KSB Shares

  • Inconsistent stock market trends
  • Value of ordinary KSB shares rose by 51%
  • Proposed dividend payout at prior year level

Developments on the world’s stock markets varied considerably in 2010: While stock markets in the emerging countries and in the USA continued to recover from the effects of the financial crisis, many exchanges in Europe and Japan (Nikkei – 3 %) suffered losses. In Europe, the ongoing debt crisis was the main reason for the price slump. In addition, investors were concerned about the value of the euro. Thus, the EURO Stoxx 50 fell sharply in the first half of the year and managed to make up only some of the lost ground by the end of the year. Year on year, the loss amounted to almost 6 %.

By contrast, investors in U.S. stocks saw the Dow Jones rise by 11 %. After a good start, the economy started to show signs of running out of steam towards the middle of the year. The stock market responded with a decline in prices falling to values below those seen at the start of the year. However, a new and positive prevailing mood, due in part to changes in monetary policy, led to rising share prices in the third and fourth quarters of the year.

Good year for the DAX

In contrast to many other European countries, equity investors in Germany posted gratifying gains. Year on year, the value of the DAX increased by a good 16 %. That said, the DAX had tended to move laterally until September before prices really took off in the subsequent months. The reason for the sudden improvement was surprisingly upbeat news on the economic and corporate fronts which, despite concerns about the high national debt of several European countries, resulted in quite a mood swing.

Market capitalisation of KSB shares now exceeds the € billion mark

The increase in KSB share prices, already positive in the previous year, continued unabated in the year under review. From the start of the year onwards, investors saw the value of their shares in KSB rise continuously, clearly outperforming the DAX as a whole. Ordinary shares gained 51 % during the year, while preference shares increased by 46 % compared with their value at the end of 2009. At 30 December 2010, the price of our ordinary shares was € 618.00, while our preference shares were trading at € 582.00.

These marked increases were reflected in our market capitalisation, which, by the end of the year, had exceeded the € 1 billion mark for the first time. The year-on-year change constituted a rise of € 343.6 million (around 49 %) to € 1,051.2 million.

Stable dividend payout despite drop in earnings at KSB AG

Even if our earnings did not quite match those of 2009, we want to keep the dividend at the same level as the previous year. We will therefore propose to the Annual General Meeting on 18 May 2011 an unchanged payout to ordinary shareholders of € 12.00 per share. Holders of preference shares once again are to receive € 12.26.

Earnings per share below prior year level

The decline in consolidated earnings resulted in a drop in the earnings-per-share figure compared with the previous year. Earnings per ordinary share were € 44.09, compared with € 61.32 in the previous year, and € 44.35 per preference share, compared with € 61.58 in 2009.