KCI KONECRANES H1/2005: NEW ORDERS FOR QUARTER REACH ALL-TIME RECORD
KCI KONECRANES PLC STOCK EXCHANGE RELEASE 4 August, 2005 10.00 a.m. 1 (15)
KCI KONECRANES H1/2005: NEW ORDERS FOR QUARTER REACH ALL-TIME RECORD
279,1 MEUR new orders received in Q2/2005
First half-year orders growth 40,9 % (organic growth 23 %)
Sales growth follows: 34,6 % (organic 19 %)
Operating profit (EBIT) 14,1 MEUR (6,2 MEUR in H1/2004)
Special Cranes profitability still weak; turnaround expected in H2/2005
IFRS valuation of currency forward contracts continues to burden EPS
Strong cash flow from operations despite of fast growth: 24.7 (19.7) MEUR
Full year sales growth now expected to exceed the earlier target of 20 %
Second quarter First half year LY
MEUR 4-6/ 4-6/ Change 1-6/ 1-6/ Change 1-12/
SALES 05 04 % 05 04 % 04
Maintenance Services 98.7 83.3 18.5 184.9 157.8 17.2 344.6
Standard Lifting
Equipment 69.6 52.2 33.2 133.6 99.2 34.7 231.2
Special Cranes 79.0 45.1 75.1 140.4 88.3 59.0 214.1
Internal Sales -12.6 -15.4 -18.5 -31.5 -27.8 13.2 -62.0
Sales total 234.8 165.2 42.0 427.4 317.5 34.6 728.0
Operating profit 9.2 5.5 67.1 14.1 6.2 127.3 31.3
(EBIT)
Interests, net -1.7 -0.7 -3.1 -1.4 -3.5
Other financial income
and expenses 1) -6.6 0.3 -11.9 0.4 -0.1
Income before taxes 0.9 5.0 -81.6 -0.9 5.2 -117.9 27.7
Net income 0.7 3.5 -79.7 -0.6 3.7 -117.4 18.4
Earnings per share,
EUR
- basic 0.05 0.25 -0.05 0.26 1.31
- diluted 0.05 0.25 -0.05 0.26 1.29
- excl. IAS 39
differences 0.33 0.26
Cash flow from
operations per share 1.75 1.40 1.20
ORDERS RECEIVED
Maintenance Services 84.5 83.3 1.4 163.0 154.0 5.8 308.4
Standard Lifting
Equipment 80.6 62.8 28.4 156.5 123.6 26.6 246.6
Special Cranes 131.5 50.8 158.9 210.8 104.1 102.5 243.7
Internal Orders -17.5 -15.4 13.7 -33.7 -29.2 15.5 -61.9
Orders Received total 279.1 181.5 53.8 496.5 352.5 40.9 736.9
Order book at end of
period 414.7 268.0 54.7 298.8
1) Hedging instruments are valued according to IFRS at market (i.e. not at
hedged) rates, yielding valuation changes. These changes (in H1/05 -10.9 MEUR) do
not have any direct cash flow impact and they are reported in other financial
items as the Group does not apply hedge accounting. As instruments mature at
their predetermined values, the valuation difference for each contract becomes
zero.
2 (15)
Comments on Q2/2005:
Strong growth in both orders and sales continued within all business areas.
Special Cranes booked several large orders, and Standard Lifting orders exceeded
for the first time ever 80 MEUR in one quarter. Maintenance Services and Standard
Lifting growth is driven by North America, Australia and the Nordic countries,
while the Continental European markets are relatively weak. Within Maintenance
Services business, field service activities grew fast while large modernisation
project orders lagged behind last year. Special Cranes grow fastest in container
handling equipment in general and geographically in North America, UK and France,
while German and Scandinavian markets were weak. Orders in China continued to
grow but at a lower relative pace compared to last year.
Maintenance Services continued to improve margins also in the second quarter, and
the first half-year margin is now up 2 %-points from last year. Restructuring
measures and higher volumes have started to improve the margins in Standard
Lifting as well, but the half-year impact to the EBIT margin is still relatively
low (8,2 % vs. 7,8 %). In spite of higher volumes, Special Cranes profitability
was unsatisfactory mainly due to high manufacturing ramp up costs.
Comments on full year 2005:
Strong growth is expected to continue in the second half of the year. The earlier
target of 20 % top line growth (of which roughly one half would be organic
growth) is expected to be exceeded.
