KSB looks to infrastructure projects for growth

Frankenthal, Germany -  Pumps, valves and related systems maker KSB Group made good headway in a growing market in 2008, helped by strong demand in the power-plant, industry and water management sectors. However, the final two months of the year saw customers come under the influence of the financial downturn and noticeably more cautious in placing orders, the group said in its 2008 financial report.

Looking to the year ahead, KSB expects order intake to weaken and to lag behind sales revenue: "Project business, which is driven by public infrastructure projects, could show greater stability than our business with standard products. As a rule, this business reacts more quickly to fluctuations in economic activity." 

Group preliminary figures for 2008 showed order intake up 12.5% on the prior year to Euro2,177 million, while sales revenues rose by almost 13% at Euro 1,998 million. The growth had necessitated a 3% increase in employee numbers to 14,350 .

With the return on sales likely to be around 10%, KSB said its consolidated earnings before income taxes (EBT) will show a strong improvement for the third year in a row. In 2007, it achieved a 7.3% return on sales and earnings of Euro129 million.

More than two-thirds of the order growth came from the European KSB companies, where an increase in orders was seen particularly in the energy and water engineering sectors. A powerful boost to orders also strengthened KSB’s important industry business, the company added..

However, the highest growth rate overall in 2008 was posted by companies in the Middle East and  Africa region, which received orders for major water engineering projects. A sharply increased order intake was also reported in Asia  Pacific, especially as a result of the high demand in the power-plant sector.

In terms of sales, KSB's Europe-based operations posted the highest growth of sales on the back of strong indirect exports via plant engineering contractors with global operations. Invoicing of major power plant orders led to a high rate of increase in the Americas; and sales revenue showed a similarly strong improvement in the Middle East and Africa.