KONECRANES PLC - THIRD QUARTER ORDER INTAKE DOWN, PROFITABILITY IMPROVED FROM THE BEGINNING OF THE YEAR
KONECRANES PLC INTERIM REPORT October 23, 2013 at 9:00 a.m.
Figures in brackets, unless otherwise stated, refer to the same period in the previous year.
THIRD QUARTER HIGHLIGHTS
- Order intake EUR 412.9 million (458.0), -9.9 percent; Service -6.3 percent and Equipment -8.8 percent.
- Order book EUR 1,018.9 million (1,085.1) at end-September, 6.1 percent lower than a year ago, 5.6 percent lower than at end-June 2013.
- Sales EUR 502.9 million (529.8), -5.1 percent; Service -1.7 percent and Equipment -6.3 percent.
- Operating profit excluding restructuring costs EUR 32.4 million (37.0), 6.4 percent of sales (7.0).
- Restructuring costs EUR 23.6 million (0.0).
- Operating profit EUR 8.8 million (37.0), 1.7 percent of sales (7.0).
- Earnings per share (diluted) EUR 0.09 (0.43).
- Net cash flow from operating activities EUR 40.7 million (45.0).
- Net debt EUR 246.3 million (250.5) and gearing 57.4 percent (55.6).
JANUARY-SEPTEMBER HIGHLIGHTS
- Order intake EUR 1,498.6 million (1,546.3), -3.1 percent; Service -0.6 percent and Equipment -2.9 percent.
- Sales EUR 1,518.7 million (1,566.4), -3.0 percent; Service -0.6 percent and Equipment -4.6 percent.
- Operating profit excluding restructuring costs EUR 72.7 million (96.1), 4.8 percent of sales (6.1).
- Restructuring costs EUR 27.9 million (0.0).
- Operating profit EUR 44.8 million (96.1), 3.0 percent of sales (6.1).
- Earnings per share (diluted) EUR 0.47 (1.08).
- Net cash flow from operating activities EUR 40.6 million (73.6).
MARKET OUTLOOK
Leading macroeconomic indicators in Europe and China improved slightly in the third quarter of 2013. However, the growth in industrial production and container traffic is moderate and below the historical averages. The near-term investment outlook within manufacturing and process industries as well as container handling remains uncertain.
FINANCIAL GUIDANCE
Based on the order book and the near-term demand outlook, the year 2013 sales are expected to be slightly lower than in 2012. We expect the fourth quarter 2013 operating profit, excluding restructuring costs, to improve from the previous year. However, we expect the full-year 2013 operating profit excluding restructuring costs to be lower than in 2012.
| KEY FIGURES | Third quarter | January-September | ||||||
| 7-9/2013 | 7-9/2012 | Change % | 1-9/2013 | 1-9/2012 | Change % | R12M | 2012 | |
| Orders received, MEUR | 412.9 | 458.0 | -9.9 | 1,498.6 | 1,546.3 | -3.1 | 1,922.4 | 1,970.1 |
| Order book at end of period, MEUR | 1,018.9 | 1,085.1 | -6.1 | 942.7 | ||||
| Sales total, MEUR | 502.9 | 529.8 | -5.1 | 1,518.7 | 1,566.4 | -3.0 | 2,123.8 | 2,171.5 |
| EBITDA excluding restructuring costs, MEUR | 40.7 | 47.2 | -13.9 | 102.3 | 126.8 | -19.4 | 155.2 | 179.7 |
| EBITDA excluding restructuring costs, % | 8.1 | 8.9 | 6.7 | 8.1 | 7.3 | 8.3 | ||
| Operating profit excluding restructuring costs, MEUR | 32.4 | 37.0 | -12.6 | 72.7 | 96.1 | -24.4 | 114.9 | 138.3 |
| Operating margin excluding restructuring costs, % | 6.4 | 7.0 | 4.8 | 6.1 | 5.4 | 6.4 | ||
| EBITDA, MEUR | 33.1 | 47.2 | -29.9 | 90.7 | 126.8 | -28.5 | 140.7 | 176.8 |
| EBITDA, % | 6.6 | 8.9 | 6.0 | 8.1 | 6.6 | 8.1 | ||
| Operating profit, MEUR | 8.8 | 37.0 | -76.3 | 44.8 | 96.1 | -53.4 | 81.2 | 132.5 |
| Operating margin, % | 1.7 | 7.0 | 3.0 | 6.1 | 3.8 | 6.1 | ||
| Profit before taxes, MEUR | 8.3 | 37.1 | -77.6 | 39.6 | 90.5 | -56.2 | 73.3 | 124.2 |
| Net profit for the period, MEUR | 5.3 | 25.0 | -78.7 | 27.3 | 62.5 | -56.3 | 49.6 | 84.8 |
| Earnings per share, basic, EUR | 0.09 | 0.43 | -79.1 | 0.47 | 1.08 | -56.4 | 0.86 | 1.47 |
| Earnings per share, diluted, EUR | 0.09 | 0.43 | -79.0 | 0.47 | 1.08 | -56.3 | 0.86 | 1.46 |
| Gearing, % | 57.4 | 55.6 | 39.3 | |||||
| Return on capital employed %, Rolling 12 Months (R12M) | 11.1 | 18.4 | ||||||