Maintenance Services and Standard Lifting margins are expected to continue to
develop positively. Special Cranes operating profit is expected to improve
significantly during the second half of the year. The Group reiterates its
earlier target of exceeding the year 2004 EBIT margin level, both in IFRS and FAS
terms.
First half year 2005 development
Orders received and order book
(All actual and comparable numbers - in brackets - from the previous year are in
accordance with IFRS unless otherwise indicated.) Group total orders received
were EUR 496.5 million (352.5). The growth was 40.9 % or 42.5 % counted at
comparable currency rates. The organic growth was 23 % and the rest of the growth
was attributable to the acquisitions of UK-based Morris Material Handling Ltd and
Sweden-based SMV Lifttrucks AB. There was growth in all Business Areas. The
growth accelerated during Q2. During the second quarter orders grew by 53,8 %
compared to Q2/2004.
The growth was very strong for the Group's harbour and shipyard cranes. Order
growth in Standard Lifting Equipment was strong and orders in field services
developed favourably, but modernization orders contracted. Geographically the
order activity remained very strong in North America and in Australia, good in
the Nordic region and in Eastern Europe, while the order growth in the rest of
Europe was mainly acquisition driven. Also orders in China continued to grow
although at a pace slower than before.
The Group's total order book reached another new record of EUR 414.7 (268.0)
million. This is up by 54.7 % compared to the end of H1/2004 and up by 38.8 %
from yearend 2004. The value of the order book grew in all three Business Areas.
The value of the maintenance contract base is not included in the order book. The
contract base continued to grow.
3 (15)
Sales
Group total sales were EUR 427.4 (317.5) million. The growth was 34.6 % and 35.8
% at comparable currency rates. The organic growth was 19 %. The speed of growth
in sales accelerated during the second quarter. The growth was 40.8 % compared to
Q2/2004. There was growth in all Business Areas. Sales grew in all major markets
and the strongest growth took place in the Nordic region and in Eastern Europe.
Profitability
The Group's operating income more than doubled. Operating income was EUR 14.1
(6.2) million, up by EUR 7.9 million compared to H1/2004. The corresponding
H1/2004 figure included EUR 2.0 million restructuring costs. Therefore, a more
comparable growth in operating income was EUR 5.9 million or 72.0 %. The
operating income margin improved from 1.9 % to 3.3 % or adjusted for
restructuring costs from 2.6 % to 3.3 %.
Financing costs (the net of interest income and expenses) were EUR 3.1 (1.4)
million. The growth in interest expenses is due to higher gearing which is a
consequence of acquisitions made at the end of last year and increased net
working capital compared to H1/2004.
Other financing costs (the net of other income and expenses) were EUR 11.9 (+0.4)
million. The valuation difference on hedging instruments according to IAS39 had a
negative impact of approx. EUR 10.9 million on other financing costs (Q2/2005:
EUR -6.2 million). This value change has been booked under other financing costs.
Hedging instruments are used to hedge currency exposures relating to non-euro
based transactions and estimated future cash flows. These value changes are not
cash effective, but they cause short to medium term fluctuations on the Group's
net income. In due course, as the hedged item matures and the corresponding
hedging instrument (e.g. currency forward contract) is realized the value
difference becomes zero.
The Group's income before taxes was EUR -0.9 (5.2) million and EUR 0.9 (5.0)
million during the second quarter.
The Group's reported income taxes were EUR +0.3 (-1.5) million based on an
estimated 31 % tax rate.
Group net income was EUR -0.6 (3.7) million and EUR +0.7 (3.5) million
accordingly for the second quarter. Excluding the above described valuation
difference on the hedging instruments and other IAS 39 related currency exchange
rate differences the net income would have been approx. EUR 4.7 (3.7) million
during the first half of 2005.
H1/2005 earnings per share were EUR -0.05 (0.26) or approx. EUR 0.33 (0.26) per
share excluding the valuation difference.
The Group's return on capital employed (ROCE) was 8.4 (7.9) % and the return on
equity (ROE) -1.0 (5.5) %. The last twelve month's ROCE was 15.1 % and ROE 10.6
%.
The Group's profit accumulation within the year has never been even between
different quarters, but there have been clear seasonal variations. The profit
accumulation has typically been slow during the first half of the year and then
accelerated towards the end of the year. This seasonal earnings pattern is
expected to repeat itself again during the current year.
