KSB achieves solid growth in the first half of 2024 – undeterred by the economic headwind
- Increase in order intake, sales revenue and earnings (EBIT)
- KSB SupremeServ Segment continues to develop its business
- Annual forecast confirmed
FRANKENTHAL: In the first half of 2024, the Frankenthal-based pump and valve manufacturer KSB built on the strong development of the 2023 financial year, increasing the key financial figures for order intake, sales revenue, earnings before finance income / expense and income tax (EBIT) compared with the prior-year period.
In the first six months of the 2024 financial year, KSB increased its order intake by 2.2 % to € 1,645 million. The KSB SupremeServ Segment achieved the largest increase, growing by 7.2 % to € 550 million, on the back of a strong spare parts business, especially in the Energy and Mining operating segments. The Valves Segment increased its order intake by 2.5 % to € 226 million, driven by major projects. This growth was opposed to a slight decline in orders of 0.7 % to € 869 million in the Pumps Segment. While the Energy Market Area achieved growth of € 38 million compared with the previous year, especially due to major orders, the economic environment contributed to a € 25 million decline to € 677 million in order intake in the Standard Markets. The Mining Market Area also concluded the first half of the year with a decline (€ – 19 million), as com¬pared with the prior-year period that was characterised by major orders.
KSB increased sales revenue by 3.7 % in the first six months of the year to € 1,439 million. The KSB SupremeServ Segment contributed to this growth with a 7.5 % increase to € 491 million – based in particular on the spare parts business for the Energy Market Area. The Valves Segment followed with growth of 5.1 % to € 193 million, while the Pumps Segment recorded an increase of 1.1 % to € 754 million. The Energy Market Area achieved growth of + 17.4 %, while the Mining Market Area and Standard Markets were down marginally from the previous year.
KSB increased its EBIT in the first half of the year by 3.7 % to € 116.3 million (prior-year period: € 112.1 million). This equates to an EBIT margin of 8.1 %, as in the previous year. The KSB SupremeServ segment made a significant contribution, increasing EBIT by 11.8 % to € 99 million (prior-year period: € 88.6 million). The Valves Segment ended the first six months of the year with an almost break-even EBIT of € – 0.3 million. At an operational level, this equates to an improvement of € 4.5 million, as EBIT in 2023 (€ 4.4 million) was influenced by a one-off insurance compensation of € 10.2 million. With an EBIT of € 17.6 million, the Pumps Segment was not quite able to match its comparative prior-year EBIT of € 19.2 million. While the Energy and Mining Market Areas achieved higher earnings compared with the prior-year period, the Standard Markets did not quite reach the previous year’s EBIT level.
KSB plans to replace the current SAP corporate software solution with SAP S/4HANA in the next three years. It views this changeover as a great opportunity to align the business processes even more strongly with the current corporate strategy. In addition, the new solution offers the advantage of faster participation in SAP’s innovation cycles. The major project had a negative impact on EBIT in the first half of the year, with external costs of € 2.3 million. A burden on earnings in the lower two-digit million range is expected for the second half of the year.
CEO Dr. Stephan Timmermann expressed his satisfaction: “We are pleased with the solid business development that we have achieved, despite the absence of stimuli from the global economy. Restraint with regard to large investments and the crisis-hit construction industry continue to impact our Standard Business. Although the weak economic situation has stabilised somewhat in Europe, the economy has slowed down noticeably in China. We are consistently pursuing our growth strategy in the USA.”
Even taking into account the costs for introducing SAP S/4HANA, KSB has confirmed the forecast for the 2024 financial year that was published at the beginning of the year.
KSB is a leading international manufacturer of pumps and valves. The Frankenthal-based Group has a presence on five continents with its own sales and marketing organisations, manufacturing facilities and service operations. With a workforce of around 16,000, the KSB Group generated sales revenue of approximately € 2.8 billion in 2023.