| Free cash flow, MEUR | 28.9 | 26.1 | 2.2 | 30.4 | 73.4 | 101.6 | ||
| Average number of personnel during the period | 12,026 | 11,860 | 1.4 | 11,917 | ||||
President and CEO Pekka Lundmark:
“Our third quarter showed mixed signals. The declining cost base showing that our tight spending control is delivering results was positive. Project execution went according to plans. As a result, our operating profit before restructuring costs improved from the second quarter. Service’s operating margin before restructuring costs of 9.6 percent was encouraging, and there is further potential for improvement. Equipment’s corresponding operating margin of 5.1 percent was low, but much better than in the first half of the year. We expect the improvement of the operating profit to continue in the fourth quarter.
Our issue is now clearly the volume. When we made the decision to lower our cost base by EUR 30 million, the logic behind it was that we did not want to count on market growth to improve profitability. Third quarter order intake was soft, showing that this decision was the right one. Many purchasing managers’ indexes have developed well in the last months, and should this trend continue it would most likely start to support our rather late cyclical demand. However, thus far these signs are only scattered at best and our customers’ investment outlook remains uncertain.
In addition to taking care of our cost base, we continue to invest in the product development to further strengthen our competitiveness. We call our first key strategic initiative “Industrial Internet”, which is making machines intelligent and aware of their own condition, and networking them to create a real-time visibility in terms of their safety and productivity. We have named the second strategic initiative “Emerging Markets Offering”, and it is creating completely new product families for the new customer needs in the parts of the world that will represent a major share of the world’s future industrial growth. Both initiatives are currently in the process of launching the first products to the market, and there is much more to come.”
DISCLOSURE PROCEDURE
Konecranes follows the disclosure procedure enabled by Disclosure obligation of the issuer (7/2013) published by the Finnish Financial Supervision Authority. This stock exchange release is a summary of Konecranes Plc’s January-September 2013 interim report. The complete report is attached to this release in pdf format and is also available on Konecranes’ website at www.konecranes.com.
ANALYST AND PRESS BRIEFING
An analyst and press conference will be held at Savoy restaurant’s Salikabinetti (Note new venue, address Eteläesplanadi 14) at 11.00 a.m. Finnish time. The Interim Report will be presented by Konecranes’ President and CEO Pekka Lundmark and CFO Teo Ottola.
A live webcast of the conference will begin at 11.00 a.m. at www.konecranes.com. Please see the stock exchange release of October 4, 2013, for the conference call details.
KONECRANES PLC
Miikka Kinnunen
Director, Investor Relations
FURTHER INFORMATION
Mr Pekka Lundmark, President and CEO, tel. +358 20 427 2000
Mr Teo Ottola, Chief Financial Officer, tel. +358 20 427 2040
Mr Miikka Kinnunen, Director, Investor Relations, tel. +358 20 427 2050
Mr Mikael Wegmüller, Vice President, Marketing and Communications, tel. +358 20 427 2008
Konecranes is a world-leading group of Lifting Businesses™, serving a broad range of customers, including manufacturing and process industries, shipyards, ports and terminals. Konecranes provides productivity-enhancing lifting solutions as well as services for lifting equipment and machine tools of all makes. In 2012, Group sales totaled EUR 2,170 million. The Group has 11,900 employees at 626 locations in 48 countries. Konecranes is listed on the NASDAQ OMX Helsinki (symbol: KCR1V).
DISTRIBUTION
NASDAQ OMX Helsinki
Media
www.konecranes.com