4 (15)
Cash flow and balance sheet
The cash flow before change in net working capital was EUR 21.3 (12.6) million
during H1/2005. In spite of a strong growth in operations the amount of net
working capital decreased by EUR 3.4 (7.1); thereby the cash flow from operations
before financing items and taxes was EUR 24.7 (19.7) million or 1.75 (1.40) euros
per share.
Cash based financing costs were EUR 4.3 (1.4) million, taxes 3.9 (-0.1) million
and investing activities totaled EUR 9.4 (3.5) million. The cash flow before
financing activities was EUR 7.0 (15.0) million.
The Group's net interest bearing debt was 116.1 (42.7) million at the end of the
reporting period and the net gearing was 91.3 (30.4) %. Both figures are clearly
higher compared to the end of June 2004 and the end of last year (EUR 110.4
million and 80.2 % respectively). The growth relates mainly to acquisitions and a
strong organic growth. Both net debt and net gearing came down from the end of
Q1/2005 when corresponding figures were EUR 126.1 million and 102.5 %.
The Group's solidity was 26.5 (38.1) % and the current ratio 1.19 (1.47). The
Group has a EUR 200 million committed financing back-up facility to secure
liquidity. At the end of period approx. EUR 30 million out of this facility was
in use.
Currencies
The currency exchange rate fluctuations had only a marginal translation effect on
the Group's orders received, sales and operating income development. However, the
strength of the euro against the US-dollar (or related currencies) had still a
somewhat negative transactional effect on the Group's operating income and
profitability development through non-euro based export from the euro-area. This
development is expected to become more favourable for the Group in the future as
soon as lower value dollars sold forward before are replaced by currently
revalued dollars.
Currency forward contracts and some other instruments are used to hedge non-euro
orders in the order book in Special Cranes (or other bigger projects) and
estimated cash flows in Standard Lifting Equipment. As the Group does not apply
hedge accounting these instruments are valued according to IAS 39 at market rates
at the end of each period (i.e. not at hedged rates), causing intermediate
positive or negative valuation differences impacting the Group's net income. As
these contracts mature and they are realized at their predetermined values, the
valuation changes become zero for the individual contract and the non-euro based
revenue or cost is reported according to hedged exchange rate.
The consolidation exchange rates of some important currencies for the Group
developed as follows (the value of one euro in other currency):
The average rates:
Q2/2005 Q2/2004 Change %
USD 1.2841 1.22711 -4.44
CAD 1.5868 1.6426 3.52
GBP 0.68586 0.67326 -1.84
CNY 10.628 10.2543 -3.52
SGD 2.1156 2.0849 -1.45
SEK 9.1451 9.1659 0.23
NOK 8.1393 8.4497 3.81
AUD 1.6627 1.6627 0.00
5 (15)
The period end rates:
Q2/2005 Q2/2004 Change %
USD 1.2087 1.2148 0.50
CAD 1.4867 1.6198 8.95
GBP 0.679 0.6687 -1.52
CNY 10.0038 10.155 1.51
SGD 2.0415 2.0841 2.09
SEK 9.4866 9.1785 -3.25
NOK 7.881 8.4925 7.76
AUD 1.596 1.7303 8.41
The Group continued its policy of hedging non-euro based transaction. The main
instrument used was forward exchange contracts. The ultimate goal for this policy
is to minimize risks relating to order book margins or negative consequences of
sudden and major currency exchange rate changes.
Capital expenditure
The Group's capital expenditures to tangible and intangible assets (including
investment in associated companies or minority shares) were EUR 7.4 (5.5)
million. Most of these investments relate to machines and equipment replacements,
information technology or shares in associated companies.
Personnel
At the end of June the total number of employees was 4940 (4329). The growth
relates to acquired operations and the Group's expansion in China.
Review by Business Area
Maintenance Services
Sales in Maintenance Services were EUR 184.9 (157.8) million, up by 17.2 %
compared to H1/2004. The organic growth was 11 %. The operating income was EUR
11.5 (6.5) million and operating margin 6.2 (4.1) %.
The positive development in profitability was supported by growth in sales and
improved productivity. The positive maintenance contract base development
continued, which also contributed to better profitability.
