Interim Report January ? September 2003
KCI KONECRANES PLC STOCK EXCHANGE RELEASE 1 (18)
30 October, 2003 10.00 a.m.
KCI Konecranes Group
Interim Report January September 2003
GOOD QUARTER, BUT RECOVERY STILL NOT IN SIGHT
EBIT of Q3/03 clearly better than in Q3/02, year to date still behind
2002
America and (espec.) Asia-Pacific growing, Nordic and rest of Europe
declining
Large crane orders jump, small cranes slow, new maintenance contracts
at good level, but industrial restructuring burdens Maintenance
results
Order book increased 14.6 % from year end (all business areas
contributed)
Full and final settlement in the Baan disputes
Internal efficiency program gaining momentum
Third quarter Three quarters LY
MEUR Q3/ Q3/ Change 1-9/ 1-9/ Change 1-12/
SALES 2003 2002 % 03 02 % 02
Maintenance
Services 89.0 94.0 -5.3 254.4 267.8 -5.0 372.4
Standard
Lifting
Equipment 44.3 49.2 -10.0 132.7 146.0 -9.1 204.5
Special
Cranes 42.4 41.5 2.3 133.5 148.1 -9.8 209.2
Internal
Sales -16.9 -21.2 -20.3 -49.3 -51.6 -4.5 -72.5
Sales total 158.8 163.4 -2.8 471.3 510.2 -7.6 713.6
Income from
operations
(EBITA) 10.4 8.0 30.5 12.4 23.1 -46.3 40.9
Goodwill
amortisation 0.7 0.8 -5.6 -2.2 -2.6 -15.7 -3.3
Operating
income (EBIT) 9.7 7.2 34.4 10.2 20.5 -50.3 37.6
Operating
Income (EBIT)
before
restructuring
costs 17.2
2 (18)
Financial
income and
expenses -0.8 -0.3 183.5 -1.8 -0.8 107.6 -1.1
Income after
financing items
8.9 7.0 28.5 8.4 19.7 -57.1 36.5
Extraordinary
items -8.2 0.0 -8.2 0.0 0.0
Income before
taxes and
minority
interest 0.7 7.0 -89.4 0.2 19.7 -98.8 36.5
Net income 0.7 4.7 -86.0 0.2 13.3 -98.9 24.6
Earnings per
share (EUR) 0.47 0.32 46.3 0.43 0.91 -52.6 1.69
ORDERS RECEIVED
Maintenance
Services 70.2 72.7 -3.5 226.8 240.0 -5.5 310.2
Standard
Lifting
Equipment 47.4 49.1 -3.5 146.7 154.0 -4.7 203.2
Special
Cranes 60.3 33.4 80.7 134.3 124.6 7.7 154.9
Internal
Orders -15.6 -15.9 -1.7 -46.8 -52.0 -9.9 -69.4
Orders Received
total 162.3 139.4 16.5 461.0 466.7 -1.2 598.9
Order book at
end of period 236.0 260.8 -9.5 206.0
Comment on first 9-month results:
Business activity continued to pick up in Q3 and also operational
profitability improved compared to H1/03 and Q3/02. Year to date total
order intake (at comparable currencies) now runs 5.5 % over the 2002
level (however 1.2 % including currency changes). Sales increased in
America (dollar to dollar) and the Far East, and it continued to
decrease in Nordic and in the rest of Europe. Special Cranes new
orders posted good growth. In Maintenance new contracts flow was good,
but industrial restructuring among customer industries pushes contract
turnover rate up and reduces net increase in contract base at
comparable currencies to 4 % and sales increase to 3.2 %.
3 (18)
Comment on year-end results:
In spite of some early signs of improvement (shipbuilding, shipping,
America), the outlook for the industry is still clouded. Asia-Pacific
has become the prime growth motor. The Group is accelerating its
efficiency improvement program. Restructuring charges will rise, but
the efficiency improvement potential is substantial.
Group operating income during the last quarter has always been very
strong, and will be so also during the current year. However, the
operative income in spite of a favourable trend is not likely to reach
last years level. Restructuring charges and a write-off for the
Omnimanö-project will reduce the net profit.
Stig Gustavson, President and CEO
Turning point?
The Group posted good figures for its Q3. The profit increased and the
order backlog grew.
On the markets we have seen clear improvements in several sectors.
World trade related activity (harbours, shipping) is increasing, and
certain industry sectors have started to invest (in particular
automotive). In America we get positive signals, and China accelerates
its growth further.
