KSB reports sales growth amid challenging global conditions

German pump and valve manufacturer KSB SE & Co. KGaA reported a nuanced first-half 2025 performance, with order intake rising 3.3% to €1,698 million and sales revenue up 1.8% to €1,465 million. While reported EBIT decreased to €108 million, adjusted EBIT, excluding SAP implementation costs, increased to €121.5 million, pushing the margin to 8.3%. Growth was primarily driven by the Pumps Segment and strong performance in the Middle East/Africa region, though the Americas and SupremeServ segments faced declines, exacerbated by negative currency effects and broader market uncertainties stemming from tariffs and geopolitical instability. Despite these macro headwinds, KSB affirmed its full-year 2025 forecast.

Analysis

KSB SE & Co. KGaA reported a resilient first half for 2025, navigating significant macroeconomic headwinds to post modest top-line growth, with order intake increasing 3.3% to €1,698 million and sales revenue rising 1.8% to €1,465 million. While reported EBIT decreased to €108 million, this figure was impacted by a one-time €13.5 million expense related to an SAP S/4HANA implementation. On an adjusted basis, EBIT increased to €121.5 million, driving a slight margin improvement to 8.3% from 8.2% a year prior, which indicates sound underlying operational performance. The growth was not uniform across the business; the Pumps Segment was the primary driver with an 8.2% increase in orders, and the Middle East/Africa region recorded a strong 15.9% rise in order intake. Conversely, the SupremeServ Segment saw a 3.1% order decline due to reduced demand from the mining and energy sectors, and the Americas region contracted by 3.5%, partly due to adverse currency effects which impacted overall group results by €23 million on order intake. Despite these challenges and stated market uncertainty from tariffs and geopolitics, management's affirmation of the full-year 2025 forecast signals confidence in its ability to meet its targets.

Key Decisions for Investors

• Investors should focus on the adjusted EBIT of €121.5 million and the underlying margin expansion to 8.3% as a more accurate measure of core profitability, looking past the one-off SAP implementation costs.
• Monitor the performance divergence between the strong Pumps segment and the declining SupremeServ segment, as continued softness in the latter could indicate persistent weakness in key energy and mining end-markets.
• While the reaffirmed full-year guidance is a positive signal of management confidence, this should be weighed against significant stated risks from currency fluctuations and geopolitical instability that could pressure results in the second half.