In terms of number of units the maintenance contract base included 239,665 cranes
and hoists at the end of H1/2005, up by 6.7 % from the end of 2004. The value of
the contract base grew also and the growth from the yearend was 4.8 %. The value
of the contract base is not recorded as orders received or as part of the order
book, only the net change in value is recorded.
The total order intake was EUR 163.0 (154.0) million, up by 5.8 % or 7.3 % when
counted at comparable currency exchange rates. In field services (approx. ¾ of
total Maintenance Services) orders grew by 17 % (organic growth 8.6 %) while the
orders for large modernizations contracted by one third. The development was very
satisfactory in North America, the Nordic area and in Australia.
6 (15)
At the end of H1/2005 there were 2786 (2619) persons employed in the Business
Area. The growth in employment is mostly attributable to the acquisition of
Morris Materials Handling (MMH) in the U.K.
Standard Lifting Equipment
Standard Lifting Equipment sales were EUR 133.6 (99.2) million, up by 34.7 %
compared to H1/2004. The organic growth was 23 %. The operating income was EUR
10.9 (7.7) million or 41.3 % higher than in H1/2004. The operating income margin
was 8.1 (7.8) %.
Growing sales volumes, restructuring benefits and positive currency exchange rate
differencies supported positive development. However, the Business Area still
suffered from unfavourable dollar to euro ratio through the currency forward
contracts made last year. However, as the US dollar has gained strength against
euro this development is likely to reverse itself toward the yearend. The
integration program in Morris Materials Handling (MMH) is progressing as planned.
The order activity continued at a high level. Orders received grew to EUR 156.5
(123.6) million or 26.6 %. The organic growth was 15 %. Orders during Q2/2005
marked a record for one single quarter. Q2/2005 orders were EUR 80.6 (62.8)
million and the corresponding growth was 28.3 %. The development was particularly
positive in North American, Nordic and Eastern European markets.
The order book in Standard Lifting Equipment continued to grow in spite of a
strong sales growth and reached a new record level. The value of the order book
now stands 27 % higher compared to one year ago and 47 % higher compared to the
end of 2004.
The number of employees at the end of H1/2005 was 1175 (993). The increase in
headcount relates to the acquisition of MMH.
Special Cranes
Special Crane sales were EUR 140.4 (88.3) million, up 59.0 % compared to H1/2004.
The organic growth was 24 %. The operating income was EUR 3.2 (4.7) million or
31.1 % less than in H1/2004.
High European manufacturing costs and ramp up costs are still burdening the
profitability. The rapid growth in sales and production volumes coinciding with
many production and procurement related changes have added to the challenge.
However, the second half of the year is expected to be significantly better than
H1/2005.
The order intake was EUR 210.8 (104.1) million or 102.4 % higher compared to
H1/2004. The organic growth was 68 %. Special Crane order activity was very
strong in the sector "harbours and terminals". Geographically the growth was
fastest in North America, the U.K. and France, while the German and Scandinavian
markets remained sluggish.
The work towards improving cost efficiency continues. The new assembly plant in
Shanghai, China is in its completion phase and the production is scheduled to
start in autumn as planned. There are also several other projects in progress.
Purchasing and outsourcing of low added value parts, components and subassemblies
will increase. There are costs related to these changes, which typically occur
ahead of corresponding benefits.
7 (15)
The number of employees was 855 (594) at the end of H1/2005. The growth relates
mostly to the acquisition of SMV and to the new factory in China.
Group costs and consolidation items
Group costs, which are not directly charged to the Business Areas mainly consist
of common development costs (personnel, products, systems, group structure etc.)
and Group management, legal, financing and treasury functions are reported as
Group Costs. These costs were EUR 12.0 (12.5) million. The corresponding costs in
H1/2004 included 2.0 million restructuring charges. Therefore the underlying
costs actually grew by EUR 1.5 million or 14 %. The increase is less than sales
growth and mainly caused by increased development expenditures.
Group consolidation items were EUR 0.5 (-0.2) million positive. Consolidation
items included the change in internal margin elimination and the share of
associated companies' profit.
Changes in the Group organisation and structure
As was previously reported, KCI Konecranes' Board of Directors appointed in its
meeting on June 17th, 2005 Mr. Pekka Lundmark President and CEO of KCI
Konecranes. Mr. Stig Gustavson, President and CEO of KCI Konecranes and the head
of operations for 17 years, was appointed Chairman of the Board of Directors and
Mr. Björn Savén, KCI Konecranes' Chairman since 1994, was appointed vice Chairman
of the Board.
