable growththrough focusing on

markets

Climb 21Strategy Project


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 2128

29IR Corp. Presentation June 2020

New KSB organisational structureClimb 21

Regions

Headquarter

Mining Energy Petrochemicals/Chemicals Water General Industry Building Services

Pumps Valves ServiceCentral

ServicesKSB Valves KSB SupremeServ


Strategy


Outlook

Sustainability

Appendix


For a Better World

KSB joined the UN Global Compact in 2010.

I 31Sustainability


2019 Facts & Figures

32Sustainability

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

33Sustainability


Strategy


Outlook

Sustainability

Appendix

+ Executive Board

+ Legal form

+ Financial Statements

+ Financial Calendar 2020


Dr Stephan Timmermann

Ralf Kannefass

Dr Stephan Bross Dr Matthias Schmitz

Executive Board of KSB SE & Co. KGaA


Mechanical engineeron the board since 13 November 2017appointed until 30 November 2023.

2015 – 2017 Consultant2005 – 2015 Member of the Board of MAN Diesel & Turbo SE2002 – 2005 Managing Director Schwäbische Hüttenwerke GmbH1999 – 2002 CEO MAN Logistics GmbH

Integrated engineering/business administration degreeon the board since 1 June 2017appointed until 31 May 2023

2014 – 2016 CFO H.C. Starck GmbH, Munich2007 – 2013 CFO Linde Material Handling GmbH (Kion Group)2002 – 2007 Head Controlling Mahle GmbH, Division Pistons1993 – 2002 KSB AG, last position: Head Controlling KSB Group

Dr Stephan Timmermann

Dr Matthias Schmitz

Members of the Executive Board


Ralf Kannefass

Members of the Executive Board

Mechanical engineer and degree in businesson the board since 1 July 2017appointed until 30 June 2023

2014 – 2017 Industrial consultancy Stieler Kannefass2013 – 2014 Board Member of Cassidian / EADS

(today Airbus Defence & Space)1994 – 2013 Siemens AG, last position: CEO of Siemens

Energy, Oil & Gas Turbo Equipment

Dr Stephan Bross

Mechanical engineer, Dr-Ing.on the board since 15 September 2017appointed until 14 September 2022

At KSB for 24 years, earlier positions:Head of Corporate Units Pumps and ValvesHead of ServiceHead of Product Management and Development Engineered PumpsMember of the Supervisory Board from 2010 to 2017


Legal FormKGaA, Kommanditgesellschaft auf Aktien / limited partnershipby sharesKSB Foundation

Johannes und Jacob Klein GmbH

(majority shareholder)

Annual General Meeting

Other Shareholders(free float)

SupervisoryBoard

Klein, Schanzlin & Becker GmbH

KSB Management SE with Administrative Board

KSB SE & Co. KGaA

Kühborth-Stiftungs GmbH

99.4 % 99.4 % 0.6 %0.6 %

Structure

KSB SE & Co. KGaA managed by the generalpartner KSB Management SE (with Non-executivesand Executive Directors)


(EUR million) 2018 2019 H1/2019 H1/2020

Sales revenue 2,245.9 2,383.2 1,141.9 1,049.2

Total output of operations 2,275.8 2,381.2 1,182.8 1,064.3Other income 33.1 33.4 19.2 15.5

Cost of materials -934.5 -984.8 -505.8 -432.4

Staff costs -765.5 -848.2 -420.3 -418.1

Depreciation and amortization expense -104.5 -81.9 -39.8 -42.3

Other expenses -416.9 -372.2 -191.0* -172.0

Other taxes -12.8 -13.9 - -

EBIT 74.7 113.6 45.2 15.1Financial income / expense (net) -11.6 -11.4 -5.6 -3.5

Income from / expense to investments accounted for using the equity method 2.5 1.2 -1.7 -1.2

EBT 65.6 103.4 37.9 10.4Taxes on income -41.6 -44.9 -18.4 -38.4

Net profit 23.9 58.5 19.5 -32.3

Income Statement

* Change in reporting from the 2019 Half-year Financial Report, other taxes item that was previously reported separately in the income statement was included in otherexpenses.


