IR Corporate Presentation KSB SE & Co. KGaA Dr. Matthias - PowerPoint PPT Presentation

IR Corporate Presentation KSB SE & Co. KGaA Dr. Matthias Schmitz (CFO) Dieter Pott (Head of Finance and Accounting) IR Corp. Presentation June 2020 1

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 IR Corp. Presentation June 2020 2

About us Key Figures Ownership structure & (EUR million) 2018 2019 No. of shares outstanding Ordinary shares: 886,615  Order intake 2,303.5 2,453.8  Sales revenue 2,245.9 2,383.2 16% Johannes &  EBITDA 179.2 195.5 Jacob Klein GmbH  EBITDA margin 8.0 % 8.2 %  EBIT 74.7 113.6 Freefloat  EBIT margin 3.3 % 4.8 % Preference shares: 864,712 84%  Equity ratio 38.2 % 37.1 % 20% Johannes & Jacob Klein Future Perspectives GmbH  Global market volume ~ EUR 107 billion in 2019 Freefloat  Average annual growth rate 2 to 4 % 80% IR Corp. Presentation June 2020 3

 Strategy  Markets, regional presence and economic development  Outlook  Sustainability  Appendix IR Corp. Presentation June 2020 4

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 Innovation and Excitement of Creativity IR Corp. Presentation June 2020 5

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. IR Corp. Presentation June 2020 6

Strategic measures Competitive cost structures Uniform systems and lean Focussing on profitable processes growth  Reducing complexity  PACE – Excellence in accounting  Aftermarket (companies, products) and controlling  Expanding business in core markets  Global Footprint including  Global SAP platform optimising Supply Chain  ETA-Flagship  KSBase  Shared Service Center  Start Additive Manufacturing  Cloud for Service (Lasercusing) for spare parts Reaching competitive cost structures and striving for profitable growth at the same time IR Corp. Presentation June 2020 7

 Strategy  Markets, regional presence and economic development  Outlook  Sustainability  Appendix IR Corp. Presentation June 2020 8

Pumps, valves and service A fragmented addressable market of roughly €107 billion 2019 Market size (€M) by geography Europe World APAC 17,900 72,600 8,400 27,200 Americas 14,500 P V 18,700 P V 8,000 34,200 MEA P V 8,700 3,300 P V P V CAGR 2019-2025 > 4% 2–4% <2% Source: KSB estimates IR Corp. Presentation June 2020 9

Pumps, valves and service Size of target 5,700 Water markets 8,000 8,000 Petrochemicals/Chemicals 25,600 Megatrends driving growth in KSB's markets 1,600 Mining  Environmentalism 2,400 − Increasing regulation 9,300 − Energy efficiency General Industry 12,800  Urbanization and population growth 2,600 − Need for more infrastructure Energy 4,300  Water scarcity 6,900 − Growing demand for water Building Services 19,500 reuse, treatment and efficiency  Digitization Centrifugal pumps in m€ Valves in m€ CAGR 2019-2025 > 4% 2–4% <2% IR Corp. Presentation June 2020 10 Source: KSB estimates

Being present in all big markets globally Share of regions (as per 31 December 2019) Order Sales intake Europe 53 % 54 % Asia 24 % 23 % America 16 % 16 % MEA 7 % 7 % KSB production sites KSB sales and service sites IR Corp. Presentation June 2020 11

Order intake is strongly influenced by the corona virus pandemic and decreased in H1/2020 by EUR 193.8 million  In the first half year of 2020 order -14.8 % - 14.3 % - 16.0 % - 15.8 % intake decreased across all segments and regions caused by the corona virus pandemic. 1,112.7 198.3 171.3  Decline in Order Intake per Region: 743.1  Europe (- EUR 83.0 million)  Asia / Pacific (- EUR 71.1 million)  Americas (- EUR 22.0 million)  Middle East / Africa / Russia (- EUR 17.7 million) KSB Group Pumps Valves Service (EUR million) IR Corp. Presentation June 2020 12

Order intake grew in 2019 by EUR 150.2 million  Order intake in 2019 grew across all + 6.5 % + 7.4 % + 1.8 % + 7.3 % segments particular driven by orders in the project business. 2,453.8 474.1  Main segment drivers: 361.9 + Energy (+ EUR 43.4 million) 1,617.8 + Industry (+ EUR 25.4 million) and + Water / Waste Water 12(+ EUR 23.3 million)  Regional growth drivers: + Asia / Pacific (+ EUR 69.5 million) KSB Group Pumps Valves Service + America (+ EUR 44.2 million) (EUR million) IR Corp. Presentation June 2020 13