Matti Ruotsala, Deputy to the CEO of KCI Konecranes Plc accepted a position
outside the Group with AGCO Corporation, as their Vice President and Managing
Director for Valtra EAME and Valtra Oy. Mr. Ruotsala will leave the Group in
October 2005.
As part of KCI Konecranes internal re-engineering program that was initiated in
2003, on April 19th, 2005 KCI Konecranes signed an agreement to outsource its
production of end carriages to the new company established by the existing
management and personnel in the production unit in Urjala, Finland. The
production unit employs approximately 70 people that continue working under their
existing employment contracts for the new company. The unit used to be part of
the Standard Lifting Equipment Business Area.
The Group acquired an approx. 30 % stake in the German based company Consens
Transport Systeme GmbH during Q2/2005. The company is pursuing the harbour and
terminal equipment area. Also during the second quarter the Group acquired a
minority stake in one Spanish based crane company (Eydimen) and entered into a
license agreement with the company.
On July 1,2005 the Group acquired two Swedish machine tool maintenance companies.
The companies employ together approx. 15 persons and have combined sales close to
EUR 2 million. Operations are still small but the acquisitions mark the Group's
first entry to the machine tool maintenance market outside Finland.
Comments on full year 2005
Strong growth is expected to continue in the second half of the year. The earlier
target of 20 % top line growth (of which roughly one half would be organic
growth) is expected to be exceeded.
8 (15)
Maintenance Services and Standard Lifting margins are expected to continue to
develop positively. Special Cranes operating profit is expected to improve
significantly during the second half of the year. The Group reiterates its
earlier target of exceeding the year 2004 EBIT margin level, both in IFRS and FAS
terms.
Subscription of shares with stock options
Pursuant to KCI Konecranes stock options, a total of 37,500 new KCI Konecranes
shares were recorded in the Trade Register during Q2/2005. The new shares were
subscribed for under the 1999A (3,000 shares), 1999B (1,500 shares), 2001A (3,000
shares) and 2003A (30,000 shares) options series.
Following these subscriptions KCI Konecranes' share capital was at the end of
June EUR 28,696,260 and the total number of shares was 14,348,130.
Share capital, share price performance and trading volume
KCI Konecranes Plc's share price increased by 8.43 % during January-June and
closed at EUR 35.25. The period high was EUR 36.47 and period low EUR 29.80. The
volume weighted average share price during the period was EUR 33.91. During the
same period the HEX All-Share Index increased by 16.26 %, the HEX Portfolio Index
by 14.56 % and the HEX Metal & Engineering index by 24.33 %.
The total market capitalization at the end of June 2005 was EUR 505.8 million,
including 210,650 own shares held by the company, the 37th largest market value
of companies listed on Helsinki Exchanges.
The trading volume totalled 9,968,740 shares of KCI Konecranes Plc, which
represents 69.5 % of the total amount of outstanding shares. In monetary terms
the trading was EUR 338 million, which was the 27th largest trading volume of all
companies listed on Helsinki Stock Exchange. The daily average trading volume was
80 393 shares representing a daily average turnover of EUR 2.7 million.
The company's own shares
At the end of June 2005, KCI Konecranes Plc held 210,650 of the company's own
shares with a nominal value of 421,300 euros. This corresponds to 1,47 % of the
company's total outstanding 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.
Important orders
Here are some examples on orders received during April-June 2005. The list
illustrates our reach, both in terms of customer base and geographical coverage.
Harbours, container terminals and shipyards
Oshima Shipyard in Japan ordered four Shipboard Gantry Cranes (Konecranes-
Munckloaders) to be installed onboard vessels ordered by Singaporean shipowner
Masterbulk Pte. Ltd. Crane deliveries are due to commence in 2007 through 2008.
The first commercial order for two units of the new Konecranes Rail Mounted
Gantry Crane (RMG) was received from Roadways Container Logistics Ltd, a
subsidiary of P&O Nedlloyd, for their new Birmingham Intermodal Freight Terminal
in the British Midlands, UK.
