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 April 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  Chemical / petrochemical industry  Water transport  Waste water treatment  Energy supply  Mining  Construction / Building services IR Corp. Presentation April 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 April 2020 3

 Strategy  Markets, regional presence and economic development  Outlook  Sustainability  Appendix IR Corp. Presentation April 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 April 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 April 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 April 2020 7

 Strategy  Markets, regional presence and economic development  Outlook  Sustainability  Appendix IR Corp. Presentation April 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 April 2020 9

Pumps, valves and service Size of target 5,700 Water /Waste Water markets 8,000 8,000 Chemical/Petrochemical 25,600 Megatrends driving growth in KSB's markets 1,600 Mining  Environmentalism 2,400 − Increasing regulation 9,300 − Energy efficiency Industry 12,800  Urbanization and population growth 2,600 − Need for more infrastructure Energy supply 4,300  Water scarcity 6,900 − Growing demand for water Construction 19,500 reuse, treatment and efficiency  Digitization Centrifugal pumps in m€ Valves in m€ CAGR 2019-2025 > 4% 2–4% <2% IR Corp. Presentation April 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 April 2020 11

Order intake decreased in Q1 2020 in compare with Q1 2019  Order intake in the first quarter was slightly below expectations as last year’s first 668.8 - 12.0 % quarter was influenced by two major orders. 588.2  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: Q1 2019 Q1 2020 Pumps: - 15.4 % (EUR million) Service: - 6.9 % Valves: - 2.8 % IR Corp. Presentation April 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 April 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 April 2020 14

Sales revenue decreased in Q1 2020 in compare with Q1 2019  Most Regions saw a decrease in sales 534.6 - 3.2 % revenue. In particular, government-ordered 517.7 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: Q1 2019 Q1 2020 Valves: + 2.4 % (EUR million) Service: - 0.2 % Pumps: - 5.1 % IR Corp. Presentation April 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 April 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 April 2020 17

Income Statement (EUR million) 2017 2018 2019 Sales revenue 2,205.0 2,245.9 2,383.2 Cost of materials -887.8 -934.5 -984.8 % of total Sales revenue 40.3 41.6 41.3 Staff costs -796.7 -765.5 -848.3 % of total Sales revenue 36.1 34.1 35.6 Other expenses / income (net) -323.2 -383.8 -338.8 EBIT 116.4* 74.7 113.6 * Retrospective new definition of EBIT as result before financial result and income tax IR Corp. Presentation April 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 April 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 April 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 April 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 April 2020 22