KSB Shares

  • High volatility in stock markets at home and abroad
  • KSB shares drop in price
  • Planned dividend payment to equal that of the prior year

After recovering from the financial crisis to a significant extent in 2009 and 2010, stock markets experienced a more turbulent year in 2011.

The natural and nuclear disaster in Fukushima in March ­unsettled the financial markets with its uncertain consequences for the Japanese market and the future direction of global ­energy supplies, while the debate on the US budget deficit similarly darkened the mood of the markets in the summer.

The capital markets also came under pressure due to the intensifying debt crisis in the euro zone, especially in the peripheral European countries. The risks of an impact on the real economy and a worsening economic outlook reinforced the level of caution among investors.

In this market environment, the German DAX fell by 15 % in the year under review. The EURO STOXX 50 and the Nikkei 225 Index suffered similar losses, falling by 17 % and 18 % respectively. Only the Dow Jones managed to end the year higher, increasing by 6 %.

DAX LOWER IN THE SECOND HALF OF THE YEAR

The DAX was firm and relatively stable in the first half of the year. The stock market recovered relatively quickly from the price falls induced by the nuclear disaster in Fukushima, and until July was able to maintain a level just under the year’s high recorded in May. From August onwards, however, the DAX came under pressure, reaching its lowest point in ­September at almost 30 % below its value at the start of the year. In the final months of 2011 the German blue-chip index traded slightly more firmly and recovered some of its losses.

Dividend development

KSB SHARES ALSO DROP IN PRICE

After a steady period at the start of the year, the KSB share price also plummeted in March as part of the stock market reaction to the Japanese nuclear accident. Within just a few days, both the ordinary share price and the preference share price had fallen by more than 10 %.

Both share types had recovered from these losses by early April, and were once again trading at close to their previous year-highs.

The shares could not escape from the subsequent downward trend in stock markets, however, and by the end of the year, the share prices had fallen, with the ordinary shares slightly firmer than the preference shares. On 30 December 2011, the ordinary share price stood at € 453.00, while preference shares were trading at € 392.50.

The market capitalisation of both share types at year end totalled € 741 million.

DIVIDEND UNCHANGED FROM THE PREVIOUS YEAR

By paying out a stable dividend, we want the shareholders of KSB Aktiengesellschaft to share in the growth of the company. For this reason, we will propose to the Annual General Meeting on 16 May 2012 the payment of an unchanged dividend of € 12.00 per ordinary share and € 12.26 per preference share.

EARNINGS PER SHARE BELOW PRIOR-YEAR LEVEL

Earnings per share are lower as a result of weaker consolidated earnings. Earnings per ordinary share were € 40.95 compared with € 44.09 last year, while earnings for preference shares were € 41.21 compared with € 44.35 in 2010.

KSB share price development in €