9 (15)
Maersk Inc. contracted KCI Konecranes for the delivery of 30 Rail Mounted Gantry
Container Handling Cranes (RMG) to APM Terminals' new state-of-the-art container
terminal in Portsmouth, Virginia. The contract included the option for an
additional 30 RMG cranes. Crane deliveries are due to commence in late 2006
through 2007.
AS Muuga Container Terminal, Port of Muuga, Estonia placed a repeat order for a
Ship-to-Shore (STS) container crane for their terminal.
Malta Freeport Terminals Ltd. ordered ten Rubber Tired Gantry cranes (8-wheel RTG
design), two Masted Lift Trucks for stacking empty containers and one 37-ton
Forklift Truck, as well as modernisation services provided by KCI Konecranes'
Port Services. The order includes an option for six additional RTG-cranes.
Bohai Shipbuilding Industrial Co., Ltd ordered two 75-ton shipyard cranes to be
used in the handling of ship sections at Bohai Shipyard in China.
China Harbour - Costain Mexico, ordered two double leg outdoor gantry cranes to
be used in the production of concrete modules for a new harbour project in Baja
California, Mexico.
Automotive
Renault ordered a 63-ton process crane for moving cutting tools at their stamping
plant in Douai, France (Renault Megane Plant).
Ford ordered three bridge cranes and one semi-gantry crane to be used for
handling stamping dies at their plant in Nanjing Chang'an in China.
General Motors ordered a special 65-ton process crane to be installed over a new
press machine at their Automotive Stamping plant in Marion, Ohio, USA.
Power plants
General Electric Company ordered two double leg outdoor gantry cranes for a new
combined cycle, gas turbine power plant in California, USA.
Siemens AG, Offenbach, Germany ordered a 130-ton power plant crane including two
CXT monorail hoists for a new Power Station in Thalka, Egypt.
Primary metals
Bechtel International, Montreal, Canada ordered one hot metal process crane, five
process cranes and 8 CXT Industrial cranes for Alcoa's new aluminium facility in
Fjaroaal, Iceland.
Corus (Uk) Ltd ordered a 25-ton Process crane and a process magnet crane to be
installed at its rolling mill in Scunthorpe, UK.
Helsinki, 4 August 2005
Board of Directors
Disclaimer
Certain statements in this report are forward looking and are based on
management's 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.
10 (15)
Statement of Income (MEUR)
1-6/2005 1-6/2004 1-12/2004
Sales 427.4 317.5 728.0
Share of result of
participating interest
undertakings 0.2 0.0 0.0
Depreciation -7.3 -6.2 -12.4
Impairment 0.0 0.0 -1.2
Other operating expenses -406.2 -305.1 -683.1
Operating income 14.1 6.2 31.3
Interests, net -3.1 -1.4 -3.5
Other financial income and
expenses -11.9 0.4 -0.1
Income before taxes -0.9 5.2 27.7
Taxes 0.3(1 -1.5(1 -9.2
Net Income for the period -0.6 3.7 18.4
Earnings per share, EUR
-basic -0.05 0.26 1.31
-diluted -0.05 0.26 1.29
1) According to estimated tax rate
Consolidated Balance Sheet (MEUR)
6/2005 6/2004 12/2004
Fixed Assets 116.6 88.9 112.1
Inventories 152.1 89.6 114.1
Receivables and other
current assets 248.0 202.6 267.0
Cash in hand and at banks 31.1 21.8 20.7
Total assets 547.8 402.9 513.9
Equity 127.1 140.5 137.7
Provisions 15.8 16.0 17.5
Long-term debt 56.9 49.7 24.8
Current liabilities 348.0 196.7 334.1
Total shareholders' equity
and liabilities 547.8 402.9 513.9
Gearing % 91.3 30.4 80.2
Solidity % 26.5 38.1 29.1
Return on capital employed
%, Last Twelve Months 15.1 * 13.7
(LTM)
Equity/share, EUR 8.99 10.00 9.76