Naturally, there are negative signs as well, as Europe at large is in
decline. Restructuring among our customer industries have had a strong
negative impact on our Maintenance Services activities. Factory
closings and consolidation of production resources together with
downscaled production has caused contract cancellations and
reductions. Fortunately, the inflow of new contracts has remained as
strong as ever, and therefore Maintenance continues to grow.
During recent years the Group has invested heavily into product
development. We now have a completely modern and very competitive
range of products.
Now we focus on developing our production. With our entry into the
Chinese market, we have found a wealth of new, high quality parts
suppliers, with very attractive pricing. Also, at the event of EU
enlargement, a number of very competitive opportunities for low-cost,
readily available sub-assemblies present themselves, mainly in the
Baltic States.
Supplementing our own production, predominantly that part which is low
in value-added, with these new sources will cost money in the form of
lay-offs and other restructuring charges. The benefits for Group
profitability are, however, very attractive. Within Standard Lifting,
the benefits are evident already; within 2004 the benefits will spread
to all other parts of the Group.
With significant cost benefits and gradually improving market
prospects, the Group is well positioned for growth.
4 (18)
General overview
(Numbers in brackets are the corresponding values for the last year
unless otherwise indicated.)
Group total sales January to September was EUR 471.3 million (EUR
510.2 million), which is 7.6 % less, compared to the same period last
year. Counted at comparable currency rates (=volume development) there
was a decrease of 2.2 %. The sales volume grew in Maintenance Services
and decreased in the new equipment business areas. In Q3/03 sales
decreased by 2.8 % compared to Q3/02, but in terms of volume sales
remained at the same level. From a geographical point of view, January
to September Sales increased by 36.9 % in Asia-Pacific with the help
of China. There was an increase in volume in America of approx. 5 %,
but translated into Euro sales decreased. In Europe sales decreased by
14.2 %.
Group operating income (EBIT) EBIT for Q3/03 was EUR 9.7 million (EUR
7.2 million), which is an increase of 34.4 % compared to Q3/02. EBIT
January to September was EUR 10.2 million (EUR 20.5 million). The
decrease in EBIT is mainly a consequence of a EUR 7 million
restructuring cost and lower sales volumes. Currency fluctuations and
sales price development also had a negative effect on the profit
development.
January to September Income from operations (EBITA) was EUR 12.4
million or 2.6% on sales including a EUR 7 million restructuring
charge (EUR 23.1 million or 4.5 % on sales) and respectively during
Q3/03 EBITA was EUR 10.4 million or 6.5 % on sales (EUR 8.0 million or
4.9% on sales).
January to September Group financing costs (net of costs and income)
were EUR 1.8 million (EUR 0.8 million) and respectively for Q3/03 EUR
0.8 million (EUR 0.3 million). The increase in financing costs is
mainly due to an increase in working capital.
The Group reached a settlement on the various disputes relating to the
terminated ERP-project Omnimanö and of which the Group had booked a
receivable of approx. EUR 14 million in the balance sheet. The
settlement caused a write down of EUR 8.2 million, which is reported
as an extraordinary item. The write down did not have an effect on the
Groups cash flow. The effect on after tax profits is approx. EUR 5.9
million.
January to September Group income taxes are reported according to an
estimated 35 % tax rate on income before taxes, which was used in the
H1/03 report. The effective tax rate for the whole year is likely to
rise from this level. The exact tax rate will be specified towards the
end of the year.
January to September Group net income was EUR 0.2 million (EUR 13.3
million). Excluding the above mentioned extraordinary charge Group net
income was EUR 6.1 million. January to September Earnings per share
were EUR 0.01 or EUR 0.43 (EUR 0.91) excluding extraordinary charge.
Net income during Q3/03 was EUR 0.7 million and EUR 6.6 million
5 (18)
excluding extraordinary items. EPS was 5 cents and EUR 0.47 (EUR 0.32)
respectively.
January to September Free cash flow was EUR 18.8 million (EUR 28.2
million). The free cash flow grew clearly during Q3/03. Cash flow from
operations was EUR 11.4 million (EUR 40.6 million), which was mainly
a consequence of an increase in work-in-progress and other inventories
(+ EUR 17 million), taxes and a change in product mix in Special
Cranes.
Investment expenditures amounted to EUR 13.9 million (17.7 million).
Investment cash payments included the purchase of own shares and fixed
assets of acquired companies and amounted to EUR 7.6 million (EUR 6.5
million). Other investments were mainly replacement investments.
