IR Corporate Presentation€¦ · Covid-19 situation as of today and forecast 2020 (2/2) Strengths...
Transcript of IR Corporate Presentation€¦ · Covid-19 situation as of today and forecast 2020 (2/2) Strengths...
1IR Corp. Presentation April 2020
IR Corporate PresentationKSB SE & Co. KGaADr. Matthias Schmitz (CFO)Dieter Pott (Head of Finance and Accounting)
2IR Corp. Presentation April 2020
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 Chemical / petrochemical
industry Water transport Waste water treatment Energy supply Mining Construction /
Building services
3IR Corp. Presentation April 2020
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 %
4IR Corp. Presentation April 2020
Strategy
Markets, regional presence and economic development
Outlook
Sustainability
Appendix
5IR Corp. Presentation April 2020
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
6IR Corp. Presentation April 2020
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.
7IR Corp. Presentation April 2020
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
8IR Corp. Presentation April 2020
Strategy
Markets, regional presence and economic development
Outlook
Sustainability
Appendix
9IR Corp. Presentation April 2020
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
10IR Corp. Presentation April 2020
Construction
Energy supply
Industry
Mining
Chemical/Petrochemical
Water /Waste 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
11IR Corp. Presentation April 2020
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 %
12IR Corp. Presentation April 2020
668.8588.2
Order intake decreased in Q1 2020 in compare with Q1 2019
Q1 2019 Q1 2020
- 12.0 %
Order intake in the first quarter was slightly below expectations as last year’s first quarter was influenced by two major orders.
In the first quarter of 2020 order intake decreased across all segments caused by the corona-virus pandemic.
North Asia and South America are still posting growth in order intake, while all other Regions experienced declines.
Decline in Order Intake per segment:
Pumps: - 15.4 %Service: - 6.9 %Valves: - 2.8 %
(EUR million)
13IR Corp. Presentation April 2020
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)
14IR Corp. Presentation April 2020
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 + 69.5 million)
(in EUR + 44.2 million)
(in EUR + 23.4 million) 2019
Total order intake: EUR 2,453.8 million
+ 16.3 %
15IR Corp. Presentation April 2020
534.6 517.7
Sales revenue decreased in Q1 2020 in compare with Q1 2019
Q1 2019 Q1 2020
- 3.2 % Most 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 negative influenced by the sale of a French service company at the beginning of January 2020.
Increase and decrease in Sales revenue per segment:
Valves: + 2.4 %Service: - 0.2 %Pumps: - 5.1 %
(EUR million)
16IR Corp. Presentation April 2020
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)
17IR Corp. Presentation April 2020
Focus on Asia / Pacific and Americas entities in sales in 2019
54%
16%
23 %
7 %
Europe
Middle East / Africa
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 + 59.5 million)
(in EUR + 41.9 million)
(in EUR - 3.0 million)
18IR Corp. Presentation April 2020
(EUR million) 2017 2018 2019
Sales revenue 2,205.0 2,245.9 2,383.2Cost of materials
% of total Sales revenue
-887.8
40.3
-934.5
41.6
-984.8
41.3Staff costs
% of total Sales revenue
-796.7
36.1
-765.5
34.1
-848.3
35.6
Other expenses / income (net) -323.2 -383.8 -338.8
EBIT 116.4* 74.7 113.6
Income Statement
* Retrospective new definition of EBIT as result before financial result and income tax
19IR Corp. Presentation April 2020
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
Middle East / Africa
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.
20IR Corp. Presentation April 2020
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
21IR Corp. Presentation April 2020
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.
22IR Corp. Presentation April 2020
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
23IR Corp. Presentation April 2020
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 %
24IR Corp. Presentation April 2020
Strategy
Markets, regional presence and economic development
Outlook
+ Forecast
+ Climb 21 Strategy Project
Sustainability
Appendix
25IR Corp. Presentation April 2020
Covid-19 situation as of today and forecast 2020 (1/2)
Current Situation and Management priorities
Interdisciplinary steering committee HR, procurement, production, sales & service and communication is established.
Top priority is the responsibility towards our employees, our company, our customers and our suppliers.
Ensure business continuity and strong focus on cash.
Full transparency and daily monitoring of suppliers base.
Global supply chains are moderately stressed
Challenges
Production may be restricted or interrupted at individual suppliers.
Restrictions in production and individual customers cannot be supplied on time.
Reduced transport capacities, delays in shipment may occur.
Authority and travel restrictions.
26IR Corp. Presentation April 2020
Covid-19 situation as of today and forecast 2020 (2/2)
Strengths
Strong balance sheet and available financial resources.
Global footprint
Resilient and diversified business portfolio
Outlook for financial year 2020
The scale and duration of any adverse effect on production as well as on KSB’s procurement and sales markets are not predictable and therefore cannot be quantified. KSB assumes that the spread of the coronavirus will have a negative impact on the Group.