Growth of order intake in all regions in 2019 Total order intake: EUR 2,453.8 million + 16.3 % + 13.6 % + 12.3 % Middle East / Africa 7 % Asia / + 1.0 % Pacific 24 % (in EUR (in EUR (in EUR (in EUR + 13.1 million) + 69.5 million) 2019 + 44.2 million) + 23.4 million) 53 % 16 % Americas Europe Asia / Pacific Americas Middle East / Europe Africa IR Corp. Presentation June 2020 14

Sales decreased in H1/2020 by EUR 92.7 million caused by the worldwide consequences of the corona virus pandemic - 8.1 % - 8.9 % - 4.6 % - 8.0 %  All regions and segments saw a decrease in sales revenue. In particular, government-ordered 188.2 1,049.2 closures in Asia / Pacific had a 165.4 negative impact. 695.6  Decrease in Sales revenue per region:  Asia / Pacific (- EUR 38.0 million)  Europe (- EUR 33.9 million)  Americas (- EUR 11.6 million) KSB Group Pumps Valves Service Middle East / Africa / Russia  (- EUR 9.1 million) (EUR million) IR Corp. Presentation June 2020 15

Sales increased by EUR 137.2 million in 2019 + 6.1 % + 6.3 % + 6.9 % + 4.7 % As some of the orders are part of  456.4 2,383.2 long-term projects, sales revenue lags behind order intake 364.4 1,562.5  Regional growth driver: + Asia/Pacific (+ EUR 59.5 million) + Americas (+ EUR 41.9 million) KSB Group Pumps Valves Service (EUR million) IR Corp. Presentation June 2020 16

Focus on Asia / Pacific and Americas entities in sales in 2019 Sales in total: EUR 2,383.2 million + 12.4 % + 12.1 % Middle East / Africa 7 % + 3.1 % (in EUR Asia / - 3.0 million) Pacific 23 % (in EUR (in EUR (in EUR - 1.9 % 2019 + 59.5 million) + 41.9 million) + 38.9 million) 54% 16% Americas Europe Asia / Pacific Americas Middle East / Europe Africa IR Corp. Presentation June 2020 17

Income Statement (EUR million) 2018 2019 H1/2019 H1/2020 Sales revenue 2,245.9 2,383.2 1,141.9 1,049.2 Cost of materials -934.5 -984.8 -505.7 -432.4 % of total Sales revenue 41.6 41.3 44.3 41.2 Staff costs -765.5 -848.3 -420.3 -418.1 % of total Sales revenue 34.1 35.6 36.8 39.8 Other expenses / income (net) -383.8 -338.8 -171.7* -156.5 EBIT 74.7 113.6 45.2 15.1 * 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 other expenses. IR Corp. Presentation June 2020 18

Capital Expenditure increased by 34.4 % resp. EUR 27.4 million Capex in total: EUR 107.0 million 107.0 Intangible assets 15.2 Middle East / Right of use asset * 79.6 12.9 * Africa 13.0 4 % Asia / Pacific 16 % Property, plant 78.9 2019 66.6 and equipment 60 % 20 % Americas Europe 2018 2019 (EUR million) * First-time adoption of the new IFRS 16 accounting standard. IR Corp. Presentation June 2020 19

Reasonable Equity ratio  Equity ratio including non-controlling 38,2 % 37,1 % 39,3 % interests 2,327 2,253 2,242 Balance sheet total 885.4 Equity 862.6 856.8 2017 2018 2019 (EUR million) IR Corp. Presentation June 2020 20

Lower Net financial position reflects introduction of IFRS 16 (lease accounting) 288.0 255.0 246.3*  Lease liabilities of € 47.1 million 364.3 Available were recognized as a result of the 347.3 333.9 financial first-time adoption of IFRS 16 in resources 2019 as compared to the fiscal year 2018. Financial liabilities -101.1 -78.9 -76.3 2017 2018 2019 * Adjusted by the lease liabilities the net financial position amounts to € 293.4 million. (EUR million) IR Corp. Presentation June 2020 21

Lower Net financial position reflects introduction of IFRS 16 (lease accounting) Financial liabilities  The increase in the financial - 101.1 liabilities of € 22.2 million are mainly attributable to the first-time adoption - 78.9 - 76.3 -44.3 of IFRS 16 in 2019, mitigated by the repayment of a borrowers note. - 22.0 Short-term - 48.8  The short-term debt of € 44.3 million debt is affected by € 15.0 million and the long-term debt of € 56.8 million is - 56.8 Long-term - 54.3 affected by € 32.0 million due to the debt - 30.1 capitalization of rights of use to leased assets under IFRS 16. 2017 2018 2019 (EUR million) IR Corp. Presentation June 2020 22