The cash flow before financing was at the end of September EUR 25.3
million (EUR 22.8 million). At the end of June it was 22.1 EUR
million.
The net interest bearing debt was EUR 74.6 million (EUR 45.0 million)
at the end of September and gearing was 48.9 % (26.6 %). Group
solidity was 39.5 % (44.7 %).
The return on capital employed was 6.8 % (13.2 %) and the return on
equity was 5.0 % (10.3 %).
January to September Order intake was EUR 461.0 million (EUR 466.7
million), which is a decrease of 1.2 % compared to the same period
last year. Counted at comparable currency rates the order intake grew
by 5.5 %. Special Cranes orders grew 7.7 % (volume growth 12.8 %).
Maintenance Services order intake decreased by 5.5 %, but counted in
local currencies there was a growth of 3.6 %. The order intake in
Maintenance Services was affected by unusually high turnover in the
agreement base. The high turnover is mainly a consequence of capacity
reductions in most customer industries. At the end of September there
were 217,949 hoisting units included in the agreement base, which is
an increase of 5.5 % compared to one year ago and 4.6 % compared to
the end of 2002. In Standard Lifting equipment the order intake
decreased by 4.7 %, but at comparable currencies orders were at the
same level as one year ago.
The order intake during Q3/03 grew by 16.5 % and at comparable
currencies the growth was approx. 22 %. The strongest growth was seen
in Special Cranes but there was also a volume growth in Maintenance
Services. In Standard Lifting Equipment the order intake volume July
to September was at the same level as last year.
Geographically the January to September Order intake grew fastest in
Asia (in China the growth accelerated) and decreased by 9 % in North
America. However, at comparable currencies the Order intake in North
America grew clearly. The Order intake varied in Europe: orders either
remained at the same level or decreased, like in the Nordic countries
and the UK or grew clearly, like in total German operations.
At the end of September the Groups total order book stood at EUR
236.0 million, which is 14.6 % higher compared to the end of 2002 but
6 (18)
9.5 % lower compared to one year ago. The decrease in the order book
reflects the development in Special Cranes where the rolling 12 months
(LTM) order intake turned to growth only during Q3/03. Compared to the
end of 2002 the order book for Maintenance Services has grown clearly
due to the growth in modernisation projects. The order book grew also
heavily in Standard Lifting Equipment because a large number of
deliveries are scheduled for yearend or beginning of next year.
In June 2003 the Group took decisions to intensify and speed-up
several efficiency increasing programs including capacity
rationalisation actions. These actions are expected to amount to
approx. EUR 7 million in one time charges for which reservations were
made in the H1/03 results and booked in full into Group overheads. As
the efficiency increasing programs have proceeded additional actions
have been identified that will further improve the Groups operational
efficiency. The actions are aimed at taking advantage of the
opportunities available in global manufacturing and sourcing for lower
unit costs and increasing flexibility.
Altogether these actions will decrease the employment number in the
new equipment business by 400 persons by the end of 2004 compared to
the end of 2002. The number of employees will further decrease also in
certain Maintenance units.
In all, the actions presented in June and the new actions that are
currently being planned are estimated to generate approximately annual
cost efficiency improvements of EUR 15-20 million. These improvements
will materialise to 50-60% in 2004 and in full during 2005.
The additional actions will be defined during the last quarter of the
year and the decisions will be made during December this year and
January 2004. Put together, the actions announced in June and the
planned new actions will amount to a cost of approx. EUR 11-13 million
and they are likely to be booked into the 2003 results.
The Group employed 4392 (4419) persons at the end of September. Since
the end of 2002 the net decrease in the number of employees is 49. The
number of employees has increased in the growing business units and
through acquired operations by approx. 90. The restructuring actions
mentioned above have reduced the number of employees by approx. 140.
Business Area Review
Maintenance Services
Order intake January to September was EUR 226.8 million (EUR 240
million), which is a decrease of 5.5 % compared to one year ago.
Counted at comparable currencies orders grew by 3.6 %. Orders for
Koneports port services and modernisation projects grew strongly by 15
% and at comparable currencies the growth was approx.
22 %.
Sales January to September was EUR 254.4 million (EUR 267.8 million),
which is a decrease of 5.0% compared to one year ago (at comparable
currencies + 3.2 %). Despite the strong order intake, modernisation
7 (18)
sales decreased in local currencies by 5 %, whereas the sales in field
services grew by almost the same percentage.