(EUR million) 2018 2019 H1/2019 H1/2020

Cash flows from operating activities 61.4 144.9 -0.2 23.1

Cash flows from investing activities -90.5 -74.0 27.0 -29.0

Cash flows from financing activities -9.4 -46.4 -12.6 -30.2

Changes in cash and cash equivalents -38.5 24.5 14.2 -35.5Effects of exchange rate changes on cash and cash equivalents 4.6 -0.4 -1.4 -3.9

Effects of changes in consolidated Group - 1.2 - -

Cash and cash equivalents at beginning of period 289.5 255.6 255.6 280.9

Cash and cash equivalents at end of period 255.6 280.9 268.3 241.6

Statement of Cash flows


Balance sheet: Assets(EUR million) 2018 2019 H1/2020

Non-current assets 696.7 782.6 677.6Intangible assets 91.1 97.1 95.9

Right-of-use assets - 50.1 43.7

Property, plant and equipment 496.6 511.3 491.5

Non-current financial assets 1.8 2.0 1.1

Other non-financial assets 2.9 2.8 2.8

Investments accounted for using the equity method 23.9 24.2 22.6

Deferred tax assets 80.4 95.1 20.0

Current assets 1,545.5 1,544.4 1,481.8Inventories 544.4 544.7 557.9

Contract assets 74.5 76.4 97.2

Trade receivables 518.1 504.1 448.3

Other financial assets 103.4 90.9 92.8

Other non-financial assets 49.5 39.6 44.1

Cash and cash equivalents 255.6 280.9 241.6

Assets held for sales - 7.8 -

Total 2,242.2 2,327.0 2,159.4


Balance sheet: Equity and Liabilities(EUR million) 2018 2019 H1/2020Equity 856.8 862.5 727.0Non-current liabilities 620.4 715.6 716.9Deferred tax liabilities 10.3 11.1 11.3

Provisions for employee benefits 578.6 646.3 650.9

Other provisions 1.4 1.4 1.4

Financial liabilities 30.1 56.8 53.4

Current liabilities 765.0 748.9 715.5Provisions for employee benefits 9.3 12.2 11.5

Other provisions 83.5 68.4 77.9

Financial liabilities 48.8 44.3 36.3

Contract liabilities 157.4 165.5 170.1

Trade payables 270.2 252.7 237.3

Other financial liabilities 32.8 31.2 27.1

Other non-financial liabilities 154.7 161.5 142.3

Income tax liabilities 8.3 9.1 13.0

Liabilities held for sales - 4.0 -

Total 2,242.2 2,327.0 2,159.4


28 January 2021 Preliminary report on financial year 2020

25 March 2021 Publication Financial Statement 2020,Financial press conference

29 April 2021 Interim report January - March 2021

6 May 2021 Annual General Meeting

12 August 2021 Half-year financial report January – June 2021

9 November 2021 Interim report January – September 2021

Financial Calendar 2021


Dieter Pott

Head of Finance and Accounting

Phone: +49 (0) 6233 86-2614

eMail: [email protected]

Investor Relations


Disclaimer

This investor presentation contains forward-looking statements that are based on current estimates, forecasts and assumptions made by KSB management to the best of its knowledge and other information currently available to KSB.

By their very nature, the forward-looking statements of this presentation are subject to various known and unknown risks, uncertainties and other factors, the non-occurrence or occurrence of which could cause material differences in future results ofoperations, financial situation, development or performance of KSB. Factors that could cause such differences include but are not limited to changes in political, business, economic and competitive environment, effects of future legal and legislative issues,fiscal, and other regulatory measures, foreign exchange rate fluctuations, interest rates, developments in raw material and personnel costs, launches of competing products or services, poor acceptance of new products or services, and changes in business strategy.

KSB does not intend and does not assume any liability whatsoever to publicly update or revise any forward-looking statements or other information contained in this presentation as a result of new information, future events or otherwise. No representation or warranty, express or implied, is made by KSB and/or its management with respect to the completeness, fairness, correctness, reasonableness or accuracy of any information, facts, expectations or opinions contained herein. Neither KSB nor any of its affiliates or representatives shall have any liability whatsoever (in negligence or otherwise) for any losses or damages arising from any use of this presentation or its content or otherwise arising in connection with the statements given herein. This presentationincludes percentage and number rounding.

IR Corporate Presentation · IR Corp. Presentation June 2020. 3. About us. Ownership structure &...

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