27IR Corp. Presentation April 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
28IR Corp. Presentation April 202028
Efficiency and effectiveness by
adapting the organi-sational structure
Profitable growththrough focusing on
markets
Climb 21Strategy Project
29IR Corp. Presentation April 2020
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 2129
30IR Corp. Presentation April 2020
Core Phases of the ProgrammeClimb 21
today
Market analysis(Three lenses)
Targeted organisational
structure
Design of strategies for market segments
2019 2020
Prioritising of initiatives and
measuresImplementation for go-live
second half of year
Standardisation of overall business plan
30
New KSB organisational structureClimb 21
Regions
Headquarter
Mining Energy Petro-/Chemical Water General Industry Construction
Pumps Valves ServiceCentral
ServicesKSB Valves KSB SupremeServ
32IR Corp. Presentation April 2020
Strategy
Markets, regional presence and economic development
Outlook
Sustainability
Appendix
33IR Corp. Presentation April 2020
For a Better World
KSB joined the UN Global Compact in 2010.
I 33Sustainability
34IR Corp. Presentation April 2020
2019 Facts & Figures
34Sustainability
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 %
35IR Corp. Presentation April 2020
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
35Sustainability
36IR Corp. Presentation April 2020
Strategy
Markets, regional presence and economic development
Outlook
Sustainability
Appendix
+ Executive Board
+ Legal form
+ Financial Statements
+ Financial Calendar 2020
37IR Corp. Presentation April 2020
Dr Stephan Timmermann
Ralf Kannefass
Dr Stephan Bross Dr Matthias Schmitz
Executive Board of KSB SE & Co. KGaA
38IR Corp. Presentation April 2020
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
39IR Corp. Presentation April 2020
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
40IR Corp. Presentation April 2020
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)
41IR Corp. Presentation April 2020
(EUR million) 2017 2018 2019
Sales revenue 2,205.0 2,245.9 2,383.2
Total output of operations 2,210.5 2,275.8 2,381.2Other income 69.2 33.1 33.4
Cost of materials -887.8 -934.5 -984.8
Staff costs -796.7 -765.5 -848.2
Depreciation and amortization expense -70.6 -104.5 -81.9
Other expenses -392.4 -416.9 -372.2
Other taxes -15.8 -12.8 -13.9
EBIT 116.4 74.7 113.6Financial income / expense (net) -13.7 -11.6 -11.4
Income from / expense to investments accounted for using the equity method 1.5 2.5 1.2
EBT 104.2 65.6 103.4Taxes on income -52.1 -41.6 -44.9
Net profit 52.1 23.9 58.5
Income Statement
42IR Corp. Presentation April 2020
(EUR million) 2017 2018 2019
Cash flows from operating activities 120.7 61.4 144.9
Cash flows from investing activities -8.2 -90.5 -74.0
Cash flows from financing activities -106.0 -9.4 -46.4
Changes in cash and cash equivalents 6.5 -38.5 24.5Effects of exchange rate changes on cash and cash equivalents -6.8 4.6 -0.4
Effects of changes in consolidated Group 0.9 - 1.2
Cash and cash equivalents at beginning of period 288.9 289.5 255.6
Cash and cash equivalents at end of period 289.5 255.6 280.9
Statement of Cash flows
43IR Corp. Presentation April 2020
Balance sheet: Assets(EUR million) 2017 2018 2019
Non-current assets 734.3 696.7 782.6Intangible assets 108.1 91.1 97.1
Right-of-use assets - - 50.1
Property, plant and equipment 506.2 496.6 511.3
Non-current financial assets 6.1 1.8 2.0
Other non-financial assets - 2.9 2.8
Investments accounted for using the equity method 22.2 23.9 24.2
Deferred tax assets 91.7 80.4 95.1
Current assets 1,519.1 1,545.5 1,544.4Inventories 461.9 544.4 544.7
Contract assets - 74.5 76.4
Trade receivables and PoC 613.3 518.1 504.1
Other financial assets 117.0 103.4 90.9
Other non-financial assets 37.4 49.5 39.6
Cash and cash equivalents 289.5 255.6 280.9
Assets held for sales - - 7.8
Total 2,253.4 2,242.2 2,327.0
44IR Corp. Presentation April 2020
Balance sheet: Equity and Liabilities(EUR million) 2017 2018 2019Equity 885.4 856.8 862.5Non-current liabilities 677.3 620.4 715.6Deferred tax liabilities 14.7 10.3 11.1
Provisions for employee benefits 606.9 578.6 646.3
Other provisions 1.4 1.4 1.4
Financial liabilities 54.3 30.1 56.8
Current liabilities 690.7 765.0 748.9Provisions for employee benefits 8.0 9.3 12.2
Other provisions 68.8 83.5 68.4
Financial liabilities 22.0 48.8 44.3
Contract liabilities - 157.4 165.5
Trade payables 241.6 270.2 252.7
Other financial liabilities 81.5 32.8 31.2
Other non-financial liabilities 263.6 154.7 161.5
Income tax liabilities 5.2 8.3 9.1
Liabilities held for sales - - 4.0
Total 2,253.4 2,242.2 2,327.0* As of 1 January 2019, lease liabilities of € 50,187 thousand were recognised as a result of the first-time adoption of IFRS 16
45IR Corp. Presentation April 2020
30 April 2020 Interim report January – March 2020
13 May 2020 Annual General Meeting, Frankenthal
13 August 2020 Half-year financial report January – Juni 2020
12 November 2020 Interim report January – September 2020
28 January 2021 Preliminary report on financial year 2020
Financial Calendar 2020 / 2021
46IR Corp. Presentation April 2020
Dieter Pott
Head of Finance and Accounting
Phone: +49 (0) 6233 86-2614
eMail: [email protected]
Investor Relations
47IR Corp. Presentation April 2020
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.