EBIT January to September was EUR 11.7 million (EUR 16.8 million),
which is a decrease of 30.4 % compared to one year ago. During January
to September there was a high turnover in the agreement base. Well-
established long term maintenance agreements were lost at the rate of
9 % compared to the end of 2002. In monetary terms the agreement base
lost 7.5 % in value. During the same time the number of new
maintenance agreements increased by 13 % and in terms of value the
agreement base increased by 17 %. The net increase in terms of number
of contracts was thereby 4 % and in terms of value (at comparable
currencies) was 10 %. The loss of established maintenance agreements
is mainly a consequence of customers reducing production capacity and
partial or total plant closings. The resulting reallocation of our
resources had a clear negative impact on Maintenance Services
profitability. The profitability was further weakened by modernisation
projects being scheduled for completion only at the year end and weak
productivity development in certain units. The weaker US-dollar and
some other currencies decreased EBIT by approx. EUR 1.2 million.
EBIT for Q3/03 improved clearly over the beginning of the year and
amounted to 5.4 million or 6.1 % on sales. This was still at a lower
level compared to one year ago (7.3 million or 7.8 % on sales) even
though the gap was reduced compared to the beginning of the year.
The number of employees was at the end of September 2708 (2671).
Excluding personnel increases in the growing business units and due to
acquisitions, the number of employees decreased by 25 persons compared
to one year ago and by 50 compared to the end of 2002.
The actions to improve productivity both in field work and in support
functions continue. Due to these actions the number of employees will
further decrease in certain units.
Standard Lifting Equipment
Orders received in January to September was EUR 146.7 million (EUR
154.0 million), which is a decrease of 4.7 % compared to one year ago.
The decrease is almost entirely a consequence of currency changes. The
order book stood at a 12.4 % higher level compared to one year ago and
40.6 % higher compared to the low level at the end of 2002.
Sales January to September were EUR 132.7 million (EUR 146.0 million),
which is 9.1 % less compared to one year ago. At comparable currencies
the sales decrease was 5.3 %. Q3/03 Sales were EUR 44.3 million, which
is a low level compared to the Order intake level. This is a
consequence of a large number of deliveries being due for shipments at
the end of the year and in the beginning of next year.
EBIT January to September was EUR 11.8 million or 8.9 % on sales (EUR
13.9 million or 9.5 % on sales). The decrease in profit is mainly a
consequence of lower sales volumes, but this effect on EBIT has
successfully been mitigated by efficiency improvement actions that
have already been taken. Price competition remained high, but price
8 (18)
erosion did not increase much further. The stronger Euro did not have
any material impact on the profit development.
The Q3/03 EBIT was EUR 4.9 million or 11.1 % on sales (EUR 5.0 million
or 10.2 % on sales).
The operational efficiencies in the Business Area has been
significantly enhanced during the last three years. During the same
time an entire new competitive wire rope hoist line has been brought
to the market. The Business Area now employs 20 % less people compared
to the end of 2000, despite the increase in personnel especially in
Asia.
The number of employees at the end of September was 937 (969). The
number of employees at the end of 2002 was 949. There are still
several on going efficiency enhancing actions, which are targeted to
further improve cost competitiveness. Due to these actions the number
of employees in this Business Area will further be reduced.
Special Cranes
Order intake January to September was EUR 134.3 million (EUR 124.6
million), which is an increase from last year of 7.8 %. Counted at
comparable currency rates the increase was 12.8 %. The growth was
especially strong in harbour cranes, but orders for process cranes
(paper, primary metal etc.) also increased during Q3/03 and exceeded
clearly the order level one year ago.
The order book for Special Cranes also turned to growth in Q3/03. The
order book was at a 2.5 % higher level compared to the end of 2002 but
at a 15.4 % lower level compared to one year ago. The 12 month rolling
(LTM) order intake level turned to growth only during Q3/03.
Sales January to September were EUR 133.5 million (148.1 million),
which is a decrease of 9.8 % compared to one year ago. The sales
decrease was 7.0 % counted at comparable currency rates.
EBIT decreased to EUR 7.5 million (EUR 8.9 million), mainly due to
lower sales volume.
EBIT during Q3/03 doubled compared to Q3/02 and was 3.0 million or 7.1
% on sales. This improvement reflects the enhanced cost efficiency,
although the most important efficiency improvements are yet not
visible in the profit development.
