Dr. Stephan TimmermannDr. Stephan Timmermann

Dear Shareholders and
Business Partners,

2022 was marked by major, wide-ranging challenges for KSB – and for our customers, suppliers and partners. It was nevertheless a successful year in which the company was able to significantly boost order numbers and increase profitability.

The key to this success lies in one of KSB’s deep-rooted strengths: We stick together in good times – and in bad. Worldwide, across hierarchies, in all areas of the company. This cohesion is supported by an organisational structure that keeps us on a steady course even in difficult times: a broad portfolio serving eight market areas and segments, and strong global positioning with more than 100 local companies.

So I am pleased to report that the 2022 financial year saw us not only keep our promises to develop the company, but actually exceed them.

Wide-ranging challenges

The consequences of Russia’s war of aggression in Ukraine reached far beyond the KSB employees in the affected regions – who fortunately came through 2022 physically unscathed. Massive price increases and unpredictable disruptions in logistics chains posed huge challenges to procurement worldwide, driven by the pandemic and exacerbated by the war.

Production was interrupted by China’s strict zero-COVID policy, which shut down the KSB factory in Shanghai for many weeks. Worldwide, major staff shortages due to COVID-19 once again challenged KSB employees’ cohesion and flexibility.

After a cyber attack on KSB in April, Management decided to disconnect the company from the Internet in order to secure the entire global IT infrastructure and check for malware. This proved to be the right decision, but the temporary halt to production and months of work on system security demanded a lot from employees and business partners. Severe hail damage at KSB’s factory in La Roche-Chalais, France, once again led to production losses in the summer. Colleagues at the French locations were barely able to manufacture anything for more than three months.

The company overcame these adversities by leveraging the capacities of its international production network and significantly increased output in the second half of the year.

KSB SE & Co. KGaA improves earnings

Measures taken to increase the earnings capacity of KSB SE & Co. KGaA experienced renewed success in the 2022 financial year. Thanks to positive earnings from the associated KSB companies, dividend income and thus net profit for the year also increased significantly compared with the previous year.

Celebrating KSB’s 150-year anniversary

The pandemic delayed celebrations for the company’s anniversary until 2022. A worldwide series of family events took place, attracting around 13,000 attendees in Germany alone to celebrate together in high spirits at our Frankenthal, Pegnitz and Halle locations. In Frankenthal, guests from politics and business, customers and KSB managers also attended a festive gala evening.

Sustainability anchored in strategy

The year under review saw us continue to pursue our nine sustainability goals, which are aligned with the United Nations Sustainable Development Goals. For example, KSB’s second-largest location in Germany, Pegnitz, is now powered exclusively by green electricity from renewable sources, and saves more than 5,000 tonnes of carbon dioxide every year. Impressive progress was also made in assessing key suppliers on their sustainability performance. As a socially committed company, we contributed to numerous projects in education, water supply and support for people in need across the globe. You can read about these and other projects in our Sustainability Magazine. Already a fundamental part of our corporate strategy, sustainability in practice is increasingly becoming part of the daily routine for our staff.

Strategy as a team effort

The corporate strategy was developed by members of senior management in an outstanding team effort and agreed with the Managing Directors. The presentation of this strategy at September’s International Management Meeting in Portugal with around 120 top executives from throughout KSB was a milestone in anchoring the strategy within the Group as a whole. Implementing this strategy will be a focus of 2023.

Employee engagement

The process of developing the strategy as a team reflects KSB’s corporate culture of integration. With the aim of constantly improving as an employer and further embedding diversity and equal opportunities, the company conducted a global employee survey during the autumn. With 65 % engagement and a response rate of 82 %, KSB has significantly increased its engagement score compared with the last survey in 2019, and for the first time has achieved above-average scores for the German mechanical engineering industry.

No doubt the new business year also has many challenges in store for us. But we are ready to tackle them – strengthened as a team – and confident that we will once again create substantial value for our shareholders, employees and business partners in the 2023 financial year.

Dr. Stephan Timmermann