* The year 2003 figures were reported only according to FAS
Net Interest bearing liabilities (MEUR)
6/2005 6/2004 12/2004
Long- and short-term
interest-bearing liabilities -147.6 -64.5 -131.4
Cash and cash equivalents and
other interest bearing assets 31.5 21.8 21.0
Total -116.1 -42.7 -110.4
11 (15)
Consolidated cash flow statement (MEUR)
1-6/2005 1-6/2004 1-12/2004
Operating income before change in net
working capital 21.3 12.6 42.8
Change in net working capital 3.4 7.1 -26.0
Cash flow from operations before
financing items and taxes 24.7 19.7 16.8
Financing items and taxes -8.2 -1.2 -9.2
Net cash from operating activities 16.5 18.5 7.6
Net cash used in investing activities -9.4 -3.5 -38.0
Cash flow before financing activities 7.0 15.0 -30.4
Net cash used in financing activities 2.4 -6.6 38.3
Translation differences in cash 1.0 0.2 -0.4
Change of cash and cash equivalents 10.4 8.6 7.5
Cash and cash equivalents at
beginning of period 20.7 13.2 13.2
Cash and cash equivalents at end of
period 31.1 21.8 20.7
Change of cash and cash equivalents 10.4 8.6 7.5
Statement of changes in Shareholders' Equity ( MEUR)
Share Other Minority Translat. Retained Total
Capital Restr. Interest Diff. Earnings Equity
Capital
Equity 12/2003 28.6 21.8 0.1 -5.7 105.4 150.3
Dividend
distribution -14.0 -14.0
Change in
untaxed reserves 0.1 0.1
Translation
difference -0.5 -0.5
Share based
payments
recognised
against equity 0.4 0.4
Other changes 0.1 0.4 0.5
Net profit for
the period 3.7 3.7
Equity 6/2004 28.6 21.8 0.1 -6.1 96.0 140.5
Equity 12/2004 28.6 22.3 0.1 -6.1 92.7 137.6
Options 0.1 0.8 0.9
exercised
Dividend
distribution -14.8 -14.8
Change in
untaxed reserves -0.7 -0.7
Translation
difference 4.1 4.1
Share based
payments
recognised
against equity 0.6 0.6
Net profit for
the period -0.6 -0.6
Equity 6 / 2005 28.7 23.1 0.1 -2.0 77.2 127.1
12 (15)
Contingent Liabilities and Pledged Assets (MEUR)
6/2005 6/2004 12/2004
Mortgages and pledged assets
For own debts 5.9 5.9 5.9
For commercial guarantees 0.3 0.4 0.3
Own commercial guarantees 110.4 95.1 101.5
Guarantees
For associated company's debt 0.0 0.8 0.8
For others 0.1 0.1 0.1
Leasing liabilities 28.6 16.4 22.5
Other liabilities 1.1 1.3 1.2
Total 146.4 120.0 132.3
Notional Amounts of Derivative Financial Instruments (MEUR)
6/2005 6/2005 6/2004 12/2004
Nominal Market Nominal Nominal
value value value value
Foreign exchange
forward contracts 338.6 -2.2 507.0 538.5
Interest rate swap 25.0 0.3 25.0 25.0
Total 363.6 -1.9 532.0 563.5
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. The hedged orderbook represents approximately one half
of the total notional amounts.
Investments ( MEUR)
1-6/2005 1-6/2004 1-12/2004
Investment total (excl.
acquisitions of 7.5 5.5 11.8
subsidiaries)
Reconciliation of net income ( MEUR)
1-6/2004 1-12/2004
Net income according to FAS 4.6 23.0
Reversal of amortization of
goodwill, IFRS 3 and IAS 36 1.2 2.6
Impairment, IAS 36 0.0 - 1.2
Employee benefits, IAS 19 - 0.5 - 1.1
Stock options, IFRS 2 - 0.4 - 0.8
Income taxes, IAS 12 0.7 1.5
Provisions, IAS 37 - 2.0 - 5.4
Other IFRS adjustments 0.1 - 0.2
Total IFRS adjustments - 0.9 - 4.6
Net income according to IFRS 3.7 18.4
13 (15)
Reconciliation of shareholders' equity (MEUR)
12/2003 6/2004 12/2004
Equity according to FAS 163.4 154.4 157.9
IFRS adjustments:
Reversal of amortization of
goodwill, IFRS 3 and IAS 36 0.0 1.2 2.6
Impairment, IAS 36 - 0.1 - 0.1 - 1.3
Employee benefits, IAS 19 - 15.0 - 15.5 - 16.1
Reserve for own shares, IAS 32 - 5.5 - 5.5 - 4.4
Income taxes, IAS 12 3.8 4.5 5.3