The number of employees in Special Cranes was at the end of September
634 (671). This is a decrease of 37 employees compared to one year ago
and 51 employees compared to the end of 2002. The number of employees
in Special Cranes will further be reduced.
Group Costs and Consolidation Items
The Group overheads, which are not charged directly to the Business
Areas, consist of costs relating to R&D, personnel development,
financing, legal affairs and Group administration. Group costs January
9 (18)
to September amounted to EUR 19.2 million (EUR 17.6 million). The cost
increase is due to the one-time restructuring cost of EUR 7 million.
Group consolidation items January to September (consisting of
elimination of internal profit, our share of associated companies
result and Group goodwill amortisation) were EUR 1.6 million, which is
at the same level as one year ago. Compared to one year ago the
elimination of internal profits grew slightly due to an increase in
work-in-progress. On the other hand the Group goodwill amortisation
decreased with the same amount.
The final settlement on the disputes relating to the Omniman-projectö
led to a write down affecting profits before tax with EUR 8.2 million
and the effect after tax is approximately EUR 5.9 million. Due to the
nature of this item it has been charged as an extraordinary cost to
the Groups statement of income. This way the Groups EBIT reflects
better the profitability of the operations and its development.
Sales by Market
Sales by different market areas developed as follows:
1-9/03 1-9/02 Change Change % (at
% comparable
exchange
rates)
Europe 245.1 285.5 -14.2 -13.3
America 162.9 178.3 -8.6 +5.3
Asia-
Pacific 63.4 46.3 +36.9 +42.2
Total 471.3 510.2 -7.6 -2.2
Comment on currencies
All transactions in currencies other than the Euro have been hedged as
an average by approx. one year ahead, or currency risks are covered by
other means. Therefore, the strengthening of the Euro, especially
against the US- dollar, has yet had only small impact on the Groups
profitability development. Also, increased production and outsourcing
in US-dollar or related currencies has also had a counter-effect,
albeit the effect has yet been small, it is clearly increasing.
The strengthened Euro has affected the Groups consolidated Sales,
Order Intake and profit development somewhat (translational effect).
These effects have been commented under the General Overviewö as well
as in the Business Area reviewsö.
The average consolidation rates (average rates) in some currencies,
which are important for the Group, developed as follows:
10 (18)
September 2003 September 2002 Change-%
USD 1.11233 0.92771 -16.60
CAD 1.5883 1.4556 -8.35
GBP 0.6904 0.62649 -9.26
SEK 9.1691 9.1831 0.15
NOK 7.9333 7.5721 -4.55
SGD 1.9447 1.6659 -14.34
AUD 1.7644 1.7197 -2.53
Litigation
In September 2003 KCI Konecranes Plc, Konecranes Inc, Baan Company
N.V., Baan International B.V., Baan Development B.V., Baan USA Inc.
and SSA Global Technologies, Inc. (Baans new owner) reached a
settlement on the various disputes relating to the terminated ERP-
project (Omniman projectö). The settlement includes a full and final
settlement of all ongoing legal proceedings in Sweden, in the
Netherlands and in the U.S.A. The details of the settlement agreement
are confidential but the settlement causes a negative total non-
recurring effect on after tax profits of approximately 5,9 million
euros. The settlement does not include any immediate cash flow effect,
but will support the Groups cash flow in the future.
In October 2003 Morris Materials Handling, Inc., one of KCI
Konecranes competitors in North America, filed a lawsuit against KCI
Konecranes Plc and Konecranes Inc. (KCI Konecranes' US subsidiary) in
the United States District Court, Eastern District of Wisconsin,
alleging violation of Morriss intellectual property rights and acts
of unfair competition under several causes of action. The lawsuit is
in its very early phase and the allegations of the Complaint are
currently being investigated by KCI Konecranes. The company does not
at the moment have a reason to expect the case to have a material
effect but decided to include it in this interim report since Morris
Materials Handling, Inc. published filing of the case earlier this
month.
Important Orders
Here are some examples on orders received during July-September 2003.
The list illustrates our reach, both in terms of customer base and
geographical coverage.
The Israel Ports Authority (IPA) placed an order for 24 new generation
Rubber Tyred Gantry Cranes (RTGs) with Konecranes VLC. This is KCI
Konecranes largest order ever for RTGs and signals the total success
of KCI Konecranes new generation RTG crane. IPA also reserved an
option to buy 15 additional RTG cranes.
ABP (Associated British Ports) ordered an overhaul and alteration of a
crane jib at the Port of Ipswich in the UK.
