IMPROVING PRODUCT MIX (%)

SERVING VARIOUS SECTORS WITH OUR RANGE OF PRODUCT CATEGORIES

ENHANCING FINANCIAL PERFORMANCE

As part of a strategic shift over the past decade, we have significantly reduced our exposure to the EPC business, while increasing our focus on services and value-added products. At the same time, we have prioritised higher-margin, profitable contracts in the water, power and irrigation sectors, enhancing both our competitiveness and financial performance.

Our limited exposure to low-margin, working capital-intensive EPC projects has strengthened our working capital cycle and improved cash flows, while supporting a consistent revenue stream. This strategic shift not only enhanced our financial stability, but also fostered a positive business outlook and unlocked multiple growth opportunities.

Moving ahead, we anticipate continued improvement in profitability, driven by a more balanced business mix from our international operations, stable commodity prices, calibrated pricing strategies and a growing share of high-margin, reliable services businesses.

Delivering Sustainable Returns

We take pride in our disciplined financial management, which enables us to consistently deliver long-term growth and profitability. Our strong balance sheet –driven by effective cost optimisation and a diverse portfolio of cost-efficient product offerings – positions us to seize opportunities in an evolving industrial landscape. Our robust financial planning framework evaluates both current and future capital needs, ensuring sustained business performance and supporting strategic investments aimed at long-term value creation and sustainability

A Return-Based Approach

Our return-focused strategy is driven by a competitive cost structure and a high-value product mix, which together strengthen our margin profile and enhance Return on Capital Employed (ROCE). Our capital and resource allocation framework are designed to deliver consistent, strong returns to the business and its financial stakeholders. By maintaining cost efficiency and offering a diverse range of value-added products, we have successfully improved profitability and capital productivity.

Our core objective is to ensure that both our standalone and subsidiary businesses are equipped with the resources needed to support growth, generate sustainable returns and create long-term value for all stakeholders.

Prudent Cash Flow Management

We follow a disciplined approach to managing cash flows, maintaining a prudent balance between inflows and outflows. Our capital expenditure requirements are primarily funded through internal cash accruals, reflecting the strength of our operational performance. We consistently generate positive cash flows and maintain adequate liquidity to meet current, anticipated and future financial obligations, ensuring long-term financial stability and operational resilience.

Optimal Capital Structure

Through focused efforts to minimise debt costs, we have achieved a zero-debt status, providing us the financial flexibility to pursue growth opportunities with confidence. Our conservative approach to debt management allows us to primarily rely on internal accruals to fund our operations and expansion plans, ensuring a strong and sustainable capital structure.

Value Creation

Creating sustained value for our customers and shareholders remains our foremost priority. We have implemented several initiatives to ensure timely and efficient product delivery, maximising value creation for our clients. Simultaneously, we focus on streamlining processes and driving operational efficiencies across multiple business domains to enhance overall performance and competitiveness.

Cost-Focussed Structure

Through the implementation of numerous cost-optimisation and backward integration initiatives, our businesses have achieved global recognition for cost leadership. Effective supply chain management ensures timely delivery of essential inputs, along with efficient logistics and warehousing. This, combined with a streamlined working capital cycle, has reinforced our position as cost leaders in the manufacturing industry. We continuously deploy and integrate new technologies across our operations. Automation has significantly enhanced cost efficiency, resulting in reduced expenses and consistently industry-leading quality standards.

Diversifying our Revenue Base

We anticipate significant growth in our overseas services business, as an increasing number of international customers outsource maintenance and monitoring of installed pumps. Our IoT-enabled platform and subscription-based services have played a key role in diversifying our revenue streams while enhancing the overall margin profile.

Towards Future Growth

We expect EBITDA growth driven by declining commodity prices, improvements in the global supply chain, ongoing cost rationalisation measures and an increasing contribution from our services revenue. Looking ahead, KBL’s growth will be supported by a strong order book for our ‘Made-to-Order’ and ‘Engineered-to-Order’ products, positioning us well to capitalise on emerging opportunities.

Maintaining Product Competitiveness

We have implemented value engineering to reduce product weight and improve power efficiency. To strengthen our market position, we have introduced online monitoring of pump performance alongside advanced manufacturing technologies such as 3D printing, artificial intelligence, virtual reality and the Internet of Things

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