Provisions, IAS 37 5.4 3.4 0.0
Minority interest, IAS 1 0.1 0.1 0.1
Changes in accounting policy, IAS 8 0.0 0.0 - 4.9
Other IFRS adjustments - 1.8 - 2.0 - 1.5
Total IFRS adjustments - 13.1 - 13.9 - 20.2
Equity according to IFRS 150.3 140.5 137.7
Segment reporting:
Sales by Business Area (MEUR)
1-6/2005 1-6/2004 LTM* 1-12/2004
Maintenance Services 184.9 157.8 371.7 344.6
Standard Lifting Equipment 133.6 99.2 265.6 231.2
Special Cranes 140.4 88.3 266.2 214.1
./. Internal -31.5 -27.8 -65.6 -62.0
Total 427.4 317.5 837.9 728.0
* LTM = last 12 months (full year 2004 ./.six months 2004 + six months 2005)
Operating Income by Business Area (MEUR)
1-6/2005 1-6/2004 1-12/2004 LTM*
MEUR % MEUR % MEUR % MEUR
Maintenance Services 11.5 6.2 6.5 4.1 22.1 6.4 27.1
Standard Lifting
Equipment 10.9 8.1 7.7 7.8 20.7 9.0 23.9
Special Cranes 3.2 2.3 4.7 5.3 15.9 7.4 14.4
Group costs -12.0 -12.5 -27.3 -26.8
Consolidation items 0.5 -0.2 -0.1 0.6
Total 14.1 6.2 31.3 39.2
* LTM = last 12 months (full year 2004 ./.six months 2004 + six months 2005)
Personnel by Business Area (at the End of the Period)
6/2005 6/2004 12/2004
Maintenance Services 2.786 2.619 2.685
Standard Lifting Equipment 1.178 993 1.028
Special Cranes 855 594 675
Group staff 121 123 123
Total 4.940 4.329 4.511
Average number of personnel
during period 4.814 4.330 4.369
14 (15)
Order Intake by Business Area (Excl. Service Contract Base) (MEUR)
1-6/2005 1-6/2004 LTM* 1-12/2004
Maintenance Services 163.0 154.0 317.4 308.4
Standard Lifting Equipment 156.5 123.6 279.6 246.6
Special Cranes 210.8 104.1 350.4 243.7
./. Internal -33.7 -29.2 -66.4 -61.9
Total 496.5 352.5 880.9 736.9
* LTM = last 12 months (full year 2004 ./.six months 2004 + six months 2005)
Order Book (Excl. Service Contract Base) (MEUR)
6/2005 6/2004 12/2004
Order Book total 414.7 268.0 298.8
Sales by Market (MEUR)
1-6/2005 1-6/2004 LTM* 1-12/2004
Nordic and Eastern Europe 95.6 56.5 180.0 140.9
EU (excl. Nordic) 139.9 95.3 267.2 222.5
Americas 115.7 96.7 234.2 215.1
Asia Pacific 76.2 69.0 156.6 149.4
Total 427.4 317.5 838.0 728.0
* LTM = last 12 months (full year 2004 ./.six months 2004 + six months 2005)
Events on 4 August, 2005
Analyst and press briefing
A luncheon presentation for media and analysts will be held at Helsinki World
Trade Center, Marski Hall at 12.00 noon Finnish Time (address Aleksanterinkatu
17).
Live webcast
A live webcast of the presentation will begin at 12.00 noon Finnish Time and can
be followed at www.konecranes.com/investor.
Telephone conference
A telephone conference for analysts and investors, in English, will begin at 4.00
p.m. Finnish Time (2.00 p.m. UK Time). Please call in at 3.50 p.m. The dial-in
number is +44-20 7162 0181 (replay available for 48 hours at +44-20 7031 4064,
code 631239).
Internet
This report and graphic material is available on the Internet at
www.konecranes.com/investor immediately after publication. A recording from the
webcast presentation and teleconference will be available on the Internet later
on 4 August.
15 (15)
Next report
Interim report, 3rd quarter, will be published on 1 November, 2005 at 10.00 a.m.
Finnish time (8.00 a.m. London time).
Graphics
A graphical presentation of this report is available on the Internet at
www.konecranes.com/investor.
KCI KONECRANES PLC
Franciska Janzon
IR Manager
FURTHER INFORMATION
Mr Pekka Lundmark, President and 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 27 2043
DISTRIBUTION
Helsinki Stock Exchange
Media
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KCI KONECRANES PLC