11 (18)
Meiden Hoist System (our Japanese Joint Venture) received an order
from Topia Corporation through Yamazen and SMK trading houses for 18
Industrial cranes to be used in the manufacturing of prototype metal
and precision machining parts for the automotive industry at their new
plant in Suzuka city, Japan.
Honda of the UK Manufacturing Co Ltd. ordered a 30 tonne industrial
crane to be used in the plastic moulding shop in their Swindon Plant
in the UK.
Drive Automotive ordered a fully automated Bale handling crane for its
automotive plant in Greenville, South Caroline, USA.
General Motors ordered a 65t Die handling crane and a 45t trolley
modernisation for its automotive plant in Dorraville, USA. In total,
GM operates 22 Konecranes heavy duty process cranes in USA and Canada.
Schuler Guss ordered a special crane to be used for transport of
casting moulds at their foundry in Göppingen, Germany.
UPM Kymmene ordered the modernisation of a 75t paper mill crane at
their Shotton paper mill in the UK.
Asian Pulp and Paper of Ningbo, China ordered 25 CXT Industrial Cranes
to be used as for Paper Mill maintenance cranes.
Andritz AG of Austria ordered a 100/50/10T EOT crane for APP Hainan
Jinhai Pulp Mill in China.
UPM Kymmene ordered for its Changsu paper mill in China several paper
machine process cranes including automatic paper roll storage systems.
Workington Engineering division of Corus (formerly British Steel)
ordered two industrial cranes to be used in the special steel
manufacturing area to support a new cutting operation in the
Workington plant in the UK.
Nucor Corporation ordered a 75t heavy duty Billet handling crane,
which is process critical and adds to their process to add to the
Ladle crane and Charging cranes ordered last year from KCI for their
steel mill in Jewett, Texas.
AvestaPolarit Stainless Oy ordered a fully automated EOT crane for
handling steel coils at their steel mill in Tornio, Finland.
Acelforma ordered four magnet cranes to be used for steel plate
handling at their steel service center in Hungary.
Wanji Aluminiun ordered 17 CXT Industrial cranes for its aluminium
production plant in Henan province, China.
Thyssen-Ferroglobus ordered the modernisation of two Industrial cranes
with special magnet beams that are used for handling steel profile
beams at their plant in Budapest, Hungary.
12 (18)
Herkules Maschinenf. ordered two automated special cranes to be used
at the roll shop at Baosteels steel mill in Shanghai, China.
TBEA Hengyang Transformer Co, Ltd ordered several special cranes with
max. 300T capacity to be used to handle huge transformers at their
plant in Hengyang City, Hunan, China.
Abu Dhabi Water & Electricity Authority (ADWEA) ordered five standard
cranes and two monorail systems for a Shuweihat water transmission
project.
Share price performance and trading volume
During January-September 2003 KCI Konecranes share price increased by
8.59 % and closed at EUR 25.29. The highest share price during the
first nine months of 2003 was EUR 28.50, the lowest was EUR 17.20 and
the average share price was EUR 21.13. During the same period HEX All-
Share Index decreased by 2.92 %, HEX Portfolio Index increased by 4.95
% and HEX Metal & Engineering Index increased by 17.18 %
Total market capitalisation at the end of September was EUR 362
million, the 37th highest market value of companies listed on Helsinki
Exchanges.
The trading volume totaled 9,737,986 shares of KCI Konecranes, which
represents 68.06 % of the total amount of shares. In monetary terms
trading was EUR 206 million, which was the 21st largest trading of
companies listed on Helsinki Exchanges.
The non-Finland-based shareholding at the end of September 2003 was
58.08 %.
The company has 14,044,530 outstanding shares (in addition the company
holds 264,100 own shares).
The companys own shares
At the end of September 2003 the company held 264,100 of the companys
own shares with a total nominal value of EUR 528,200, which is 1.85 %
of the total amount of shares and votes. The shares were bought back
between February 20 and March 5, 2003 at an average price of EUR 20.75
per share. The total purchase price was approx. EUR 5.5 million.
Hyvinkää, October 30, 2003
The Board of Directors
Formal statement
Certain statements in this report are forward looking and are based on
managements expectation at the time they are made. Therefore they
involve risks and uncertainties and are subject to change due to
changes in general economic or industry conditions.
