KSB SE & Co. KGaA ETR: KSB reported higher order intake and modest revenue growth in the first half of 2026, while profitability trailed the prior-year period amid material, energy and logistics costs, pricing pressure and weaker capacity utilization in the first quarter.
Order intake rose 8.8% from a year earlier, while sales revenue increased 0.4%, Chief Financial Officer Dr. Matthias Schmitz said during the company’s half-year earnings call. Reported EBIT was €98 million, including a €16.6 million effect from the first-time consolidation of KSB Pumps Arabia and €12.3 million of costs related to the SAP S/4HANA implementation.
Schmitz said currency effects reduced reported order intake by €44 million versus the prior year and reduced reported sales by €37 million. On a like-for-like basis excluding foreign-exchange effects, he said order intake increased by roughly €190 million.
Second Quarter Improves After Weak Start
KSB said its second-quarter performance improved substantially from the first quarter. Sales rose by nearly €50 million sequentially, with growth in the Pumps segment and a €27 million increase in SupremeServ sales, according to Schmitz.
Second-quarter EBIT reached €64 million. Profitability in the Pumps business increased by €19 million from the first quarter, while SupremeServ contributed €46.3 million in profitability during the period.
“We had a weak quarter. Q2, we see we are back on track,” Schmitz said, adding that the company expects the second half to be stronger than the first half in sales, EBIT and net financial position.
The CFO said first-half margins were affected by rising competition, including from Chinese competitors in markets beyond China, as well as higher material, energy and logistics costs. The material-cost ratio rose above 40%, compared with 39% in the first half of 2025. KSB has launched programs intended to reduce material costs.
Chief Executive Officer Dr. Stephan Timmermann said KSB increased prices beginning June 1, following moves by competitors in May. He cited higher transportation expenses and increased prices for foundry products in some markets, including India, where he said certain foundry articles had risen by 25% because of gas shortages.
Cash Flow, Working Capital and Balance Sheet
Earnings after income tax totaled €60 million, and KSB’s tax rate was 31.7%. Schmitz said the company expects its full-year tax rate to be in a range of 31% to 32%.
The company’s balance sheet total increased to nearly €3 billion. Its equity ratio edged higher to 48.4%, while equity rose by €45 million despite a €53 million dividend payment. Schmitz attributed the equity movement partly to earnings and other comprehensive income effects, including currency translation and pension-related items.
Working capital increased by €85 million from year-end, including an approximately €23 million impact from the consolidation of the Saudi Arabian business. Working capital represented 29.7% of sales, which Schmitz characterized as a manageable level for a growing company and said KSB aims to keep below 30%.
Free cash flow declined from the prior year, reflecting lower operating cash flow, the non-cash first-time consolidation effect in Saudi Arabia, and acquisitions or increased stakes in ai-omatic, ecop and KSE Group. Capital investments totaled €48 million and included spending on a new energy testing facility, a CNC machine at GIW and modernization of large-parts production in Pegnitz.
KSB’s net financial position fell to €200 million at the end of June, primarily following the dividend payment. Schmitz said the position is expected to improve in the second half and increase by “far more than €250 million,” though he does not expect it to return to its year-end 2025 level.
Cost Actions and Strategic Opportunities
Management said it has initiated measures to cut variable structural costs by up to €30 million in 2026, responding to the economic and geopolitical environment. Schmitz said more than €10 million of those savings were achieved in the first half, with a larger contribution expected in the second half. He said the current actions do not carry one-off costs because they do not include structural measures.
Timmermann said KSB is also reviewing how to make its worldwide headquarters structures lighter and more flexible over time. The company continues to pursue its Mission TEN30 target of becoming a company with more than €4 billion in revenue and a return on sales above 10% by 2030.
KSB said its SAP S/4HANA project remains on schedule for a first-quarter 2027 go-live. The company expects to spend approximately €26 million on the implementation during 2026.
Data Centers, Water and Service Demand
Management identified data centers as a potentially significant growth area, spanning power generation, cooling systems, water supply, firefighting and HVAC applications. Timmermann said individual cooling-pump orders can start at 100 pumps, while customer plans point to volumes in the thousands.
He said the company estimates accumulated data-center-related order intake of about €100 million over the next three years, while cautioning that the estimate does not encompass the full range of related applications. Timmermann said the business can offer attractive economies of scale because it involves standardized products and large packages, while customers also require rapid delivery.
The company also reported stronger demand for submersible pumps used in farming as drought conditions in Europe have lowered groundwater levels and increased the need to extract water from deeper levels.
In SupremeServ, management said mining-spares demand improved in the second quarter after customers had reduced spare-parts inventories to preserve liquidity. Timmermann said mine operators are running facilities at high utilization, which should ultimately support replacement-parts demand.
However, KSB faces a €15 million annual spare-parts business impact from the delayed reopening of the affected portion of Freeport-McMoRan’s Indonesian mine. Timmermann said that reopening is now not expected until at least 2028. He said KSB has offset the impact through other SupremeServ business, though chemical-industry demand remains weak because of worldwide overcapacity.
KSB confirmed its 2026 outlook. Schmitz said he remained confident that the company would reach the midpoint of its guidance range, despite uncertainty associated with the Iran conflict, slowing activity in China, Europe’s economic downturn and intensifying Chinese competition in export markets.
About KSB SE & Co. KGaA (ETR:KSB)
KSB SE & Co KGaA, together with its subsidiaries, manufactures and supplies pumps, valves, and related services worldwide. It operates through three segments: Pumps, Valves, and KSB SupremeServ. The Pumps segment offers single and multistage pumps, submersible pumps, and associated control and drive systems. The Valves segment provides butterfly, globe, gate, control, diaphragm, and ball valves, as well as associated actuators and control systems. The KSB SupremeServ segment is involved in the installation, commissioning, start-up, inspection, servicing, maintenance, and repair of pumps, valves, and related systems for various applications; modular service concepts and system analyses for complete systems; and spare parts for pumps and valves.
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