13 (18)
Statement of Income (MEUR)
1-9/2003 1-9/2002 1-12/2002
Sales 471.3 510.2 713.6
Share of result of
participating
interest undertakings -0.2 -0.2 -0.2
Depreciation -12.0 -11.7 -15.5
Other operating
expenses -448.9 (1 -477.8 -660.3
Operating income 10.2 20.5 37.6
Interests, net -2.3 -1.4 -2.0
Other financial
income and expenses 0.5 0.5 0.8
Income after
financing items 8.4 19.7 36.5
Extraordinary items -8.2 0.0 0.0
Income before taxes 0.2 19.7 36.5
Taxes -0.1 (2 -6.4 (2 -11.8
Net Income for the
period 0.2 13.3 24.6
Profit /share (EUR) 0.43 0.91 1.69
1) Includes 7.0 MEUR restructuring charges
2) According to estimated tax rate
Consolidated Balance Sheet (MEUR)
9/2003 9/2002 12/2002
Fixed Assets 101.0 103.0 93.5
Inventories 89.0 87.8 73.9
Receivables and
other current assets 208.8 207.6 214.6
Cash in hand and at
banks 14.9 12.1 15.2
Total assets 413.7 410.5 397.1
Equity 159.1 179.7 173.2
Minority Interest 0.1 0.1 0.1
Provisions 17.2 11.6 12.0
Long-term debt 33.1 41.1 31.4
Current liabilities 204.3 178.0 180.4
Total shareholders
equity and
liabilities 413.7 410.5 397.1
Gearing 48.9% 26.6% 19.1%
Solidity 39.5% 44.7% 45.5%
Return on capital LTM 03 LTM 02
employed (3 6.8% 12.8% 13.2% 18.8% 17.8%
Equity/share(EUR) 10.94 11.59 12.11
3) Calculated on annual basis
14 (18)
In accordance with the decision of the Annual General Meeting, the
company bought back between 20 February and 5 March, 2003 264,100 of
its own shares at an average price of EUR 20.75 per share. At 30
September 2003, the company held 264,100 shares with a total nominal
value of EUR 528.200. The total purchase price was approx. MEUR 5.5
representing 1.85 % of total amount of shares and votes.
Consolidated cash flow (MEUR)
1-9/2003 1-9/2002 1-12/2002
Free Cashflow 18.8 28.2 46.2
Change in working capital -30.3 12.4 20.1
Cashflow from operations -11.4 40.6 66.3
Net Investments -13.9 -17.7 -31.0
Cashflow before financing -25.3 22.8 35.4
Change in debt,increase
(+), decrease (-) 38.8 -13.3 -22.4
Dividend paid -13.3 -13.2 -13.2
Correction items (1 -0.5 -0.9 -1.4
Net financing -0.3 -4.6 -1.6
Cash in hand and at banks
at beginning of period 15.2 16.8 16.8
Cash in hand and at banks
at end of period 14.9 12.1 15.2
Change of Cash in hand and
at banks -0.3 -4.6 -1.6
1) Translation difference in cash in hand and banks
Contingent Liabilities and Pledged Assets (MEUR)
9/2003 9/2002 12/2002
Mortgages and
pledged assets
For own debts 5.9 5.9 5.9
For commercial
guarantees 0.6 0.9 0.9
Own commercial
guarantees 149.8 146.5 141.6
Guarantees
For associated
companys debt 0.8 0.8 0.8
For others 0.1 0.2 0.1
Leasing liabilities 16.9 17.6 18.8
Other liabilities 0.9 0.8 1.0
Total 174.9 172.7 169.1
15 (18)
Notional Amounts of Derivative Financial Instruments (MEUR)
9/2003 9/2002 12/2002
Foreign exchange
forward contracts 523.7 417.9 411.4
Interest rate swap 25.0 25.0 25.0
Currency options 156.6 203.7 0.0
Total 705.3 646.5 436.4
Derivatives are used for currency and interest rate hedging only. The
notional amounts do not represent amounts exchanged by the parties and
are thus not a measure of the exposure. A clear majority of the
transactions relate to closed positions, and these contracts set off
each other. The hedged order book and equity represent approximately
one half of the total notional amounts.
Investments
1-9/2003 1-9/2002 1-12/2002
Total (excl.
acquisitions of
subsidiaries) (MEUR) 9.1 12.3 13.9
DEVELOPMENT BY BUSINESS AND MARKET AREA
Sales by Business Area (MEUR)
1-9/2003 1-9/2002 LTM* LTM 1-
Year ago 12/2002
Maintenance
Services 254.4 267.8 359.1 372.4 372.4
Standard Lifting
Equipment 132.7 146.0 191.2 212.4 204.5
Special Cranes 133.5 148.1 194.7 222.7 209.2
./. Internal -49.3 -51.6 -70.2 -77.7 -72.5
Total 471.3 510.2 674.7 729.7 713,6
*) LTM = last 12 months (full year 2002 ./. nine months 2002 + nine
months 2003)
Operating Income by Business Area (MEUR)
1-9/2003 1-9/2002 1-12/2002 LTM* LTM*
Year
ago
MEUR % MEUR % MEUR % MEUR MEUR
Maintenance
Services 11.7 4.6 16.8 6.3 26.2 7.0 21.1 24.9
Standard
Lifting
Equipment 11.8 8.9 13.9 9.5 19.5 9.5 17.4 21.0
16 (18)
Special Cranes 7.5 5.6 8.9 6.0 16.7 8.0 15.3 16.0
Group costs -19.2 -17.6 -23.8 - -
(1 25.4 19.1
Consolidation
items -1.6 -1.6 -1.0 -1.0 -0.8
Total 10.2 20.5 37.6 27.3 42.1
*) LTM = last 12 months (full year 2002 ./. nine months 2002 + nine
months 2003)
1) Includes 7.0 MEUR restructuring charges
Personnel by Business Area (at the End of the Period)
9/2003 9/2002 12/2002
Maintenance Services 2,708 2,671 2,698
Standard Lifting
Equipment 937 969 949
Special Cranes 634 671 685
Group staff 113 108 109
Total 4,392 4,419 4,441
Average number of
personnel during
period 4,441 4,384 4,396
Order Intake by Business Area (Excl. Service Contract Base)(MEUR)
1-9/2003 1-9/2002 LTM* LTM* 1-
Year ago 12/2002
Maintenance 226.8 240.0 297.0 306.0 310.2
Services
Standard Lifting 146.7 154.0 195.9 204.2 203.2
Equipment
Special Cranes 134.3 124.6 164.6 168.1 154.9
./. Internal -46.8 -52.0 -64.3 -70.2 -69.4
Total 461.0 466.7 593.2 608.2 598.9
*) LTM = last 12 months (full year 2002 ./. nine months 2002 + nine
months 2003)
Order Book (Excl. Service Contract Base)
9/2003 9/2002 12/2002
Total (MEUR) 236.0 260.8 206.0
17 (18)
Sales by Market (MEUR)
1-9/2003 1-9/2002 LTM* LTM 1-
Year ago 12/2002
Nordic and
Eastern Europe 117.4 126.5 170.2 195.7 179.4
EU (excl.
Nordic) 127.7 159.0 189.6 224.3 220.9
Americas 162.9 178.3 227.0 244.3 242.4
Asia-Pacific 63.4 46.3 88.0 65.4 70.9
Total 471.3 510.2 674.8 729.7 713.6
*) LTM last 12 months (full year 2002 ./. nine months 2002 + nine
months 2003)
Teleconference
An international teleconference will be arranged today on 30 October
2003 at 4.00 p.m. Finnish time (2.00 p.m. London time). The dial-in
number is +44-(0)20 8401 1043. Please call in at 3.50 p.m. The
graphics of the presentation are attached to the report on the
Internet. A replay of the teleconference will be available for the
next 48 hours at +44-(0)20 8288 4459, code 976622.
Internet
This report is also available on the Internet at www.kcigroup.com. An
audio recording of Mr Gustavsons presentation at the teleconference
will be available on the Internet later on 30 October.
Upcoming events
The KCI Konecranes Capital Market Day 2003 will be held at our factory
in Shanghai on Tuesday, December 2, 2003. This event is held in
conjunction with a Finnish Engineering roadshow to Shanghai China
during 1-5 December, 2003 organized by KCI Konecranes, Wärtsilä, Metso
and KONE.
Next report
KCI Konecranes will publish its Financial Calendar for next year
during November 2003.
Graphics
A graphical presentation of this report is available on the Internet
at www.kcigroup.com.
18 (18)
KCI KONECRANES PLC
Franciska Janzon
IR Manager
FURTHER INFORMATION
Mr Stig Gustavson, President & CEO, tel. +358-20 427 2000
Mr Teuvo Rintamäki, Chief Financial Officer, tel. +358-20 427 2040
Ms Franciska Janzon, IR Manager, tel. +358-20 427 2043
DISTRIBUTION
Helsinki Exchanges
Media
